UNITED STATES COURT OF APPEALS
For the Fifth Circuit
No. 96-60071
Summary Calendar
JACKIE H. JONES; PALMA H.
BONAVENTURE; JAMES MCKEE HIGGINS,
Plaintiffs-Appellees,
VERSUS
GEORGIA PACIFIC CORPORATION; THE PRUDENTIAL
INSURANCE COMPANY OF AMERICA,
Defendants-Appellants.
Appeal from the United States District Court
for the Southern District of Mississippi
Before DAVIS, BARKSDALE and DeMOSS, Circuit Judges.
DeMOSS, Circuit Judge:
W. J. Higgins’ group life insurance policy with his company
terminated when he reached age 65. The policy provided that for 31
days following his sixty-fifth birthday he had the right to
purchase an individual life insurance policy without a medical
examination. If he died during that period he would receive death
benefits just as if he had bought the new policy. Higgins did not
purchase the individual policy within the 31-day period, and he
died on the thirty-second day following his sixty-fifth birthday.
Because the thirty-first day after his birthday was a Sunday, his
family argues that he should have been covered for an extra day.
Applying federal common law, we hold (1) that the unambiguous terms
of the policy control and (2) that Higgins was not covered by the
policy on the day he died. Therefore, we reverse the judgment of
the district court and render judgment in favor of Georgia Pacific
and Prudential.
BACKGROUND
W. J. Higgins worked for Georgia-Pacific Corporation until he
was disabled in 1978. As a Georgia-Pacific employee, Higgins was
covered by a group life insurance plan issued by Prudential
Insurance Company. After being disabled, Higgins was allowed to
remain in the group plan until he reached age 65. Higgins turned
65 on September 23, 1993.
Shortly before his sixty-fifth birthday, Prudential sent
Higgins a letter informing him that his group life insurance
coverage would terminate on September 23, 1993, and that he had 31
days from his birthday in which to convert his insurance to an
individual policy, by making an application and paying the first
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premium during the 31-day period.1
The “thirty-first day immediately following” Higgins’ sixty-
fifth birthday was Sunday, October 24, 1993. Higgins neither made
application to acquire an individual policy nor submitted the first
premium by that date. Likewise, on Monday, October 25, neither
Higgins nor any of his heirs made application for the individual
policy nor submitted the first premium required for such individual
policy. Higgins died on Monday, October 25, 1993, at approximately
3:20 p.m., and that day was the thirty-second day after his sixty-
1
The relevant provisions of the group insurance policy state:
PRIVILEGE TO ACQUIRE INDIVIDUAL POLICY. -- The rights and
benefits of this section are for a Participant ceasing to be
a covered individual under the circumstances described in (a)
or (b) below. The acquirement period is the thirty-one day
period immediately following the date of such cessation.
(a) Privilege in Event of Termination of Membership in
Eligible Classes. -- This applies if the Participant ceases to
be a covered individual and his Participant Life Insurance
under the Group Policy then ceases by reason of termination of
his membership in the classes eligible for such insurance
under the Group Policy. He shall be entitled to have issued
to him by the Insurance Company, without evidence of
insurability, an individual policy of life insurance only,
without disability or other supplementary benefits; but the
policy shall be obtainable only if written application and the
first premium payment for it are made to the Insurance Company
within the acquirement period. . . .
* * * *
(e) Insurance Protection During Limited Period. -- If a
Participant is entitled by the terms of this Coverage to
acquire an individual policy but dies within the thirty-one
day period immediately following the date he ceased to be a
covered individual, the amount of insurance which he would
have been entitled to have issued to him under the individual
policy will be paid as a claim under the Group Policy whether
or not application for the individual policy has been made.
Prudential Insurance Policy at 10 (emphasis added).
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fifth birthday.
After Higgins’ death, his widow and two children (“Higgins’
heirs” or the “heirs”) sought payment on the policy from
Prudential. They argued that because the thirty-first day after
Higgins’ sixty-fifth birthday was a Sunday (a day on which
Prudential’s offices were closed), Higgins had no reasonable
opportunity to comply that day, so the acquirement period (and
insurance coverage) should be extended one more day. Prudential
refused the claim, and Higgins’ heirs sued Georgia-Pacific and
Prudential (the “companies”) in Mississippi state court. The
companies removed the case to federal district court pursuant to 28
U.S.C. § 1331, based upon the existence of a federal question under
the Employee Retirement Income Security Act of 1974 (ERISA), 29
U.S.C. §§ 1001, et seq.
