Cornelius B. Faison v. Donalsonville Hospital, Inc. , 534 F. App'x 924 ( 2013 )

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[DO NOT PUBLISH]
IN THE UNITED STATES COURT OF APPEALS
FOR THE ELEVENTH CIRCUIT
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No. 12-15400
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D.C. Docket No. 1:11-cv-00010-WLS
CORNELIUS B. FAISON,
Plaintiff-Appellee,
versus
DONALSONVILLE HOSPITAL INC.,
Defendant-Appellant.
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Appeal from the United States District Court
For the Middle District of Georgia
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(August 22, 2013)
Before MARTIN and BLACK, Circuit Judges, and GOLDBERG, ∗ Judge.
PER CURIAM:
∗
Honorable Richard W. Goldberg, United States Court of International Trade Judge, sitting by
designation.
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Cornelius Faison (Faison) sued Donalsonville Hospital, Inc. (the Hospital),
pursuant to the Employee Retirement Income Security Act of 1974 (ERISA), to
recover insurance benefits the Hospital had denied as excluded from coverage.
After a bench trial on the papers, the district court granted Faison’s Motion for
Entry of Judgment. After careful consideration of the record, and with the benefit
of oral argument, we affirm.
I.
The Hospital has an Employee Benefit Plan, which includes health insurance
coverage (the Plan). The Hospital is the Plan Administrator. According to the
Plan, in this capacity, the Hospital has “maximum legal discretionary authority to
construe and interpret the terms and provisions of the Plan, to make determinations
regarding issues which relate to eligibility for benefits.” Paragon Benefits, Inc.
(Paragon) is a third-party administrator of the Plan. In this role, Paragon is
responsible for receiving claims from covered individuals and making an initial
claim determination.
When Paragon’s initial benefits decision is appealed, the Hospital, as
fiduciary of the Plan, reviews the determination, without giving Paragon’s decision
any deference. The Hospital’s Benefits Committee (Committee) makes the final
determination on appeals. The members of the Committee are Herman Brookins,
Charles Orrick, and James Moody.
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The Plan includes a number of exclusions. As relevant to this case, the Plan
excludes from coverage:
(19) Illegal acts. Charges for services received as a result of
Injury or Sickness occurring directly or indirectly, as a result
of a Serious Illegal Act, or a riot or public disturbance. For
purposes of this exclusion, the term “Serious Illegal Act” shall
mean any act or series of acts that, if prosecuted as a criminal
offense, a sentence to a term of imprisonment in excess of one
year could be imposed. It is not necessary that criminal
charges be filed, or, if filed, that a conviction result, or that a
sentence of imprisonment for a term in excess of one year be
imposed for this exclusion to apply. Proof beyond a
reasonable doubt is not required.
The Hospital funds the Plan from its own revenue, plus a modest
contribution from the employees. The Hospital’s annual funding for benefits
provided by the Plan is approximately $2,300,000.00. The funds are considered by
Hospital management to be Hospital assets. The Hospital purchases reinsurance
for claims exceeding $50,000.
On July 26, 2009, Faison sustained serious injuries after he crashed his
motorcycle into a tree while eluding a Georgia State Patrol Officer. As a result of
his accident, Faison was in the hospital for over a month and amassed over
$480,000 in medical bills.
As a result of his conduct leading to the accident, Faison was charged with:
(1) fleeing/attempting to elude; (2) speeding (120 plus); (3) failing to maintain
lane; (4) driving with an expired tag; and (5) violating his permit. Considering
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each charge independently, none of the charges could result in a sentence to a term
of imprisonment in excess of one year. See O.C.G.A. § 17-10-3(a)(1)
(misdemeanors punishable by maximum 12 months); O.C.G.A. § 40-6-1 (unless
otherwise specified, it is a misdemeanor to do any act forbidden in this chapter);
O.C.G.A. §§ 40-2-8 (expired tag), 40-5-30 (permit), 40-6-48 (failure to maintain
lane), 40-6-181 (speeding), 40-6-395 (fleeing). Faison pleaded guilty to each
charge. He was sentenced to 12 months of probation on each charge, to be served
consecutively.
At this time, Faison was a plan participant of the Plan. As required by the
Plan, Faison submitted his claim to Paragon. Paragon denied his request for
coverage. Faison appealed the denial to the Hospital. The Hospital sent a letter to
Faison on October 21, 2010, which explained that the Committee affirmed the
denial of Faison’s claim, based on the Illegal Acts exclusion in the Plan.
II.
The parties consented to have the district court hear their case as a trial on
the papers pursuant to Federal Rule of Civil Procedure 52. In accordance with that
rule, the district court issued an opinion explaining its findings of fact and
conclusions of law separately.
“We review de novo a district court’s ruling affirming or reversing a plan
administrator’s ERISA benefits decision, applying the same legal standards that
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governed the district court’s decision.” Blankenship v. Metro Life. Ins. Co., 644
F.3d 1350, 1354 (11th Cir. 2011). “Review of the plan administrator’s denial of
benefits is limited to the material available to the administrator at the time it made
its decision.” Id. Blankenship sets forth a six-step test for reviewing a plan
administrator’s benefits decision. Id. at 1355.
“We review for clear error factual findings made by a district court after a
bench trial.” Morrissette-Brown v. Mobile Infirmary Med. Ctr., 506 F.3d 1317,
1319 (11th Cir. 2007). “A factual finding is clearly erroneous when although there
is evidence to support it, the reviewing court on the entire evidence is left with the
definite and firm conviction that a mistake has been committed.” Id. (quotation
marks omitted).
After applying these legal standards and considering only those arguments
that were actually made by the parties in the district court, see e.g., Depree v.
Thomas, 946 F.2d 784, 793 (11th Cir. 1991) (“[A]n issue not raised in the district
court and raised for the first time in an appeal will not be considered by this
court.”), we AFFIRM.
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