                            United States Court of Appeals

                                FOR THE EIGHTH CIRCUIT



                                       No. 96-1796


Jeffrey W. Shelton,                           *
                                              *
      Appellant,                              *
                                              * Appeal from the United States
          v.          *                       District Court for the Eastern
                                              * District of Missouri.
Annuity Board of the Southern                 *
Baptist Convention and Prudential             *
Service Bureau, Inc.,                         *
                                              *
         Appellees.                           *




                          Submitted:   November 21, 1996

                              Filed:   March 24, 1997


Before McMILLIAN and MORRIS SHEPPARD ARNOLD, Circuit Judges, and BOGUE,1
     District Judge.


MORRIS SHEPPARD ARNOLD, Circuit Judge.

     Jeffrey W. Shelton appeals from the district court's order granting
the defendants' motion for summary judgment and dismissing his action.      Mr.
Shelton raises two issues on appeal: Whether he is eligible for coverage
under the terms of an insurance plan, and whether waiver and estoppel
principles apply to prevent the defendants from denying him coverage.       For
the reasons discussed below, we affirm the decision of the district court.2




     1
      The Honorable Andrew W. Bogue, United States District Judge
for the District of South Dakota, sitting by designation.
     2
      The Honorable Stephen Nathaniel Limbaugh, United                  States
District Judge for the Eastern District of Missouri.
       Mr. Shelton was employed by the Immanuel Baptist Church in Cobden,
Illinois, from October, 1985, through September, 1986.                      The church is
affiliated with the Southern Baptist Convention, whose Annuity Board
provided a health insurance plan.              Aetna Insurance Company originally
administered the plan and provided the coverage under it.                   On January 1,
1991, the plan became a self-insured one administered by Prudential
Insurance Company of America.         Mr. Shelton joined the plan in November,
1985, shortly after becoming a church employee; he left that employ in
September, 1986.    Since 1990, he has incurred substantial costs associated
with   the   treatment   of    Lyme   disease,     and   in    this    suit    he   sought
reimbursement for those costs from the Annuity Board and from Prudential
under the plan.    The parties concede that booklets published by the Annuity
Board in conjunction with Aetna and Prudential set forth the plan's
contractual terms.


                                          I.
       The district court ruled that Texas law ought to be applied to this
case under Missouri choice-of-law principles, a holding with which the
parties have no quarrel.      Texas courts interpret insurance contracts in the
same manner as other contracts.            They interpret all portions of an
insurance    contract    collectively,      attributing        to     the    contract   an
interpretation that will achieve, to the largest degree possible, the aims
of the parties to it.         State Farm Lloyds, Inc. v. Williams, 791 S.W.2d
542, 545 (Tex. App. 1990).       When an insurance contract is ambiguous, the
ambiguity is construed in favor of the insured.               Id.
                                          A.
       Mr. Shelton initially argues that the plan's terms cover him, and we
first address his claim with respect to the coverage as it existed when
Aetna administered the plan.          The plan provided that to be eligible for
coverage, one had to be a salaried employee of a Southern Baptist church
and work at least 20 hours per week.           The plan also stated that coverage
terminated when eligibility ceased.       The plan therefore apparently covered
Mr. Shelton only during his employment, or from October, 1985, through
September, 1986.




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                                          2
      The plan as administered by Aetna also provided, however, that "[i]f
an individual is totally disabled when his Comprehensive Medical Expense
Coverage ceases[,] benefits will continue to be available to him during the
disability for up to 12 months."            The Aetna plan defined as "totally
disabled" anyone who, because of injury or disease, had stopped working and
had become otherwise ineligible for medical coverage.              Since Mr. Shelton
was "totally disabled" when he stopped working, he would have been eligible
for extended coverage only until September, 1987, long before he incurred
the costs at issue in this case.


      Mr. Shelton contends nevertheless that he was eligible for coverage
because   the    Aetna   plan   provided    that    ceasing   "active    work    will    be
considered to be immediate termination of employment, except that if you
are absent from work because of sickness [or] injury, ... employment may
be considered to continue for the purposes of some of the coverages up to
the limits specified in the contract" (emphasis added).           Mr. Shelton argues
that because he left work due to a disability, we should apply the
exception contained in the quoted excerpt.