The parties stipulated that there were no genuine issues of
material fact and cross-moved for summary judgment. The district
court denied the companies’ motion for summary judgment and granted
Higgins’ heirs’ motion for summary judgment. The district court
agreed with the heirs that because the final day of the acquisition
period ended on a Sunday, the period should be extended for one
day. Thus, in the district court’s view, Higgins died within the
acquisition period and was still covered by the life insurance
policy. The companies filed a timely notice of appeal.
DISCUSSION
Our review of this appeal turns on two questions: First, are
the relevant provisions of the policy ambiguous; and second, under
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federal common law, when a private contract provides that an offer
is to be accepted within a certain number of days, and the last day
falls on a Sunday, must the offeree accept by that day, or is he
given until the next business day to accept. We hold that the
offeree must accept by the last day provided for in the offer, even
if it is a Sunday.
We begin by noting that federal common law, rather than state
law, applies in this case. Todd v. AIG Life Ins. Co., 47 F.3d
1448, 1451.2 In ascertaining the applicable federal common law,
we may “draw guidance from analogous state law.” Brandon v.
Travelers Ins. Co., 18 F.3d 1321, 1325 (5th Cir. 1994) (internal
quotation omitted). “We must nevertheless bear in mind that, in so
doing, we may use state common law as a basis for new federal
common law ... only to the extent that state law is not
inconsistent with congressional policy concerns.” Todd, 47 F.3d at
1451 (internal quotation and brackets omitted; ellipses in
original).
We have held that in construing ERISA plans we follow the rule
of contra proferentem, which dictates that “when plan terms remain
ambiguous after applying ordinary principles of contract
interpretation, courts are to construe them strictly in favor of
the insured.” Todd, 47 F.3d at 1452. In construing the contract
language “[w]e interpret ERISA plans in an ordinary and popular
2
The life insurance plan is an employee welfare benefit plan
governed by ERISA, 29 U.S.C. § 1002(1), so federal law preempts
state law. 29 U.S.C. § 1132(e)(1). Firestone Tire & Rubber Co. v.
Bruch, 489 U.S. 101, 110 (1989).
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sense as would a person of average intelligence and experience.”
Id. n.1 (internal quotation omitted).
After reviewing the insurance policy we hold that the
provisions at issue in this case are not ambiguous. A person of
ordinary intelligence and experience would understand what the
policy provides and requires of the insured: after a person ceases
being a covered individual in the group life insurance plan, he has
a 31-day “acquirement period” in which to apply for and pay the
first premium on an individual life insurance plan. If he does not
make such application and pay such premium he will not be entitled
to an individual policy. Likewise, if the individual “dies within
the thirty-one day period immediately following the date he ceased
to be a covered individual” under the group policy, then his
beneficiaries will receive payment under the group policy as if he
had applied for and paid the premium on the individual policy.
These provisions are not ambiguous.
In this case, the starting date of this 31-day period is the
date of Higgins’ sixty-fifth birthday -- a fixed date, both as to
the day of the month and the day of the week. The period consists
of the 31 days immediately following the starting date. The
qualifying phrase “immediately following” can have no other meaning
than the 31 days in their normal and natural sequence, without
concern as to the days of the week or to the fact that the first
day or the thirty-first day or any day in between may be a Saturday
or a Sunday or a holiday or a Monday or a Wednesday. The Higgins’
heirs argued, and the district court concluded, that these
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provisions were ambiguous because they do not state what would
happen if the thirty-first day fell on a Sunday; and that,
therefore, construing the policy provisions against the company and
in favor of the insured, the court should, in effect, write into
the policy a provision that would extend the period for one day if
the thirty-first day falls on a Sunday. We disagree. As stated
earlier, these provisions are not ambiguous; what they do not say
cannot render what they do say ambiguous.
