IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT
No. 00-20639
AIG LIFE INSURANCE COMPANY,
Plaintiff-Appellee,
versus
BERTHA JACKSON BLACKSHEAR; ET AL,
Defendants,
TYLER EMMANUEL BLACKSHEAR; TAYLOR JASMINE BLACKSHEAR,
Defendants-Cross-Claimants-Appellants.
-----------------
EDDIE EMANUEL, JR.; CORY TARELL DAVIS,
Movants-Appellants,
versus
BERTHA JACKSON BLACKSHEAR,
Defendant-Cross-Defendant-Appellee.
Appeal from the United States District Court
for the Southern District of Texas
H-96-CV-2705
June 13, 2002
Before GARWOOD, WIENER, and CLEMENT,1 Circuit Judges.
GARWOOD, Circuit Judge:2
Tyler Emmanuel Blackshear, Taylor Jasmine Blackshear, Eddie
Emmanuel Blackshear Jr. and Corey Tarell Davis appeal the district
court's grant of summary judgment in favor of defendant-appellee
AIG Insurance Company on their suit for the proceeds of their
father Eddie Blackshear Sr.'s accidental death and dismemberment
policy. They also appeal the district court's distribution of the
impleaded proceeds of Tamiki Blackshear's accidental death and
dismemberment policy. We affirm.
Facts and Proceedings Below
Eddie Blackshear Sr. (Eddie) was employed by Andrews
Transport, Inc. (Andrews) as a gasoline truck driver. Andrews
offered its employees a “cafeteria plan” of insurance coverage,
including medical, dental, life and disability insurance, and a
supplemental accidental death and dismemberment (AD&D) policy
underwritten by AIG Insurance Company (AIG). Eddie purchased AD&D
coverage for himself and his wife Tamiki.
Eddie and Tamiki had a stormy marriage which began to fall
1
Judge Edith Brown Clement participated by designation in the oral argument of this case as
a United States District Judge for the Eastern District of Louisiana. Since that time she has been
appointed as a Fifth Circuit Judge.
2
Pursuant to 5TH CIR. R.47.5 t he Court has determined that this opinion should not be
published and is not precedent except under the limited circumstances set forth in 5TH CIR.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.
2
apart after Tamiki moved out of their Conroe, Texas home in May
1995. On June 2, 1995, Eddie found Tamiki at a friend's house and
assaulted her out of jealousy, biting her leg in the process. The
next morning, Eddie visited his mother, where he reviewed his
insurance documents. He also ransacked his sister's house, took
her pistol, and went to the Shell gas station where Tamiki worked.
Over the course of several visits that day, Eddie carried on a
conversation with Tamiki that her co-worker Cricket Mann described
as increasingly intense and argumentative. When Tamiki
unequivocally told Eddie their marriage was over, he pulled out the
pistol and pointed it at Tamiki. He then ordered Mann out of the
store, saying “this isn't going to be pretty,” and dragged Tamiki
by the neck into a back storage room. Eddie shot Tamiki twice in
the head, paused, and then shot himself in the temple. Police
found a suicide note in Eddie's possession, which he had apparently
written that morning.
Eddie's suicide note reflects the desire to punish Tamiki for
“playing games,” balanced with a fear of hell and an apology to
Jesus for his lost faith. In despair that he had lost his family,
Eddie wrote that he chose eternity in hell so that he could punish
Tamiki. He concluded by bitterly and cruelly criticizing Tamiki's
parents, Brenda and Henry Victoria.
The Victorias filed a Notice of Claim on Tamiki's policy and
Eddie's mother Bertha Blackshear filed on Eddie's AD&D policy. AIG
3
conceded they owed the $120,000 proceeds of the policy on Tamiki's
life, but were concerned that the proceeds belonged to Eddie and
Tamiki's children, Tyler and Taylor Blackshear, minors who had not
themselves filed a Notice of Claim. AIG therefore interpleaded the
funds representing the proceeds payable under the policy on
Tamiki’s life in the district court and named the Victorias, Bertha
Blackshear, Tyler and Taylor as defendants. In the complaint, AIG
also denied payment of Bertha Blackshear's claim on the grounds
that Eddie's death fell within the suicide exclusion of the policy
on his life. Brenda Victoria responded with a cross-claim against
Bertha Blackshear, arguing, as next friend of the children, that
they should receive the proceeds of Tamiki's policy.
