Case: 20-50953 Document: 00515919054 Page: 1 Date Filed: 06/29/2021
United States Court of Appeals
for the Fifth Circuit United States Court of Appeals
Fifth Circuit
FILED
June 29, 2021
No. 20-50953
Lyle W. Cayce
Clerk
Enrique Talamantes,
Plaintiff—Appellant,
versus
Metropolitan Life Insurance Company,
Defendant—Appellee.
Appeal from the United States District Court
for the Western District of Texas
USDC No. 1:18-CV-904
Before Davis, Duncan, and Oldham, Circuit Judges.
W. Eugene Davis, Circuit Judge:
Plaintiff filed this ERISA suit to recover long-term disability benefits
from MetLife, which denied coverage. The district court severed the
coverage issue from the remaining issues in this case. The decision on
coverage narrowed to whether Standard Insurance Co., the carrier for
calendar year 2016, or MetLife, the carrier for 2017, provided coverage. The
district court granted summary judgment in favor of MetLife and entered a
final judgment dismissing the case. The court concluded that Standard,
which had been previously dismissed, covered this claim. We disagree. Our
reading of the Standard and MetLife policies leads us to conclude that
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No. 20-50953
Standard provided no coverage, and coverage was afforded to Plaintiff under
MetLife’s policy. We REVERSE and REMAND.
I. BACKGROUND
Plaintiff, Enrique Talamantes, was a Product Development Engineer
for Becton, Dickinson and Company (“BD”). BD provided its employees
with a group life and health plan (“the Plan”) which is governed by ERISA.
The Plan provides long-term disability (“LTD”) coverage to BD’s eligible
employees, including Plaintiff. During the relevant time period, BD used two
insurers, Standard Insurance Co. (“Standard”) for the 2016 calendar year
and MetLife Insurance Co. (“MetLife”) for the 2017 calendar year, to fund
LTD payments under the Plan.
On November 9, 2016, Plaintiff became disabled due to trigeminal
neuralgia 1 and underwent microvascular decompression surgery. In light of
this disability, Plaintiff was approved for and paid short-term disability
(“STD”) benefits for 34 days under the Plan from November 18, 2016
through December 22, 2016. The Plan’s STD benefits were paid by BD and
administered by Sedgwick Claims Management Services (“Sedgwick”) and
did not involve Standard or MetLife. On December 23, 2016, Plaintiff
returned to full-time active work. Standard’s policy terminated on December
31, 2016, and MetLife’s policy became effective on January 1, 2017. On
January 12, 2017, Plaintiff stopped working and again became disabled
because of a relapse in his trigeminal neuralgia symptoms.
After a minor dispute over reinstating the STD benefits, Sedgwick
approved Plaintiff for the maximum amount of STD benefits (146 days) from
January 12, 2017 through June 7, 2017. When added to the 34 days of STD
1
Trigeminal neuralgia is a disease that affects trigeminal nerves in the face causing
chronic pain.
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benefits paid earlier, these benefits were paid by BD for a total of 180 days.
After the STD benefits were exhausted, Sedgwick forwarded Plaintiff’s claim
for LTD benefits to Standard, the LTD benefits insurer for 2016—the year
Plaintiff’s disability began. Without addressing the merits of Plaintiff’s
disability, Standard denied Plaintiff’s LTD claim on the basis that it was not
covered under its policy.
Following denial, Plaintiff made a LTD benefits claim against MetLife
in June 2018. MetLife was the LTD benefits insurer for calendar year 2017—
the year Plaintiff’s disability relapsed. After receiving no response, Plaintiff
filed the instant lawsuit against the Plan, Standard, and MetLife on October
22, 2018, alleging that Plaintiff was entitled to recover LTD benefits under
the civil enforcement provisions of ERISA.
On May 30, 2019, Plaintiff settled with Standard resulting in its
dismissal. After resolving discovery issues related to the settlement, Plaintiff,
MetLife, and the Plan stipulated to the dismissal of the Plan leaving Plaintiff
and MetLife the only parties in this suit. Plaintiff and MetLife then jointly
moved to bifurcate the trial on the issue of coverage and the merits of
Plaintiff’s disability claim under the policy. The district court granted the
motion, and Plaintiff and MetLife jointly submitted a stipulation of the
material facts relevant to the coverage issue. The parties filed cross motions
for summary judgment asking the district court to decide whether MetLife
provided coverage to Plaintiff under the terms of the policy.