Higgins’ Heirs also urge us to follow the legal maxim dies
dominicus non est juridicus (Sunday is not a day in law). They
argue that the general common law rule is that when an act is to be
performed within a given number of days and the last day falls on
Sunday, the person charged with acting has the following day to
comply. We note, however, that what is called a common law rule
more often than not derives from state statutes rather than common
law principles. Most of the state cases cited by Higgins’ heirs
involve statutes providing for an extra day if the last day is
Sunday. See, e.g., Flowers v. Provident Life & Accident Ins. Co.,
713 S.W.2d 69, 71 (Tenn. 1986); First National Bank of Oregon v.
Mobil Oil Corp., 538 P.2d 919, 920 (Or. 1975); Brooks v. Hicks, 197
S.E.2d 711 (Ga. 1973). Counsel for the Higgins’ heirs have not
cited, and our research fails to disclose, any federal statutory
provisions similar to these state statutes. The closest federal
provision is Federal Rule of Civil Procedure 6(a). This rule
provides that in computing time in federal civil cases, “[t]he last
day of the period . . . shall be included, unless it is a Saturday,
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a Sunday, or a legal holiday. . . .”3 However, Rule 6(a) by its
express terms applies only to “any period of time prescribed or
allowed by these rules, by the local rules of any district court,
by order of court or by any applicable statute.” We note also that
Aron expressly recognizes that Rule 6 does not apply ordinarily to
private contracts. Id. at 417.
The Higgins’ heirs urge, and the district court so concluded,
that the federal courts should adopt and apply Rule 6 to all time
periods, even those in private contracts. We decline to do so for
the following reasons:
a. Under the facts in this case we are dealing with the
period for acceptance in a private option contract. As such, “the
offeror has full control of its terms, . . . [including] the length
of time during which the power of acceptance shall last.” CORBIN ON
CONTRACTS §2.14 at 195 (rev. ed. 1993). In an option contract, “the
power of acceptance may be exercised only within the time stated in
the offer.” Id. § 2.15 at 201. The only exception is in states
where a statute provides for an extra day if the last day of
acceptance falls on a Sunday or legal holiday. Id. § 2.14 at 201.
3
We are aware that our Court has allowed the additional day
when the last day for filing a suit under the Carriage of Goods by
Sea Act, 46 U.S.C. §§ 1300, et seq., fell on a Sunday. J. Aron &
Co. v. S/S OLGA JACOB, 527 F.2d 416 (5th Cir. 1976). We believe
that Aron is distinguishable because it dealt with the limitations
period for filing a lawsuit, not the time limit for exercising an
option in a private contract. This limited reading of Aron is
supported by the fact that our Court has never cited Aron outside
the limitations period context.
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b. We find no provision of the statutes of the State of
Mississippi, which is the state where these private contracts were
entered into and contemplate performance, which purports to adopt
a “don’t count Sunday” rule for private contracts in that state.
c. There is no comparable federal statute applicable to
private contracts and we find no federal cases which purport to
establish or adopt a “don’t count Sunday” rule as a matter of
federal common law applicable to private contracts.
d. Except for suicides, the date of an individual’s death is
not a matter of choice. When death occurs the day following the
expiration of insurance coverage there is a natural human reaction
to agonize over the fortuitousness of that circumstance. Such is,
however, the inherent result of defining limits and boundaries for
events, i.e. some will fall just inside and some will fall just
outside the boundaries. We can perceive no valid public policy to
be served by saying that deaths which occur on a Monday following
expiration of such a period on Sunday will be given protection and
coverage but deaths which occur on Tuesday following expiration of
such a period on Monday will not.
e. Finally, as to the time for performance by Higgins of
those acts which would have resulted in his getting new coverage
under an individual policy, the problem is not when such
performance could have occurred but the fact that such performance
never occurred; and for the court to apply a “Sundays don’t count
rule” to the facts of this case doesn’t cure the fundamental
problem of non-performance.
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CONCLUSION
Under federal common law there is no rule providing an extra
day for one to accept a private contract when the last day for
acceptance falls on a Sunday. Therefore, the last day of the
acquisition period was the thirty-first day after Higgins’ sixty-
fifth birthday: Sunday, October 24, 1993. By the express terms of
the policy, the extension of benefits under the group policy ended
on that Sunday. Because Higgins did not apply for an individual
life insurance policy within the acquisition period, he was not
covered by any policy when he died on Monday, October 25, 1993.
Accordingly, the district court’s grant of summary judgment in
favor of Higgins’ heirs is REVERSED and summary judgment is
RENDERED in favor of Prudential and Georgia-Pacific.
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