Opinion ID: 52297
Heading Depth: 1
Heading Rank: 3

Heading: Degree of House’s Disability

Text: We turn to the issue of whether the district court erred in finding that House was totally disabled under the policy and that House could be deemed simultaneously both totally disabled and partially disabled under the policy. When called upon to interpret an ERISA-covered policy, “we construe the terms of the plan de novo unless the benefit plan gives the administrator or fiduciary discretionary authority to determine eligibility for benefits or to construe the terms of the plan.” Wegner v. Standard Ins. Co.,129 F.3d 814, 818 (5th Cir.1997) (internal quotation and citation omitted). As the record in this case reveals no such grant of discretionary authority to a fiduciary or administrator, the language of the policy guides our de novo interpretation. Id. The policy definitions for Class 1 or 2 insureds (attorneys) provides that: TOTAL DISABILITY and TOTALLY DISABLED mean that because of Injury or Sickness the Person cannot perform the material and substantial duties of his regular occupation. PARTIAL DISABILITY and PARTIALLY DISABLED mean that because of Injury or Sickness the Person, while unable to perform every material and substantial duty of his regular occupation on a full-time basis, is: 1. performing at least one of the material and substantial duties of his regular occupation or another occupation on a part-time or full-time 16 basis; and 2. is earning less than 80% of his Indexed Pre- Disability Earnings due to that same Injury or Sickness. Because the terms “material and substantial duties” and “regular occupation” are not defined in the policy, we accord the terms their ordinary and generally accepted meaning. Provident Life & Accident Ins. Co. v. Sharpless, 364 F.3d 634, 641 (5th Cir. 2004). Reading the partial and total disability provisions in pari materia, in order to obtain total disability benefits, House would have to demonstrate that he cannot perform all of the material and substantial duties of his occupation. In analyzing similar policy provisions, we have concluded that this means a claimant is totally disabled only if he or she cannot perform each and every material and substantial duty of his or her occupation. Ellis v. Liberty Assurance Co. of Boston, 394 F.3d 262, 272 (5th Cir. 2004). A claimant is thus partially disabled under this policy if able to perform one or more, but not all, of the material and substantial duties of his or her occupation. See id. at 271-72. The definitions of total and partial disability under the AUL policy are therefore mutually exclusive. We find the district court’s distinction between “trial lawyer” and “lawyer” too fine under a common sense interpretation of “regular occupation.” A number of courts have upheld an interpretation of “regular occupation” as meaning a general occupation 17 rather than a particular position with a particular employer.8 Although review of such an interpretation in many cases was deferential, having been made by a plan administrator vested with discretion, we do not believe that precludes a like interpretation here. House’s “regular” occupation was as an attorney, not restricted to his own specific job as a litigation attorney with a uniquely stressful practice, but rather referencing the activities that constitute the material duties of an attorney as they are found in the general economy. See, e.g., Osborne v. Hartford Life and Accident Ins. Co., 465 F.3d 296, (6th Cir. 2007) (“Whatever the meaning of “regular” is, it is not synonymous with “own.”). Even crediting the opinion of House’s doctor that House’s heart condition 8 See, e.g., Schmidlkofer v. Directory Distrib. Assoc., Inc., 107 Fed. App’x 631, 633-34 (6th Cir. 2004) citing Ehrensaft v. Dimension Works Inc. Long Term Disability Plan, 120 F.Supp.2d 1253, 1259 (D. Nev.2000) (“This Court finds that the term, ‘occupation,’ is a general description, not a specific one.... A person may not be able to perform a specific job assignment, but still be able to perform the duties generally understood to be part of his or her ‘occupation.’ For example, a secretary is not disabled from his or her ‘occupation’ just because he or she cannot also perform additional tasks assigned by an employer, such as moving furniture or lifting heavy objects.”); Dionida v. Reliance Standard Life Ins. Co., 50 F.Supp.2d 934, 939 (N.D. Cal. 1999) (“The term ‘regular occupation’ may be fairly construed to mean ‘a position of the same general character as the insured's previous job, with similar duties and training requirements.” ’ (quoting Dawes v. First Unum Life Ins., Co., 851 F.Supp. 118, 122 (S.D.N.Y.1994))); Hanser v. Ralston Purina Co., 821 F.Supp. 473, 478 (E.D.Mich.1993) (“The court finds that defendant's interpretation of the terms ‘regular occupation’ as meaning the type of work which a covered employee is trained to perform rather than the specific job at which the employee was working when he became ill, is a rational interpretation supported by the plain meaning of the words.”); cf. Valeck v. Watson Wyatt & Co., 266 F.Supp.2d 610, 620-21 (E.D.Mich.2003) (upholding as the interpretation of both “regular job” and “regular occupation” as “the kind of work [insured] did” rather than the “specific job in the specific office and with the specific supervisor and co-workers with whom she worked”). 