Continental Insurance Ex Rel. Aetna Life Insurance v. Dawson

642 F. App'x 309
CourtCourt of Appeals for the Fifth Circuit
DecidedMarch 16, 2016
Docket15-10510
StatusUnpublished
Cited by2 cases

This text of 642 F. App'x 309 (Continental Insurance Ex Rel. Aetna Life Insurance v. Dawson) is published on Counsel Stack Legal Research, covering Court of Appeals for the Fifth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Continental Insurance Ex Rel. Aetna Life Insurance v. Dawson, 642 F. App'x 309 (5th Cir. 2016).

Opinion

PER CURIAM: *

Continental Insurance Company (“Continental”), acting as an assignee, filed a lawsuit in federal district court to enforce its subrogation and reimbursement rights against David Dawson. The district court granted summary judgment in favor of Dawson, holding that a prior agreement between Dawson and Continental precluded Continental’s recovery. Because we conclude that the district court misconstrued the parties’ agreement, we REVERSE and REMAND.

I.FACTUAL AND PROCEDURAL BACKGROUND

On November 16, 2007, David Dawson was severely injured in the course of his employment with Hill International, Inc. (“Hill”) in Baghdad, Iraq. Dawson suffered burns from dangerously hot water while taking a shower in his assigned living quarters. Continental was Hill’s workers’ compensation carrier and, as such, was required to pay for Dawson’s medical expenses and indemnity in accordance with the Longshore and Harbor Workers’ Compensation Act (“LHWCA”), 33 U.S.C. §§ 901-950. Aetna Life Insurance Company (“Aetna”) was Dawson’s group health insurance carrier through Hill’s employee benefit plan established under the Employee Retirement Income Security Act (“ERISA”), 29 U.S.C. §§ 1001-1091c.

Dawson was initially treated in Germany. The expenses for Dawson’s overseas treatment were billed to Aetna, rather than to Continental. Between November 18, 2007, and January 24, 2008, Aetna paid $282,774.51 to overseas medical providers on behalf of Dawson. Continental paid for Dawson’s subsequent medical treatment.

In 2009, Dawson filed a lawsuit in Texas state court against Fluor Intercontinental, Inc. (“Fluor”), which managed Dawson’s living quarters in Iraq. Both Continental and Aetna intervened in the state lawsuit, asserting liens upon any settlement or judgment obtained against Fluor for the amounts they paid to or on behalf of Dawson. In April 2010, Continental and Dawson executed a settlement agreement (the “Settlement Agreement”) pursuant to § 8(i) of the LHWCA, 33 U.S.C. § 908G). 1 The Settlement Agreement was approved one month later by the U.S. Department of Labor (“DOL”). It provided in pertinent part:

1. [Continental] will pay [Dawson] a lump sum of $260,759.68 in return for a complete discharge of [Continental’s] liability for compensation and past medical care arising out of the subject injury....
2. [Continental] further agreefs] to provide payment for any reasonable and necessary medical treatment related to the injury of November 16, 2007 that should arise prior to the date of approval of this agreement.
3. [Continental] assertfs] a lien upon any settlement or judgment obtained in favor of [Dawson] in his lawsuit against Fluor....

Pursuant to the Settlement Agreement, Continental’s lien amounted to $388,457.67. Ultimately, after the jury in Dawson’s state lawsuit rendered judgment in his fa *311 vor, he entered into a confidential settlement with Fluor and paid Continental the full amount of its lien under the Agreement.

In May 2012, Aetna filed a claim with the DOL against Continental for reimbursement of the medical benefits Aetna had paid on Dawson’s behalf. Aetna and Continental agreed to settle this claim. In exchange for a payment of $219,000 from Continental, Aetna assigned to Continental its subrogation and reimbursement rights connected to Dawson’s medical treatment. Continental thereafter sought a stipulation from Dawson regarding those rights. After Dawson refused, Continental filed this suit in federal district court, seeking to enforce Aetna’s subrogation and reimbursement rights related to Aetna’s payments of $282,774.51 for Dawson’s overseas medical treatment.

The district court denied Continental’s motion for summary judgment and granted Dawson’s cross-motion for summary judgment against Continental. Applying Texas law, the court held that the terms of the Settlement Agreement obligated Continental to pay for Dawson’s past medical treatment, i.e., treatment provided before the DOL ratified the Settlement Agreement, which included Aetna’s payments on Dawson’s behalf. In turn, the court held that the Settlement Agreement precluded Continental from enforcing the subrogation rights that Aetna had assigned to it and limited Continental’s recovery from Dawson to the amount of its lien specified in the Agreement, which Dawson had already paid. This appeal followed.

II. STANDARD OF REVIEW

We review the district court’s judgment on cross-motions for summary judgment de novo. McCorkle v. Metro. Life Ins. Co., 757 F.3d 452, 456 (5th Cir.2014). Summary judgment is appropriate “if the mov-ant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed.R.Civ.P. 56(a).

III. DISCUSSION

Dawson’s employee benefits plan, which was governed by ERISA, provided Aetna with subrogation and reimbursement rights pertaining to third-party liability for his injuries. Dawson does not dispute that Aetna was a fiduciary of the plan. Under 29 U.S.C. § 1132(a)(3), an ERISA fiduciary may bring suit for “appropriate equitable relief ... to enforce ... the terms of the plan.” Therefore, Continental — as an assignee of Aetna’s subrogation and reimbursement rights — has derivative standing to enforce claims under 29 U.S.C. § 1132. See La. Health Serv. & Indem. Co. v. Rapides Healthcare Sys., 461 F.3d 529, 537 (5th Cir.2006).

A. The 2010 Settlement Agreement and the 2013 Assignment

Continental argues that the district court erred in holding that the Settlement. Agreement required it to pay for Dawson’s past medical treatment and thus precluded any subsequent recovery for those payments beyond those contemplated by the Settlement Agreement. We agree.

The parties do not dispute the district court’s conclusion that Texas law governs the interpretation of the Settlement Agreement. Under Texas law, “a contract is to be construed in accordance with its plain language.” Gen. Am. Indem. Co. v. Pepper, 161 Tex. 263, 339 S.W.2d 660, 661 (1960). “[Cjourts should examine and consider the entire writing in an effort to harmonize and give effect to all the provisions of the contract so that none will be rendered meaningless.”

Free access — add to your briefcase to read the full text and ask questions with AI

Related

Cite This Page — Counsel Stack

Bluebook (online)
642 F. App'x 309, Counsel Stack Legal Research, https://law.counselstack.com/opinion/continental-insurance-ex-rel-aetna-life-insurance-v-dawson-ca5-2016.