Harrison v. Unum Life Ins. CV-04-21-PB 04/11/05

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF NEW HAMPSHIRE

Francie E. Harrison

v. Civil No. 04-21-B Opinion No.

Unum Life Insurance Company of America

MEMORANDUM AND ORDER

Francie E. Harrison brings this action against Unum Life

Insurance Company of America ("Unum") claiming that its refusal

to grant her long-term disability benefits violates the Employee

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

1132(a)(1)(B). The parties have filed cross-motions for summary

judgment. For the reasons set forth below, I grant Unum's motion

and deny Harrison's motion.

I. BACKGROUND

On November 23, 2001, Francie Harrison was injured in a

motor vehicle accident. The accident resulted in severe head

trauma, which Harrison alleges has rendered her totally disabled. Because her blood alcohol levels exceeded the legal limit when

she was admitted to Cheshire Medical Center, Harrison was charged

with and ultimately convicted of driving while intoxicated

("DWI") under

. She was a first­

time offender.

Prior to the accident, Harrison had purchased a long-term

disability benefits policy from Unum. In a section entitled,

"WHAT DISABILITIES ARE NOT COVERED UNDER YOUR PLAN," the policy

states that "[y]our plan does not cover any disabilities caused

by, contributed to, or resulting from your. . . commission of a

crime for which you have been convicted under state or federal

law."

On November 27, 2001, Harrison's employer submitted claims

for long-term disability benefits on Harrison's behalf. While

reviewing Harrison's long-term disability claim, Unum learned of

Harrison's DWI conviction. In a letter dated July 10, 2002, it

informed her that:

We received copies of court documents from Cheshire Keene District Court in Keene, NH, indicating that you were convicted of driving while intoxicated at the time of your motor vehicle accident on November 24, 2001. Since your injuries happened as a result of this accident, we are unable to approve benefits as indicated by the policy above.

- 2 - Harrison appealed the adverse ruling on her disability claim

on September 2, 2002. She argued that a New Hampshire driver

convicted of DWI for the first time is deemed only to have

committed a "violation," and that under New Hampshire law " [a]

violation does not constitute a crime and conviction of a

violation shall not give rise to any disability or legal

disadvantage based on a conviction of a criminal offense."

(emphasis added). Viewing "crimes" and

"violations" as distinct, she argued that Unum erred in

concluding that her injuries were "caused" by a "crime," and thus

that she was disgualified from receiving benefits.

In a letter dated September 19, 2002, Unum denied Harrison's

appeal, explaining that it was justified in doing so because it

had adopted the Webster's Dictionary definition of the word

"crime" to define the policy's scope. Unum claimed that

Webster's defines a "crime" as "an act committed or omitted in

violation of a law."1 DWI gualifies as a "crime" under this

1 Harrison does not dispute that Webster's defines "crime" in this manner, though neither party cites to a particular edition for the proposition. Citing W e b s t e r ' s T h i r d n e w I n t e r n a t i o n a l D i c t i o n a r y , however, the New Hampshire Supreme Court has affirmed that "Webster's defines 'crime' broadly enough to embrace'" a "violation" under New Hampshire law. State v. Woods, 139 N.H.

- 3 - definition.

Unum further argued that its interpretation must be

respected " [r]egardless of the State of New Hampshire's

classification of the act," because it is reasonable to rely on a

dictionary when interpreting terms in an insurance policy.

Harrison disagrees and asks that Unum's decision be reversed. I

consider her arguments below.

II. STANDARD OF REVIEW

The threshold guestion presented by this case is whether

Unum's denial of Harrison's claim should be reviewed de novo or

under the familiar "abuse of discretion" standard. In Firestone

Tire & Rubber Co. v. Bruch,

(1989), the United

States Supreme Court held that "a denial of benefits challenged

under [29 U.S.C.] § 1132(a)(1)(B) is to be reviewed under the de

novo standard unless the benefit plan gives the administrator or

fiduciary discretionary authority to determine eligibility for

benefits or to construe the terms of the plan." Id. at 115.

This reguirement has been given teeth by the First Circuit, which

399, 400 (1995)

- 4 - mandates the use of the de novo standard unless the plan "clearly

grant[s] discretionary authority to the administrator." Terry v.