      The plan states that "employment may be considered to continue,"
without stating explicitly who makes this decision.              Mr. Shelton asserts
that the decision rests with him.       Given the context of this phrase within
the paragraph in which it appears and within the plan as a whole, we
conclude that the plan's drafters could logically have assigned this
responsibility to Aetna, the Annuity Board, or the individual church that
employed Mr. Shelton.       The provision, however, does not reasonably lend
itself    to    the   interpretation    that       the   responsibility       rests    with
Mr. Shelton.      Chen v. Metro. Ins. & Annuity Co., 907 F.2d 566, 569 (5th
Cir. 1990) (a construction urged by an insured must be adopted if and only
if   it   is   reasonable).      The   Aetna     provisions    thus     did    not    cover
Mr. Shelton's post-1987 medical expenses.




                                           -3-
                                            3
                                                B.
        Eligibility under the Prudential administration paralleled that
provided by Aetna.        To be eligible for coverage immediately, one had to
have    "regularly      work[ed]      for   a   Southern      Baptist      church    or   related
organization     at     least    20     hours    per    week"    as   of     January   1,    1991.
Mr. Shelton, as we have noted, was not employed as of that date.                          The plan
also provided, however, that "[c]overage will be delayed if you do not meet
the Active Work Requirement on the day your coverage would otherwise begin.
Instead,    it   will    begin     on    the    first   day     you   meet    the   Active    Work
Requirement and the other requirements for the coverage."                      The term "Active
Work Requirement" is defined as "[a] requirement that you be actively at
work for an employer affiliated with the Southern Baptist Convention, on
full time at the Employer's place of business, or at any other place that
the Employer's business requires you to go."                     Since Mr. Shelton has not
worked for a Southern Baptist organization at any time since January 1,
1991,    it is manifest that Mr. Shelton was not eligible for coverage under
the terms of the plan as administered by Prudential.
        Mr. Shelton resists this conclusion, however, by focusing on the
following provision contained in the relevant booklet published by the
Annuity Board:    "Your eligibility will end when you are no longer a full-
time Participant actively at work for the Employer and, under the terms of
the Plan, the Purchaser may consider you as still employed in the Covered
Classes during certain types of absences from full-time work.                             This is
subject to any time limits or other conditions stated in the Plan"
(emphasis added).       Mr. Shelton asserts that this provision is ambiguous and
that the ambiguity should be resolved in his favor.                   See Southern Life and
Health Ins. Co. v. Simon, 416 S.W.2d 793, 795 (Tex. 1967).                          He maintains
that he could be the "Purchaser" referred to in this provision because he
paid the premiums to the plan's administrator and continued to do so until
January 1, 1994, despite the fact that his employment terminated in 1986.
Mr. Shelton, in effect, asks us to allow him to decide for himself whether
he is indeed eligible for coverage, a result that no reasonable person
could have




                                                -4-
                                                 4
anticipated from the language of the plan or the circumstances in which it
was created.


       The term "Purchaser," moreover, is not subject to more than one
interpretation.            The    provision      at   issue    also    contains       the   term
"Participant," which is defined as "[a] person employed by a Southern
Baptist     church    or     related    organization."          This   clearly     refers     to
Mr. Shelton.         Had the plan's drafters intended to give to the word
"Purchaser" the meaning that Mr. Shelton ascribes to it, the phrase under
consideration        would    have     used    the    term     "Participant"      instead     of
"Purchaser."      The appearance of two different nouns in the same sentence
gives rise to the presumption that they have different referents, with
"Participant" referring to church employees and "Purchaser" referring to
something else entirely.


       Additionally, had the drafters intended to grant Mr. Shelton the
power he claims, it would have been more natural for them to use the term
"you" instead of "Purchaser," given their use of "you" twice in the
provision.     "You," as used in the provision and throughout the plan, so
obviously    refers     to    Mr.    Shelton     that   a    definition   of    the    term   is
unnecessary.      We note, nevertheless, that the plan defines "you" as "[a]
covered Participant," demonstrating yet again that "Participant" refers to
Mr.    Shelton.        The       definition     of    "you,"    moreover,      includes     only
"Participant" and not "Purchaser."              Because "you" and "Participant" refer
to Mr. Shelton and cannot be synonymous with "Purchaser," "Purchaser" must
refer to someone other than Mr. Shelton.                 We think it is also plain that
"Purchaser" does not refer to churches affiliated with the Southern Baptist
Convention or to the Convention itself.                 The plan defines "The Employer"
as "[c]ollectively, all employers included under the Plan."                    "The Employer"
thus   includes      those       churches     affiliated     with   the   Southern      Baptist
Convention and the Convention itself.


