United States Court of Appeals,
Fifth Circuit.
No. 94-30064.
Summary Calendar.
Lawrence E. JAMES, as executor of the Estate of Ollie James, Deceased, Plaintiff-Appellant,
v.
LOUISIANA LABORERS HEALTH AND WELFARE FUND, Defendant-Appellee.
Aug. 26, 1994.
Appeal from the United States District Court for the Eastern District of Louisiana.
Before REYNALDO G. GARZA, JOLLY and BARKSDALE, Circuit Judges.
PER CURIAM:
This case arose as an action under section 502(a)(1)(B) of the Employee Retirement Income
Security Act ("ERISA"), 29 U.S.C. § 1132(a)(1)(B) to recover benefits allegedly due under the terms
of an ERISA employee benefit welfare plan. Plaintiff appeals from a summary judgment granted in
favor of the Louisiana Laborers Health and Welfare Fund ("the Fund"). Plaintiff asserts that the plan
administrators abused their discretion in denying his claim for benefits based on a provision which
excludes medical benefits for "injuries sustained in the course or the commission of a felony." For
the following reasons, we AFFIRM.
FACTS AND PROCEEDINGS
1. Background
The facts in this case are largely uncontested. The Louisiana Laborers Health & Welfare Fund
is a multiemployer, jointly-administered employee benefit welfare fund established and administered
pursuant to section 302(c)(5) of the Labor Management Relations Act, 29 U.S.C. § 186(c)(5), on the
basis of collective bargaining agreements entered into bet ween various Locals of the Laborers
International Union and employer members of the New Orleans Chapter of the Associated General
Contractors of America, Inc. The plan administrators are the fund's six trustees, three of whom are
designated by contributing employers and three of whom are designated by participating Unions. The
fund is self-insured and employs no outside insurer to underwrite its plan benefits. The plan explicitly
gives the Trustees discretion to interpret the plan and make determinations concerning claims.
On June 8, 1989, Ollie James, a participant in the Plan, sustained injuries as a result of a
gunshot wound to his chest. The facts surrounding the incident, and which eventually led to the
denial of benefits, come from the New Orleans Police Department Police Report.
Officers arrived at 9:10 a.m. and found the victim, Ollie James, lying on his back next
to a fence in front of 5223 Tchoupitoulas. A woman, later identified as Irma Jackson, ran up
to the officers and said, "Help him, he's dying. I shot him." Suspect was handcuffed and
placed in the back seat of 292. Officer Aldridge interviewed the arrested subject after
advising her of her rights, while Officer Curet tended the victim. EMS was ordered on a
Code 3 as the victim had been shot in the chest and was losing consciousness.
Arrestee Jackson stated that she and her common law husband, who both reside at
5221 Tchoupitoulas with her grandfather, Sidney Gaulden (also a witness), had been arguing
over money all morning. They had both been drinking earlier at F & M Patio Bar,
Tchoupitoulas, and they went home after being ejected from the bar. She stated she had left
the house to get away from James because he had begun to hit her in the face and side. He
followed her outside and grabbed her to keep her from walking off. He threw her to the
ground directly in front of their house. He pulled a knife from his pants and began to threaten
her with it. He kicked her in the left side and left leg as she tried to avoid the knife. A
neighbor, later identified as Raymond Stewart, was walking to a store with his two daughters,
and he approached the couple and tried to stop the fight.
The grandfather approached the two and had in his right hand a gun which he pointed
at the victim, telling him to stop kicking the arrestee. The arrestee jumped up, grabbed the
gun from her grandfather, and as the victim tried to grab the arrestee, she shot him in the
stomach. She dropped the gun and ran across the street. The victim picked up the gun and
chased the arrestee across the street and then back again to the sidewalk in front of 5223
Tchoupitoulas, where he collapsed. Aldridge then interviewed witness/neighbor Raymond
Stewart, 5109 Tchoupitoulas, who stated that he was walking with his two daughters to the
store when he saw the arrestee & the victim fighting on the sidewalk. The victim was kicking
the arrestee. Stewart stated he saw something clutched in victim's right hand but could not
identify it. He said that he said to the victim, "Leave her alone." Victim replied, "The bitch
took my money, she's on that coke." Stewart said, "Talk to her father." He then turned
around and took his two girls home. When he was about fifty feet from the scene, he heard
a popping sound, which he believed was a gunshot, and he hurried home never looking back.
Aldridge then interviewed grandfather, Sidney Gaulden, 5221 Tchoupitoulas, who stated that
his granddaughter and her common law husband constantly fought. He saw them fighting in
the house and she ran outside to avoid being struck by victim. Victim found her outside.
Gaulden stated he heard them fighting outside, so he took his .22 caliber revolver outside to
scare off the victim. He saw the victim kicking the arrestee who was on the ground. He saw
the victim had a knife in his right hand and he told the victim to go away and leave the
arrestee alone. The arrestee jumped up and grabbed the gun from his hand and fired one shot
at the victim. Victim picked up gun after arrestee dropped it, and ran across the street after
her. Victim returned to house behind arrestee and collapsed on the sidewalk.
