Jessen v. CIGNA Group Insurance
Filing
26
OPINION and ORDER Granting 19 Cross MOTION Plaintiff's Cross Motion for Reversal of Administrative Denial of Claim for Benefits AND Denying 20 Cross MOTION for Judgment On The Administrative Record to Affirm The Administrator's Decis ion,, Motions terminated: 19 Plaintiff's Cross Motion for Reversal of Administrative Denial of Claim for Benefits filed by Lisa Jessen, 20 Cross MOTION for Judgment On The Administrative Record to Affirm The Administrator's Decision filed by Life Insurance Company of North America. Signed by District Judge David M. Lawson. (DTof)
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MICHIGAN
SOUTHERN DIVISION
LISA JESSEN,
Plaintiff,
Case No. 09-12280
Honorable David M. Lawson
v.
CIGNA GROUP INSURANCE and LIFE
INSURANCE COMPANY OF NORTH
AMERICA,
Defendants.
___________________________________/
OPINION AND ORDER GRANTING PLAINTIFF'S MOTION TO REVERSE
ADMINISTRATIVE DENIAL OF INSURANCE BENEFITS AND DENYING
DEFENDANT’S MOTION TO AFFIRM ADMINISTRATOR’S DECISION
Kurt Jessen, a forty-four-year-old manager working for Hewlett Packard, died from a heroin
overdose while on assignment for his employer in Melbourne, Australia. Hewlett Packard provided
its employees with a life insurance policy underwritten by defendant Life Insurance Company of
North America that paid benefits to a designated beneficiary in the event the employee dies as a
result of an accident. Because the insurance policy was issued as part of an employee welfare
benefit plan, it is governed by the Employee Retirement Income Security Act of 1974 (ERISA). See
29 U.S.C. § 1002(1)(A). Jessen’s beneficiary was plaintiff Lisa Jessen, Kurt’s wife of four months
at the time of his death. She applied for the death benefit, which the defendant denied on the ground
that Kurt’s death was not an accident. After a round of administrative appeals, this lawsuit followed.
The parties filed cross motions on the administrative record and the Court heard oral argument on
April 19, 2010. The parties agree that the de novo standard of review applies. The administrative
record is bereft of any evidence that Kurt Jessen intended to injure himself or that his death would
result from his illicit drug use. Although Jessen’s use of illicit drugs certainly amounts to risky
behavior, there is no basis in the record to conclude that his death resulted from anything but an
accident, and the evidence does not invoke any of the policy’s exclusions. The defendant’s denial
of benefits violated the plan’s language, and therefore the Court will grant the plaintiff’s motion to
reverse the plan administrator’s decision and deny the defendant’s motion to affirm it.
I.
Jessen’s group life insurance policy procured by Hewlett Packard contained the following
terms:
In exchange for the payment of premiums . . . , we agree to pay benefits to
all eligible persons (as defined in Schedule I):
a) who suffer injury to the body in any of the types of accidents described in
Schedule IV, which happens while he is covered by this policy; and
b) who, as a direct result of the injuries, and from no other cause, suffered a
covered loss (as defined in Description of Coverage).
AR 546. The benefits for loss of life are classified as “Coverage A” and are payable if “a) a person
is injured by one of the types of accidents described in Schedule IV which happens while he is
covered by this policy; and b) he suffers one of the losses listed below as a direct result of the
injuries, and from no other cause, within a year of the accident.” AR 554. Schedule IV includes
“any accident which occurs anywhere in the world while a covered person, on a business trip, is
traveling or making a short stay: a) away from [the employer’s] premises in his city of permanent
assignment; and b) on business for [the employer], and in the course of [the employer’s] business.
All such trips must be authorized by [the employer.]” AR 557.
The parties agree that Jessen died while he was in Australia on a business trip for Hewlett
Packard, and that the cause of death was a heroin overdose. Whether he died as a result of an
“accident” is one point of contention in the case. In a footnote in its response brief, the defendant
also maintains that Jessen took the drugs with the intention to overdose. The insurance policy
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excludes from coverage “benefits for loss caused by or resulting from . . . [s]uicide, attempted
suicide, or whenever a covered person injures himself on purpose, while sane or insane.” AR 555.
However, the defendant did not cite that provision of the policy to support its denial of benefits at
the administrative level. The policy also contains an exclusion of coverage for self-inflicted injuries,
upon which the defendant relies; but the defendant did not cite that provision as a basis for denying
benefits, either.
The parties also agree that the applicable plan language does not call for any level of
deference to the plan administrator’s decision, and that the applicable standard of review is de novo.
The facts of the case as disclosed by the administrative record are as follows. Kurt Jessen
was employed as an operations manager for Hewlett Packard. He frequently traveled internationally
and arrived in Melbourne on business on Saturday, April 26, 2008, to attend a business conference.
He was scheduled to return to the United States within a week. When he was late for a business
meeting on April 29, his colleague contacted the hotel where he was staying. The hotel’s duty
manager and security officer went up to Jessen’s room, where they found him lying on the bathroom
floor in a supine position, with his left sleeve rolled up, a “recent ven[i]puncture” on his left inner
elbow, and a small amount of vomit “from airway and down side of face.” AR 464, 487, 518. On
the bathroom counter top, the hotel employees found drug paraphernalia consisting of a small Sharps
container, two syringes, some alcohol swabs, and a used plastic spoon. Also found in the hotel room
were pills of Suboxone (medical substance used to treat an opiate addiction), Chantix (smoking
cessation treatment), Imodium, and Tylenol.