       "Purchaser" must therefore refer to the Annuity Board.                    The relevant
provision now reads, "[The Annuity Board] may consider you as still
employed in the Covered Classes during certain types of




                                               -5-
                                                5
absences from full-time work."             This is the very
person                                                                                     e
plan.    "[T]he court in construing a policy deter
of                                                                                         n
parlance'                                         understanding of the term.'"       United
         Ins. Co. v. Boyer                                                          American
                             r, 5 S.W.2d 252, 254 (Tex. App. 1928).            Furthermore,
        interpretation is consistent with the drafters' use of "Purchaser,"
                       and    "you"   in    the      paragraph    describing    "limits    o
assignments."                                                                              s
use of "Policyholder," which Aetna defines as the Annuity Board.
                                                                                     plan's
coverage provisions.


        Mr. Shelton asserts in the alternative that the plan is estopped from
         g   him   coverage    because      it   accepted   his   premium   payments,     wa
allegedly                                                                                  d
him that he would be covered.


                                                                                     er and
estoppel                                                                                   s
under the terms of the policy.'"                             at'l Mut. Cas. Ins. Co. v.
Kitty         k Airways, Inc., 964 F.2d 478, 480-81 (5th Cir. 1992) (                      r
curiam       quoting            , 791 S.W.2d at 550.        We have already decided that
      Shelton was not covered by the terms of the contract.                    "[W]aiver and
             cannot enlarge the risks covered by a policy and cannot be used
     create a new and different contract with respect to the risk covered an
the                              Minnesota Mut. Life Ins. Co. v. Morse, 487 S.W.2
317, 320 (Tex. 1972).         "'[E]stoppel cannot be used to change, rewrite and
                                                         Enserch Corp. v. Shand Morahan
         952 F.2d 1485, 1498 n.24 (5th Cir. 1992), quoting
v. Moriarty, 746 S.W.2d 249,




                                                 6
252 (Tex. App. 1987) (emphasis in Enserch Corp. deleted).              Furthermore,
where a policy extends coverage to a specified group (such as employees of
churches affiliated with the Annuity Board), "the requirement that the
insured be employed with or have membership in the group at the time the
loss occurs is generally held not subject to the doctrines of waiver and
estoppel."   W. C. Crais III, Annotation, Comment Note: Doctrine of Estoppel
or Waiver as Available to Bring within Coverage of Insurance Policy Risks
Not Covered by Its Terms or Expressly Excluded Therefrom, 1 A.L.R.3d 1139,
1155 (1965).


       Mr. Shelton relies on several cases that he believes support the
application of waiver and estoppel principles to this case, a reliance that
is entirely misplaced.        Of these cases, only two are potentially apposite,
and    both support a decision favoring the defendants.                These cases,
Northeastern Life Ins. Co. v. Gaston, 470 S.W.2d 128 (Tex. App. 1971), and
Travelers Indem. Co. v. Holman, 330 F.2d 142 (5th Cir. 1964), used waiver
and estoppel to preserve insurance coverage already in existence.           In both
cases the courts acted to protect binders.                "'Waiver and estoppel may
operate to avoid a forfeiture of a policy, but they have consistently been
denied operative force to change, re-write and enlarge the risks covered
by a policy.'"    Gaston, 470 S.W.2d at 132, quoting Great Am. Reserve Ins.
Co. v. Mitchell, 335 S.W.2d 707, 708 (Tex. App. 1960).            Our case does not
involve the possible forfeiture of a contract; it involves an attempt to
"'enlarge the risks covered by a policy.'"          Id.   Since Mr. Shelton does not
purport to have a binder from the defendants, any application of waiver and
estoppel principles to force the defendants to cover him will result in an
impermissible enlargement of coverage beyond that which the insurance
contract originally provided.
       As Mr. Shelton states in his brief, it "has been the settled law of
Texas" that "waiver and estoppel cannot create a new and different contract
with    respect   to   risk    covered   by   the   policy."     We   disagree   with
Mr. Shelton's attempt to carve an exception for himself from this rule.




                                         -7-
                                          7
                                  III.
     Because M
and because Mr. Shelton cannot create coverage via waiver and estoppel, we



     A true copy.


           Attest:




                                   -8-