According to the police report, Jackson sustained scratches to her face and bruises to her left
side. In connection with the incident, she was charged with attempted second degree murder, and
subsequently pleaded guilty to aggravated battery. Ollie James was neither arrested, charged, nor
convicted as a result of the incident. As a result of the gunshot wound, he required hospitalization
and extensive medical treatment, but this injury was not fatal. On March 12, 1990, Jackson, while
out on parole, stabbed and killed Ollie James in Bogalusa, Louisiana. James's claims are being
advanced by his estate to pay unpaid hospital bills.
2. The Plan's Decisions
By letter dated February 20, 1990, t he Plan Office confirmed receipt of medical claims
submitted by Ollie James totaling in excess of $358,000 for injuries sustained on June 8, 1989. The
medical claims submitted by James were for services rendered by various providers in the total
amount of $359,005.52. By certified letter dated April 12, 1990, the Plan notified James of the denial
of payment of all claims related to the June 8, 1989 injury, based on the Fund's exclusion for injuries
sustained in the course of the commission of a felony. The denial letter concluded that Aggravated
Battery (La.R.S. 14:34) and Second Degree Battery (La.R.S. 14:34.1), both felonies, could
reasonably have been at issue.
On September 27, 1990, Lawrence James, as Executor of the Estate of Ollie James, appealed
the Board's decision. However, the Trustees determined the appeal presented no additional evidence
that would support reversal of its prior decision and affirmed its denial of benefits. The denial stated
in pertinent part:
In this case, two witnesses and Ms. Jackson stated that Mr. James kicked Ms. Jackson during
the incident. Jurisprudence has established that kicking a victim may constitute an aggravated
battery. The courts have reasoned that shoes are considered a dangerous weapon within the
meaning of the aggravated battery statute if it were found that in the manner they were used
it is calculated or likely to produce great bodily harm.
3. Court Proceedings
Finding that the Fund denied James his benefits without conducting an investigation of the
facts and circumstances of the alleged felony, the district court remanded the case back to the Fund
on November 19, 1992. The court was again not satisfied with the diligence of the investigative
effort of the Fund, when it attempted to support its findings through inferences drawn from the police
report, and remanded for the second time on June 8, 1993. The Fund was ordered to undertake a
more rigorous and thorough investigation, in keeping with the fiduciary duty owed to plaintiff. After
finally complying with the district court's mandate, the Fund provided the findings of a private
investigator to support their denial of benefits based on the felony exclusion.
[T]he Board of Trustees finds that Ollie James kicked Irma Jackson, while standing above her
and brandishing a knife, with hard-soled shoes, either dress shoes or steel-toed work boots,
in a manner that was calculated and did result in great bodily harm to Irma Jackson who
sustained bruises from approximately her breastbone to her hips on her left side, complicated
by her diabetic condition.
Satisfied that the Fund had, although belatedly, gathered sufficient evidence to support its denial of
James' benefit claim on the basis that the injuries were sustained in the course or commission of a
felony, the district court held the Fund's decision to be legally correct, and granted summary judgment
for the Plan.
DISCUSSION
The Plan gives the trustees of the Fund the express authority to determine questions of
eligibility for benefits. As a result, we are bo und to review the Fund's decision under an abuse of
discretion standard. Firestone Tire and Rubber Co. v. Bruch, 489 U.S. 101, 115, 109 S.Ct. 948,
956-57, 103 L.Ed.2d 80 (1989). In situations where the administrator is acting under a possible or
actual conflict of interest, that factor must also be weighed in determining whether there is an abuse
of discretion. Id. at 115, 109 S.Ct. at 956-57. Such a review involves two steps. First, this Court
must determine whether the Fund's decision was legally correct. Kennedy v. Electricians Pension
Plan, IBEW No. 995, 954 F.2d 1116, 1124 (5th Cir.1992); Batchelor v. International Brotherhood
of Electrical Workers Local 861, 877 F.2d 441, 442-43 (5th Cir.1989). If the answer to this question
is no, then the court must determine whether, even though legally incorrect, the decision amounts to
an abuse of discretion. Kennedy, 954 F.2d at 1124. For the following reasons, we find the Fund's
conclusion to be legally correct, and therefore need not address any abuse of discretion.
The Kennedy case instructs us that, in determining the legally correct interpretation of the
plans, we should consider: (1) whether the interpretation is consistent with a fair reading of the plans;
(2) whether there has been uniformity in construction of the plans; and (3) whether the interpretation
results in any unanticipated costs to the plans. Kennedy, 954 F.2d at 1121.
Since the parties have not submitted evidence of other occasions where the Fund denied
benefits based on the injury arising during the course of a felony, or that the denial of benefits on this
basis results in substantial unanticipated costs, we will concern ourselves only with whether the Fund's
reading of the Plan was fair and reasonable.
Under Louisiana law, aggravated battery is defined as "battery committed with a dangerous
weapon." La.R.S. 14:34. A dangerous weapon is defined as any "substance or instrumentality,
which, in the manner used, is calculated or likely to produce death or great bodily injury." La.R.S.
14:2(3).
