Petition for Writ of Certiorari — Lingerfelt v. Commercial Insurance

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IN THE SUPREME COURT

OF THE UNITED STATES

October Term 1990

EDWARD LINGERFELT,

Petitioner,

v.

COMMERCIAL INSURANCE COMPANY OF NEWARK, NJ.,

Respondent.

PETITION FOR A WRIT OF CERTIORARI

TO THE UNITED STATES COURT OF APPEALS

FOR THE SIXTH CIRCUIT

PETITION FOR WRIT OF CERTIORARI

Tony Seaton

Counsel of Record

926 West Oakland Avenue

Johnson City, Tennessee 37604

(615) 282-1041

Counsel for Petitioner

QUESTIONS PRESENTED FOR REVIEW

1. Did the court below err in failing to apply the fed-

eral common law of ERISA to construe the term “acci-

dent” as used in petitioner’s disability insurance policy,

thereby denying petitioner his rights to disability insurance

benefits, in conflict with the decisions of other federal cir-

cuit courts of appeal?

2. Did the court below err in failing to apply the fed-

eral common law of ERISA to construe an insurance policy

exclusion provision which provided for coverage of acci-

dents “resulting directly and independently of all other

causes,” thereby denying petitioner his rights to disability

insurance benefits, in conflict with the decisions of other

federal circuit courts of appeal?

TABLE OF CONTENTS

Page

Questions Presented for Review. .................ccccccsscsssscosvessceeees i

I Oe IE aiictssiccsesinnisarnnsihetnntcnsniniernciatadineiaenmannene ii

I Or I eisanessscsinscietinsisieasenadesiacdtammitdanaane iv

SI BI sersansnsnssttninunceiinsicassauainactaleraiiaianieaaaiaamaa l

PR aisnssisinienteceincritninsiinnvancenngstobsuiimmmemtiama cei 2

Statutory Provisions Involved ...................ccccccsssssessssssessessesese 3

I iE I ST rsissiiinscticscechsnicdceesntentemaemiaiaemeen 4

Reasons For Granting The Wit ................ccccssessescessesseeseeees 9

I. THE COURT BELOW ERRED IN FAILING TO

APPLY THE FEDERAL COMMON LAW OF

ERISA TO CONSTRUE THE TERM “ACCIDENT”

IN PETTTIONER’S DISABILITY INSURANCE

POLICY, THEREBY DENYING PETITIONER

HIS RIGHTS TO DISABILITY INSURANCE

BENEFITS, AND THE ERROR OF THE AP-

PELLATE COURT IS IN CONFLICT WITH

THE DECISIONS OF OTHER FEDERAL

CIRCUIT COURTS OF APPEAL REGARDING

AN IMPORTANT QUESTION OF FEDERAL

LAW WHICH HAS NOT BEEN, BUT SHOULD

BE, RESOLVED BY THIS COURT, CONSISTENT

WITH THE PRIOR DECISIONS OF THIS COURT

RASA FET ORE Eee sven cacnsninscnsenssinantnsssonbeidcunamiidaduaais 9

TABLE OF CONTENTS (CONT'D)

Page

Il. THE COURT BELOW ERRED IN FAILING TO

APPLY THE FEDERAL COMMON LAW OF

ERISA TO CONSTRUE THE INSURANCE

POLICY EXCLUSION PROVISIONS OF

PETTTIONER’S DISABILITY INSURANCE

POLICY COVERING ACCIDENTS “RESULTING

DIRECTLY AND INDEPENDENTLY OF ALL

OTHER CAUSES,” THEREBY DENYING PETI-

TIONER HIS RIGHTS TO DISABILITY INSUR-

ANCE BENEFITS, AND THIS ERROR OF THE

APPELLATE COURT BELOW IS IN CONFLICT

WITH THE DECISIONS OF OTHER FEDERAL

CIRCUIT COURTS OF APPEAL REGARDING

AN IMPORTANT QUESTION OF FEDERAL

LAW WHICH HAS NOT BEEN, BUT SHOULD

BE, RESOLVED BY THIS COURT, CONSISTENT

WITH THIS COURT'S PRIOR DECISIONS RE-

A 21

ed ee icicilh ciahGraivaliienasinenecaisatcasteecsvounees 29

Appendices:

A. Magistrate’s Memorandum Opinion..................00000+. A-1

SS A-28 J

C. Opinion of the Appellate Court...............c:ccccceeceeee A-29

i

TABLE OF AUTHORITIES

Cases Page

Adkins v. Reliance Standard Life Insurance Co., 917 F.2d

Fe Es SE erteccencctinasin 10, 21, 22, 23, passim

Evans v. Safeco Life Insurance Co., 916 F.2d 1437

OPUS RING SPI lacs sshsciindeschihiciicastumbsdcaaiaiildie cin 10, 11, 12

Firestone Tire & Rubber Co. v. Bruch, 489 US. 101(1989). 10

Fort Halifax Packing Co. v. Coyne, 482 U.S. 1 (1987)......11

Pilot Life Insurance Co. v. Dedeaux, 481 U.S. 41

SEI caceihcbieieticceisecadeveicninahicpceeneiadiaicnessacheltniieticaodsbdaiaitaghie 10, 11

Sampson v. Mutual Benefit Life Insurance Co., 863 F.2d

Pe I A citinssineenciectnidhsavidennebiacianitehauiincswinleseiee 11

Shaw v. Delta Airlines, Inc., 463 U.S. 85 (1983)..........000+ 11

Wickman v. Northwestern National Insurance Co., 908 F.2d

1077 (Ast Cir. 1990), cert. denied, 59 U.S.L.W. 3418

PST tlic icislsd asciscininlipiaichetsinteninaneamancquiblanaioes 10, 12, 13, 15, passim

Statutes

Employee Retirement Income Security Act of 1974, 29

ies ee Eg gf ” Senne 9, 10, 11, 12, passim

yee al) i TE eee ne RS ene 10

Other

H.R. Rep. No. 93-807 93d Cong., 2d Sess. 3, reprinted in

1974 U.S. Code Cong. & Admin. News 4639 ........ccccccc000 9

iV

OPINIONS BELOW

The decision of the United States Court of Appeals for

the Sixth Circuit is an unpublished opinion (infra at A-29),

filed on February 5, 1991, and noted at Lingerfelt v. Nuclear

Fuel Services, Inc., 924 F.2d 1058 (6th Cir. 1991). The

magistrate presiding over trial of the action entered a

Memorandum Opinion (infra at A-1) and a judgment (infra

at A-28), both unpublished, against petitioner on February

9, 1990 in the United States District Court for the Eastern

District of Tennessee, Northeastern Division.

JURISDICTION

Petitioner brought the instant action for the recovery of

disability insurance benefits under the provisions of the

Employee Retirement Income Security Act of 1974

(ERISA), 29 U.S.C. §§ 1001 et seq., in the United States

District Court for the Eastern District of Tennessee. Pur-

suant to an agreement of the parties, the action was tried

before a United States Magistrate on January 25 and 26,

1990, without a jury.

On February 9, 1990, the magistrate filed a memoran-

dum opinion and an accompanying order denying peti-

tioner’s claim to disability insurance benefits (A-1; A-28).

Petitioner appealed this judgment, as to defendant

below and respondent herein, Commercial Insurance Com-

pany, to the United States Court of Appeals for the Sixth

Circuit. Defendants below Continental Insurance Com-

pany and Nuclear Fuel Services were not parties to the ap-

peal nor are they respondents herein.

On February 5, 1991, the United States Court of Ap-

peals for the Sixth Circuit filed its decision affirming the

judgment of the magistrate below (A-29).

The jurisdiction of this Court to review the judgment of

the United States Court of Appeals for the Sixth Circuit is

invoked pursuant to 28 U.S.C. § 1254(1).

STATUTORY PROVISIONS INVOLVED

Petitioner brought the instant action under the com-

prehensive statutory provisions of the Employee Retire-

ment Income Security Act of 1974 (ERISA), 29 U.S.C. §§

1001 et seq. Specifically, petitioner instituted his action in

the United States District Court pursuant to the specific

authority conferred by Title 29, U.S.C. § 1132(a), which

provides:

§ 1132. Civil enforcement

(a) Persons empowered to bring a

civil action. A civil action may be

brought —

(1) by a participant or beneficiary —

(B) to recover benefits due to him

under the terms of his plan, to enforce his

rights under the terms of the plan, or to

clarify his rights to future benefits under

the terms of the plan[.]

STATEMENT OF THE CASE

On October 6, 1987, petitioner Edward Lingerfelt suf-

fered a back injury while in the employ of Nuclear Fuel

Services, Inc. (NFS) (Magistrate’s Decision at 1; A-1).

Specifically, this injury occurred when petitioner and two

coworkers attempted to lower a motor from a roof of a

building to the floor by means of a long rope attached to

the motor (Magistrate’s Decision at 12; A-11). As the

three employees were lowering the motor from the roof to

the floor, petitioner felt the rope jerk, and immediately

thereafter felt a “pop” or “catch” in his back (Magistrate’s

Decision at 12; A-11). Following this injury, petitioner ex-

perienced severe back pain, which continues to the present

day and which has made it impossi>le for the petitioner to

return to his employ with NFS (Magistrate’s Opinion at 12-

16; A-11-14).

Expert witness testimony adduced at trial below estab-

lished that, prior to sustaining the October 6, 1987 injury,

petitioner had suffered other back injuries in the past, and

that petitioner’s preexisting back condition had contributed

to the seriousness of his October 6, 1987 injury

(Magistrate’s Decision at 15-16; A-13-14). However, the

expert witness testimony also established that the October

6, 1987 accident was the precipitating cause of petitioner’s

removal from work and led to petitioner’s failure to return

to gainful employment to the present day (Magistrate’s De-

cision at 15-16; A-13-14).

Following his debilitating injury of October 6, 1987,

petitioner claimed the disability insurance benefits pro-

vided for in his employee group accident disability insur-

ance plan, on the grounds that, as a result of the October 6,

1987 accident, he had become totally and permanently dis-

abled from his occupation with NFS and any other occupa-

tion (Magistrate’s Decision at 4; A-3-4). Petitioner sought

to recover the principal sum of the group disability in-

surance policy from respondent insurance company.

Upon respondent’s denial of petitioner’s claim for dis-

ability insurance benefits, petitioner instituted the instant

action, pursuant to ERISA, to recover benefits due him

under his disability insurance policy, as governed by

ERISA (Magistrate’s Decision at 2; A-2). Respondent con-

ceded that petitioner’s action arose under ERISA, as the

disability insurance policy in question was an employee

group disability insurance policy covered by ERISA

(Magistrate’s Decision at 5; A-4).

At trial, respondent admitted that petitioner complied

with all requirements of the subject insurance policy for

making the claim pursuant to the policy, but denied liabil-

ity to petitioner based on two grounds of defense

(Magistrate’s Decision at 4; A-4). First, respondent con-

tended that petitioner was not involved in an “accident” on

October 6, 1987 within the meaning of the coverage provi-

sions of his group disability insurance policy (Magistrate’s

Decision at 4; A-4). Second, respondent contended that

even if petitioner had suffered an “accident” within the

meaning of the terms of the insurance policy, nevertheless

petitioner could not recover on the policy for such an acci-

dent, as the accident was not a “loss resulting directly and

independently of all other causes” within the meaning of

the exclusions from coverage contained in the insurance

contract (Magistrate’s Decision at 4; A-4). Respondent

further contended that petitioner’s disability arose in whole

or in part from petitioner’s degenerative disc disease which

predated the October 6, 1987 accident and for which peti-

tioner could not recover under the disability insurance pol-

icy (Magistrate’s Decision at 4; A-4).

Following trial of the case, the magistrate filed his

memorandum opinion on February 9, 1990, denying

petitioner’s claim to disability insurance benefits. In his

decision, the magistrate recognized that the federal courts

should develop a federal common law regarding the con-

struction of insurance policies governed by ERISA

(Magistrate’s Decision at 18-19; A-16). The magistrate

went on to note that such federal common law should be

derived from state law if state law is compatible with fed-

eral policy, and concluded that in the instant case state law

was compatible with federal policy (Magistrate’s Decision

at 19; A-16-17).

The magistrate found that petitioner had not suffered

an “accident,” as that word is defined under the appellate

decisions of the courts of Tennessee —the forum State of

the ins-ant litigation; the magistrate further found that, in

any event, petitioner did not suffer an accidental loss “re-

sulting directly and independently of all other causes” as

provided in the exclusions from coverage set forth in the

disability insurance policy in question (Magistrate’s Decis-

ion at 27-29; A-24-26). The court concluded that peti-

tioner could not qualify for disability insurance benefits

under the relevant portions of the subject plan, under ei-

ther state or federal law (Magistrate’s Decision at 30; A-

26).

The United States Court of Appeals for the Sixth Cir-

cuit affirmed the decision of the magistrate and held that

petitioner was not entitled to disability insurance benefits

under the federal common law of ERISA, as applied to the

provisions of the insurance plan in question, because peti-

tioner did not have an “accident,” and because if petitioner

had had an “accident,” recovery was nevertheless pre-

cluded by the specific exclusions from coverage contained

in the insurance policy in question (Appellate Decision at

10-11; A-38-39).

