GARBER v. PROVIDENT LIFE AND ACCIDENT INSURANCE COMPANY, 1999 U.S. App. LEXIS 11280 (6th Cir. May 27, 1999) (unpublished)- Before: BOGGS, CLAY, and GODBOLD, * Circuit Judges. (* The Honorable John C. Godbold, United States Circuit Judge for the Eleventh Circuit, sitting by designation.)
Plaintiff's son, Dr. David Garber, an engineer for Northrop Grumman Corporation in California, flew to Chicago on business. With Northrop's permission, he scheduled his return flight to California through Pittsburgh and Akron-Canton, to allow a surprise weekend visit with his parents in Canton, Ohio. He was insured for $ 300,000 against accidental death while traveling on business under Northrop's group travel accident insurance, issued by Provident Life and Accident Insurance Company. Garber was killed when his flight from Chicago to Pittsburgh crashed near the Pittsburgh airport. A.C. Newman and Company, the claims administrator for Provident, declined to pay Garber's accidental death benefits. Plaintiff, the named beneficiary under the travel insurance policy, appealed the decision. Provident, as claims review fiduciary, reviewed the decision and again denied payment. Plaintiff sued Provident in district court. Following a bench trial, the district court held that Provident acted arbitrarily and capriciously in reading the policy to exclude coverage, and entered a $ 300,000 judgment for Plaintiff. Provident appeals the judgment of the district court. Plaintiff cross-appeals the denial of attorney's fees and pre-judgment interest.
Garber's son had permission to fly to his parent's house on a Friday morning. Dr. Garber's employer was only going to charge him a 1/2 day vacation since Dr. Garber's flight left at 7:44 a.m. on Friday. Since the conference ended early, Garber made a Thursday night flight which crashed. Dr. Garber's employer, Northrop submitted affidavits arguing that Dr. Garber was on personal time and not entitled to the plan's benefits.
The claims administrator denied the Garber's claim since Dr. Garber was off-duty. The district court found as a matter of fact that the "distinction between whether Dr. Garber was on duty or off duty at the time of his death has no relevance" to the travel policy.
Sixth Circuit held that heightened standard of review was appropriate due to conflict of interest. (District court applied the most differential standard of review available.) Sixth Circuit held that the poor draftsmanship of Defendant caused the problem. Defendant poorly drafted the language excluding coverage while an employee was not on business. We hold that any interpretation of the policy that requires such a fine line to be drawn is not a reasonable interpretation. On any reasonable interpretation of the language in Northrop's policy, an employee is generally "on business" if he started a business trip and has not returned to his home or workplace--just as the "coverage . . . begins" and "coverage ends" language of the policy clearly states. Court affirmed the denial of attorneys' fees since Defendant did not act in bad faith. Defendant only gave an unreasonable interpretation to an ambiguous provision.
Court reversed denial of prejudgment interest holding that bad faith was not required.
