Fifth Circuit denies insurance benefits for husband following his wife’s death

By Holland Phillips | Oct 2, 2013

NEW ORLEANS— The U.S. Court of Appeals for the Fifth Circuit has reversed a district court decision that would have granted business travel death benefits to a surviving spouse.

Josh Porter filed suit on on behalf of the beneficiaries of Elizabeth A. Porter, his wife, against Lowe’s Companies, Incorporated’s Business Travel Accident Insurance Plan and Gerber Life Insurance Company.

The plaintiff was originally denied benefits because the plan administrator determined that Elizabeth was not on a bona fide business trip. Decisions in the case hinged on the interpretation of a “bona fide” business trip, which is defined by the plan as “a trip made in good faith and authorized by the Policyholder for the purpose of furthering the business of the Policyholder” and “not includ[ing] an Injury sustained during travel to and from work, leave of absence, vacation or personal deviation.”

On the night of Feb. 24, 2008, Elizabeth Porter was en route to respond to an alarm at the Lowe’s store as a part of her regular duties as business manager. On this trip, she and her unborn child were killed in a head-on collision with a car traveling in the wrong lane of traffic.

A district court understood her trip back to the store to be a bona fide business trip and not part of “travel to and from work,” which they read as indicating an employee’s regular daily commute. The district court granted plan benefits to the plaintiff in the amount of $181,830.37 plus interest, finding that the plan administrator’s ruling was legally incorrect and an abuse of discretion.

The appeals court took on a review of the case in response to the defendants’ claim that the plan administrator correctly read the phrase in its common sense meaning. The appeals court identified a lack of phrasing in the plan that would have marked uninsured commutes as “everyday” or “day-to-day,” and thus found previous case law cited by the district court in favor of finding coverage for Porter not relevant to the case at hand.

They emphasized that the issue comes down to a question not which interpretation of the plan “is most persuasive, but whether the plan administrator’s interpretation is unreasonable.” And while Porter was able to claim a workers’ compensation award because his wife was on a “special errand” for her employer, that award was governed by state law and did not necessarily alter the reading of the insurance plan’s coverage.

The appeals court found that the plan administrator did not abuse its discretion in denying coverage, and thus reversed the district court’s judgment and rendered judgment in favor of the defendants.

Circuit Judges presiding over this appeal were W. Eugene Davis, Edith H. Jones and Fortunato Benavides.

Case no. 2012-60683.

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