Court Opinion

ID: 40665
Source: CourtListenerOpinion
Date Created: 2010-04-25 20:51:40+00
Date Added: 2024-06-11T12:18:23.104783
License: Public Domain

United States Court of Appeals
                                                              Fifth Circuit
                                                            F I L E D
                 UNITED STATES COURT OF APPEALS
                      For the Fifth Circuit                 January 23, 2006

                                                         Charles R. Fulbruge III
                                                                 Clerk
                           No. 04-51253

          NEVA MURRAY, Individually and as Guardian of
                        Hugh Murray, Ward

                                              Plaintiff-Appellant,

                              VERSUS

    CROSSMARK SALES, INC.; CONNECTICUT GENERAL LIFE INSURANCE
                        COMPANY; ET AL.,

                                             Defendants-Appellees.

          Appeal from the United States District Court
                For the Western District of Texas
                          ( 5:03-CV-85 )

Before HIGGINBOTHAM, DeMOSS, and OWEN Circuit Judges.

PER CURIAM:*

     Plaintiff-Appellant Neva Murray appeals the district court’s

affirmance of the denial of her benefits claim on the basis of an

ERISA-plan exclusion.   We AFFIRM.

     Defendant-Appellee Crossmark Sales, Inc. (“Crossmark”) employs

Murray. Since 1996, Murray has participated in Crossmark’s Medical

Plan, a self-funded plan providing medical, prescription drug, and

     *
      Pursuant to 5TH CIR. R. 47.5, the Court has determined that
this opinion should not be published and is not precedent except
under the limited circumstances set forth in 5TH CIR. R. 47.5.4.
vision benefits to plan participants under the terms of both the

Plan Document and the Summary Plan Description (the “SPD”).2             Upon

joining the Plan, Murray signed an enrollment application, agreeing

to be bound by the terms and conditions of the Plan Document and

the SPD.

     As     Plan    administrator,       Crossmark      delegated       claim

administration to a third party claims administrator, which was

empowered to make benefit determinations.             Over the course of

Murray’s    participation   in   the     Plan,   at    least   two     claims

administrators were named by Crossmark.               In 1997, Defendant-

Appellee Group & Pension Administrators, Inc. (“GPA”) became the

claims administrator. Then, on March 29, 2000, Murray enrolled her

husband, Mr. Hugh Murray, as a dependent beneficiary in the Plan.

Mr. Murray was self-employed as a pest control contractor at that

time.     On March 1, 2001, Crossmark replaced GPA with Defendant-

Appellee Connecticut General Life Insurance Company (“CIGNA”) as

claims    administrator.    Thus,    effective   March    1,   2001,    CIGNA

exercised its discretion to make benefit determinations under the

Plan for claims occurring on or after March 1, 2001.

     On February 12, 2001, Mr. Murray suffered serious injury when

he fell from an attic onto a concrete floor while performing pest

control work for profit at his customer’s residence.           Mr. Murray’s

     2
      All parties conceded before the district court that the
Plan is an employee benefit plan under the Employee Retirement
Income and Security Act (“ERISA”), 29 U.S.C. § 1002 et seq.

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medical bills exceed $500,000.   Murray submitted claims to GPA for

expenses incurred for his treatment through February 28, 2001.

During investigation into the claim, Murray averred that her

husband’s injuries were work related.       GPA sent a denial of

benefits notice to Murray, indicating that Mr. Murray’s injuries

were not covered because of an exclusion of coverage for any work-

related injury.3   Crossmark also instituted its own investigation

and likewise concluded that Mr. Murray’s injuries were expressly

excluded under the Plan’s terms.     When CIGNA replaced GPA as the

claims administrator, the Plan was amended, and Crossmark gave its

employees notice of the material amendments as required by ERISA,

29 U.S.C. § 1024(b)(1) (“The administrator shall furnish to each

participant, and each beneficiary receiving benefits under the

     3
      The SPD, under GPA’s administration, provided,

     The following exclusions and limitations apply to
     expenses incurred by all Covered Persons:
     . . .
     3. Charges arising out of or in the course of any
     occupation for wage or profit, or for which the Covered
     Person is entitled to benefits under any Worker’s
     Compensation or Occupational Disease Law, or any such
     similar law.

     The SPD, under CIGNA’s administration, provided,

     No payment will be made for expenses incurred for you
     or any one of your Dependents:
     • for or in connection with an Injury arising out of,
     or in the course of, any employment for wage or profit;
     • for or in connection with a Sickness which is covered
     under any workers’ compensation or similar law.

