Estate of Thompson v. Sun Life Assurance Co.

IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT United States Court of Appeals
Fifth Circuit

FILED
November 20, 2009

No. 09-10036 Charles R. Fulbruge III
Summary Calendar Clerk

ESTATE OF CAPTAIN BRADLEY JAMES THOMPSON, Deceased;
RACHEL RUIZ, Individually

Plaintiffs - Appellants
v.

SUN LIFE ASSURANCE COMPANY OF CANADA

Defendant - Appellee

No. 09-10365
Summary Calendar

SUN LIFE ASSURANCE COMPANY OF CANADA

Defendant-Appellant
v.

ESTATE OF CAPTAIN BRADLEY JAMES THOMPSON, Deceased;
RACHEL RUIZ, Individually

Plaintiffs-Appellees

Appealsfrom the United States District Court
for the Northern District of Texas
USDC No: 4:07-cv-00594
 No. 09-10036

Before HIGGINBOTHAM, CLEMENT, and SOUTHWICK, Circuit Judges.
PER CURIAM:*
This employee-benefit case is governed by the Employee Retirement
Income Security Act of 1974 (“ERISA”). See 29 U.S.C. §§ 1001-1461. The
beneficiary of a life-insurance plan brought suit over a benefit denial, and the
district court granted summary judgment to the plan provider. The beneficiary
appeals, and the provider cross-appeals. We AFFIRM the judgment.
I. FACTS AND PROCEDURAL HISTORY
On October 20, 2006, Captain Bradley James Thompson was found dead
in his bedroom, nude and hanging by his neck. After an autopsy, the Tarrant
County Medical Examiner’s Office concluded that the cause of death was
hanging and the manner of death was accidental. The parties do not dispute
that Thompson’s death was accidental and occurred during an act of autoerotic
asphyxiation. Autoerotic asphyxiation has been described as “the practice of
limiting the flow of oxygen to the brain during masturbation in an attempt to
heighten sexual pleasure.” Todd v. AIG Life Ins. Co., 47 F.3d 1448, 1450 (5th
Cir. 1995).
Thompson’s employer delegated administrative authority over its
employee-benefit plan to defendant Sun Life Assurance Company, the plan
provider. Sun Life paid Thompson’s named beneficiary, Rachel Ruiz, the basic
life-insurance benefits due under the plan. Sun Life denied Ruiz’s claim for
accidental death and dismemberment benefits. The policy excluded a loss
“which is due to or results from . . . intentionally self-inflicted injuries.” Ruiz

*
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 R. 47.5, the court has determined that this opinion should not
be published and is not precedent except under the limited circumstances set forth in 5TH CIR .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.

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appealed the denial of the accidental death and dismemberment benefit, and
Sun Life denied the appeal.
Ruiz then filed suit in Texas state court, alleging that the denial violated
ERISA and also alleging state law claims of negligent misrepresentation and
violation of Texas Insurance Code. Sun Life removed the case to federal district
court. Ruiz acknowledged that her state law claims were preempted by ERISA.
The district court granted summary judgment to Sun Life, finding that Sun Life
did not abuse its discretion in finding the self-inflicted injury exclusion
applicable. The district court denied Sun Life attorney’s fees.
On appeal, Ruiz first argues that the district court applied the wrong
standard of review to Sun Life’s determination. She then argues that the court
erred in finding the self-inflicted injury exclusion not waived. Finally, she
argues that the policy benefits were improperly denied under the self-inflicted
injury exclusion. Sun Life cross-appeals, alleging that the district court erred
in striking the review of Dr. Katherine Hollister, an independent medical
consultant hired by Sun Life, from the administrative record, and that the
district court abused its discretion in denying Sun Life’s motion for attorney’s
fees. Ruiz also moves this court for attorney’s fees, and Sun Life moves to strike
that motion.
II. DISCUSSION
When a district court has granted summary judgment, we review the
decision by applying the same standards as the district court was required to
apply. Wade v. Hewlett-Packard Dev. Co. LP Short Term Disability Plan, 493
F.3d 533, 537 (5th Cir. 2007). We view the evidence in the light most favorable
to the non-moving party and draw all reasonable inferences in that party’s favor.
Kane v. Nat’l Union Fire Ins. Co., 535 F.3d 380, 384 (5th Cir. 2008) (internal
quotations omitted); see also Fed. R. Civ. P. 56(c). Summary judgment is granted
if there is no genuine issue of material fact. Id.