The district court granted summary judgment in favor of MetLife
concluding that “a harmonious reading of Standard’s and MetLife’s
insurance policies shows that MetLife owes no payable benefits to Plaintiff.”
Plaintiff timely appealed.
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II. DISCUSSION
A. Standard of Review
ERISA cases are governed by standard summary judgment rules. 2
Therefore, a district court’s grant of summary judgment is reviewed de
novo. 3 Summary judgment is appropriate when “there is no genuine dispute
as to any material fact and the movant is entitled to judgment as a matter of
law.” 4
Interpretations of policy provisions in ERISA-regulated plans are
governed by federal common law. 5 “When construing ERISA plan
provisions, courts are to give the language of an insurance contract its
ordinary and generally accepted meaning if such a meaning exists.” 6 “Only
if the plan terms remain ambiguous after applying ordinary principles of
contract interpretation are we compelled to apply the rule of contra
proferentum and construe the terms strictly in favor of the insured.” 7
B. Coverage Under the Policies
MetLife contends it does not cover Plaintiff’s claim because the
Standard policy provides the necessary coverage. The MetLife policy
excludes payment of benefits if the claim is covered by another policy. 8 Both
2
Green v. Life Ins. Co. of N. Am., 754 F.3d 324, 329 (5th Cir. 2014).
3
Id.
4
Id. (quoting Fed. R. Civ. P. 56(a)).
5
Id. at 331.
6
Id. (quoting Provident Life & Accident Ins. Co. v. Sharpless, 364 F.3d 634, 641 (5th
Cir. 2004)).
7
Id. (quoting Wegner v. Standard Ins. Co., 129 F.3d 814, 818 (5th Cir. 1997)).
8
“Any benefits paid for such Disability will be equal to those that would have been
payable to You under the Prior Plan less any amount for which the prior carrier is liable.”
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policies cover Plaintiff under the general coverage provisions of the
respective policies. Standard’s policy states in its insuring clause, “If you
become Disabled while insured under the Group Policy, we will pay LTD
Benefits according to the terms of the Group Policy after we receive Proof of
Loss.” MetLife’s policy describes when its insurance takes effect and
provides coverage when an employee was covered under a prior plan: “If You
are Actively at Work on the day before the Replacement Date, You will
become insured for Disability Income Insurance under this certificate on the
Replacement Date.” The Replacement Date is January 1, 2017, and it is
undisputed that Plaintiff was “Actively at Work” the day before the new
policy attached. The parties agree that MetLife will not provide coverage for
benefits due if coverage is provided by Standard’s policy.
MetLife argues that two general provisions in Standard’s policy
continue to provide coverage for Plaintiff. The first is the insuring clause
discussed previously. The second is the general rule for coverage after
Standard’s policy ends or is changed:
During each period of continuous Disability, we will pay LTD
Benefits according to the terms of the Group Policy in effect on
the date you become Disabled. Your right to receive LTD
Benefits will not be affected by . . .
Termination of the Group Policy after you become Disabled.
Fortunately, the policies have more specific provisions that apply to the
situation in this case—a transition from one policy to another during a period
of temporary recovery.
Plaintiff relies on a specific provision in Standard’s policy that
excludes coverage when an employee experiences a temporary recovery.
That specific provision describing the rules for a “Temporary Recovery”
acknowledges:
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You may temporarily recover from your Disability and then
become Disabled again from the same cause or causes without
having to serve a new Benefit Waiting Period. 9 Temporary
Recovery means you cease to be Disabled for no longer than
the applicable Allowable Period.
It is undisputed that Plaintiff met the conditions described above to be
temporarily recovered. The Standard policy next details the effects of a
Temporary Recovery. Herein lies the exclusion:
B. Effect of Temporary Recovery
If your Temporary Recovery does not exceed the Allowable
Periods [90 days], the following will apply.
1. The Predisability Earnings used to determine your LTD
Benefit will not change.
2. The period of Temporary Recovery will not count toward
your Benefit Waiting Period, your Maximum Benefit Period or
your Own Occupation Period.
