Since the publication in 1943 of James M. Cain’s noir classic, “Double Indemnity,” there has been a public fascination with accidental death insurance. Surprisingly, even when a sudden and unexpected death occurs other than as a result of a heart attack or other clear-cut medical condition, the issue of whether the death was accidental or resulted from natural or self -inflicted means is of ten not easily determined.

For example, the U.S. Court of Appeals for the Seventh Circuit’s April 2019 decision in Tran v. Minnesota Life Insurance Co.[1] determined that when partial self -strangulation during an act of autoerotic asphyxiation went too far and proved fatal, it was a self -inflicted injury for which there was no coverage.[2]

Most courts evaluate such accidental death insurance cases under a standard first set forth in 1990 by the U.S. Court of Appeals for the First Circuit in Wickman v. Northwestern National Insurance Co.[3] The Wickman test examines the insured’s expectations of survival from both a subjective and objective viewpoint to decide whether the insured “knew or should have known that serious bodily injury or death was a probable consequence substantially likely to occur as a result of” the conduct in question.

How, though, do courts address situations where someone who suffers from an illness drowns or is in a fatal car accident that may have been triggered by an underlying disease?

Determining whether accidental death insurance benefits are payable under such circumstances recently confounded a divided First Circuit panel in Arruda v. Zurich American Insurance Co.,[4] which is illustrative of the Employee Retirement Income Security Act’s effect on settled principles of insurance law.

Arruda overturned a ruling from the U.S. District Court for the District of Massachusetts that awarded accidental death insurance benefits to the widow of Joseph Arruda, who died in 2014 from injuries he sustained in a car accident. Benefits that were sought under Arruda’s
employer-sponsored group accidental death insurance policy were refused, however, based on the insurer’s argument that Arruda’s death was not compensable even though the of ficial death certificate deemed the manner of death accidental.

The insurer argued that accidental death insurance benefits were not payable because Arruda’s death fell within a policy exclusion for losses that are “caused by, contributed to, or [result] from … illness or disease, regardless of how contracted, medical or surgical
treatment of illness or disease; or complications following the surgical treatment of illness or disease.”

The leading modern case interpreting such an exclusion is the U.S. Court of Appeals for the Tenth Circuit’s 2008 ruling in Kellogg v. Metropolitan Life Insurance Co.[5] which was also an ERISA-governed accidental death insurance case involving a fatal car accident that
occurred when the decedent lost control of his car after suffering a seizure.

The court concluded that benefits were payable and that the policy’s exclusion for prior illnesses was inapplicable because the insured’s immediate cause of death was the blunt force head trauma that proved fatal. The court cataloged a number of similar cases that had
reached the same conclusion, including a 19th century decision from the U.S. Court of Appeals for the Sixth Circuit written by then-Circuit Judge William Howard Taft, who pronounced in the ruling:

[I]f the deceased suffered death by drowning, no matter what was the cause of his falling into the water, whether disease or a slipping, the drowning, in such case, would be the proximate and sole cause of the disability or death, unless it appeared that death would have been the result, even had there been no water at hand to fall into. The disease would be but the condition; the drowning would be the moving, sole, and proximate cause.[6]

Arruda did not even mention Kellogg or follow its causation analysis, though, because the panel majority simply deferred to Zurich’s discretionary authority under ERISA.

The Arruda ruling is yet another illustration of how ERISA’s deferential standard of review is essentially determinative of a litigation outcome in favor of the defendant in an employee benefit case.

Another example is a pair of cases I handled which involved a former orthopedic oncologist who died from a pulmonary embolism shortly after he concluded a lengthy airplane flight. In Yasko v. Reliance Standard Life Insurance Co., the beneficiary asserted that the lengthy
airplane travel and high altitude exposure was the cause of the embolism.

Under the de movo standard of review, that argument prevailed in the U.S. District Court for the Northern District of Illinois.[7] However, in a second case in the same court, Yasko v. Standard Insurance Co., brought on behalf of the same claimant under a different policy
that contained language triggering the arbitrary and capricious standard of review, the defendant won.[8]

In Arruda, the plaintif f retained a forensic pathologist who explained the absence of a record showing a cardiac event on a device that had previously been implanted into Arruda to monitor an irregular heartbeat ruled out a heart attack as the cause of death rather than
the blunt force trauma that occurred in the collision and ensuing rollover. The insurer countered with its own pathologist who was unable to pinpoint a natural cause for Arruda’s death but maintained it was due to “several possible pre-existing illnesses or diseases, singly or in combination,” or perhaps an undiagnosed sleep apnea.