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Ruiz argues that the standard of review applied in the district court was
erroneous. She argues that the district court should have given the
administrator’s determination de novo, not abuse of discretion, review. We find
the abuse of discretion standard proper under these circumstances.
The district court is to apply abuse of discretion review where the plan
gives the administrator “discretionary authority to determine eligibility for
benefits or to construe the terms of the plan.” Firestone Tire & Rubber Co. v.
Bruch, 489 U.S. 101, 115 (1989); Lafleur v. La. Health Serv. and Indem. Co., 563
F.3d 148, 158 (5th Cir. 2009). The administrator’s factual determinations are
also reviewed for abuse of discretion. Lafleur, 563 F.3d at 159.
Ruiz challenges the discretionary authority granted to Sun Life on several
grounds. Ruiz questions the employer’s right to delegate, and also alleges that
there is inconsistency between the plan and the policy. Ruiz also claims that
there is some ambiguity in the plan and that there was not proper notice of the
delegation.
In this case, the policy provided Sun Life with discretionary authority to
determine eligibility benefits with the following language:
The Plan Administrator has delegated to Sun Life its entire
discretionary authority to make all final determinations regarding
claims for benefits under the benefit plan insured by this Policy.
This discretionary authority includes, but is not limited to, the
determination of eligibility for benefits, based upon enrollment
information provided by the Policyholder, and the amount of any
benefits due, and to construe the terms of this Policy.

Any decision made by Sun Life in the exercise of this authority,
including review of denials of benefit, is conclusive and binding on
all parties. Any court reviewing Sun Life’s determinations shall
uphold such determination unless the claimant proves Sun Life’s
determinations are arbitrary and capricious.

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This language is a clear and proper delegation of discretionary authority
to Sun Life. Further, upon review of the record, we find no inconsistency
between the plan and the policy. Therefore, the district court properly applied
the abuse of discretion standard of review.
A. Waiver of Exclusion
Ruiz alleges that the district court erred in finding that the policy
exclusion defense was not waived. Ruiz argues that Sun Life waived the policy
exclusion by not raising it as an affirmative defense in its answer.
In this case, Ruiz was first put on notice of the exclusion’s applicability on
December 20, 2006, when Sun Life stated in a letter to her that it was denying
accidental death benefits. At that time, Sun Life stated that Thompson’s death
fell within the policy’s exclusions for intentionally self-inflicted injuries.
Federal Rule of Civil Procedure 8(c) requires that affirmative defenses be
included in the initial responsive pleading. Fed. R. Civ. P. 8(c). Waiver
generally results from failure to follow this rule. W RIGHT AND M ILLER, F EDERAL
P RACTICE AND P ROCEDURE: C IVIL § 1278. “Where the matter is raised in the trial
court in a manner that does not result in unfair surprise, however, 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). A defense is not waived if raised
at a “pragmatically sufficient time, and [the plaintiff] was not prejudiced in its
ability to respond.” Rogers v. McDorman, 521 F.3d 381, 385-86 (5th Cir. 2008)
(quotation marks and citation omitted).
Sun Life argues that it incorporated the self-injury exclusion into its
answer when it asserted as an affirmative defense that the denial “was not
arbitrary and capricious and/or was otherwise in accordance with the terms of
the employee benefit plan.” We do not decide if this standing alone was enough
to put Ruiz on notice of the exclusion.