Significantly, the decision of the Court of Appeals

specifically characterized the October 6, 1987 incident as

an “accident” at one point in its opinion, and noted that

expert witness testimony at trial had established that the

“accident” was the precipitating cause which led to peti-

tioner’s removal from work and his failure to return to

gainful employment (Appellate Decision at 5; A-33).

However, later in its decision, the appellate court specifi-

cally concluded that the petitioner had not suffered from

an “accident” and that petitioner’s recovery of benefits was

therefore barred (Appellate Decision at 8; A-35).

In affirr ‘ng the magistrate’s decision, the circuit court

concluded that where the petitioner—who admittedly suf-

fered from a preexisting disc disease prior to his October 6,

1987 injury—engaged in the lifting of a heavy weight,

which precipitated the 1987 injury, “the resulting disability

more closely resembled an inevitable consequence than an

unforeseen accident” (Appellate Decision at 7; A-35). The

circuit court then noted that the disability insurance policy

in question covered only “accidents” and concluded that

petitioner did not have an accident within any reasonable

meaning of that term (Appellate Decision at 8; A-35).

In addition, the appellate court noted that the insur-

ance policy in question did not insure for illness or disease,

but only insured against accidents “resulting directly and

independently of all other causes” (Appellate Decision at

2-3; A-30-31). Based on the exclusionary language of the

insurance policy, the court denied petitioner’s claim to

benefits, stating: “[MlJost importantly for us, [Petitioner’s]

situation falls within the clear language of the policy exclu-

sions” (Appellate Decision at 11; A-38 (emphasis added)).

In affirming the magistrate’s decision, the appellate

court recognized that in enacting ERISA, Congress in-

tended to establish the regulation of employee benefit

plans as an exclusive federal concern, and that in constru-

ing the provisions of employee benefit plans governed by

ERISA, the federal courts are required to develop a fed-

eral common law consistent with the ameliorative public

policies underlying the enactment of ERISA (Appellate

Decision at 9-10; A-36-38).

The circuit court held that under this emerging federal

common law it would adhere to the literal language of

accident insurance contracts, except where public policy

considerations underlying ERISA required a different con-

struction (Appellate Decision at 9-10; A-36-38). The ap-

pellate court recognized that the congressional objective in

enacting ERISA was to assure that those who participate in

employee benefit plans actually receive the benefits to

which they are entitled and do not lose benefits as a result

of unduly restrictive provisions (Appellate Decision at 10;

A-37-38).

The appellate court concluded that it could construe lit-

erally the coverage and exclusion provisions of the insur-

ance policy in question without running afoul of the public

policy considerations which underlie the enactment of

ERISA and which are required to be implemented into the

emerging federal common law of ERISA. The court de-

nied petitioner’s claim to disability benefits on the grounds

that petitioner had not suffered an “accident” as that term

was used in the insurance policy because the injury in ques-

tion was objectively foreseeable, and, furthermore, because

“most importantly . .. , Lingerfelt’s situation falls within

the clear language of the policy exclusions” (Appellate

Decision at 10-11; A-38).

The decision of the circuit court of appeals affirming

the magistrate’s decision was entered on February 5, 1991.

This petition followed.

REASONS FOR GRANTING THE WRIT

I. THE COURT BELOW ERRED IN

FAILING TO APPLY THE FEDERAL

COMMON LAW OF ERISA TO CON-

STRUE THE TERM “ACCIDENT” IN

PETITIONER’S DISABILITY INSUR-

ANCE POLICY, THEREBY DENYING

PETITIONER HIS RIGHTS TO _IN-

SURANCE DISABILITY BENEFITS,

AND THE ERROR OF THE APPEL-

LATE COURT IS IN CONFLICT WITH

THE DECISIONS OF OTHER FED-

ERAL CIRCUIT COURTS OF APPEAL

REGARDING AN IMPORTANT QUES-

TION OF FEDERAL LAW WHICH HAS

NOT BEEN, BUT SHOULD BE, RE-

SOLVED BY THIS COURT, CON-

SISTENT WITH THE PRIOR DECI-

SIONS OF THIS COURT REGARDING

ERISA.

A.The Development Of A Uniform Body Of Federal

Common Law Governing ERISA Actions Is Necessary To

Achieve The Purposes Of ERISA.

The Employee Retirement Income Security Act of 1974

(“ERISA”), 29 U.S.C. $§ 1001 et seq., was enacted by Con-

gress for the purpose of assuring that persons who partici-

pate in employee welfare benefit plans actually receive the

benefits to which they are entitled and that such persons

do not lose these benefits as a result of unduly restrictive

provisions or lack of sufficient funds. See H.R. Rep. No.

93-807 93d Cong., 2d Sess. 3, reprinted in 1974 U.S. Code

Cong. & Admin. News 4639, 4670, 4676-77. Under ERISA,

the beneficiary of an employee welfare benefit plan, such

as the employee group disability insurance policy at issue

in the instant case, is specifically empowered to bring an

action in the federal courts to recover any benefits due the

beneficiary under the terms of such an ERISA plan. 29

U.S.C. § 1132(a)(1)(B).

In construing the provisions of ERISA, in the context of

civil actions brought under the foregoing statute by

beneficiaries of ERISA plans for the recovery of benefits

due under particular ERISA plans, this Court has recog-

nized that insurance coverage which is part of an ERISA

plan is regulated under ERISA. See Pilot Life Insurance

Co. v. Dedeaux, 481 U.S. 41, 48 (1987). Furthermore, in

construing ERISA in the context of ERJSA beneficiaries’

claims to benefits under ERISA plans, this Court has

recognized that the various federal courts must develop a

federal common law of rights and obligations of ERISA-

regulated plans. See Firestone Tire & Rubber Co. v. Bruch,

489 U.S. 101, 110-14 (1989). Moreover, this Court has rec-

ognized that ERISA was enacted to promote the interests

of employees and the beneficiaries of employee benefit

plans. /d. at 113. .

In evaluating claims to benefits under insurance poli-

cies which are regulated by ERISA, several federal circuit

courts of appeal have recognized that in construing the

provisions of an insurance policy which is governed by

ERISA, the federal courts must construe such policies with

reference to the emerging federal common law of ERISA,

rather than with reference to state laws and state-court de-

cisional authority relating to insurance policies. See Wick-

man v. Northwestern National Insurance Co., 908 F.2d 1077

(1st Cir. 1990), cert. denied, 59 U.S.L.W. 3418, 3420 (1991);

Adkins v. Reliance Standard Life Insurance Co., 917 F.2d

794 (4th Cir. 1990); Evans v. Safeco Life Insurance Co., 916

F.2d 1437 (9th Cir. 1990). Moreover, at least one federal

circuit court of appeals has recognized, in view of the pro-

visions of ERISA and the prior decisions of this Court with

10

respect thereto, that although it may be acceptable for a

federal court to look to the developed law of a particular

State in attempting to develop a federal common law of

ERISA, it would contravene the underlying policies of

ERISA if, in developing the federal common law of

ERISA, the federal courts were to develop 50 different sets

of applicable federal common law, each to be applied with

reference to the insurance laws in effect in the forum state.

See Evans v. Safeco Life Insurance Co., supra.

In Evans v. Safeco Life Insurance Co., supra, the United

States Court of Appeals for the Ninth Circuit noted that

several prior decisions of this Court have clearly indicated

that a critical concern to the federal courts in the de-

velopment of a federal common law of ERISA must be the

development of a uniform federal common law of ERISA

which will not fluctuate depending upon the laws of the

forum state within which a federal court entertaining an

ERISA claim is situated. 916 F.2d at 1440 (citing Pilot Life

Insurance Co. v. Dedeaux, supra, 481 U.S. at 56; Fort Hali-

fax Packing Co. v. Coyne, 482 U.S. 1, 9 (1987); Shaw v.

Delta Airlines, Inc., 463 U.S. 85, 99-100 (1983); see also

Sampson v. Mutual Benefit Life Insurance Co., 863 F.2d 108

(ist Cir. 1988)).

In Evans v. Safeco Life Insurance Co., supra, the Ninth

Circuit Court of Appeals was confronted with an

employee’s claim to insurance benefits under an insurance

policy governed by ERISA. The employee sought to re-

cover benefits under a provision of the insurance policy in

question which provided for coverage of an employee’s

children. The employee’s stepson (possibly his biological

son) was killed in an accident, and the employee applied

for accidental death benefits under the policy provisions

covering employees’ children. The insurer denied cover-

age, on the grounds that the decedent was not the em-

ployee/claimant’s “child.”

1]

The appellate court in Evans addressed the threshold

question of how the term “child” in the insurance policy in

question should be construed, and concluded that the defi-

nition of the term “child” must be interpreted with refer-

ence to a uniform federal common law of ERISA, rather

than with reference to the state decisional law of the forum

state. In arriving at a definition of the term in question,

the appellate court considered various definitions of the

term “child” which had been developed by various state

courts, and adopted the definition which seemed most

reasonable and most widely accepted in numerous juris-

dictions and by numerous commentators. The import of

the Evans decision lies in the fact that the circuit court of

appeals in that case recognized the necessity of developing

a uniform federal common law of ERISA under which in-

surance plans governed by ERISA could be interpreted,

particularly with respect to the definition of the coverage

terms used in such policies.

B.The Emerging Federal Common Law Of ERISA, As

Developed In Other Federal Circuits, Mandates A More

Reasonable Definition Of The Term “Accident” Than That

Adopted By The Court Below In Denying Petitioner

Insurance Benefits.

In Wickman v. Northwestern National Insurance Co.,

supra, the United States Court of Appeals for the First Cir-

cuit reviewed a beneficiary’s claim to insurance benefits

due under an insurance policy governed by ERISA. The

insurer had denied coverage on the basis that the insured’s

death was not the result of an “accident,” thereby negating

the claimant/beneficiary’s rights to double indemnity bene-

fits under the insurance policy in question.

In Wickman, the employee insured by the ERISA-gov-

erned insurance policy was killed when he fell to his death

from a highway overpass. The insurer denied the claims of

12

the employee’s widow to double indemnity accidental

death benefits under the insurance policy in question, on

the grounds that the employee had intentionally hurled

himself to his death and had not suffered an “accident”

within the coverage of the insurance policy. In reviewing

the matter, the First Circuit Court of Appeals recognized

that in order to determine the rights of the parties to the

action, the court must adopt a definition of the term “ac-

cident” as a part of the emerging federal common iaw of

ERISA, rather than accepting the definition of the term

“accident” as defined by the state decisional law of the

forum state of the litigation.

In order to develop a definition of the term “accident”

within the framework of ERISA, the court in Wickman em-

barked on an analysis of the definitional law which has de-

veloped in various states over the years with respect to

construction of the term “accident.” In its analysis, the cir-

cuit court noted that the traditional approach to the defini-

tion of the term “accident” had led several state appellate

courts in the pasi to hold that where an incident which

might otherwise be termed an accident was the result of

activity which, in hindsight, might have foreseeably or

predictably resulted in injury, the injury would not be con-

sidered an “accident” for purposes of recovering under an

insurance policy which insured against accidents.

In rejecting this traditional distinction between acciden-

tal means and accidental results, the Wickman court noted

that such a distinction was not in keeping with the under-

standing of the average citizen:

In recent years, courts consistently

have rejected the distinction between ac-

cidental means and accidental results not-

ing that:

13

it is illogical to purport to distinguish be-

tween the accidental character of the re-

sult and the means which produce it; that

the distinction gives to “accidental

means” a technical definition which is not

in harmony with the understanding of the

common man; and that the ambiguity

found in the concept should be resolved

against the insurer so as to permit cover-

age.

10 Couch on Insurance 2d § 41:31, 50

(1982); see also Page Flooring and Constr.

Co. v. Nationwide Life Ins. Co., 840 F.2d

159, 162 (1st Cir.1988) (Coffin, J., dis-

senting) (urging the interpretation pre-

vailing in an increasing number of jur-

isdictions that the two terms be construed

aS synonymous and rejecting the distinc-

tion between “accidental means” and “ac-

cidental results” as artificial and confus-

ing). Having reviewed the pertinent state

court decisions, we conclude that the bet-

ter reasoning rejects the distinction.

Thus, we elect’ to pursue a path for the

federal common law which safely circum-

vents this “Serbonian Bog.”

908 F.2d at 1086.

The court concluded that whether a person suffers an

accident or not should be determined from a subjective

analysis of the insured person’s reasonable expectations as

to whether certain activity would result in injury, rather

than from an analysis of an injury in the context of wheth-

er, in hindsight, others might believe that a particular in-

jury was foreseeable or predictable based on the activity

14

leading up tothe injury in which the injured person was

engaged. In carrying out this analysis, the Wickman court

held that the insured’s expectations should be given the

benefit of the doubt, as follows:

[T]he reasonable expectations of the in-

sured when the policy was purchased is

the proper starting point for a determina-

tion of whether an injury was accidental

under its terms.

