Opinion ID: 780702
Heading Depth: 2
Heading Rank: 2

Heading: The Trust's Denial of Celardo's Claim

Text: 17 Celardo contends that the Trust's interpretation of the exclusionary phrase resulting from ... participation in or in consequence of having participated in an illegal act was arbitrary and capricious because Celardo's traffic violations: (1) did not constitute illegal acts under the Plan; and (2) did not cause or contribute to his accident. The district court agreed in part, finding that because Celardo's traffic violations did not cause his injuries the Trust was arbitrary and capricious in denying coverage. We are not persuaded and we conclude that the Trust's denial of coverage was based on a rational interpretation of the Plan's provisions and was supported by substantial evidence.
18 Celardo's contention that violations of the VTL are mere traffic infractions that do not amount to illegal acts smacks of casuistry. The Trustees' broad discretion to interpret the Plan's terms can only be disturbed where they interpret the plan in a manner inconsistent with its plain words, or by their interpretation render some provisions of the plan superfluous.... O'Shea v. First Manhattan Co. Thrift Plan & Trust, 55 F.3d 109, 112 (2d Cir.1995) (quoting Miles, 698 F.2d at 599). Here, the Trustees' interpretation of the phrase illegal acts was not unreasonable. While Celardo would have us hold that illegal means criminal, this interpretation contravenes the plain, common-sense meaning of illegal. Fay v. Oxford Health Plan, 287 F.3d 96, 104 (2d Cir.2002) (the terms of an ERISA plan should be accorded their plain meaning). The dictionary definition of illegal is contrary to or violating a law or rule or regulation or something else (as an established custom) having the force of law. Webster's Third New Int'l Dictionary 1126 (Philip Babcock Gove ed.1981). Traffic infractions prohibited by the VTL may reasonably be encompassed by this definition even if they are not considered crimes in New York. 19 Celardo emphasizes that all but two of the summonses issued after the accident were eventually dismissed when he pled guilty to the remaining two infractions: operating a vehicle with bald tires and operating an uninsured vehicle. The significance of this fact is lost on the Court when it is noted that Celardo admitted at trial that he was in fact guilty of each of the ten summonses that he was issued.
20 Celardo's argument that there was no basis for the Trustees' decision that his traffic violations caused his injuries is wide of the mark. Applying notions of proximate cause taken from tort law, Celardo simply posits the absence of a causal link between his traffic violations and his injuries. This may or may not be true, but it distorts our role; we are confined to determining whether the Trustees' interpretation of the Plan's terms was reasonable and supported by the evidence. While Celardo has a decent argument that his placing the dealer plates on the unregistered, uninsured, and uninspected Corvette did not directly cause his injuries, the argument collapses when one considers Celardo's illegal act of crossing the solid, double-yellow line to pass another vehicle immediately before he crashed. See Letter from Trust Administrator James A. Payton to Celardo, dated July 27, 1998 (citing, inter alia, Celardo's driving on the left side of a double-yellow line in violation of VTL § 1126 as one of the illegal acts that led to the Trust's denial of coverage for his injuries). The Trustees thoroughly considered the circumstances of Celardo's accident, and it is difficult to dispute the determination that this infraction caused Celardo's injuries. Indeed, Celardo himself does not address this point in his brief. 21 The Trust supports its causation analysis by arguing that had Celardo not illegally placed the dealer plates on the Corvette, he would not have been able to drive the Corvette on that fateful day. Again, while this causal link is not overwhelming, the Trustees' reading of the policy language excluding injuries resulting from ... participation in ... an illegal act as barring recovery for Celardo's injuries is a reasonable interpretation of the Plan. That is sufficient for us. See O'Shea, 55 F.3d at 112; Pagan, 52 F.3d at 443 (Where it is necessary for a reviewing court to choose between two competing yet reasonable interpretations of a ... plan, this Court must accept that offered by the administrators.).