Opinion ID: 44548
Heading Depth: 2
Heading Rank: 1

Heading: Whether the District Court Erred in Granting Summary Judgment

Text: 8 The standard of review for a district court's grant of summary judgment is de novo. Facility Ins. Corp. v. Employers Ins. of Wausau, 357 F.3d 508, 512 (5th Cir.2004) (citing Gowesky v. Singing River Hosp. Sys., 321 F.3d 503, 507 (5th Cir. 2003)). Summary judgment is only appropriate if the evidence shows that there is no genuine issue as to any material fact, and that the moving party is entitled to judgment as a matter of law. Id. ; Fed. R.Civ.P. 56(c)LQ. When, as here, the language of the plan grants discretion to an administrator to interpret the plan and determine eligibility for benefits, a court will reverse an administrator's decision only for abuse of discretion. Meditrust Fin. Servs. Corp. v. Sterling Chems., Inc., 168 F.3d 211, 213 (5th Cir.1999). In the summary judgment context, to avoid reversal, the ERISA administrator's decision must be supported by substantial evidence in the administrative record. Ellis v. Liberty Life Assurance Co., 394 F.3d 262, 273 (5th Cir.2004). Substantial evidence is that which a reasonable mind might.accept as sufficient to support a conclusion. Id.
9 One of the underlying principles of ERISA is to ensure that employee benefits are given as promised and as expected. Lockheed Corp. v. Spink, 517 U.S. 882, 887, 116 S.Ct. 1783, 135 L.Ed.2d 153 (1996). Therefore, ERISA has specific provisions regarding decisions that may affect these expectations. For example, an adverse benefit determination is any of the following: a denial, reduction, or termination of, or a failure to provide or make payment (in whole or part) for, a benefit. 29 C.F.R. 2560.503-1(m)(4) (2004). In the case of a claim for disability benefits, the plan administrator shall notify the claimant ... of the plan's adverse benefit determination within a reasonable period of time, but not later than 45 days after receipt of the claim by the plan. 29 C.F.R. 2560.503-1(f)(3) (2006). 1 10 On the other hand, even though Congress strictly guards ERISA plans, where an ERISA plan gives an administrator discretionary authority to determine eligibility for benefits and to construe terms, courts may not reverse the administrator's benefits determinations absent an abuse of discretion. Meditrust, 168 F.3d at 213. The E-Systems Plan provides discretionary authority to the plan administrator, as does the subsequent Raytheon Plan. Accordingly, we may apply a two-step analysis to determine whether the administrator in this case abused its discretion, first determining whether the administrator's decision was legally sound and, if it is not, determining whether the decision was an abuse of discretion in any event. Duhon v. Texaco, 15 F.3d 1302, 1307 n. 3 (5th Cir.1994). 2 This court, however, is not confined to this test; we may skip the first step if we can determine the decision was not an abuse of discretion. Id.; see MacLachlan v. ExxonMobil Corp., 350 F.3d 472, 481 (5th Cir.2003); Sweatman v. Commercial Union Ins. Co., 39 F.3d 594, 602-03 (5th Cir.2003) (concluding that an ERISA administrator's determination was not an abuse of discretion and affirming judgment on that basis without considering whether the administrator's determination was legally correct). Accordingly, in assessing whether MetLife abused its discretion in applying the offset, our analysis bypasses whether MetLife's determination was legally correct, as the record reflects that it has not abused its discretion. 11 High asserts that the six year gap during which he received both VA benefits and benefits under the E-Systems plan was an unreasonable amount of time for E-Systems to delay adjusting his entitlements. The time lapse that occurred in this case, however, is only one variable in the equation that we consider; thus the regulations, referred to by High and cited above, delineating a reasonable time are not instructive. This situation is not one where MetLife knew about the improper disability benefits and then, six years later, applied an offset provision; this is a situation where once MetLife took over as claims administrator, it reviewed the policy provisions and disability payments it would be making, immediately found a discrepancy in High's disability payments, conducted a thorough investigation, contacted the former plan administrator for an opinion, considered whether other participants in the E-Systems Plan had their benefits offset under the provision, allowed High to appeal (twice) its decision to offset VA benefits, and then made an ultimate determination to (a) offset VA benefits and (b) not attempt to collect retroactively the benefits inadvertently paid from 1992-1998. We hold that this scenario constitutes careful deliberation on MetLife and E-Systems's part and does not evidence arbitrary or capricious decision-making. The record reflects that there is a rational connection between the known facts and the [ultimate] decision. Meditrust, 168 F.3d at 215. Thus, MetLife's determination was reasonable. 12 On appeal, High cites to Barnett v. Aetna Life Insurance Co., 723 S.W.2d 663, 667 (Tex.1987), for the proposition that VA benefits are unique in character. In that case, the Texas Supreme Court found, [b]enefits under the VA appear to be unique in character and scope, certainly important enough to warrant specific mention in an insurance policy if they are sought to be offset. At first glance, High's argument is quite compelling; however, a closer look reveals that his argument is misplaced. First, Barnett applies Texas insurance law, which is preempted by ERISA. See Thibodeaux v. Cont'l Cas. Ins. Co., 138 F.3d 593, 596 (5th Cir.1998) (We, like other circuits that have addressed this issue, agree that ERISA preempts state law governing insurance policy interpretation.). Second, Barnett involves an insurance policy and not a self-funded ERISA plan, as in this case. Third, the language referred to by High in Barnett did not include an all-encompassing provision, as in the E-Systems Plan, providing for a reduction by other income benefits to which such Employee may be entitled, and which are payable on or after the commencement of the disability for which benefits are payable, including other income benefits: (a) Disability benefits payable under the federal Social Security Act (including benefits for dependents); (b) Earnings continuation from any Employer; (c) benefits payable under any other group disability plan; and (d) benefits payable under any workmen's compensation or similar law. The E-System Plan also provides that if an insured becomes totally disabled, his monthly benefits payments will be reduced by any primary and dependent benefits paid or payable under social security, worker's compensation and the provisions of the E-Systems Retirement Plans. Therefore, High's reliance on Barnett is misplaced. 13 Furthermore, High's assertion that the language of the plans is ambiguous and, therefore, the rule of contra proferentum should apply is without merit. This court has explained that eligibility for benefits under an ERISA plan is first governed by the plain meaning of the language of the contract. Threadgill v. Prudential Sec. Group, Inc., 145 F.3d 286, 292 (5th Cir.1998). Only when the plan terms remain ambiguous after applying ordinary principles of contract interpretation does this court apply the rule of contra proferentum and construe the terms strictly in favor of the insured. Wegner v. Standard Ins. Co., 129 F.3d 814, 818 (5th Cir.1997). High's case, however, does not warrant the application of this rule; the language of neither the E-Systems Plan nor the Raytheon Plan is ambiguous and, as E-Systems suggests, by giving MetLife complete discretion to interpret the plans, if there had been an ambiguity, MetLife was empowered to resolve it, exercising interpretive discretion. MacLachlan, 350 F.3d at 482. Therefore, because the plans clearly state that discretion is given to the plan administrator to carry out and interpret the plan, we affirm the district court's grant of summary judgment as to this issue.