If the fact-finder determines that the

insured did not expect an injury similar in

type or kind to that suffered, the fact-

finder must then examine whether the

suppositions which underlay that expecta-

tion were reasonable. See New York Life

Ins. Co. v. Harrington, 299 F.2d 803, 806

(9th Cir. 1962). This analysis will prevent

unrealistic expectations from undermin-

ing the purpose of accident insurance. If

the fact-finder determines that the suppo-

sitions were unreasonable, then the inju-

ries shall be deemed not accidental. The

determination of what suppositions are un-

reasonable should be made from the per-

spective of the insured, allowing the insured

a great deal of latitude and taking into ac-

count the insured’s personal characteristics

and experiences. See, e.g., Ward v. Penn

Mutual Life Ins. Co., 352 $.W.2d 413, 423

(Mo.Ct.App.1961) (finding accident

where man fell off top of moving car; he

had performed the stunt previously,

knew, and trusted the driver, was strong,

and had a good grip); Oldring v. Metropol-

itan Life Ins. Co., 492 F.Supp. 994

15

——

(D.N.J.1980) (finding an accident where

owner experienced in use of gun, after

having examined the gun and thinking it

was empty, pointed and fired the gun at

his head, killing himself); Knight v. Metro-

politan Life Ins. Co., supra, (finding ac-

cidental the death of professional diver

after diving off the Coolidge Dam; he

previously had completed the same dive

without injury).

Id. at 1088 (emphasis added).

C.The Appellate Court Below Erred In Applying The

Distinction Between Accidental Means And Accidental

Results In Determining That The Petitioner Did Not

Suffer An “Accident.”

As a review of the decisions of the courts below clearly

indicates, both the trial court and the appellate court ap-

plied the antiquated distinction to the definition of the |

term “accident” still adhered to by the state courts of the

forum state of Tennessee, placing great emphasis on the

objective predictability and foreseeability of petitioner’s in-

jury in light of petitioner’s preexisting back problems. In

adopting this approach, the courts below wholly ignored

the more reasonable analysis, adopted by many states over

the past three decades, which addresses the question of

whether a person has suffered an accident in terms of

whether the injured person intended to injure him or her-

self, as opposed to whether a third party might, in hind-

sight, determine that an injury was objectively predictable

or foreseeable.

As noted above in the Statement Of The Case, the

magistrate below analyzed the events leading up to peti-

tioner’s injury under Tennessee insurance law and con-

16

cluded that under Tennessee insurance law the petitioner

did not suffer an “accident.” Under the Tennessee state-

law analysis, although the injury which resulted from

petitioner’s activities in lowering the motor with his co-

workers on October 6, 1987 might be termed an accidental

result, the means by which the injury occurred was not ac-

cidentai, in the sense that petitioner’s voluntary act of low-

ering the motor precipitated the injury (Magistrate’s Deci-

sion at 27-28; A-24-25). The magistrate held that in the

instant case, Tennessee’s state law was consistent with the

principles underlying ERISA and would therefore be ap-

plied as the federal common law of ERISA, for the pur-

poses of evaluating petitioner’s claims under ERISA

(Magistrate’s Decision at 19; A-17). In analyzing the case

under the federal common law of ERISA, the magistrate

applied Tennessee state law in determining that no “acci-

dent” had occurred within the coverage of petitioner’s in-

surance policy.

Similarly, the Circuit Court clearly applied the Tennes-

see state-law distinction between accidental means and ac-

cidental results in holding that petitioner did not suffer an

“accident” covered under his disability insurance policy.

Although the Circuit Court did not make specific reference

to Tennessee state law on this subject, the analysis of the

Circuit Court is clearly grounded in the distinction between

accidental means and accidental results, as demonstrated

by the court’s failure to consider petitioner’s subjective

expectations, and by the court’s reliance on the fact that a

third-party objective observer might have foreseen that an

injury could have resulted from the activity of lowering a

motor.

The Circuit Court’s opinion speaks of the injuries sus-

tained by the petitioner in lowering the motor in terms of

their objective foreseeability on numerous occasions

throughout its decision. Early in the decision, the court

17

stated that petitioner’s injury “more closely resembled an

inevitable consequence than an unforeseen accident” (Ap-

pellate Decision at 7; A-35). Later, the court indicated

that petitioner might have recovered benefits if he had

been the victim of “an unforeseen calamity” (Appellate De-

cision at 10; A-38). Still later, the court held that pe-

titioner could not recover, inasmuch as no accident had oc-

curred, but rather an injury had resulted from voluntary

activity, “which proceeding normally as planned, predict-

ably cause[d] the employee ... injury” (Appellate Deci-

sion at 12; A-40).

In summary, the appellate court clearly grounded its

conclusion that petitioner had not suffered an “accident” in

Tennessee state-law decisions which have applied the “ac-

cidental means” and “accidental results” distinction to deny

accidental insurance coverage benefits to persons who have

suffered injuries as a result of voluntary activities. The

court adopted the rationale that, although the results may

have been accidental, the underlying causes of the acci-

dents were voluntary activities, which a third-party objec-

tive observer might, in hindsight, conclude were potentially

hazardous and could have resulted in injury. As the First

Circuit Court of Appeals noted in the Wickman case, this

harsh and outmoded analysis of what constitutes an “acci-

dent” within the terms of insurance policy coverage has

been rejected in numerous jurisdictions as being contrary

to common sense and the understanding of the average

person.

The First Circuit in Wickman undertook an analysis of

the term “accident” in a manner consistent with the public

policies underlying ERISA, and concluded that under the

emerging federal common law of ERISA, whether or not

an insured has suffered an “accident” may not be de-

termined by an objective analysis of the facts or activities

leading up to the injury, but must be determined with re-

18

gard to the subjective expectations of the insured, giving

great latitude to the insured in favor of coverage, and tak-

ing into account the insured’s persona! characteristics and

experiences.

Applying the federal common law of ERISA, as devei-

oped by the First Circuit in Wickman, to the instant facts, it

is manifest that petitioner suffered an “accident” as a result

of lifting a motor with his co-workers on October 6, 1987.

Although petitioner readily concedes that prior to the lift-

ing incident he suffered from a degenerative disc disease, it

is also undisputed that prior to the lifting incident the peti-

tioner had been working in a fairly strenuous position with

his employer for several years, and had never suffered the

sort of totally debilitating injury which he suffered as a re-

sult of the motor-lifting incident on any prior occasion

when engaged in what was, for petitioner, fairly routine

work. There is no evidence in the record below to indicate

that petitioner subjectively expected to injure himself by

lifting the motor on October 6, 1987.

Thus, applying the federal common law of ERISA, as

developed in the First Circuit in the Wickman case, the

petitioner undoubtedly suffered an “accident” and should

be entitled to disability insurance benefits under his

ERISA insurance plan. However, in denying petitioner

benefits under this plan, the Sixth Circuit has clearly enun-

ciated a different and much harsher construction of the

federal common law of ERISA in determining what con-

Stitutes an “accident,” thus adhering to the antiquated and

inequitable law on this subject developed by the courts of

the State of Tennessee, and thereby denying petitioner any

insurance benefits whatsoever.

The stark distinction between the approaches taken to

the resolution of this issue by the Sixth Circuit Court of

Appeals in the instant case and by the First Circuit Court

19

of Appeals in the Wickman case presents a clear split in

the federal circuits, which should be resolved by this Court,

so as to eliminate the possibility of future contradictory de-

cisions by other courts of appeal. Furthermore, the split in

the federal circuits presented by the instant case and the

Wickman case clearly involves an important issue of federal

law which has not been, but should be, resolved by this

court.

Without doubt, the question of what constitutes an “ac-

cident” within the terms of insurance coverage under an

ERISA-controlled insurance plan is bound to arise in innu-

merable future cases of ERISA-related litigation. If a uni-

form federal common law of ERISA on this most basic

question of coverage under an accidental insurance plan is

not charted by this Court, the result will be innumerable

conflicting appellate decisions in the future, in both the

state and federal appellate systems, which will make an

ERISA beneficiary’s recovery of benefits dependent upon

his or her state of residence, rather than upon the merits of

a particular claim under a uniform federal law.

In order to implement the congressional intent in en-

acting ERISA, to resolve the current split in the federal

circuits presented by the instant case and by the Wickman

case, and to chart a clear and uniform development of the

federal common law of ERISA, this Court should grant

petitioner’s petition, reverse the decision of the court

below, and adopt the subjective analysis approved by the

First Circuit Court of Appeals in Wickman as the uniform

federal common law of ERISA, applicable in all ERISA

litigation in all state and federal courts.

20)

I.THE COURT BELOW ERRED IN

FAILING TO APPLY THE FEDERAL

COMMON LAW OF ERISA TO CON-

STRUE THE INSURANCE POLICY EX-

CLUSION PROVISIONS OF PETI-

TIONER’S ERISA DISABILITY INSUR-

ANCE POLICY COVERING ACCI-

DENTS “RESULTING DIRECTLY AND

INDEPENDENTLY OF ALL OTHER

CAUSES,” THEREBY DENYING PETI-

TIONER HIS RIGHTS TO DISABILITY

INSURANCE BENEFITS. THIS ERROR

BY THE COURT BELOW IS IN CON-

FLICT WITH THE DECISIONS OF

OTHER FEDERAL CIRCUIT COURTS

OF APPEAL REGARDING AN _ IM-

PORTANT QUESTION OF FEDERAL

LAW WHICH HAS NOT BEEN, BUT

SHOULD BE, RESOLVED BY THIS

COURT, CONSISTENT WITH THIS

COURT’S PRIOR DECISIONS’ RE-

GARDING ERISA.

In Adkins v. Reliance Standard Life Insurance Co.,

supra, the United States Court of Appeals for the Fourth

Circuit held that under the emerging federal common law

of ERISA, where an accident insurance policy governed by

ERISA provides for coverage only for losses “resulting di-

rectly and independently of all other causes from bodily in-

jury caused by accident,” such an exclusionary clause will

not operate to deny accident benefits to an insured, where

the insured, prior to an accidental injury, suffered from a

preexisting illness or disease which was made significantly

worse by the accident in question. The Adkins court noted

that a literal construction of such an exclusionary clause

might result in a denial of accidental insurance benefits

wherever an insured aggravated a previously existing condi-

21

tion through an accident. The court concluded that such a

literal interpretation of such an exclusionary clause would

not be consistent with the underlying purposes of ERISA

and would lead to unduly harsh results in the denial of ac-

cidental benefits to beneficiaries of ERISA accident insur-

ance plans. Accordingly, the court held that, in the cases

of such exclusionary clauses, a preexisting illness or disease

would not be considered as a cause contributing to other-

wise accidental disability, unless it was shown to have sub-

stantially contributed to the resultant disability. Moreover,

the court held that the fact that a preexisting illness or dis-

ease might render a person predisposed or more suscepti-

ble to an injury did not necessarily amount to a showing of

a substantial contributing cause to an otherwise accidental

injury so as to preclude the recovery of accident insurance

benefits. The court held that this analysis was consistent

with this Court’s admonition to promote the interests of

employees and beneficiaries in ERISA plans.

In Adkins, the insured beneficiary under a group

accidental disability insurance plan governed by ERISA

stepped into a hole inside a coal mine and injured his back,

resulting in his permanent total disability (the 1985 acci-

dent). The administrator of the ERISA plan denied dis-

ability insurance benefits to the insured, on the grounds

that the 1985 accident had not, independently of all other

factors, rendered the insured totally and permanently dis-

abled, but rather that the 1985 accident aggravated a pre-

existing back condition of the insured. The administrator

cited the policy exclusions of the insurance policy in ques-

tion, which provided that the policy covered only losses

“resulting directly and independently of all other causes,”

and concluded that, inasmuch as the 1985 accident had

combined with the insured’s preexisting back condition to

render the insured totally and permanently disabled, the

1985 accident had not “directly and independently” caused

the insured’s total and permanent disability. The adminis-

22

trator refused to pay any benefits to the insured, based on

the policy exclusions. The United States District Court for

the Southern District of West Virginia granted the insur-

ance company’s motion for summary judgment, concluding

that the insured’s preexisting back condition had contrib-

uted to his total and permanent disability, thus rendering

the insured ineligible for benefits because the 1985 acci-

dent had not been the sole and independent cause of the

insured’s ultimate disabled condition.

The United States Court of Appeals for the Fourth Cir-

cuit reversed the decision of the district court, holding that

the district court’s analysis led to a result which was too

harsh to have been applied in an ERISA case, where insur-

ance policies were to be construed with the interests of

employees and beneficiaries in mind. The appellate court

noted that, were it to adopt the stringent construction

urged upon it by the insurer, an ERISA claimant would

have to be in perfect health at the time of his or her most

recent accidental injury before the insurance policy would

provide any benefits, and that this was a condition hardly

ever obtained by the average person. 917 F.2d at 796.

The Fourth Circuit in Adkins held that a preexisting ill-

ness or disease or preexisting susceptibility to injury would

not preclude the recovery of accidental disability insurance

benefits under an ERISA plan which purports to provide

coverage only for losses resulting directly and in-

dependently of all other causes, notwithstanding the fact

that a preexisting illness or disease or susceptibility to in-

jury contributed to a disability or loss also caused in part by

an accident suffered during the policy coverage period.

The court held that in order for such a preexisting condi-

tion to preclude coverage for loss suffered during the pol-

icy coverage period, the preexisting condition must com-

bine with the accident during the policy period to con-

Stitute a “substantial contributing cause” of the accident.