A state court appointed Brenda Victoria as guardian of the
children.3 She thereafter withdrew her own claim to Tamiki's
policy and moved for summary judgment on Tyler and Taylor's behalf.
The district court appointed Ursula Hall as attorney ad litem for
Tyler and Taylor, and those children joined in the summary judgment
motion. Tyler and Taylor cross-claimed for the proceeds of
Tamiki's policy against Bertha Blackshear, now the executor of
Eddie's estate. They also counterclaimed against AIG for failing
to pay Eddie's policy, arguing it was payable because Eddie was
insane at the time he took his life. Added to their demand for the
proceeds of Eddie’s policy were various state law counterclaims
3
At about this time, Henry Victoria passed away.
4
related to bad faith and failure to investigate.
AIG then moved for summary judgment on Eddie's policy, arguing
that his death was excluded from coverage by the policy's suicide
clause. On August 6, 1998, the district court held that the AD&D
policy only excluded “sane” suicide and therefore summary judgment
was improper because issues of fact remained regarding Eddie's
mental state. The court then took under advisement the summary
judgment on Tamiki's policy and ordered AIG to implead Eddie's
other two children, Eddie Blackshear Jr. and Corey Davis (each a
minor). Because Bertha Blackshear declined to represent Eddie
Jr.'s and Corey's interest, the court appointed Ursula Hall as
attorney ad litem for them as well.
On March 15, 1999, AIG again moved for summary judgment and
proffered expert testimony establishing the cause of Eddie's death
and his mental state. AIG also argued that the policies were part
of an ERISA plan and thus ERISA preempted any state-law
counterclaims of the children. On June 30, 1999, the district
court granted AIG's summary judgment in part, holding that the AD&D
policy was an ERISA plan that preempted the state law
counterclaims. The district court denied the motion, however, so
far as it addressed Eddie's mental state.
After hearing evidence at a bench trial beginning July 7,
1999, the district court finally granted AIG's second summary
judgment in full. The court held that even though Eddie suffered
5
from mental illness, his impulses were not irresistible. Instead,
the district court held, Eddie intentionally and methodically
committed suicide with full understanding of the moral
consequences. The district court then disbursed the proceeds of
Tamiki's policy in equal portions to her children Tyler and Taylor,
implicitly rejecting the attorney ad litem's argument that Corey
and Eddie Jr. were entitled to a share of the proceeds of Tamiki’s
policy under the Texas Simultaneous Death Act, TEX. PROB. CODE ANN.
§ 42. All four minor children have appealed.
Discussion
We review a grant of summary judgment de novo, applying the
same standards as the district court, while viewing all disputed
facts and reasonable inferences “in the light most favorable to the
nonmoving party.” Duffy v. Leading Edge Prods., 44 F.3d 308, 312
(5th Cir. 1995). The appellants allege three points of error.
First, they argue that the AD&D policy was not an ERISA “plan” and
thus their state law claims should not have been preempted.
Second, they argue that Eddie was insane at the time he took his
life and thus they are entitled to the proceeds of his policy.
Finally, they argue that the district court improperly distributed
the proceeds of Tamiki's policy. We shall address each argument in
turn.
I. The Insurance Policy Was an ERISA Plan
This court explained the process for determining whether an
6
employee benefit is an ERISA-covered “employee welfare benefit
plan” in Hansen v. Continental Insurance Company, 940 F.2d 971 (5th
Cir. 1991). In Hansen, a worker had purchased an AD&D policy for
himself and his family through his employer, Fairfield Industries.
Id. at 973. Fairfield distributed printed materials with the
Fairfield name and logo on them, and the materials contained a
discussion of risk and a suggestion that workers consider accident
insurance. Id. at 974. Moreover, Fairfield both collected the
premiums and employed a full-time benefits administrator. Id.
When his wife died, Hansen filed a claim for benefits under the
policy. Continental Insurance disputed the amount due under the
policy, and Hansen sued under various state law theories. Id.