3. No LTD Benefits will be payable for the period of
Temporary Recovery.
4. No LTD Benefits will be payable after benefits become
payable to you under any other disability insurance plan under
which you become insured during your period of Temporary
Recovery.
5. Except as stated above, the provisions of the Group Policy
will be applied as if there had been no interruption of your
Disability. 10
9
A Benefit Waiting Period is “the period you must be continuously Disabled before
LTD Benefits become payable.” This period is defined as “Through the end date of any
Employer-sponsored short term disability benefits or salary continuation program, or 180
days, if longer.” During the Benefit Waiting Period, Standard does not pay LTD benefits.
10
Emphasis to policy language added.
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We agree with Plaintiff that paragraph four in Standard’s policy under the
“Effect of Temporary Recovery” clause primes the general insuring clauses
relied on by MetLife and excludes coverage for LTD benefits under the
precise circumstances of this case. Because Plaintiff became insured under
MetLife’s policy during his temporary recovery, the above exclusion in
Standard’s policy applies, and MetLife provides LTD benefits coverage.
MetLife’s provision specifically affording coverage when an employee is
actively at work during the transition period fits the facts here perfectly and
provides coverage to Plaintiff.
MetLife makes much of the fact that paragraph four says, “after
benefits become payable” and argues that this is not the same as being merely
eligible for coverage under a new policy. 11 This argument, however,
overlooks the fact that whether the benefits are payable is dependent on the
merits of Plaintiff’s disability claim. To accept MetLife’s argument that
benefits were not payable under its policy would leave the claimant in the
dark about whether he had coverage until he litigated his disability claim. The
parties agreed to bifurcate the coverage and merits issues, and on remand,
MetLife is free to litigate the disability issue and any other contested issues
other than coverage.
Finally, MetLife’s argument that Plaintiff’s relapse in disability makes
the disability “continuous” and triggers paragraph five of Standard’s policy,
captioned “Effect of Temporary Recovery,” is similarly unavailing.
Paragraph five contains an important qualifier: “Except as stated above, the
provisions of the Group Policy will be applied as if there had been no
interruption of your Disability.” 12 In other words, when there is a temporary
11
Emphasis added.
12
Emphasis added.
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recovery and allowable relapse, Standard considers no interruption (thus
continuous disability) except when, under paragraph four, the employee
becomes insured and benefits become payable under a new policy that affords
coverage during the temporary recovery.
C. The Waiting Period
Both policies provide for a waiting period during which an employee
must be disabled before LTD benefits are triggered. The Standard policy
required Plaintiff to be disabled for 180 days before becoming eligible for
LTD benefits. In the event that MetLife provides a replacement policy,
MetLife agrees to adopt the previous policy’s waiting period and waive its
own waiting period so long as five conditions are met. 13
Plaintiff was paid STD benefits for 180 days. It is unclear to us what,
if any, issue is presented as to whether Plaintiff met the waiting period under
MetLife’s waiting period waiver clause. Because this is a merits issue, we
leave this determination to the district court to reconsider on remand.
III. CONCLUSION
The Standard and MetLife policies outline how to transition coverage
between old and new policies, as well as provide special rules for employees
13
“Special Rules for Groups Previously Insured Under a Plan of Disability Income
Insurance.” “Rules for Temporary Recovery from a Disability under the Prior Plan.” “We
will waive the Elimination Period that would otherwise apply to a Disability under this
certificate if You: 1. received benefits for a disability that began under the Prior Plan; 2.
returned to work as an active Full-Time employee prior to the Replacement Date; 3.
become Disabled, as defined in this certificate after the Replacement Date and within 90
days of Your return to work due to a sickness or accidental injury that is the same as or
related to the Prior Plan’s disability; 4. are no longer entitled to benefit payments for the
Prior Plan’s disability since You are no longer insured under such Plan; and 5. would have
been entitled to benefit payments with no further elimination period under the Prior Plan,
had it remained in force.
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who temporarily recover during a transition. The plain language of the
policies make it clear that Plaintiff’s benefits coverage for his alleged long-
term disability shifted from Standard to MetLife. Based on the foregoing we
REVERSE and REMAND for further proceedings not inconsistent with
this opinion.
9