23

EEE EE

Having adopted this rule of construction as the emerging

federal common law of ERISA, the appellate court re-

manded the case in Adkins to the district court for the dis-

trict court to make a determination as to whether the in-

sured’s preexisting back condition had not merely contrib-

uted to the 1985 accident to produce a total and permanent

disability, but had in fact been a substantial contributing

cause of the 1985 injury.

The Fourth Circuit decision in Adkins reads, in perti-

nent part, as follows:

[I]n order to recover under such policies

as the one here involved, and with. ..a

Stringent construction, a claimant would

have to be in perfect health at the time of

his most recent injury before the policy

would benefit him, and that of course, is

a condition hardly obtained, however de-

voutly to be wished.

In 84 A.L.R.2d 176 is the extensive

Annotation “Pre-existing physical condi-

tion as affecting liability under accident

policy or accident feature of life policies.”

The Annotation explains that the

courts are divided in their construction of

the insuring clauses which insure for dis-

ability arising from accidental bodily inju-

ries “directly and independently of all

other causes.” One group of cases would

permit recovery where there is disability

following an accident, although there may

have been some pre-existing injury or dis-

ability, on the ground that the pre-exist-

24

ing disease or infirmity is a remote cause

of the disability. Another group of cases

has denied recovery when the insured’s

pre-existing physical condition con-

tributed to or cooperated with a more im-

mediate cause in producing the disability.

We think [the] solution is to take a

middle ground as has been taken by Ken-

tucky in Colonial Life & Acc. Ins. Co. v.

Weartz, 636 S.W.2d 891 (Ky.Ct. App.

1982). In Weartz, a claim was made on an

accident insurance policy which insured

against loss resulting from accidental

bodily injury “directly, independently and

exclusively of all other causes.” This lan-

guage in the insuring clause is almost pre-

cisely that in issue here. Certainly it is no

more favorable to the insured. The

claimant in that case had slipped at work

while carrying a bathtub, injuring his back

and causing his disability. He had pre-

viously had an injury to his back. The

court held that the fact of a pre-existing

injury to the claimant’s back was not

enough to bar recovery. It went on to

State the rule in such cases as follows:

“{A] pre-existing infirmity or disease is

not to be considered as a cause unless it

substantially contributed to the disability

or loss... . [A] ‘pre-disposition’ or ‘sus-

ceptibility’ to injury, whether it results from

congenital weakness or from previous ill-

ness or injury, does not necessarily amount

25

to a substantial contributing cause. A mere

‘relationship’ of undetermined degree is not

enough.”

636 S.W.2d at 894.

We think the Kentucky rule is appro-

priate and we adopt it. It is neither all

that the plaintiff asks for, nor is it as strict

as the Virginia rule or the rule in

QuesTech. We think, however, that it

gives effect to the [United States Su-

preme] Court’s admonition to promote

the interests of the employees and benefi-

ciaries in employee benefit plans. Fire-

stone, 489 U.S. at 110-114, 109 S.Ct. at

954-56.

Id. at 796-97 (emphasis added).

Applying the rule adopted by the Fourth Circuit in Ad-

kins to the instant facts, it is manifest that the October 6,

1987 accident in this case was the precipitating causal event

leading to the petitioner’s total and permanent disability.

As noted by the expert testimony at trial, the “accident” in

October [1987] did precipitate the petitioner’s removal

from work (Appellate Decision at 5; A-33).

The petitioner in the instant case has consistently con-

ceded that his preexisting back condition may have predis-

posed him to the injury precipitated by the October 6, 1987

lifting incident. However, the petitioner has always con-

tested any suggestion that this preexisting back condition

substantially contributed to the October 6, 1987 injury, and

the record certainly does not establish that the petitioner’s

preexisting condition substantially contributed to cause the

injury precipitated by the 1987 accident. In light of the

26

above, applying the standards enunciated by the Fourth

Circuit in Adkins, with respect to construction of the par-

ticular insurance policy exclusion language used both in the

Adkins insurance policy and in the instant insurance policy,

consistent with the emerging federal commo.. law of

ERISA, the petitioner was not precluded from receiving

disability insurance benefits under the policy in question in

this case, even though a literal reading of the exclusion

provisions of the policy would have mandated this result

due to petitioner’s preexisting condition.

However, applying the harsh analysis adopted by the

Sixth Circuit in reviewing the instant case, the petitioner

was denied benefits under his insurance policy because the

court chose to “adhere to the literal language of [the] acci-

dent insurance contract” (Appellate Decision at 9-10; A-

37), including the language providing that coverage would

be provided only for losses which resulted absolutely inde-

pendently of any other conceivable contributing cause. In-

deed, the appellate court placed its greatest reliance on a

literal reading of this exclusionary language in denying

petitioner’s claims, holding that “most importantly for us,

Lingerfelt’s situation falls within the clear language of the

policy exclusions” (Appellate Decision at 11; A-38).

As the foregoing clearly indicates, the decisions of the

Fourth Circuit Court of Appeals in Adkins and the Sixth

Circuit Court of Appeals in the instant case are clearly in

conflict with respect to an important question of federal

law which has not, but which should be, resolved by this

Court. As with the definition of the term “accident,” the

construction of insurance policy exclusion clauses in insur-

ance policies governed by ERISA is doubtless the sort of

question which may reasonably be anticipated to recur in-

numerable times in the future with respect to claims for

ERISA benefits. Although this issue has been the subject

of a considerable body of developed law in the state appel-

27

|

late courts, the construction of exclusionary terms such as

the one involved in this case, in ERISA policies, is a rela-

tively new problem. Consistent with the policies under-

lying the enactment of ERISA, and the prior decisions of

this Court, petitioner would respectfully submit that the

definitional questions regarding the instant policy should

be resolved by this Court so as to chart a uniform federal

common law of ERISA with respect to the construction of

ERISA-governed insurance policies, so as to insure har-

mony among the federal circuits, and so as to prevent de-

velopment of 50 different sets of federal common-law rules

of ERISA, each applicable to a respective state, thus

thwarting the efforts of Congress to create a uniform and

reliable federal law governing employee benefits.

Because the approach taken by the Fourth Circuit

Court of Appeals in Adkins appears to be more consistent

with the ameliorative purposes behind ERISA than the

harsh approach taken by the Sixth Circuit in giving literal

effect to the exclusionary clauses in the insurance policy in

question, petitioner respectfully submits that this Court

should grant the petitioner’s petition, reverse the court be-

low, and adopt the rule set forth by the Fourth Circuit in

Adkins as the federal common law of ERISA with respect

to ERISA-governed insurance policy exclusion clauses.

28

CONCLUSION

For the foregoing reasons, the petitioner, Edward

Lingerfelt, respectfully requests that this Court grant this

petition and issue a writ of certiorari to the Sixth Circuit

Court of Appeals.

Respectfully submitted,

Tony Seaton

Counsel of Record

Commerce Center West

926 West Oakland Avenuc

Johnson City, TN 37604

(615) 282-1041

Counsel for Petitioner

APPENDIX A

(filed February 9, 1990]

IN THE UNITED STATES DISTRICT COURT

FOR THE EASTERN DISTRICT OF TENNESSEE

NORTHEASTERN DIVISION

EDWARD LINGERFELT

NO. CIV-2-89-206

V.

COMPANY OF NEWARK,

N.J., and

CONTINENTAL INSURANCE

COMPANY )

)

)

)

)

COMMERCIAL INSURANCE _ )

)

)

)

MEMORANDUM OPINION

The trial of this case on its merits was conducted for

two days before the undersigned on January 25 and 26,

1990, without the intervention of a jury. The following

findings of fact and conclusions of law are made pursuant

to Rule 52(a), Federal Rules of Civil Procedure.

I. STATEMENT OF THE CASE

Plaintiff Edward Lingerfelt was employed as a chemical

operator at Nuclear Fuel Services, Inc. [NFS! when on Oc-

tober 6, 1987, he suffered a back injury. Defendants Com-

mercial Insurance Company of Newark, N.2. [Commercial

Insurance] and Continental Insurance Company [Continen-

tal Insurance] are the insurance underwriters and adminis-

trators of an accident disability insurance plan in which the

plaintiff had participated as a contributing member during

his period of employment with NFS. It is noted that de-

fendant Continental Insurance is a subsidiary of defendant

Commercial Insurance and that these defendants’ interests

A-1

sla e

are, for all practical purposes, identical in this lawsuit.

Procedurally, Mr. Lingerfelt, the plaintiff in this case,

originally sued defendants Commercial Insurance, Conti-

nental Insurance, and NFS. In his complaint, he alleged

that jurisdiction exists under the Employee Retirement In-

come Security Act of 1974 [ERISA], 29 U.S.C. § 1132(e),

or, in the alternative, under 28 U.S.C. § 1332 and based on

diversity of citizenship. Defendants Commercial Insurance

and Continental Insurance filed answers to the complaint.

{[Doc. 3]. NFS filed a motion to dismiss or for summary

judgment [Doc. 5, Sa], arguing that it was not a proper

party defendant to the lawsuit. Before any action was

taken by the Court in regard to NFS’s motion to dismiss,

the parties filed a proposed agreed order, which was en-

tered by this Court, dismissing NFS as a party from this

lawsuit and ordering that the cause should continue as to

defendants Commercial Insurance and Continental Insur-

ance.

At the trial of this cause, the plaintiff testified that he

took out an insurance policy called the Voluntary Accident

Insurance Plan and that he could not recall what year this

insurance policy went into effect. He estimated that he

paid approximately $16.00 a month in premiums and that

he, not his employer NFS, maintained the subject plan

since the time it started. He alleged in his complaint that

he (and not NFS) filed his claim for total disability with

defendant Commercial Insurance and defendant Con-

tinental Insurance, as provided in the subject plan. He fur-

ther alleged that he has complied with all requirements of

the policy for making a claim for the total disability bene-

fits of $250,000. His compliance with the requirements for

making a claim, including filing a written proof of loss, is

not contested.

The policy at issue provides that, by way of exclusions,

A-2

there is no coverage of loss resulting from illness or dis-

ease. [See Exhibit 4, page 2]. The policy also provides that

the insured may recover for permanent total disability “re-

sulting directly and independently of all other causes from

bodily injuries caused by accident occurring while this pol-

icy, is in force as to an insured person.” [See Exhibit 4, page

8}. The policy defines permanent total disability as fol-

lows:

If injury occurring after the effective date

of coverage and commencing within 365

days after an accident causes continuous

total disability for 12 continuous months

and you are judged to be permanently

and totally disabled (unable to engage in

each and every occupation or employ-

ment for compensation or profit for

which you are reasonably qualified by

reason of your education, training or ex-

perience), you will be paid the Principal

Sum less any amount paid or payable

under the policy as the result of the same

accident.

[See Exhibit 4, page 2].

'This language quoted hereinabove is taken from a pamphlet which

is a summary of the Voluntary Accident Insurance Plan for Hourly Em-

ployees of Nuclear Fucl Services, Inc. The master plan issued by de-

fendant Commercial Insurance was also entered into evidence as Ex-

hibit 43. The master plan and the summary plan contain virtually the

same wording and language. However, the Sixth Circuit Court of Ap-

peals has held that, in regard to differences between a summary of the

plan and the mastcr plan, the court is bound to follow the summary

plan. See Edwards v. State Farm Mutual Auto Insusance Co., 851 F.2d

134 (6th Cir. 1988).

In this case, the plaintiff alleges that he became totally

and permanently disabled from his occupation with NFS

and any other occupation as a result of an accident in

which he was involved on October 6, 1987; and that be-

cause he is totally and permanently disabled and has com-

plied with all requirements of the subject policy for making

a claim for the total disability benefit, he is entitled to re-

cover the principal sum of the policy ($250,000) from the

defendant. Finally, he also argues that he is entitled to re-

cover attorneys’ fees and costs in addition to the lump sum

disability benefit of $250,000; and an award of prejudgment

interest from the date that his application was denied (Sep-

tember 30, 1988) through the date of the trial of this case

(January 25 and 26, 1990).

The defendants admit that the plaintiff complied with

all requirements of the subject policy for making a claim

pursuant to the policy; however, they deny that the plaintiff

is entitled to recover on this cause of action. Specifically,

they argue that the plaintiff was not involved in an “acci-

dent” within the meaning of or terms of the contract; that

he did not suffer a “loss resulting directly and independ-

ently of all other causes” within the meaning of or the

terms of the contract; that his alleged disability is based in

whole or in part on degenerative disc disease to the back

and, therefore, is a “disease” specifically excluded from

coverage by the terms of the contract; and that the plaintiff

is not totally and permanently disabled within the meaning

or terms of the contract.

The parties contend that this action arises under the

Employee Retirement Income Security Act of 1974

(“ERISA”), 29 U.S.C. § 1001, et seg. Specifically, the ac-

tion arises under 29 U.S.C. § 1132(e). ERISA preempts

state causes of action. 29 U.S.C. § 1144; Pilot Life v.

Dedeaux, 481 U.S. 41-56, 107 S.Ct. 1549, 1557, 95 L.Ed.2d

39, 53 (1987).