Bayer Corp.,

(1st Cir. 1998) (quoting Rodriguez-

Abreu v. Chase Manhattan Bank, N.A.,

(1st Cir.

1993)) (emphasis added).

Harrison does not dispute that Unum's policy purports to

grant it discretionary authority. Indeed she is in no position

to argue otherwise because the section of the policy entitled

"CERTIFICATE SECTION," explicitly gives Unum "discretionary

authority. . . to determine. . . eligibility for benefits and to

interpret the terms and provisions of the policy." Nevertheless,

Harrison argues that I must review the case de novo in spite of

this provision because Unum operated under a conflict of

interest.

Harrison is correct that a court " 'may cede a diminished

degree of deference--or no deference at all--to the

administrator's determinations'" upon proof of a conflict of

interest. Wright v. R.R. Donnelley & Sons Co. Group Benefits

Plan, e t . a l ., 2005 U.S. Ap p . Lexis 4855, *13 (1st Cir. March 25,

2005) (quoting Leahy v. Raytheon, Co.,

(1st Cir.

2002)). "To affect the standard of review, however, a conflict

- 5 - of interest must be real. A chimerical, imagined, or conjectural

conflict will not strip the fiduciary's determination of the

deference that otherwise would be due." Leahy,

(citing Doyle v. Paul Revere Life Ins. Co.,

(1st Cir. 1998) ) .

Harrison argues that Unum has a conflict based on its dual

status as payor and administrator of the policy's benefits. This

argument has been explicitly rejected by the First Circuit. See

Wright, 2005 U.S. App. Lexis at *15 (concluding that the district

court "properly declined to apply a less deferential standard due

to the alleged structural conflict"). According to Wright, "'the

fact that [] the plan administrator [] will have to pay [the

plaintiff's] claim [] out of its own assets does not change [the

arbitrary and capricious] standard of review." Id. at *15

(guoting Glista v. Unum Life Ins. Co. of Am.,

, 125-

26 (1st Cir. 2004)). Harrison's claim that Unum operated under a

conflict of interest is therefore rejected.

Unum's decision to classify a first-time DWI conviction as a

"crime" shall thus be reviewed under the abuse of discretion

standard. This standard of review reguires the court to ask

"'whether the aggregate evidence, viewed in the light most

- 6 - favorable to the non-moving party, could support a rational

determination that the plan administrator acted arbitrarily in

denying the claim for benefits.'" Wright, 2005 U.S. App. Lexis

at *12 (guoting Twomey v. Delta Airlines Pension Plan,

(1st Cir. 2003) (citation omitted)). A decision to deny

benefits to a beneficiary will be upheld under this standard if

the administrator's decision "was reasoned and supported by

substantial evidence." Gannon v. Metro. Life Ins. Co.,

(1st Cir. 2004) .

III. DISCUSSION

The guestion thus presented is whether Unum's definition of

the term "crime" is "reasoned" and "supported by substantial

evidence." See Gannon,

. Harrison argues that it

is not. She claims that any interpretation that departs from the

definition provided in the New Hampshire code is per se

unreasonable. Under the code's definition, she claims that she

was convicted only of a "violation," and not, as Unum argues, of

a "crime."2

2 As Unum notes, the strength of the distinction Harrison seeks to draw between "violations" and "crimes" under New

- 7 - The issue in this case, however, is not what the word

"crime" means in the context of the code. Rather, the question

is what the word means in the context of Unum's long-term

disability policy. As at least two appellate courts have made

clear, it is perfectly permissible for a policy administrator to

adopt a definition that is different from a definition adopted by

the state if that definition is reasoned and supported by

substantial evidence. See Rolling v. American Power Conversion

Corp,

(1st Cir. 2003) (holding that a plan

administrator has the right to reasonably determine the

definition of a plan phrase, even if that phrase contradicts the

state common law definition); see also Sisters of the Third Order

v. Swedishamerican Grp. Hit. Ben.,

(7th Cir.

1990) (stating that "ERISA preempts state law and lets a health

and welfare plan draft its own rules") .

