# Petition for Writ of Certiorari — Lingerfelt v. Commercial Insurance

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## Record

- **Collection:** Supreme Court brief
- **Document type:** Petition for Writ of Certiorari
- **Published:** January 1, 1991
- **Citation:** 501 U.S. 1251

## Text

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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*

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Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385009_2026%3A1. Public record. Not legal advice.