A-4

—————reeee

Until recently, the standard which this Court applied in

regard to ascertaining the validity of the defendant’s ac-

tions under the policy was whether the defendant acted in

an arbitrary and capricious manner in denying benefits to

the plaintiff. See, e.g., Cook v. Pension Plan for Salaried

Employees of Cyclops Corp., 801 F.2d 865 (6th Cir. 1986);

Moore v. Reynolds Metal Company Retirement Program for

Salaried Employees, 740 F.2d 454, 457 (6th Cir. 1984), cert.

denied 469 U.S. 1109, 105 S.Ct. 786, 83 L.Ed.2d 780 (1985).

However, the standard was recently changed by the United

States Supreme Court in the case of Firestone Tire and

Rubber Co. v. Bruch, 489 U.S. __, 109 S.Ct. 248, 103

L.Ed.2d 80 (1989), which holds that this Court must exer-

cise a de novo standard of review over the actions of the

defendant insurance companies. As stated by Judge Edgar

in the case of Schiller v. Mutual Benefit Life Insurance Co.,

713 F.Supp. 1064 (E.D. Tenn. 1989),

In its de novo review of [the

defendant’s] actions, this Court is to look

to the “federal common law” for guid-

ance. Firestone, 489 U.S. at __, 109 S.Ct.

at 954-955, 103 L.Ed.2d at 92-93. In Pilot

Life v. Dedeaux, the Supreme Court has

said that courts are to develop substantive

federal law derived from the federal pol-

icy regarding private welfare and pension

plans in a fashion similar to the way that

the courts have fashioned substantive fed-

eral law under section 301 of the Labor

Management Relations Act of 1947

(“LMRA”) in accordance with the policy

of our national labor laws. 481 U.S. at

56-57, 107 S.Ct. at 1556-1558, 93 L.Ed.2d

at 52-53.

In Firestone, the Supreme Court has

A-5

indicated that if the ERISA plan does not

give the employer or administrator dis-

cretionary or final authority to construe

uncertain contract terms, the courts are

to review the employee’s claim as it

would any contract claim “by looking to

the terms of the plan and other manifes-

tations of the parties intent.” 489 U.S. at

__, 109 S.Ct. at 955, 103 L.Ed.2d at 94.

Schiller, supra at 1065-1066.

In order to ascertain whether, under the contract terms,

the plaintiff suffered a loss caused by or resulting from an

illness or disease, which is excluded under the terms of the

policy, and whether he meets the terms of the policy which

insure him “against loss resulting directly and independ-

ently of all other causes from bodily injuries caused by ac-

cident occurring while this policy is in force”, the under-

signed must review the facts of this case. In this regard,

the undersigned makes the following findings of fact pursu-

ant to Rule 52(a), Federal Rules of Civil Procedure.//.

FINDINGS OF FACT

A. HISTORY OF PLAINTIFF’S BACK CONDITION:

The plaintiff was born on June 20, 1940, and has ob-

tained a high school education. On February 6, 1987, he

was hired by NFS as a production operator, a job position

which is also referred to as a chemical operator. Mr.

Lingerfelt had a variety of duties and responsibilities in this

job, ranging from painting portions of the NFS facilities to

demolition work involving the moving and carrying of

heavy containers and equipment. It was undisputed that

the plaintiff's work required him to engage in medium to

heavy work and, on occasion, lift in excess of 100 pounds in

order to fulfill his responsibilities.

The medical records of the plaintiff reveal that he has

had complaints of back pain as far back as March of 1973.

[Exhibit 24]. He testified that in 1974, he missed work for

approximately four to five months because of his lower

back pain. He was treated by Dr. T. J. Ellis and hospital-

ized in April of 1974 in regard to his complaints of low

back pain. Dr. Ellis noted that the plaintiff told him he

had been suffering said back pain for approximately five or

six months and that the back pain had worsened two weeks

prior to his admission to Memorial Hospital, Inc., of John-

son City, Tennessee. Upon admission, Dr. Ellis reported

the plaintiff's height to be five feet eleven inches and his

weight to be 227 pounds. A physical examination of the

plaintiffs extremities revealed tenderness over the L-4

interspace in the midline of the back. Dr. Ellis also made

the following findings:

There is some slight tenderness across

the left sciatic nerve superiorally, but no

sciatic notch tenderness. He is able to

flex his back enough to get his fingertips

to knee level. He bends fairly well to the

right and left, however bending to the left

gives midlumbar pain without any irradia-

tion. Straight leg raising is possible to

about 70 degrees estimated bilaterally be-

fore he had hamstring tightness. No sub-

jective numbness in the lower extremity.

[Exhibit 24]. Plaintiff was treated conservatively during

hospitalization and was discharged to outpatient care after

four days of hospitalization. The final diagnosis by Dr.

Ellis was that of lumbar disc syndrome.

In March of 1974, the plaintiff sought treatment from

Dr. Beaver, at which time he was diagnosed as suffering

from acute low back strain resulting from having lifted

A-7

something at work. Initially, he was treated conservatively

as an Outpatient, but was eventually admitted for a period

of hospitalization. [Exhbibit 27].

In June of 1975, the plaintiff again injured his back.

Said injury occurred in the course of his employment and

as a result of lifting a tube. [Exhibit 18]. The plaintiff con-

sulted Drs. Ellis and Beaver. Dr. Beaver opined that the

plaintiff suffered a thirty-five percent disability to the body

as a whole. He further restricted the plaintiff from engag-

ing in any type of employment requiring repeated or stren-

uous lifting, pushing, or stacking. He limited the plaintiff

from lifting more than twenty-five pounds and opined that

the plaintiff needed to alternate between sitting and stand-

ing. He also stated “[a]ny significant strenuous work

causes a flare up. He is seen intermittently with bouts of

flare up with increased pain and spasm, but this is not con-

sidered an operable situation. He needs to get into a light-

er type of work.” [Exhibit 27]. It is further noted that Dr.

Mullins also examined the plaintiff in regard to his back

problems and diagnosed him as suffering from chronic

lumbosacral strain. He opined that the plaintiff should not

return to the type of work which would require heavy lift-

ing, bending, straining, climbing, pulling, etc., and further

opined that he should perform only light work. [Exhibit

33]. It is noted that these restrictions are virtually identical

to those imposed on the plaintiff after his injury sustained

in October, 1988, and which is the subject of this lawsuit.

As a result of this injury, the plaintiff entered into a

compromise settlement and lump sum payment under the

Workmen’s Compensation Act with NFS and Travelers In-

surance Company. [Exhibit 13]. In that state law action,

the parties agreed upon a settlement on a permanent par-

tial disability of forty-two percent to the body as a whole.

Furthermore, NFS approved his absence from work for

long-term disability commencing December 24, 1975 and

continuing until his return to work on August 6, 1979. [Ex-

hibit 1]. During his absence from work, he continued to

receive treatment for his back. [Exhibit 25].

It is noted that, pursuant to an insurance policy carried

by an insuring company other than the defendants in the

case at hand, the plaintiff applied for accidental _ permanent

total disability. In this application, he alleged accidental

permanent total disability as a result of the incident on

June 24, 1975. [Exhibit 18]. Plaintiff's application pursu-

ant to said accidental permanent total disability insurance

policy was denied.

Upon the plaintiff's return to work in August of 1979,

Roland Bailey of NFS stated that the plaintiff should not

lift more than twenty-five pounds or engage in repeated

stooping, pushing or pulling, or much step clirmbing. He

further stated that the plaintiff “should be counseled as to

[his] restrictions and instructed not to perform work that

would violate these restrictions.” [Exhibit 34]. In this re-

gard, the plaintiff testified that he initially performed only

light work upon his return to his position as a chemical op-

erator. However, he stated that he felt as though he could

perform more strenuous work and after approximately six

weeks, he returned to engaging in the heavy work which he

had performed prior to his injury.

The plaintiff again received treatment for his back

problem in 1984, at which time he was admitted to John-

son City Medical Center Hospital for ten days. During his

hospitalization, he was followed by Dr. B. A. Richardson,

who stated that the plaintiff was admitted to the hospital

because of “marked tightening of the chest, marked pulmo-

nary congestion, elevated temperature, and also some low

back pain and GI bleeding and rectal bleeding.” [Exhibit

17}. While hospitalized, the plaintiff's back was x-rayed,

revealing marked narrowing of the lumbosacral disc. At

A-9

this time, Dr. Richardson opined that the plaintiff was suf-

fering from degenerative arthritis.

In 1986, the plaintiff again sought treatment for his

back pain. [Exhibits 9, 28, 29]. This time said treatment

was sought from Dr. Kennedy of the Watauga Orthopedic

Professional Association, Inc. Dr. Kennedy found that the

plaintiff was showing signs of improvement both subjec-

tively and objectively. He further stated that the plaintiff's

CT scan at NFH showed multiple level

degenerative disc disease but no evidence

of any acute lesion which we could

definitely attribute to his most recent in-

dustrial injury. It does not appear that he

would benefit from surgery.

I plan to recheck him in 2 weeks, at

which time hopefully we can return him

to work.

[Exhibit 29].

In November of 1986, Dr. Kennedy again stated that

the plaintiff had made satisfactory progress in recovering

from his low back pain. At this time, he released the plain-

tiff to return to work, stating that there was no evidence of

permanent physical impairment which could be attributed

to the recent work-related injury. He further stated:

I think the most important thing [Mr.

Lingerfelt] has gained probably has been

the concept of various techniques for

preventing recurrence of low back pain.

He will need to continue to be careful

with his back for the rest of his life be-

cause of his multiple level painful degen-

erative disc disease.

(Exhibit 28}.

This concludes the review of the plaintiffs medical

condition prior to October 8, 1987, the date upon which he

alleges he became permanently and totally disabled within

the meaning of the subject policy.

B. INCIDENT OF OCTOBER 8, 1987:

On October 8, 1987, the plaintiff was engaged in demo-

lition work. He and co-worker Isaac (Ikie) Price and Su-

pervisor Claude Tims attempted to lower a motor from a

roof of a building to the floor. The plaintiff described this

motor as weighing at least 250 pounds. The three men tied

a rope around the motor and began to lower it to the floor

when the plaintiff felt a “catch” in his lower back. [Exhibit

5]. He further testified that he felt the rope jerk im-

mediately prior to feeling the “pop” or “catch” in his back,

and he was not sure whether the motor had bumped a lad-

der or what had caused it to jerk. It is noted that the

plaintiff's application for accidental disability benefits does

not mention that the rope jerked when he and the other

two men were lowering the motor.

However, reasons set forth hereinafter, the undersigned

finds that it is not necessary to resolve any conflict in the

evidence as to whether the rope jerked or not, as this point

is immaterial. Plaintiff reported his injury to his supervisor

and completed the necessary accident report forms. NFS

required him to undergo an examination performed by the

company doctor, Dr. Hyder. Subsequent to his examina-

tion by Hyder, plaintiff returned to the Watauga Ortho-

pedic Professional Association where he was treated by Dr.

Calvin Johnson. [Exhibit 9].

In November of 1987, Dr. Johnson wrote a letter in

which he summarized his findings regarding the plaintiff's

back condition subsequent to the October 7, 1987 incident.

He noted the plaintiff's complaints of severe pain and limi-

tation of intersegmental movement and a moderate degree

of overall limitation. Upon review of the plaintiff's x-rays

taken a year prior to this incident, Dr. Johnson noted the

plaintiffs marked degenerative disc disease at LS-S1 and

severe disc degeneration at L3-4. Dr. Johnson advised the

plaintiff not to return to work until he underwent therapy,

with the hope that said therapy would bring improvement

to his condition. However, Dr. Johnson stated that he

could not say with certainty that the plaintiff would be able

to return to work due to his significant degenerative disc

and facet disease. [Exhibit 9]. The plaintiff remained

under Dr. Johnson’s treatment and has never been re-

leased from his care or authorized to return to work.

The plaintiff filed a worker’s compensation claim

against NFS and Liberty Mutual Insurance Company. In a

deposition taken of Dr. Johnson in November of 1988 in

regard to the plaintiffs worker’s compensation claim, Dr.

Johnson stated that in February of 1988, he felt the plain-

tiff had probably reached maximum improvement although

he was still suffering a great deal of back pain. Dr. John-

son opined that the plaintiff could not return to his job at

NFS since this job involved heavy work. He restricted the

plaintiff from engaging in repetitive lifting, bending, stoop-

ing, twisting, climbing ladders or stairs, vigorous or strenu-

ous pushing or pulling, or repeated or vigorous jostling. At

the time of this deposition, Dr. Johnson opined that the

plaintiff had a permanent impairment of twenty percent to

the body as a whole, as a result of his back, at least twelve

percent of which could be attributed to the recent injury.

{See Deposition of Dr. Calvin Johnson, Exhibit 9, page 10].

Dr. Jewell of Bristol Orthopedic Associates, Inc., con-

A-12

curred with Dr. Calvin Johnson’s impairment rating of

twenty percent permanent impairment relative to the body

as a whole as a result of his back condition, twelve percent

attributable to the October of 1987 injury and eight per-

cent preexisting this injury. Dr. Jewell also opined that the

plaintiff could not perform his past job due to the amount

of lifting involved. He stated that the plaintiff specifically

needed to avoid prolonged standing, re-petitive bending, or

lifting. It is further noted that Dr. Jewell opined that the

plaintiff could perform a light work job within the confines

of these limitations. [Exhibit 16].