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plan, a copy of the summary plan description, and all modifications

and changes referred to in [29 U.S.C. § 1022(a)] . . . .”).

     Because of the change in the entity administrating claims,

Murray submitted claims for expenses incurred after March 1, 2001

to CIGNA. Unlike GPA, CIGNA uses a system of claims administration

called “pay   and    chase.”     Consistent       with   this    system,   CIGNA

initially paid Murray based upon the claims received and then

instituted an investigation.         CIGNA paid approximately $90,000 in

benefits but, after investigation, determined that Mr. Murray’s

claims were barred by the work-related exclusion. Murray contested

the denials, and, in its role as claims administrator at the time,

CIGNA affirmed      the   decision   to    deny   Mr.    Murray’s   claims   for

benefits.

     Murray filed this lawsuit against Crossmark, GPA, and CIGNA

(collectively, “Defendants”), arguing that the denial of benefits

was arbitrary and capricious, resulting in an abuse of discretion.

The Defendants filed a motion for summary judgment, arguing that

Murray’s claims were barred by the exclusions and limitations

included in the SPD.        Murray filed a motion for partial summary

judgment on February 27, 2004.             On July 22, 2004, the district

court denied Murray’s motion for partial summary judgment, granted

judgment for GPA and CIGNA, and granted in part judgment for

Crossmark as to the denial of benefits of claim.                By stipulation,

the parties dismissed with prejudice Murray’s remaining claim

against Crossmark.        Murray timely appealed the district court’s

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grant of judgment on October 4, 2004 to Defendants.

     This Court reviews de novo the district court’s grant of

summary judgment, applying the same standards as the district

court.   Young v. Equifax Credit Info. Servs., Inc., 294 F.3d 631,

635 (5th Cir. 2002); see also FED. R. CIV. P. 56(c).         When the plan

administrator enjoys authority to make a final determination of

eligibility   for   claim   benefits,   as   here,   we   review   the   plan

administrator’s denial of benefits for an abuse of discretion. See

Duhon v. Texaco, Inc., 15 F.3d 1302, 1305 (5th Cir. 1994); see also

Gosselink v. AT&T, Inc., 272 F.3d 722, 726 (5th Cir. 2001).

     Murray argues that the district court erred in denying her

benefits claim on the basis of an affirmative defense – the work-

related exclusion – that Defendants failed to plead.          The district

court assumed for purposes of analysis, without deciding, that an

ERISA-plan exclusion must be pled as an affirmative defense under

Federal Rule of Civil Procedure 8(c).          The district court then

determined that Defendants did not waive the defense provided by

the work-related exclusion in failing to plead it.             Rule 8(c)’s

provision that waiver results from a failure to plead is not

absolute because “[w]here the matter is raised in the trial court

in a manner that does not result in unfair surprise, . . .

technical failure to comply precisely with Rule 8(c) is not fatal.”

Allied Chem. Corp. v. Mackay, 695 F.2d 854, 855-56 (5th Cir. 1983);

Jones v. Miles, 656 F.2d 103, 107 n.7 (5th Cir. 1981); see also

                                    5
Bull’s Corner Rest., Inc. v. Dir., Fed. Emergency Mgmt. Agency, 759
F.2d 500, 502 (5th Cir. 1985), superceded in part by rule on other

grounds, FED. R. CIV. P. 52(a).

     We find the work-related exclusions here unambiguous, and the

record reflects that Murray was on notice of the work-related

exclusion in the SPDs prior to the filing of the lawsuit.                  Murray

concedes that the Defendants asserted the work-related exclusion in

their June 11, 2003 Motion to Limit Discovery, filed over eleven

months   before    the   trial   setting.              Furthermore,    Defendants

affirmatively pled in their answer to Murray’s Second Amended

Complaint that the claims were denied “in accordance with the terms

and conditions of the Plan.”       Based on this record, the district

court did not err in concluding that the work-related exclusion

defense was not waived, nor did the court err in concluding that

the denial of benefits under the unambiguous terms of the work-

related exclusions was neither arbitrary nor capricious.

     After thorough review of the briefs, the oral arguments of the

parties, and      relevant   portions       of   the    record,   we   AFFIRM   the

district court’s judgment for Defendants on Murray’s denial of

benefits claim essentially for the well-stated reasons provided by

the district court.

AFFIRMED.

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