This court affirmed the district court's holding that the plan was
an ERISA “employee welfare benefit plan” and thus his state law
claims were preempted. Id. at 979. The court first considered
whether the policy was excluded from ERISA coverage by the “safe
harbor” provision of 29 C.F.R. 2510.3-1(j), holding that
Fairfield's actions had sufficiently endorsed the plan to make that
regulation inapplicable. Id. at 976-77. The court then asked
whether the policy was a “plan,” finding that it was. Id. at 977.
The court finally asked whether the plan was established by the
employer with the purpose of benefitting the employees, finding
that Fairfield's purpose was exactly that. Id. at 978.
a. The AD&D Insurance Is Not Within The “Safe Harbor.”
7
First, we examine the “safe harbor” provision that excludes
employee benefits from ERISA coverage when certain conditions are
met. The parties agree that the AD&D insurance meets three of the
four conditions, but dispute the application of the third listed
requirement:
“(3) The sole functions of the employer or employee
organization with respect to the program are, without
endorsing the program, to permit the insurer to publicize
the program to employees or members, to collect premiums
through payroll deductions or dues checkoffs and to remit
them to the insurer.” 29 C.F.R. § 2510.3-1(j)(3).
As was true in Hansen, Andrews's actions exceeded the
restraint described in this provision. The printed materials
provided to the employees carried the Andrews Transport name and do
not clearly explain that the coverage is being offered by a third
party, just as in Hansen. On the contrary, the handbook
distributed by Andrews is entitled “Personal Accident Insurance
Plan of Andrews Transport, underwritten by AIG Life Insurance
Company.” Andrews is listed as the plan administrator, whose
powers include the “authority to control and manage the operation
and administration of the plan.” These descriptions suggest a
degree of employer control and endorsement inconsistent with the
regulation above. Appellants claim the handbook doesn't describe
the AD&D policy, but the handbook only describes accident insurance
and Andrews offers only one accident policy. Appellant also
disputes the authorship of the handbook, but we find authorship
less relevant than the fact that Andrews distributed these
8
materials bearing its name to its employees and thereby endorsed
their contents.
Moreover, the booklet Andrews distributed lists accident
statistics and urges the workers to give the plan careful
consideration, a point the Hansen court held to be employer
endorsement. Finally, as in Hansen, Andrews did not avoid
administration of the plan but instead employed a full-time
benefits administrator who collected claim forms for submission to
AIG and explained the plan to employees. For all these reasons,
Andrews's actions exceeded the minimal “sole functions” enumerated
above and amounted to “endorsing” the policy. Thus, the AD&D
policy cannot be excluded from ERISA protection under 29 C.F.R. §
2510.3-1(j)(3).
b. The AD&D Insurance Was a “Plan.”
“Before a court can ask whether a plan is an ERISA plan, it
must first satisfy itself that there is in fact a 'plan' at all.”
Hansen, 940 F.2d at 977. We must “determine whether from the
surrounding circumstances a reasonable person could ascertain the
intended benefits, beneficiaries, source of financing, and
procedures for receiving benefits.” Id. (citing Donovan v.
Dillingham, 688 F.2d 1367, 1373 (11th Cir. 1982)(en banc)). The
Andrews AD&D insurance was a “plan.” A reasonable person could
ascertain that the insurance was a benefit for the employees of
Andrews and their families, that premiums were paid by the
9
employees, and that benefits would be received by submitting claims
to Andrews's full-time benefits administrator so they could be
forwarded to AIG.
c. The AD&D Plan Was an ERISA Plan.
In examining whether a given insurance program was an ERISA
plan, Hansen applied two tests. First, the court should “focus on
the employer and its involvement with the administration of the
plan,” because “if an employer does no more than purchase insurance
for her employees, and has no further involvement with the
collection of premiums, administration of the policy, or submission
of claims, she has not established an ERISA plan.” Hansen, 940
F.2d at 978 (some punctuation and citations omitted). As in
Hansen, Andrews provided a full-time benefits administrator who
collected premiums and accepted claim forms. The first test is
therefore met.