Mr. Lingerfelt entered into a settlement agreement

with NFS and Liberty Mutual Insurance Company on the

worker’s compensation claim. In this settlement agree-

ment, the plaintiff received a lump sum payment of

$20,000, which was the equivalent of uncommuted perma-

nent partial disability to the body for approximately 29.8

percent permanent partial disability to the body as a whole

of Mr. Lingerfelt. [Exhibit 14].

In the trial of the case at hand, Dr. Aiex Williams’ testi-

mony via deposition was that he would have restricted the

plaintiff from performing medium to heavy work prior to

the October, 1987 injury and that, based on prior CT scan

reports and x-rays, the plaintiff's degenerative arthritic

condition was the reason for placing this limitation on the

plaintiff. [See Exhibit 22, page 12]. He further testified

that the plaintiff suffers from a degenerative disc disease at

L3 and LS with a pars inarticularis defect at the LS level.

[Exhibit 22, pages 6, 9].

Plaintiffs treating orthopedic specialist, Dy. Calvin

Johnson of Johnson City, Tennessee, testified by deposi-

tion that the plaintiff's degenerative disc problems had

been going on for quite some time. [Exhibit 21, pages 9,

10}. He further stated that the plaintiffs injury of October,

A-13

a

1987 was the precipitating factor which removed him from

the work force, but that there was no question that he had

also suffered other back injuries. “I have trouble separat-

ing the whole thing because there was certainly not one

specific episode that is the origin of this man’s back pain.

There is a precipitating episode. There is an accident in

October that did precipitate his removal from work and

has led to his failure to return to gainful employment.”

[Exhibit 21, page 14].

Dr. Norman Hankins, a board-certified vocational ex-

pert, testified at the trial of this case on the plaintiff's be-

half. As a vocational expert, Dr. Hankins interviewed the

plaintiff and conducted numerous intelligence and voca-

tional tests designed to measure the plaintiff's aptitudes

and skills. He also reviewed the opinions of Dr. Johnson

andhis recommendation that the plaintiff sit for a maxi-

mum of 45 minutes, walk for a maximum of one and one-

half hours, and alternate his positions. He noted that Dr.

Johnson indicated that the plaintiff's pain is great. In addi-

tion, Dr. Hankins reviewed a deposition of Dr. Williams.

After reviewing all this evidence, Hankins opined that the

plaintiffs pain would prevent him from sustaining regular

work; and that there are no jobs for someone, such as the

plaintiff, whose pain renders him unreliable in the work

place. He further opined that, as a practical matter, em-

ployers generally choose not to hire a person with the

plaintiffs physical/medical problems but, instead, hire ap-

plicants who have no health problems.

Dr. David Sabatino, also a vocational expert, testified

on behalf of the defendants. He, of course, disputed the

findings of Hankins and opined that the plaintiff could be

retrained vocationally and perform a number of jobs exist-

ing in the economy. He further opined, initially, that the

plaintiff is a malingerer. His explanation of how he con-

cluded that the plaintiff is a malingerer was vague and un-

A-14

clear. Therefore, his testimony on this point is rejected.

This concludes the review of the evidence regarding the

plaintiffs back condition. As previously stated, the plain-

tiff received workers’ compensation as a result of this in-

jury. He was also approved for long-term disability by NFS

and presently is receiving long-term disability benefits pur-

suant to the group long-term disability insurance provided

by NFS. [Exhibit 19]. He is also receiving Social Security

disability insurance benefits, which were awarded to him

on April 11, 1989. [Exhibit 11]. In this regard, an Admin-

istrative Law Judge reviewed the plaintiffs claim and

found that the plaintiff suffers from degenerative spinal

disease at multiple lumbar levels. He further noted that

the plaintiff's treating orthopedic surgeon, Dr. Johnson, has

opined that he could perform sedentary work; that Dr.

Norman Hankins, a vocational expert, opined that, given

the limitations of Dr. Johnson, the claimant could not per-

form a full range of sedentary work but suffers a 100 per-

cent vocational! disability; that Dr. Johnson’s limitations in-

clude no repetitive lifting, bending, stooping, twisting,

climbing ladders or stairs, and vigorous or strenuous push-

ing or pulling or repeated or vigorous jostling. After re-

viewing the evidence, the Administrative Law Judge

opined that the plaintiffs musculoskeletal problems re-

duced his exertional capability to the extent that he is inca-

pable of performing any work available in substantial num-

bers in the national economy, and that he has a residual

functional capacity insufficient for the performance of sub-

Stantial gainful activity, sedentary or otherwise. Therefore,

he found the plaintiff entitled to a period of disability

commencing October 9, 1987 and to disability insurance

benefits accordingly.

Ill. CONCLUSIONS OF LAW AND REVIEW

UNDER ERISA

As stated at the outset, this Court is to review the

plaintiff's claim filed pursuant to ERISA as it would any

contract claim “by looking to the terms of the plan and

other manifestations of the parties’ intent.” Schiller, supra,

at 1066, quoting Firestone, supra, 103 L.Ed.2d at 94. After

reviewing the facts of this case and looking at the terms of

the subject plan, the undersigned finds that the plaintiff did

not suffer a “loss resulting directly and independently of all

other causes”, but instead is unable to return to his former

occupation with NFS as a result of a “illness or disease”

which he has been suffering for over fifteen years and

which excludes him, under the terms of the policy, from

receiving benefits. The proof shows that the plaintiffs se-

vere and painful degenerative disc disease and arthritis

combined and concurred with any injury he may have sus-

tained in October of 1987 to cause his present condition.

His own physician stated that he is suffering from a severe

disc disease which is a significant factor in his present dis-

ability.

As previously stated, the Supreme Court has stated that

courts should develop substantial federal law derived from

the federal policy regarding private welfare and pension

plans in a fashion similar to the way that the courts have

fashioned federal law under § 301 of the Labor Manage-

ment Relations Act of 1947. Schiller, supra, at 1065. In

this regard, and as stated by the Schiller court, “[i]nsurance

policies have been traditionally interpreted in accordance

with state law. Under § 301 of the LMRA, it is possible to

resort to state law in interpreting collective bargaining

agreements if state law is compatible with federal policy.

Any state law so utilized, however, becomes absorbed as

federal law.” Schiller, supra, at 1066, quoting Textile Work-

ers Union v. Lincoln Mills, 353 U.S. 448, 457, 77 S.Ct. 912,

A-16

918, 1 L.Ed.2d 972 (1957). The undersigned finds that

State iaw is in agreement with this Court’s interpretation of

the subject policy.

The undersigned notes that in formulating rules of law

to govern aspects of the employee benefit field, the court

must be guided by the general policies underlying ERISA.

The general objective of this Act is to in-

crease the number of individuals in em-

ployer-financed benefit plans. Congress

wanted to assure that thuse who partici-

pate in the plans actually receive the ben-

efits they are entitled to and do not lose

these as the result of unduly restrictive

‘provisions or lack of sufficient funds.

Helms v. Monsanto Co., Inc., 728 F.2d 1416 (11th Cir.

1984), quoting 1974 U.S. Code Cong. & Ad. News, 4639,

4670, 4676-77. As will be addressed more fully hereinafter,

the subject plan in which the plaintiff was participating was

a totally voluntary plan. In other words, employees of NFS

were not required to be enrolled in the voluntary accident

insurance plan but were merely offered the opportunity to

enroll in said plan. Any insurance they obtained pursuant

to this plan was not funded by the employer, NFS. Instead,

NFS funded a different disability insurance plan, pursuant

to which the plaintiff is presently receiving benefits.

In regard to formulating a rule of law on the question

of whether the plaintiff is unable to recover because of the

provision in the insurance policy excluding coverage of in-

jury from “disease”, the undersigned has found virtually no

federal cases. The undersigned has read the case of Ore v.

Aetna Life Insurance Co., 435 F.2d 957 (6th Cir. 1970). In

Ore, the plaintiff sought recovery of accidental death bene-

fits under a group life policy for the death of her insured

husband. As the jurisdiction of the Ore court was based on

diversity of citizenship, the court looked to the law devel-

oped by the State of Tennessee on this point and found:

It is also the general rule that if the in-

sured, at the time of the alleged acciden-

tal injury, was also suffering from a dis-

ease and the disease aggravated the ef-

fects of the accident, and actively contrib-

uted to the disability or death occasioned

thereby, there can be no recovery under

the policy.

Ore, supra, at 959, quoting Britton v. Prudential Insurance

Co. of America, 205 Tenn. 726, 730-731, 330 S.W.2d 326,

328 (1959).

The undersigned further finds that Tennessee’s rule on

this issue is the same rule applied by the majority of «

State courts when faced with interpreting exclusionary

clauses in accidental death and disability insurance policies,

similar to the exclusionary clause at issue in the case at

hand. In this regard, 131 A.L.R. 240, 242 makes the fol-

lowing pertinent statement:

Where, however, at the time he sustained

an accidental injury the insured was suf-

fering from a disease or other infirmity,

and such disease or infirmity proximately

caused, or substantially contributed to, his

death or injury, it is generally held that

no recovery can be had under a policy in-

suring in substance against death or injury

resulting, independently of all other

causes, from accidental means, or varia-

tions of such provisions, and containing

no express exception with respect to dis-

A-18

ease, infirmity, etc. This conclusion was

reached in the following cases, which are

set out infra, II a.

Then follows a list of cases from virtually every state.

Application of this majority rule to the case at hand, which

is what Judge Edgar did in the Schiller case, leads the

undersigned to conclude that because of the plaintiffs

preexisting degenerative disc disease, he was suffering from

an “illness or disease” which caused or contributed to his

present condition and prevents him from recovering under

the terms of the policy.

Finally, the undersigned agrees with the defendants’

argument that to allow the plaintiff to recover under the

facts of this case would result in an inappropriate modifica-

tion of the customary and restrictive accidental disability

contract language used in this particular policy and which

has developed through years of extensive state court litiga-

tion. As stated by the defendants, “any such modification

would effectively rewrite the accidental disability policy

into a much broader injury or illness policy which would be

the equivalent of a long-term disability policy.” [File Doc.

40, page 5]. To hold for the plaintiff would amount to lib-

eralization of the contract terms and provide coverage

which was not contemplated when the policy was issued

and for which no premiums were paid. [> this regard, the

plaintiff paid approximately $17.00 a month for $250,000 of

coverage provided by the voluntary accident insurance plan

as opposed to payment of $2.45 per $100 of payroll in pre-

miums for coverage pursuant to the disability insurance

plan from which he presently receives benefits. By mathe-

matical calculation, on an annual salary of $25,000, the an-

nual premium for the disability insurance plan would be

approximately $612.50. It can be inferred from the differ-

ence in the amount of these premiums that the voluntary

accident insurance plan provides much more restrictive

coverage than does the disability insurance plan under

which the plaintiff presently receives benefits.

IV. CONCLUSIONS OF LAW AND REVIEW

UNDER STATE LAW

As Stated at the outset in the section above entitled

“Statement of the Case”, Mr. Lingerfelt originally sued his

employer, NFS, in addition to the defendant insurance

companies. In his complaint, he alleged that jurisdiction

exists pursuant to ERISA or, in the alternative, pursuant to

28 U.S.C. § 1332 for diversity of citizenship. However,

NFS’s principal place of business is at 205 Banner Hill

Road, Erwin, Tennessee 37659. Therefore, NFS is deemed

a citizen of the State of Tennessee; and as long as it was a

party to this lawsuit, there was no complete diversity of

citizenship. 28 U.S.C. § 1332(c). However, as noted in the

undersigned’s statement of the case, an agreed order was

entered dismissing NFS as a defendant in this case. Be-

cause NFS has been dismissed from the lawsuit and NFS

was not an indispensable party, jurisdiction based on diver-

sity of citizenship was acquired by the court upon the dis-

missing action as to the nondiverse party. Grant County

Deposit Bank v. Campbell, 194 F.2d 469 (6th Cir. 1952);

Dadew v. Tenn. Copper Co., 179 F.2d 245, aff'd. [sic] 218

U.S. 357, 54 L.Ed. 1069, 31 S.Ct. 81 (1910). Therefore, this

Court also has jurisdiction of this case as predicated on

diversity of citizenship and existing pursuant to 28 U.S.C. §

1332.

The issue of whether this Court should exercise juris-

diction of this case as based on diversity of citizenship or

under ERISA was not raised by the parties. Furthermore,

the defendants did not contest or litigate the question of

whether the insurance policy in question is an ERISA em-

ployee benefit plan. However, the undersigned questions

whether the subject policy is an ERISA employee benefit

A-20

plan as defined by the statute and the regulations passed by

the Secretary of Labor in relation to this statute. In this

regard, the Department of Labor has issued regulations de-

fining ERISA plan requirements. 29 C.F.R. § 2510.3-1(j)

(1989) states factors which will preclude an insurance plan

from ERISA designation:

(1) No contributions are made by an

employer or employee organization;

(2) Participation [in] the program is

completely voluntary for employees or

members;

(3) The sole function [sic] of the em-

ployer or ernployee organization with re-

spect to the program are, without endors-

ing 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; and

(4) The employer or employee organ-

ization receives no considera..on in the

form of cash or otherwise in connection

with the program, other than reasonable

compensation, excluding any profit, for

administrative services actually rendered

in connection with payroll deductions or

dues checkoffs.