Had the case not been subject to deferential standard of review, the plaintif f would surely have won since the burden of proof is typically on the insurer, regardless of ERISA, to establish the applicability of a policy exclusion. The First Circuit refused to follow that rule,

Instead, the court determined that under ERISA’s arbitrary and capricious standard of review “the issue is only whether there is substantial evidence in the record to support the administrator’s determination.” Based on the finding made by Zurich’s pathologist, the court
accepted that Arruda’s death was “caused, at least in part” by his preexisting medical condition.

Circuit Judge Kermit Lipez, one of the three judges on the Arruda panel, dissented. Judge Lipez maintained that the mere existence of underlying health conditions is not sufficient to prove Arruda’s death was due to natural causes. The dissent further observed: “The
inescapable fact is that many healthy people fall asleep at the wheel while driving, and  many sick people fall asleep at the wheel while driving for reasons that have nothing to do with their illness.”

The dissent expressed discomfort with the majority’s willingness to accept the insurer’s conclusion that Arruda died f rom his prior illnesses merely because he had a medical history that included heart problems. To be sure, Arruda could have died f rom natural causes, but there was no proof confirming such a theory of causation.

Zurich was excused from having to meet its traditional burden of proof requiring it to establish Arruda’s death was due to natural causes by the majority’s deference to its decision under ERISA’s arbitrary and capricious standard of review. Arruda suffered a broken neck in the car accident that was almost certainly the immediate cause of his death.

Why then did Arruda lose while Kellogg collected accidental death insurance benefits under similar circumstances? Absent stronger evidence that Arruda’s preexisting medical conditions were responsible for his death, his widow should have recovered benefits. The
panel majority’s willingness to defer to Zurich’s decision provided the defendant with a get-out-of-liability card the insurer was able to play.

Deference should not be an excuse for a court to act as a rubber stamp. Indeed, in Metropolitan Life Insurance Co. v. Glenn,[9] the U.S. Supreme Court’s 2008 finding that insurer conflicts of interest must be weighed in evaluating claim decisions relied on a seminal precedent that explained how courts are to review administrative agency determinations.[10] Judicial review of administrative agency findings is comparable to how courts weigh employee benefit decisions under ERISA’s arbitrary and capricious standard of

In 1951, the Supreme Court pronounced in Universal Camera Corp. v. National Labor Relations Board that

courts must now assume more responsibility for the reasonableness and fairness of [administrative] decisions than some courts have    shown in the past. Reviewing courts must be influenced by a feeling that they are not to abdicate the conventional judicial

The citation of Universal Camera in the Glenn decision suggests the Arruda dissenter was correct in maintaining the panel majority was too lenient when it upheld Zurich’s denial.

The Arruda case exposes an even greater problem that few, other than the limited number of lawyers who handle ERISA cases and the judges who decide such matters, are aware of Life, health and disability benefits are too important to leave the decisions about who
receives such benefits in the hands of self -interested parties whose determinations are largely immune from judicial review.

It is well past time for a serious discussion of the continued viability of the arbitrary and capricious standard. A widow lost life insurance indemnity in the Arruda case. Next time, a denial of critical health benefits will result in an unnecessary death.

Mark DeBofsky is a shareholder at DeBofsky Law.

This article was originally published in Law360 on March 27, 2020

Disclosure: The author represented the plaintiff in Yasko v. Reliance Standard Life Insurance and Yasko v. Standard Insurance, discussed in this article.

The opinions expressed are those of the author(s) and do not necessarily reflect the views of the firm, its clients, or Portfolio Media Inc., or any of its or their respective affiliates. This article is for general information purposes and is not intended to be and should not be taken
as legal advice.

[1] 922 F.3d 380 (7th Cir. 2019).

[2] Tran is in conflict with two other rulings involving autoerotic asphyxiation and accidental death insurance coverage. Both Padfield v. AIG Life Ins. Co., 290 F.3d 1121 (9th Cir. 2002); and Critchlow v. First UNUM Life Ins., America, 378 F.3d 246 (2nd Cir. 2004) held to the

[3] 908 F.2d 1077, 1088–89 (1st Cir.), cert. denied, 498 U.S. 1013, 111 S.Ct. 581, 112 L.Ed.2d 586 (1990).

[4] 951 F.3d 12 (1st Cir. 2020).

[5] 549 F.3d 818 (10th Cir. 2008).

[6] Manufacturers’ Accident Indemnity Co. v. Dorgan, 58 F. 945, 954 (6th Cir.1893).

[7] Yasko v. Reliance Standard Life Ins. Co., 53 F.Supp.3d 1059 (N.D. Ill. 2014).

[8] Yasko v. Standard Ins. Co., 2014 U.S. Dist. LEXIS 68601, 2014 WL 2155227 (N.D. Ill. June 30, 2014).

[9] 553 U.S. 105 (2008).

[10] Universal Camera Corp. v. NLRB, 340 U.S. 474, 490 (1951).

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