Hampshire law was at least diluted by the New Hampshire Supreme Court in Woods. There, in determining whether a defendant could be required to pay restitution to the victim of an offense, the Court concluded that a "violation" was indeed a "crime" under the relevant statute. 139 N.H. at 400-02. I find for Unum on grounds unrelated to the Woods decision. I therefore see no reason to further explore the implications of Woods here. Unum has done so here. Rather than rely on any state law

definition, Unum's construction relies on a definition of the

word "crime" that is provided by Webster's Dictionary. Harrison

argues that this approach constitutes reversible error. For the

following reasons, I disagree.

First, Unum's approach adheres to established contract

interpretation principles. The normal rule is that contract

language in an ERISA action is to be given its plain meaning.

See Rodriguez-Abreu v. Chase Manhattan Bank, N.A.,

(1st Cir. 1993) (citation omitted). "Dictionaries of the

English language are a fundamental tool in ascertaining. . .

plain meaning." United States v. Lachman,

(1st

Cir. 2004); Levinsky's, Inc. v. Walmart Stores,

(1st Cir. 1997) (stating that "we start, as we often do in

searching out the meaning of a word, with the dictionary") ; see

also Woods, 139 N.H. at 400 (relying, in part, on Webster's

Dictionary for a definition of the word "crime"). Indeed, in

Littlefield v. Arcadia Insurance Co.,

(1st Cir. 2004),

the court relied on an American Heritage Dictionary definition of

the word "crime" to affirm the defendant's decision to exclude a

plaintiff from coverage under its policy.

. There, "crime" was defined as "[a]n act committed or omitted in

violation of a law forbidding or commanding it and for which

punishment is imposed upon conviction." That Unum has relied on

a similar dictionary definition to interpret the scope of the

policy's criminal act's exclusion thus appears to be both well-

reasoned and supported by substantial, legitimate evidence.3

Second, Unum's interpretation promotes consistency among

similarly situated policy holders. See

-

1 (b)(5) (encouraging plan administrators to ensure that plan

provisions are "applied consistently with respect to similarly

situated claimants"). Because it draws its definition from one

interpretive source, all policy holders are bound by Unum's

definition. This would not be true if, as Harrison argues, the

applicability of the criminal act's exclusion were to depend upon

the way in which DWI is classified under the law of each state

3 That DWI is treated as a "crime" under New Hampshire law in other contexts, see N.H. Rev. Ann. Stat. 265:82 (classifying a second DWI offense as a "misdemeanor" reguiring a "minimum sentence of 10 days") and that DWI is considered a "crime" in other states, see, e.g.

(2005) (Massachusetts statute categorizing a first DWI offense as a misdemeanor), lends support to Unum's determination that DWI is a "crime." It remains to be seen whether Unum's broad definition of "crime" would withstand scrutiny in a case where the underlying offense at issue lacks a similar penological pedigree.

- 10 - where the DWI occurred. Under such a regime, similarly situated

claimants would receive different treatment depending upon the

state in which the "crime" was committed. Compare

(classifying DWI as a violation) with Mass.

Gen. Laws Ann. ch. 90 § 24 (2005) (classifying DWI as a

misdemeanor).

Third, Unum's interpretation effectuates, rather than

undermines the criminal act exclusion's underlying purpose. The

exclusion exists to prevent claimants from passing the costs of

illegal behavior on to other policy holders. Cf. Sisters of the

Third Order,

(stating that "[i]njuries arising

out of the combination of liguor and motor cars are self-

inflicted, and a health insurance plan . . . need not draw down

the assets contributed by the provident many to shift the cost of

self-destructive behavior"). Harrison's interpretation would

have the opposite effect. I reject this construction.

Given the degree of deference normally accorded plan

administrators in the interpretation of their own plans, these

reasons provide an adeguate basis for affirming Unum's

interpretation. I thus hold that Unum's interpretation of the

word "crime" is reasoned and supported by substantial evidence.

- 11 - Unum therefore justifiably excluded Harrison from coverage under

its long-term disability benefits policy.

III. CONCLUSION

For the foregoing reasons, I deny Harrison's motion for

summary judgment (Doc. No. 6) and grant Unum's motion for summary

judgment (Doc. No. 7). The clerk is instructed to enter judgment

accordingly.

SO ORDERED.

Paul Barbadoro United States District Judge

April 11, 2005

cc: Byrne J. Decker, Esg. Francis G. Murphy, Jr., Esg.

- 12 -