The existence of an ERISA plan is a question of fact to

be answered in the light of all the surrounding circum-

stances from the point of view of a reasonable person.

Credit Managers Association v. Kennesaw License Accident

Insurance, 609 F.2d 617, 625 (9th Cir. 1987), citing Dono-

A-21

van v. Dillingham, 688 F.2d 1367, 1373 (11th Cir. 1982) en

banc. The party which asserts that ERISA applies has the

burden of establishing the existence of a plan which would

invoke ERISA’s exclusive remedy provisions. See Murphy

v. Inexso Oil Co., 611 F.2d 570, 573 (Sth Cir. 1980), and

Kanne v. Connecticut General Life Insurance Co., 859 F.2d

96, 99 n. 4 (9th Cir. 1988). As previously stated, the de-

fendants did not raise this issue during the trial of this

cause; however, the undersigned has some question as to

whether the proof established the existence of a plan which

would invoke ERISA’s exclusive remedy provisions.

The uncontradicted testimony during the trial of the

case was that participation in the program was completely

voluntary for employees. Furthermore, the policy itself is

entitled the “Voluntary Accident Disability Insurance” pol-

icy. The regulations promulgated by the Department of

Labor and quoted hereinabove mandate that ERISA does

not apply to a group-type insurance program offered by an

insurer to employees under which the participation in the

program “is completely voluntary for employees”. 29

C.F.R. § 2510.3-1(j)(2). It would appear from the facts of

this case that the insurance program at issue is not an

ERISA plan in that the employer, NFS, apparently did not

contribute to the payment of premiums but merely de-

ducted from the plaintiff's paycheck his payment and for-

warded it to the defendant companies on his behalf. 29

C.F.R. § 2510.3-1(j)(3). Furthermore, the participation by

the employees in the program was voluntary. Apparently,

the sole function of the employer was to publicize the pro-

gram and to collect premiums. When faced with a similar

factual scenario, the Southern District of Mississippi found

that the plan at issue was not an employee welfare benefit

plan as defined by ERISA and 29 C.F.R. § 2510.3-1(j) and,

therefore, ERISA had no application. Terry v. Protective

Life Insurance Co., 717 F.Supp. 1203, 1205 (S.D. Miss.

1989). Also see Taggart Corp. v. Life and Health Benefits

A-22

Administration, 617 F.2d 1208, 1211 (Sth Cir. 1980); Bond

v. Life Insurance Co. of North American, C.A. No. 88-4244

(E.D. La. Nov. 7, 1989); and Ellington v. Metropolitan Life

Insurance Co., 696 F.Supp. 1237, [sic] (S.D. Ind. 1988).

If the jurisdiction of this Court does not exist pursuant

to ERISA but is predicated, instead, on diversity of citizen-

ship, then the case clearly must be decided under Ten-

nessee law pursuant to a breach of contract claim. Ap-

plication of Tennessee law to the case at hand, [sic] results

in the conclusion that the plaintiff is not entitled to re-

cover.

As previously stated in this opinion, the general rule

applied in Tennessee is as follows:

[I]f the insured, at the time of the alleged

accidental injury, was also suffering from

a disease, and the disease aggravated the

effects of the accident, and actively

contributed to the disability or death oc-

casioned thereby, there can be no recov-

ery under the policy.

Where, however, at the time he sustained

an accidental injury the insured was also

suffering from a disease or infirmity, and

such disease or infirmity proximately

cause [sic], or substantially contributed to,

his death or injury, it is generally held

that no recovery can be had under a pol-

icy insuring in substance against death or

injury resulting, independently of all

other causes, from accidental means, or

variations of such provisions, and con-

A-23

taining no express exception with respect

to disease, infirmity, etc. Briton v.

Prudential Ins. Co. of America, supra, 205

Tenn. at 730-731, 330 S.W.2d at 328.

Ore v. Aetna Life Insurance Co., 435 F.2d 957, 959 (6th Cir.

1970).

Additionally, under Tennessee law, the plaintiff has

failed to prove that he was involved in an “accident” as

that word is traditionally defined by the Tennessee courts.

Accident disability insurance contract language has been

litigated exhaustively in Tennessee courts. In these cases,

the word “accident” has been interpreted as “an injury that

may be caused by a voluntary, natural ordinary movement,

executed exactly as was intended.” Baker v. National Life

& Accident Insurance Co., 298 S.W.2d 715, 717 (Tenn.

1956). A voluntary act which unexpectedly causes an indi-

vidual to sustain an injury has generally been found not to

meet the definition of “accident” and, therefore, any such

injury is excluded from coverage under an accidental dis-

ability insurance policy. Baker, supra. In other words, “a

person may do certain acts, the result of which produces

unforeseen consequences resulting in which is termed an

accident; yet it does not come within the terms of this con-

tract”. Baker, supra; Stone v. Fidelity & Casualty Co., 133

Tenn. 672, 182 S.W.2d 252 (1916). Tennessee decisions

distinguish between “accidental means” and “accidental re-

sults”. See Seeley v. Pilot Fire & Casualty Co., 222 Tenn. 33,

432 S.W.2d 58, 61 (1968).

In the case at hand, the facts reveal that the plaintiff's

back injury occurred subsequent to his engaging in heavy

work, specifically the lowering of a motor. This incident

and the resulting injury might be termed an “accidental re-

sult”. However, the means by which the injury occurred

were not accidental. The plaintiff was engaged in a volun-

A-24

tary act, that is, the act of intentionally lowering the 200-

pound motor. His bodily injury did not result “solely

through external, violent, and accidental means”. Seeley,

supra, at 61. As stated by the defendant,

Had a piece of heavy equipment fallen

without warning upon Edward Lingerfelt

as he walked beneath it, the plaintiff

would have sustained an “accidental” in-

jury under the terms of the defendant’s

policy. Since plaintiff was engaged in the

usual performance of his NFS duties and

making voluntary movements when he

“felt a sudden onset of pain” neither his

back “injury” nor his subsequent disabil-

ity are accidental under the terms of the

defendant’s policy.

[File Doc. 15, page 14].

In summary, the undersigned makes a legal finding, in

the alternative to the legal findings made pursuant to

ERISA, that if this case is treated as an insurance contract

case and reviewed under Tennessee law, the plaintiff still is

not entitled to recover and judgment must be entered for

the defendants.

Finally, the undersigned finds that a determination of

whether the plaintiff is permanently disabled under the

terms of the subject policy is unnecessary. By reason of the

Court’s finding that the plaintiff simply does not qualify for

benefits because he did not suffer a loss resulting directly

and independently of all other causes and because, instead,

he suffered a loss by reason of a disease that was preexist-

ing, the issue of whether he is totally disabled is pretermit-

ted. The question of whether the plaintiff is permanently

and totally disabled as defined by the plan (“unable to en-

A-25

gage in each and every occupation or employment for com-

pensation or profit for which you are reasonably qualified

by reason of your education, training or experience”) is a

difficult one. The Social Security Administration applies a

definition of disability virtually identical to the definition

contained in the subject insurance plan. Therefore, the

Administrative Law Judge’s finding that the plaintiff is to-

tally disabled is persuasive evidence of permanent and total

disability of the plaintiff. However, the record also con-

tains evidence that the plaintiff could perform sedentary,

or perhaps even light, work activity if he underwent voca-

tional rehabilitation or retraining. Also, even the plaintiff's

treating physician found only a twenty percent permanent

impairment in the context of the plaintiff's worker’s com~-

pensation case which arose out of the October, 1987 injury.

The doctor further opined that this twenty percent medical

impairment could be broken down as follows: twelve per-

cent occurred as a result of his October, 1987 injury, and

eight percent preexisted the October, 1987 injury.

There is positively no doubt in the undersigned’s mind

that the plaintiff suffers a very serious back problem which

has resulted in a variety of restrictions to his movement.

However, it is harder to determine whether he is perma-

nently and totally disabled; and because this question has

in effect been pretermitted by the finding that the plaintiff

does not qualify for benefits under the relevant portions of

the subject plan, the undersigned makes no finding in this

regard.

In conclusion, the Court finds that the plaintiff is not

entitled to recover disability benefits under the subject pol-

icy.

A-26

ENTER:

/s/ Joe A. Tilson

JOE A. TILSON

UNITED STATES MAGISTRATE

A-27

APPENDIX B

[filed February 9, 1990}

IN THE UNITED STATES DISTRICT COURT

FOR THE EASTERN DISTRICT OF TENNESSEE

NORTHEASTERN DIVISION

EDWARD LINGERFELT

NO. CIV-2-89-200

V.

)

)

)

)

COMMERCIAL INSURANCE _ )

COMPANY OF NEWARK, )

N.J., and )

CONTINENTAL INSURANCE )

COMPANY )

ORDER

For the reasons set out in the Memorandum Opinion

entered this day in this action, the Clerk is hereby DI-

RECTED to enter judgment in favor of the defendants and

against the plaintiff.

SO ORDERED:

s/ Joe A. Tilson

JOE A. TILSON

UNITED STATES MAGISTRATE

A-28

APPENDIX C

[filed February 5, 1991]

No. 90-5320

THE UNITED STATES COURT OF APPEALS

FOR THE SIXTH CIRCUIT

EDWARD LINGERFELT,

Plaintiff-Appellant,

Ve

NUCLEAR FUEL SERVICES, INC. On Appeal from

the United States

Defendant, District Court for

the Eastern Dis-

and trict of Tennessee

COMMERCIAL INSURANCE CO. OF

NEWARK, NEW JERSEY; and

CONTINENTAL INSURANCE CO.,

Defendants-Appellees.

BEFORE: NELSON and RYAN, Circuit Judges; and

LIVELY, Senior Circuit Judge.

RYAN, Circuit Judge. Plaintiff Edward Lingerfelt ap-

peals the magistrate’s judgment in favor of Commercial In-

surance Company of Newark, New Jersey, with respect to

Lingerfelt’s claim for accident benefits under an

employees’ group-based accident insurance plan. The is-

sues On appeal are 1) whether the magistrate’s fact finding

that disease rather than accident caused the employee’s

back injury is clearly erroneous, and 2) whether, assuming

the Employee Retirement Income Security Act of 1974

(ERISA), as amended, 29 U.S.C. § 1001, et seq., applies,

ERISA policy dictates that the insurance plan be construed

to cover Lingerfelt’s injuries.

We conclude that the magistrate’s fact finding that dis-

ease caused the employee’s injury is not clearly erroneous,

and that even assuming ERISA governs this case, ERISA

policy does not suggest that we construe an insurance plan

clearly intended to cover only injury due to accident to

cover injury due to disease.

Lingerfelt, a chemical operator at Nuclear Fuel Serv-

ices, Inc. (NFS), suffered a sudden recurrence of back

problems on October 6, 1987, while helping to lower a 250-

pound motor from the roof of a building.

Lingerfelt was a contributing member of an accident

disability insurance plan with Commercial Insurance Com-

pany. The plan policy was entitled, “Voluntary Accident

Insurance Plan for Hourly Employees of Nuclear Fuel

Services, Inc.” NSF [sic] employees were not required to

participate in the plan, and NSF did not help fund the plan,

which was funded entirely by the employees themselves.

Under the policy terms, Lingerfelt was covered “24 hours a

day, 365 days a year against loss from any type of accident

which occurs in the course of business or pleasure, in-

cluding accidents on or off the job, occurring in or away

from home, traveling by train, airplane, automobile, or

oiher public and private conveyance (except as noted in

”Exclusions” below).” Under the heading “Exclusions,” the

policy stated, “The policy excludes loss resulting from in-

tentionally self-inflicted injuries or suicide or any attempt

thereat; accident occurring while insured is on full-time ac-

tive duty in any Armed Forces; pregnancy, childbirth, ill-

ness or disease... .”

A-30

Under the heading “PERMANENT TOTAL DISABIL-

ITY,” the policy further provided:

If injury occurring after the effective date

of coverage and commencing within 365

days after an accident causes continuous

total disability for 12 continuous months

and you are judged to be permanently

and totally disabled (unable to engage in

each and every occupation or employ-

ment for compensation or profit for

which you are reasonably qualified by

reason of your education, training or ex-

perience), you will be paid the Principal

Sum less any amount paid or payable

under the policy as the result of the same

accident.

A less conspicuous part of the policy clarified that the em-

ployee was insured “against loss resulting directly and inde-

pendently of all other causes from bodily injuries caused by

accident occurring while this policy is in force... .”

Claiming that he was totaily and permanently disabled

as a result of the recurrence of his back problems,

Lingerfelt filed a policy claim for disability benefits with

Commercial Insurance Company and its subsidiary Conti-

nental Insurance Company. When bis policy claim was de-

nied, Lingerfelt brought suit in federal district court against

Commercial Insurance Company, Continental Insurance

Company (a subsidiary of Commercial Insurance), and

NFS. He aileged jurisdiction under ERISA or alternatively

under diversity of citizenship. The parties voluntarily dis-

missed NFS and Continental Insurance Company from the

lawsuit.

