Filed: Jan. 23, 2006
Latest Update: Feb. 21, 2020
Summary: 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 Judg
Summary: 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 Judge..
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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this opinion should not be published and is not precedent except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.
2
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.
3
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
4
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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