18 precludes him from resuming his stressful trial practice, House is clearly able to perform some of the material aspects of his occupation as an attorney, as evidenced by his postsurgery activities with his firm and his current legal employment with the Louisiana agency. Under the policy, this takes House outside of the definition of total disability and places him squarely within the definition of partial disability. The dissent discusses total disability as if the policy does not at the same time define partial disability. When read together, at the same time the disability can be either total or partial but never both. So when the definition of partial disability fits the condition of House, that is his benefit. House urges that such an interpretation runs afoul of Louisiana Revised Statute 22:230(C), which provides that “[a] general definition of total disability in [a disability loss of income policy] shall not be more restrictive than one requiring the individual to be totally disabled from engaging in any employment or occupation for which he is, or becomes, qualified by reason of education, training, or experience and which provides him with substantially the same earning capacity as his former earning capacity prior to the start of the disability.”9 However, section 22:230(D) permits an insurer defining total disability to “specify the requirement of the complete inability of the individual to perform all of the substantial and material duties of his regular occupation or words of 9 We note, and AUL concedes, that ERISA preemption does not preclude such argument because, if applicable, section 22:230 directly regulates the business of insurance and substantially affects the risk-pooling agreements between insurers and insureds. See 29 U.S.C. § 1144(b)(2)(A). 19 similar import.” As discussed above, the AUL policy’s definition of total disability comports with this standard. Further, while House’s former occupation as a trial lawyer was clearly more lucrative than some other alternative practices and certainly more lucrative than his new agency job, House might have switched to a more sedentary nontrial legal practice and still earned substantially more than he now does. In sum, we cannot agree that the policy’s total disability language is unduly restrictive under Louisiana law. Because we conclude that House does not qualify as totally disabled under the policy language, we do not reach the issue of whether AUL is entitled to set off House’s present earnings against total disability benefits. IV. Termination of House’s Entitlement to Partial Disability Benefits Finally, we consider the district court’s conclusion that partial disability benefits terminated as of February 2002 when House’s former firm terminated the firm’s policies with AUL. Reviewing the record de novo, we find no error. “Under Louisiana law, the rights of the beneficiary of an insurance policy depend, first and foremost, on the terms of the policy.” Gonzales v. Prudential Ins. Co. of Am., 901 F.2d 446, 454 (5th Cir. 1990).1 “Supplementing the rights guaranteed to the beneficiary by the insurance contract are others that are established by the provisions of 1 Recognized as superseded by statute on other grounds (definition of disability under Louisiana law) as stated in Guidry v. Northwestern Mut. Life Ins. Co., 88 F. App’x 12 (5th Cir. 2004). 20 the Insurance Code and the jurisprudential rules that have sprung from it.” Id. The Louisiana Insurance Code protects a beneficiary’s claims for “benefits accrued or expenses incurred” against the contingency of the policy’s subsequent unilateral cancellation by the insurer. LA. REV. STAT. ANN. § 22:213(B)(7). The Louisiana Supreme Court has held, Soniat v. Travelers Ins. Co., 538 So.2d 210, 215 (La. 1989), and we have assumed without deciding, Gonazales, 901 F.2d at 454, that this insuranceregulating state law provision is not preempted by ERISA. However, these rules do not protect a beneficiary against the contingency of the policy’s subsequent termination, which we have defined in this context as “cessation of coverage under an insurance contract by reason of the passage of the policy period or the occurrence of some event anticipated by the terms of the contract.” Gonzales, 901 F.2d at 455 (citations and internal quotations omitted); see also Soniat, 538 So.2d at 215 & n.12 (recognizing the distinction between cancellation and termination of insurance coverage under Louisiana law). The policy covering House clearly contemplated that payment of benefits for a persisting total disability arising during a covered period would be extended throughout the duration of a beneficiary’s normal working life. Section 5 of the policy reads: “EXTENDED BENEFIT: If the Person is Totally Disabled on the date of termination of insurance, AUL will pay benefits for Total Disability.” However, the insuring provisions of the policy do not provide the same extended coverage for a partially disabling condition, that coverage expressly ceasing upon, among other enumerated events, 21 termination of the firm’s coverage under the group policy. Section 8 of the policy reads, in relevant part: “[T]he Partial Disability Benefit will continue until the EARLIEST of the following: . . . 9. The date the policy terminates; or 10. The date the Participating Unit’s [the firm’s] coverage under the policy terminates.” Because, under the terms of the contract, no right to permanent partial disability coverage was bargained or provided for, no right to perpetual partial disability benefits accrued to House prior to the termination of the policy. The cessation of AUL’s liability for partial disability payments at the time House’s former firm ceased to be a covered “Participating Unit” constitutes a termination rather than a cancellation of coverage and thus does not run afoul of the Insurance Code.