“In addition to some meaningful degree of participation by the
employer in the creation or administration of the plan, the statute
requires that the employer have had a purpose to provide health
insurance, accident insurance, or other specified types of benefits
to its employees.” Id. (citing 29 U.S.C. § 1002(1)). The second
test for ERISA plan status is therefore to examine whether the
employer had an “intent to provide its employees with a welfare
benefit program through the purchase and maintenance” of the
policy. Id. (quoting Memorial Hospital System v. Northbrook Life
10
Ins. Co., 904 F.2d 236, 241 (5th Cir. 1990)). Andrews demonstrated
its intent to provide a welfare benefit program. It provided a
benefit plan to its employees that listed the AD&D insurance as a
supplement, and distributed materials that included the Andrews
name and urged employees to carefully consider the plan as a
“valuable supplement to your existing coverages.” Just as in
Hansen, Andrews intended to provide the supplemental accident
insurance as a benefit to its employees.
The AD&D insurance offered by Andrews was an ERISA plan, and
thus any state law counterclaims were preempted. See 29 U.S.C. §
1144.
II. Eddie Blackshear Sr.'s Sanity
The parties agree that because the AD&D policy merely excludes
the ambiguous term “suicide” and not “suicide, sane or insane,”
case law requires AIG to pay the policy if Eddie was insane when he
took his own life. The standard for “insane suicide” was stated
130 years ago in Mutual Life Insurance Company v. Terry, 82 U.S.
(15 Wall.) 580, 590-91 (1872):
“We hold the rule on the question before us to be this:
If the assured, being in the possession of his ordinary
reasoning faculties, from anger, pride, jealousy, or a
desire to escape from the ills of life, intentionally
takes his own life, the proviso attaches, and there can
be no recovery. If the death is caused by the voluntary
act of the assured, he knowing and intending that his
death shall be the result of his act, but when his
reasoning faculties are so far impaired that he is not
able to understand the moral character, the general
11
nature, consequences, and effect of the act he is about
to commit, or when he is impelled thereto by an insane
impulse, which he has not the power to resist, such death
is not within the contemplation of the parties to the
contract, and the insurer is liable.” Id.
The burden of establishing such insanity falls upon the
beneficiaries. Casey v. Uddeholm Corp., 32 F.3d 1094, 1097 (7th
Cir. 1994). This court reviews the district court's grant of
summary judgment de novo, as explained above.4
a. Knowing and Able to Understand.
We begin by applying the first part of the Terry test and
asking whether Eddie took action while both “knowing and intending
4
This court normally reviews the fact determinations of the
plan administrator for abuse of discretion, and such review is
usually limited to the administrative record. Schadler v. Anthem
Life Ins. Co., 147 F.3d 388, 394-95 & n.7 (5th Cir. 1998). As to
whether the plan administrator correctly interpreted the terms of
the plan, if the plan vests the administrator with the power to
construe it, we review that construction for abuse of discretion.
Id. at 395. Otherwise, review thereof is de novo. Id.
From their first claim determination through their arguments
in the district court, AIG relied on an issue of plan
interpretation by insisting that there was no exception for
insanity in the policy’s suicide clause. The district court
rejected this argument, and AIG has conceded the point before this
court. We turn to the question of whether Eddie Sr. was insane.
Because AIG denied the claim based on its interpretation of the
policy language, however, this question was apparently neither
adequately presented to nor ruled on by the plan administrator.
Where the parties did not have an opportunity to present the
relevant facts to the plan administrator, we are not limited to the
administrative record on review. See Schadler, 147 F.3d at 395;
Wildbur v. ARCO Chemical Co., 974 F.2d 631, 639 (5th Cir. 1992).
While in Schadler we remanded to the plan administrator, in that
case, unlike this one, the plan gave the administrator discretion
to construe its terms. In any event, none of the parties request
remand to the plan administrator, and AIG has conceded that de novo
review of the district court’s judgment is appropriate.