Lingerfelt alleges that he was totally and permanently

A-31

disabled as a result of the back injury and therefore is enti-

tled to the $250,000 disability benefit under the policy.

The insurance company refuses to pay on the grounds that

Lingerfelt was not the victim of an “accident” as covered

by the policy. Specifically, the company alleges that the

back injury was due in whole or part to degenerative disc

disease.

As required by Firestone Tire and Rubber Co. v. Bruch,

489 US. _, 103 L.Ed.2d 80, 95-96 (1989), the magistrate

evaluated the insurance companies’ decision to deny bene-

fits de novo. Following a trial, the magistrate found that

plaintiff had a long history of back problems dating back to

at least March 1973. These problems sometimes had re-

quired hospitalization and Lingerfelt had sought treatment

for the problems periodically up until the time of the Octo-

ber 6, 1987, injury.

In June of 1975, for example, Lingerfelt injured his

back while lifting some tubing on the job. A doctor gave

his opinion that Lingerfelt suffered a thirty-five percent

disability to his body as a whole due to that accident. The

doctor restricted the plaintiff from lifting more than

twenty-five pounds and noted that “[a]ny significant strenu-

ous work causes a flare up.... He needs to get into a

lighter type of work.” Due to that injury, Lingerfelt re-

ceived a lump sum payment under the Workers’ Com-

pensation Act, and he was absent from work due to long-

term disability from December 24, 1975, until August 6,

1979. When Lingerfelt returned to work, he initially did

only “light” work but then felt he could perform heavier

labor and eventually returned to the heavy work he had

been doing before the June 1975 injury.

In 1984, Lingerfelt was hospitalized again, partly due to

low back pain. At that time a doctor thought Lingerfelt

had degenerative arthritis. In 1986 a different doctor con-

A-32

cluded Lingerfelt “showed multiple level degenerative disc

disease.” In November of 1986, this doctor released

Lingerfelt to return to work but concluded, “He will need

to continue to be careful with his back for the rest of his

life because of his multiple level painful degenerative disc

disease.”

After the October 6, 1987, accident at issue here, Dr.

Johnson, who had been following Lingerfelt’s condition for

several years, stated in effect that he could not say with

certainty that Lingerfelt would be able to return to work in

view of Lingerfelt’s significant degenerative disc and facet

disease. In a later deposition, Dr. Johnson stated in effect

that while the October 1987 injury was the precipitating

factor which removed Lingerfelt from the work force, there

was no question that Lingerfelt also had suffered other

back injuries. Dr. Johnson stated, “I have trouble separat-

ing the whole thing because there was certainly not one

specific episode that is the origin of this man’s back pain.

There is a precipitating episode. There is an accident in

October that did precipitate his removal from work and

has led to his failure to return to gainful employment.”

The magistrate evaluated Lingerfelt’s claim filed pursu-

ant to ERISA as the magistrate would evaluate any con-

tract claim, by looking to the terms of the agreement and

other indicia of the parties’ intent. In view of the evidence

just discussed, the magistrate concluded:

After reviewing the facts of this case and

looking at the terms of the subject plan,

{I find] that the plaintiff did not suffer a

‘loss resulting directly and independently

of all other causes,’ but instead is unable

to return to his former occupation with

NFA [sic] as a result of a ’illness or

disease’ which he has been suffering for

A-33

over fifteen years and which excludes

him, under the terms of the policy, from

receiving benefits. The proof shows that

the plaintiff's severe and painful degener-

ative disc disease and arthritis combined -

and concurred with any injury he may

have sustained in October of 1987 to

cause his present condition. His own

physician stated that he is suffering from

a severe disc disease which is a significant

factor in his present disability.

The magistrate also noted that Lingerfelt received a

lump-sum workers’ compensation payment and also re-

ceives Social Security disability benefits and long-term dis-

ability benefits under a separate group long-term disability

insurance plan.

The magistrate’s fact findings are subject to the clearly

erroneous standard of review. Cf. Anderson v. Bessemer,

470 U.S. 564, 573 (1985). The magistrate found that

“plaintiff's severe and painful degenerative disc disease and

arthritis combined and concurred with any injury he may

have sustained in October of 1987 to cause his present con-

dition.” This finding, based upon the magistrate’s careful

review of medical records and testimony documenting a fif-

teen-year history of back problems, is not clearly errone-

Ous.

Determining whether Lingerfelt’s injuries were covered

by the insurance contract involves a mixed question of law

and fact. Therefore, this determination is subject to de

novo review. Blackburn v. Foltz, 828 F.2d 1177, 1181 (6th

A-34

Bilin.

A el A SNS A tI Ola OME eB He RD

Cir. 1987), cert. denied, 485 U.S. 970 (1988).

According to the language of a relatively easy-to-under-

stand booklet distributed to NFS employees, the insurance

plan very plainly and conspicuously excluded from cover-

age any losses resulting from illness and disease. Some-

what less conspicuously, the plan clarified that permanent

disability benefits would be paid only due to disability re-

sulting “directly and independently of all other causes from

bodily injuries caused by accident.” In view of the

magistrate’s fact finding that disease rather than accident

caused Lingerfelt’s back injuries, it might seem a foregone

conclusion that Lingerfelt could not recover under this pol-

icy. When, despite his disc disease and his doctors’ warn-

ings, Lingerfelt persisted! in lifting heavy weights, the

resulting disability more closely resembled an inevitable

consequence than an unforeseen accident. We are not

dealing here with a Workers’ Compensation program or

with a general long-term disability insurance plan — two

programs under which Lingerfelt has received or is re-

ceiving benefits as a result of the November 1987 injury.

We instead are dealing with an insurance policy covering

only accidents, and Lingerfelt did not have an “accident”

within any reasonable meaning of that term. To allow

Lingerfelt to recover under the policy would distort the

parties’ initial bargain by changing the allocation of risk

which the parties had in mind when they agreed to the

amount of the insurance premium.

Nonetheless, Lingerfelt argues that even if state law

would require following the literal language of the con-

tract, federal policy under ERISA mandates a different

‘It is unclear whether Lingerfelt was required to lift heavy weights

in order to keep a job with NFS.

A-35

outcome.” ERISA does preempt state-law causes of action

insofar as they “relate to” employee benefit plans. 29

U.S.C. § 1144; Pilot Life v. Dedeaux, 481 U.S. 41, 56 (1987).

Additionaliy, Congress intended that “a federal common

law of rights and obligations under ERISA-regulated plans

would develop.” /d. Stated differently, “ERISA’s broad

preemption provision makes it clear that Congress in-

tended to establish employee benefit plan regulation as an

exclusive federal concern, with federal law to apply ex-

clusively, even where ERISA itself furnishes no answer.”

In re White Farm Equipment Co., 788 F.2d 1186, 1191 (6th

Cir. 1986). However, Lingerfelt can point to nothing in the

federal common law in this area which would indicate that

we should depart from the literal meaning of the language

of his accident insurance contract.

We find no federal appellate case where the court was

called upon to decide as a matter of federal common law

under ERISA, whether an accident insurance plan should,

despite its explicit language to the contrary, be read to

cover injuries caused substantially or entirely by a known,

pre-existing disease. Compare Adkins v. Reliance Standard

Life Ins. Co., 917 F.2d 794 (4th Cir. 1990). However, we

regard as instructive language from a recent First Circuit

opinion:

“Throughout this litigation both parties have agrced that ERISA

law and policies govern the insurance contract at issue, and the pretrial

order grounded jurisdiction on that basis. However, the magistrate ex-

pressed some doubt about whether ERISA actually covered this insur-

ance contract. Accordingly, he decided to consider Lingerfelt’s claim

under the alternative assumptions that 1) ERISA and federal common

law apply, and 2) Tennessee contract law applies. The magistrate deter-

mined that under either assumption, Lingerfelt was not entitled to the

accident benefits. Since neither party disputes that ERISA applies and

since its applicability would not change our holding in ihis case, we as-

sume without deciding that ERISA does apply.

A-36

[Tjhe “federal common law of rights and

obligations,” Pilot Life, 107 S.Ct. at 1558,

while still in formation, must embody

common-sense canons of contract inter-

pretation. Notwithstanding the ennobling

purposes which prompted passage of

ERISA, courts have no right to torture

language in an attempt to force particular

- results or to convey .. . nuances the con-

tracting parties neither intended nor

imagined. To the exact contrary, straight-

forward language in an ERISA-regulated

insurance policy should be given its natural

meaning.

Burnham v. Guardian Life Ins. Co., 873 F.2d 486, 489

(ist Cir. 1989) (emphasis added and citation omitted). We

believe that under the emerging federal common law, we

should adhere to the literal language of accident insurance

contracts except where public-policy considerations dictate

a different course. Lingerfelt can point to no such counter-

vailing public-policy considerations here.

The Eleventh Circuit has commented upon the public

policy underlying ERISA:

[I]n formulating these laws [governing

various aspects of the employee benefit

field] courts must be guided by the gen-

eral policies underlying ERISA. The

general objective of [ERISA] is to in-

crease the number of individuals in em-

ployer-financed benefit plans. Congress

wanted to assure than [sic] those who

participate in the plans actually receive

the benefits they are entitled to and do

not lose these as the result of unduly

A-37

restrictive provisions or lack of sufficient

funds.

Helms v. Monsanto, 728 F.2d 1416, 1420 (11th Cir. 1984)

(citing H.R.Rep. No. 93-807, 93rd Cong., 2nd Sess. 3,

reprinted in 1974 U.S. Code Cong. & Ad. News, 4639, 4670,

4676-77) (emphasis added). A provision in an accident in-

surance policy providing in effect that the policy does not

cover losses resulting from disease rather than from acci-

dent is not an “unduly restrictive” provision in our view. If

this were a case where the employee’s disease were subtle

or latent, where the employee had not been warned against

precisely the outcome that ensued, or where the disease

contributed only negligibly to what was essentially an un-

foreseen calamity, then perhaps the insurance company

would not be justified in denying benefits. In such a case,

the employee’s reasonable expectations might be upset by

denying benefits. Here, however, we perceive nothing un-

conscionable or misleading about the accident policy on its

face, and most importantly for us, Lingerfelt’s situation

falls within the clear language of the policy exclusions.

Lingerfelt cites several federal court cases to support

his position, but all these cases are inapposite on two

grounds: 1) the injured employees could point to some

sudden, unexpected eVent that fits the common-sense no-

tion of an accident, and 2) the injured employees were

members of the United Mine Workers of America and

covered by the UMWA disability plan. In Odom v. United

Mine Workers of America, 687 F.2d 843, 847 (6th Cir.

1982), a case upon which Lingerfelt relied at oral argu-

ment, the miner slipped while pulling a pipe wrench and

then fell from a platform. Such an event indisputably is an

accident, not a sudden recurrence of a known, pre-existing

disease. The fall from the platform permanently damaged

the miner’s kidneys, which had been suffering from renal

disease before the accident. We analyzed the issue of

A-38

whether the mining accident caused the permanent injury

as follows:

[Defendant’s] own “proximate cause prin-

ciple” set forth in its “Health Services

Card Processing for Disabled Mine

Workers,” provides:

If the mine accident aggravated a pre-ex-

isting condition to the extent that the per-

. son became totally disabled, or if the

mine accident occurred after a non-mine

related injury and the two injuries com-

bined resulted in total disability, then the

mine worker shall be deemes to be to-

tally disabled as a result of a mine ac-

cident. This rule applies even if evidence

establishes that the mine related condi-

tion is only a small percentage of the dis-

ability.

This principle is commonly found in dis-

ability benefits programs, see 1 A. Lar-

son, Law of Workmen’s Compensation,

section 12.20 (1978), and is akin to the

tort principle that tortfeasors must take

their victims as they find them. It is irrel-

evant whether a person with normal kid-

neys would have sustained permanent

damage to his kidneys as a result of an

accident. The question is whether the ac-

cident contributed in some part to the

disability of appellant.

We conclude that there is not substantial

evidence in the record to support a find-

ing that the accident did not contribute to

A-39

appellant’s disability. To the contrary,

the evidence overwhelmingly establishes

that the accident did contribute to his dis-

ability. Therefore, the decision of the

district court affirming the decision deny-

ing disability benefits must be reversed.

Id. at 847 (emphasis in original).

Odom reveals that the special regulations governing

disability plans available to UMWA members help explain

the outcome in the cases Lingerfelt cites. Additionally, the

time-honored rule that one takes one’s victim as one finds

him does not apply where the employee, acting contrary to

his physician’s orders, engages in an activity which, pro-

ceeding normally as planned, predictably causes the em-

ployee the very injury against which his physicians had

warned him.

Lingerfelt raises a number of miscellaneous policy ar-

guments which, he felieves, indicate that he should recover

benefits under this accident policy. However, these argu-

ments do not apply to the case of an insurance policy which

explicitly insures only against accidents and which, from the

employee’s point of view, is supplemental to a more gen-

eral policy that covers disability resulting from disease as

well as disability resulting from accident. We believe that

the employee’s reasonable expectations were not upset in

this case.

IV.

The magistrate’s order conforms to the plain language

of the accident insurance contract and does not conflict

with public policy. Accordingly, for the reasons given

above, the magistrate’s judgment is AFFIRMED.

A-40

a*