The Fund found, aft er conducting their own investigation, that James used his shoes in a
manner calculated or likely to cause death or great bodily harm when he stood above Jackson and
kicked her left side as she lay on the ground. Such a finding comports with a fair and reasonable
interpretation of the Plan in light of the Louisiana criminal cases finding shoes to be dangerous
weapons. Interest of Ruschel, 411 So.2d 1216 (La.App. 4th Cir.1982) (steel-toed boot used in
"brutal" attack); State v. Taylor, 485 So.2d 117 (La.App. 2d Cir.1986) (tennis shoes used to stomp
victim with such force that shoe marks were left on face).
Appellant contends that by remanding the case twice, and allowing the Fund to gather
decision-driven supplemental findings, the district court abused its discretion. Moreover, the
appellant argues that the plan administrators' actual conflict of interest influenced their decision, as
reflected in the minutes of the board's meeting.1 Any inferences of bad faith or conflict of interest are
1
The Plan's trustees and attorneys first considered James' request for coverage at a meeting
held on February 20, 1990. The minutes of this meeting provided that:
Mr. Berthold presented another claim [James'] for review. He reported that the
claim amounted to $220,000 and the liability could be far more. Mr. Berthold
stated that the circumstances surrounding the claim were that Ollie James had been
drinking and began beating his common law wife (Erma [sic] Jackson). Mr. James
threatened Ms. Jackson with a knife. Ms. Jackson shot Ollie James. The common
law wife was booked and the victim, Ollie James was taken to Touro where he
spent 47 days in intensive care.... Acting Chairman Boh asked if the same
application as the previous claim [denial on the basis of the same "commission of
felony" provision] could be applied since a knife was being used to attack another
individual. Ms. Healey [one of the Fund's attorneys] stated that this was a more
difficult claim since the common law wife was arrested, whereas no action was
taken against the claimant.... [Ms. Voigt, another Fund attorney] stated that
weighed not in the determination of whether the decision was incorrect, but in reviewing a possible
abuse of discretion. Firestone, 489 U.S. at 113-15, 109 S.Ct. at 956. As previously mentioned, since
we find the Fund's decision that James was injured during the commission of a felony to be legally
correct, we need not address issues that address the manner in which the Fund arrived at its decision.2
Appellant further asserts that James' conduct cannot be considered a "felony" since the legal
authorities did not prosecute the matter. The failure of the state criminal justice system to prosecute
an individual for alleged felonious activity by no means constitutes an affirmative finding that the
individual is absolved of any crime. Unlike the Plan, the State has neit her the resources nor the
obligation to prosecute a suspect in connection with each and every felony, potentially or actually
committed. The illogic of this rule was also criticized by our brethren on the Seventh Circuit, who
present an example "in which a Plan participant is killed during the commission of a felony. As the
state cannot prosecute a dead man, the trustees would be unable to deny benefits although the injuries
were not covered by the Plan." Berg v. Board of Trustees, Local 705 International Bro. of
Teamsters Health and Welfare Fund, 725 F.2d 68, 70 (7th Cir.1984).
CONCLUSION
Appellant has not pointed to any evidence in the record to prove that the Fund's decision to
deny benefits did not meet with the Kennedy criteria. They did not present any evidence of the Fund's
treating other similar employees' claims differently. Appellant did not submit evidence that Fund's
before an opinion could be given, the facts would have to be closely reviewed and
possibly a hearing would be necessary to elicit more facts.
The appellant seems to read these minutes to evidence a predetermined mindset to find a
way to deny James' claim. We do not benefit from such intuition. On the contrary, it
implies an intention to withhold a decision for a further investigation of the facts. The fact
that no factual review or hearing was conducted until the second remand amounts to, as
the district court puts it, "at worst mere sloppiness and laziness and at best, an attempt to
avoid expenses in administering the Plan."
2
Appellee points out that under this Fund, they hold no potential for any type of pecuniary
benefit by denying appellant's claim. The assets are held in trust for the sole and exclusive benefit
of the Fund's participants. The only conflict the trustees have is their legally recognized dual
responsibility toward both the beneficiaries and the preservation of the corpus of the trust. See
Brown v. Blue Cross, 898 F.2d 1556, 1567-68 (11th Cir.1990), cert. denied, 498 U.S. 1040, 111
S.Ct. 712, 112 L.Ed.2d 701 (1991) (citing De Nobel v. Vitro Corp., 885 F.2d 1180, 1191 (4th
Cir.1989)).
decision resulted in unanticipated costs to plaintiff. Moreover, we hold that the decision of the
trustees complied with a full and fair reading of the plan that the plaintiff's injuries were incurred while
in the commission of a felony.
After reviewing the Fund's factual determination, including the Fund's investigative report,
our own reading of the plan, and after careful considerat ion of any potential or actual conflict of
interests under which the plan administrators were acting, we are persuaded that the Fund gave the
plan its legally correct interpretation. Accordingly, the Fund's decision to deny the plaintiff's benefits
on the grounds that James was in the commission of aggravated battery at the time he sustained his
injuries was not an abuse of discretion in either their factual or their legal determinations. The grant
of summary judgment was proper.
AFFIRMED.