12
that his death shall be the result of his act” and “able to
understand the moral character, the general nature, consequences,
and effect of the act.” Eddie's suicide note demonstrates that he
met that standard. Through that writing, it is clear that Eddie
did not suffer from delusions or misapprehensions regarding the
act; he was plainly aware that his action would result in his
death. Moreover, there is no evidence or suggestion of physical
impairment or drug or alcohol use that could have prevented Eddie
from truly understanding what he was doing. Eddie's note also
exhibits an understanding of the moral character of suicide, along
with its general nature and consequences, because he discusses at
some length the religious condemnation facing him. Yet, despite
his firm belief that eternal punishment awaited him, he chose to
trade damnation for the opportunity to kill his wife without going
to jail. Eddie also understood that his act would leave his
children as orphans, but expressed some happiness that the very
sight of his children would bring sadness to his detested in-laws.
The note shows that Eddie fully met the first Terry test.
Appellants argue that Eddie failed to appreciate that his goal
of reuniting his family would be forever stymied by his acts, and
this lack of appreciation means he failed to meet this test. We
disagree. Eddie had no hope of reuniting his family; in his
suicide note he expresses those desires but then laments that
“that's all over now.” His actions on June 3, 1995 show restraint
13
until Tamiki unequivocally told him that their marriage was over.
Eddie waited to act until there was no hope of achieving his main
goal, and thus nothing indicates that he failed to appreciate the
consequences of his actions. Appellants also urge a “moral
insanity” test based in John Stuart Mill's utilitarian
philosophies, but that simply is without any support in the law (or
in psychiatry).
b. Irresistible Impulse.
The second test in Terry asks whether the deceased was
“impelled thereto by an insane impulse, which he had not the power
to resist.” The Supreme Court said that a substantially similar
definition was: “able to distinguish between right and wrong, and
know that the act is wrong, yet his will (by which I mean the
governing power of his mind) has been, otherwise than voluntarily,
so completely destroyed that his actions are not subject to it, but
are beyond his control.” Ritter v. Mutual Life Insurance Company
of New York, 18 S.Ct. 300, 303 (1898) (quoting Davis v. United
States, 17 S.Ct. 360, 378 (1897)). The appellants commend the
definition in Reinking v. Philadelphia American Life Insurance
Company, 910 F.2d 1210, 1216 (4th Cir. 1990), asking whether the
person “lacked the ability to make a meaningful choice between
committing and not committing suicide” because he lacked “the
ability to assess the merits of the goal to be achieved.”
Under all of these tests, Eddie demonstrated that he was not
14
subject to an irresistible impulse. Instead, his actions on June
3rd were methodical and calculated. Eddie wrote the suicide note
and checked his insurance policy that morning, thus indicating that
he was already planning his own death. Nevertheless, his actions
with Tamiki were careful. Over the course of that long and often-
interrupted conversation he attempted one last time to reunite with
Tamiki, and he acted only when she unequivocally told him that
their marriage was over. Even then, Eddie took the time to order
the cashier out of the store and took Tamiki into a back room so
that he would not be disturbed. Eddie was impulsive, but on that
day he repeatedly demonstrated his ability to resist those
impulses. Moreover, Eddie's calculated choice to trade damnation
for revenge without imprisonment shows that he could assess the
merits of his goal. There is no evidence sufficient to sustain a
finding that Eddie’s actions were the result of an inability to
control himself.
c. Expert Evidence.
The affidavits of experienced psychiatrists Drs. Coons and
Reid, who reviewed all the relevant material, clearly reflect that
Eddie was sane, knew and intended that his death would result from
his act, was able to understand the moral character, nature and
consequences of his action, and was not under an irresistible
impulse. These affidavits further reflect that nothing in the
reports of Dr. Bacon or Dr. Battin, relied on by appellants,
15
reflects otherwise, that Dr. Battin, a professor of philosophy
without medical, psychiatric or relevant psychological education,
was not qualified to render a psychiatric or psychological opinion
as to Eddie’s mental capacity when he committed suicide, and that
the concept of “morally insane” urged by appellants and Dr. Battin
“is not a recognized concept or diagnosis in the
psychological/psychiatric community, nor has it been for over 150
years.”
Appellants proffered evidence from Dr. Margaret P. Battin, Dr.
Roger E. Foxall (a psychologist), and Dr. Robert J. Bacon (a
psychiatrist). Though their testimony related to Eddie's mental
state, we agree with the district court that it failed to raise an
issue of material fact regarding Eddie's ability to resist his
impulses or to understand what he was doing and the moral
character, nature and consequences of his actions at the time he
acted.