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Here, however, we find no prejudice or unfair surprise. Ruiz was first put
on notice of the exclusion’s applicability at the time of the initial benefit denial.
Sun Life in its denial letter stated that the denial was because of the self-
inflicted injury exclusion. Further, Ruiz discussed the exclusion in her own
motion for summary judgment. Ruiz does not allege, nor does the record reveal
there to have been, any prejudice resulting from the failure to explicitly plead
the exclusion in the answer.
B. Striking the Dr. Hollister File Review
We now consider the district court’s order granting Ruiz’s motion to strike
Dr. Hollister’s file review from the administrative record. On cross-appeal, Sun
Life alleges that the district court erred in striking the file review of Dr.
Hollister for Sun Life’s failure to comply with the terms of the plan in not
disclosing the identity of its independent medical expert. We review a motion
to strike for abuse of discretion. Cambridge Toxicology Group, Inc. v. Exnicios,
495 F.3d 169, 178 (5th Cir. 2007).
We review challenges to ERISA procedures under a substantial compliance
standard. Lacy v. Fulbright & Jaworski, 405 F.3d 254, 256-57 & n.5 (5th Cir.
2005). “[T]echnical noncompliance with ERISA procedures will be excused so
long as the purpose of section 1133 have been fulfilled.” Robinson v. Aetna Life
Ins., 443 F.3d 389, 393 (5th Cir. 2006) (internal quotation marks omitted). The
purpose of the ERISA procedures is “to afford the beneficiary an explanation of
the denial of benefits that is adequate to ensure meaningful review of that
denial.” Lafleur, 563 F.3d at 154 (5th Cir. 2009) (quoting Schneider v. Sentry
Long Term Disability, 422 F.3d 621, 627-28 (7th Cir. 2005)).
The district court properly found that the communications between Sun
Life and Ruiz, consisting of the benefits booklet and the two denial letters,
substantially complied with the requirements of 29 U.S.C. § 1133 of ERISA and
the Department of Labor regulations promulgated pursuant to that section. See

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29 C.F.R. § 2560.503-1. Further, it is not disputed that Dr. Hollister’s file review
was made only after the initial denial, and thus we find no defect in the first
denial letter by its failure to mention Dr. Hollister.
The district court also found, though, that Sun Life’s appeal denial letter
did not comply with the terms of the policy as set forth in the benefits booklet.
Specifically, Sun Life did not – as the benefits booklet required – provide Ruiz
with “written notice of denial setting forth . . . the identity of any medical or
vocational experts whose advice was obtained in connection with the appeal,
regardless of whether the advice was relied upon to deny the appeal.” Sun Life
concedes that the appeal denial did not technically comply with the benefits
booklet.
Though the name of the expert was not provided, there has been no
argument that Ruiz was in anyway adversely affected. For example, there were
no additional levels of administrative review to pursue in which knowing the
name of the expert might have allowed some challenge to the expert’s opinion.
The record indicates that Ruiz received the file review well in advance of the
district court proceedings. The district court issued a scheduling order on
January 24, 2008, and Sun Life gave the administrative record containing the
file review to Ruiz shortly thereafter. The first dispositive motion by Ruiz, her
motion for summary judgment, was not filed until April 30, 2008. The
intervening time was ample for Ruiz to react adequately to the file review and
respond to it in her motion for summary judgment.
Thus, even though the technical requirements of the benefits booklet were
not followed, the purposes of ERISA’s procedures were not undermined. We find
the district court’s grant of Ruiz’s motion to strike to be an abuse of discretion.
We therefore will consider Dr. Hollister’s file review in our de novo review of the
record in this case.
C. Applicability of Self-Inflicted Injury Exclusion