We therefore hold that under the undisputed evidence Eddie met
the Terry definition of sanity at the time he took his life and
that there is no evidence sufficient to sustain a finding that he
did not.
III. Distribution of the Impleaded Funds
The final issue on appeal regards the proper distribution of
the proceeds of Tamiki's AD&D policy, which AIG impleaded into the
registry of the court. The district court ordered attorney's fees
16
paid from the funds and then distributed the remainder in equal
portions to Tyler and Taylor Blackshear. Appellants argue that the
proper distribution would instead be one-eighth to Corey Davis,
one-eighth to Eddie Blackshear Jr., three-eighths to Tyler
Blackshear, and three-eighths to Taylor Blackshear. They arrive at
this result by urging the effect of the Texas Simultaneous Death
Act, TEX. PROB. CODE ANN. § 47(b), on insurance policies held as
community property, claiming that one half of the proceeds must be
distributed among Tamiki's two children and the other half
distributed among all four of Eddie's children.
We disagree. Because Eddie murdered Tamiki, TEX. INS. CODE ANN.
art. 21.215 applies. That statute says:
“The interest of a beneficiary in a life insurance policy
or contract heretofore or hereafter issued shall be
forfeited when the beneficiary is the principal or an
accomplice in willfully, bringing about the death of the
insured. When such is the case, a contingent beneficiary
named by the insured in the policy shall receive the
insurance unless that contingent beneficiary was also a
principal or an accomplice in willfully bringing about
the death of the insured. If no contingent beneficiary is
named by the insured in the policy or if all contingent
beneficiaries named by the insured in the policy were
principals or accomplices in willfully, bringing about
the death of the insured, the nearest relative of the
insured shall receive, said insurance.” TEX. INS. CODE
ANN. art. 21.21.
To the extent that Eddie would be entitled to any interest in the
funds as a beneficiary or through the Simultaneous Death Act, art.
21.21 nevertheless distributes those funds via constructive trust
5
The statute has been renumbered as TEX. INS. CODE § 1103.151,
effective June 1, 2003.
17
directly to “the nearest relative of the insured.” See Bounds v.
Caudle, 560 S.W.2d 925, 928 (Tex. 1977). The statute transfers the
funds without further reference to the policy and the funds never
enter the possession of the killer. Crawford v. Coleman, 726
S.W.2d 9, 11 (Tex. 1987); Farmers & Merchants Bank of Shamrock v.
Helton, 278 S.W.2d 352, 354-55 (Tex.Civ.App.—Amarillo 1954, writ
ref'd n.r.e.). The entire amount therefore goes directly to
Tamiki's “nearest relatives,” Tyler and Taylor. See TEX. PROB. CODE
ANN. § 38(a) (declaring descendants to be first to receive in
intestacy). We therefore affirm the distribution of the funds
ordered by the district court.6
Conclusion
The evidence shows Eddie Blackshear Sr. was sane when he
committed suicide and there is no sufficient evidence to support a
finding that he was then insane, an issue on which appellants would
bear the burden of proof at trial. AIG therefore acted properly by
denying payment of his AD&D policy. Moreover, the AD&D policy
offered by Andrews was an ERISA plan and thus any state law action
based on that denial is preempted by ERISA. Finally, Tyler and
6
The attorney ad litem argued that Corey Davis and Eddie
Blackshear Jr. were entitled to a portion of the proceeds, yet
purported to also represent Tyler’s and Taylor's interests.
Because we affirm the distribution to Tyler and Taylor, and because
the interests of Corey Davis and Eddie Blackshear, Jr. have been
vigorously and thoroughly defended throughout, we need not reach
the conflict-of-interest problem that would otherwise have
presented itself.
18
Taylor, the two children of Tamiki Blackshear, were entitled to the
entire proceeds of her life insurance policy under the provisions
of the Texas Insurance Code preventing slayers from profiting from
their actions. The record does not present a genuine issue of
material fact as to these matters. Accordingly, the orders of the
district court granting summary judgment and distributing the
impleaded funds are
AFFIRMED.
19