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Ruiz’s final claims relate to the decision to deny accidental death and
dismemberment benefits.
A denial of benefits is not an abuse of discretion if it “is supported by
substantial evidence and is not arbitrary and capricious.” Ellis v. Liberty Life
Assurance Co. of Boston, 394 F.3d 262, 273 (5th Cir. 2004). “Substantial
evidence is more than a scintilla, less than a preponderance, and is such relevant
evidence as a reasonable mind might accept as adequate to support a
conclusion.” Id. (quotation marks and citation omitted). The question of
whether there is substantial evidence must be considered “in the light of all the
evidence.” Corry v. Liberty Life Assur. Co. of Boston, 499 F.3d 389, 399 (5th Cir.
2007). A decision is arbitrary if it is “made without a rational connection
between the known facts and the decision.” Meditrust Fin. Servs. Corp. v.
Sterling Chems., Inc., 168 F.3d 211, 215 (5th Cir. 1999) (quotation marks and
citation omitted).
Where, as here, the same entity is responsible both for determining
eligibility and for paying benefits, that conflict of interest must be considered in
determining whether there has been an abuse of discretion. Metro. Life Ins. Co.
v. Glenn, 128 S. Ct. 2343, 2351 (2008).
In determining whether the injury was intentional, the administrator
must “ask whether a reasonable person, with background and characteristics
similar to the insured, would have viewed the injury as highly likely to occur as
a result of the insured’s intentional conduct.” Schadler v. Anthem Life Ins. Co.,
147 F.3d 388, 397 n.10 (5th Cir. 1998) (quoting Wickman v. Northwestern Nat’l
Ins. Co., 908 F.2d 1077, 1088 (1st Cir. 1990)).
The autopsy report showed that Thompson had hanged himself and noted
multiple injuries to his body resulting from that hanging. Dr. Hollister
concluded that Thompson “intended to deprive his brain of oxygen,” and noted
there was no evidence of an escape mechanism. The medical examiner

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characterized autoerotic asphyxiation as a “high risk activity.” Dr. Hollister’s
file review said that a ligature around the neck “would cause soft tissue damage
varying in severity with its tightness and weight applied.” Various other
injuries that result from this act with some frequency and which require
hospitalization were described.
Sun Life’s denial letter found that Thompson had been engaged in a high
risk activity “which he knew could cause serious or fatal injury.” What the
deceased “knew” can at best be based on circumstantial evidence, but the
evidence we have summarized supports the existence of knowledge.
Our review requires us to determine whether Sun Life’s finding was an
abuse of discretion based on the evidence available. To the extent the district
court’s opinion finds that any injuries resulting from autoerotic asphyxiation are
per se intentional self-inflicted injuries, that may be too absolute. See Todd, 47
F.3d at 1453. It is enough to resolve whether this record supports the finding of
a self-inflicted injury. We agree that a reasonable person could find this
evidence adequate to conclude that there occurred an intentional self-inflicted
injury within the policy. There is no evidence that any conflict of interest
affected that determination. We find no abuse of discretion.
D. Attorney’s Fees
On cross-appeal, Sun Life challenges the denial of attorney’s fees. Ruiz
moves that this court award attorney’s fees, and Sun Life moves to strike that
motion.
We consider Sun Life’s argument on cross-appeal first, that the district
court erred in denying Sun Life attorney’s fees. ERISA grants the court
discretion to award attorney’s fees and costs to either party, and we review the
district court’s decision only for abuse of that discretion. 29 U.S.C. § 1132(g)(1);
Todd, 47 F.3d at 1458. In awarding attorney’s fees, courts are generally

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required to consider the five factors articulated by this court in Iron Workers
Local No. 272 v. Bowen, 624 F.2d 1255, 1266 (5th Cir. 1980).
In its Order Denying Attorneys’ Fees and Granting Costs, the district
court considered each of the Bowen factors and denied Sun Life attorney’s fees.
We find no abuse of discretion.
Ruiz moves that this court grant attorney’s fees. A motion for attorney’s
fees must be filed within fourteen days of the entry of judgment. Fed. R. Civ. P.
54(d)(2). Ruiz filed this motion in September of 2009, over nine months after the
district court’s judgment. We deny this untimely motion.
The district court’s grant of summary judgment in favor of Sun Life is
AFFIRMED. The district court’s order denying Sun Life attorney’s fees is
AFFIRMED. Ruiz’s motion for attorney’s fees is DENIED. Sun Life’s motion to
strike Ruiz’s motion for attorney’s fees is DISMISSED as moot.

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