According to the Inquest Brief of the Victoria police department prepared by Detective
Leading Senior Constable Adrian Smith, the reason of Jessen’s death was “[a]ccidental illicit drug
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overdose (heroin).” AR 452. Testing confirmed that Jessen had 0.2 mg/L of morphine in his blood,
3.7 mg/L of morphine in his urine (which usually indicates the use of heroin within six hours of
death), and 0.03 mg/L of codeine in his blood. The autopsy report explained that “[m]orphine is the
principal metabolite of heroin” and that “[c]odeine is often found as an impurity in heroin.” AR 52,
58. The autopsy revealed no evidence of significant natural disease and no signs of injury, but
confirmed pulmonary edema, which also commonly occurs with overdose deaths.
There is little dispute that Jessen had a long history of drug dependence. His mother recalled
that Jessen “began to experiment with drugs . . . between 1990-1991, perhaps earlier,” had been
admitted “in several inpatient short term and long term rehabilitation facilities,” and managed to be
“drug free sporadically, for periods of from one to three years.” AR 65. One of Jessen’s most recent
relapses occurred when he resided in Melbourne in 2006-2007. His mother believed that he
“befriended a woman [who] . . . provided Kurt with drugs in exchange for a place to live.” AR 66.
There is also testimony on the record that during his stay in Australia in 2006-07, Jessen, who at the
time was separated from his second wife, dated one Sheila Margaret Scott. AR 508, 504. Scott
recalls that Jessen got her hooked on heroin and tried to introduce her to other illicit drugs. See AR
509-10.
This relapse prompted both Jessen and Scott to enroll in the outpatient rapid detox program
with Dr. Yona Josefsberg, where both were placed on the Suboxone program. Although Jessen’s
mother reports that Jessen had a brief, two- or three-day relapse during the course of the program,
she insists that Jessen was drug-free following his return from Australia in August 2007.
Following his return from Australia in August 2007, Jessen met his third wife, Lisa M.
Jessen, the plaintiff in the present case. After a month of dating, Jessen proposed, and the couple
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married on December 31, 2007. Jessen had two daughters from previous relationships; the plaintiff
also had a daughter from a previous marriage. Jessen’s mother claims that the plaintiff was Jessen’s
“soulmate” and “the love of [his] life.” AR 504. The plaintiff likewise recalls having a solid, loving
relationship with Jessen; she also notes that Jessen treated her daughter Amanda as his own.
The plaintiff remembers that when Jessen was traveling, as he would frequently do for his
work, he would contact her regularly during set times each day. The plaintiff recalls her last
conversations with Jessen during his final trip to Melbourne:
4. Kurt left for Melbourne, Australia on April 20, 2008.
5. On April 24, 2008, Kurt called me in the air as he was leaving Germany
on his way to Singapore. During this conversation, we discussed this trip being his
last for a while so we could spend time together in our new married life. Kurt had
already traveled two months out of the four months we had been married.
6. He called me on April 25, 2008 to tell me he was leaving Singapore for
Australia.
7. He called me about 12:42 p.m. on April 26, 2008 as soon as his plane
landed and got situated with his car and baggage. He told me he couldn’t wait to
come back home, that he missed me and my daughter and was sorry to be missing
my birthday. He promised to get me an opal charm for my chain.
8. My mother called me on Sunday, April 27, 2008 to take me to lunch. Kurt
called while I was at lunch and I told him I was with my mother and would call him
after lunch. He didn’t want to wait and wanted to talk to him at that moment. He
became upset and short with me because I wouldn’t talk to him. He had never acted
this way with me before and was completely out of the ordinary for him. He kept
calling me and I did not answer. I did call him after lunch and we argued about the
earlier calls. He felt bad that he had missed Valentine’s Day, Amanda’s birthday and
would be missing my birthday because of this trip.
9. My mother told me later that day that Kurt called her earlier to thank her
for taking me to lunch and apologized for not being there for me. He told my mother
how much he loved me.
10. Later that night, I spoke with Kurt. We discussed the earlier
conversation and both apologized. He told me how much he missed me and couldn’t
wait to get home. He seemed his normal self again.
11. He promised to call me first thing in the morning as usual on April 28,
2008. I never heard from him after the last time we spoke shortly before midnight,
April 27, 2008.
Lisa Jessen aff., AR 498-99.
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The plaintiff averred that she heard from Jessen’s colleague, Bob Huffman, who
accompanied Jessen on the Australia trip. Huffman reported that on April 27, 2008 Jessen appeared
to be extremely tired, disoriented and “had dropped his entire face into a bowl of soup at dinner.”
AR 500. However, Huffman said that he and Jessen planned activities with their families together
after they returned from Australia.
The hotel records show that around 5 p.m. on April 28, 2008, Jessen placed a call to a cell
number that is believed to belong to a drug supplier. He left the hotel at 5:26 p.m. and returned at
6:34 p.m. The hotel’s video surveillance depicts him wearing the same clothing that he wore when
he was found dead the following morning. No one else entered Jessen’s room that night. When next
morning Jessen did not call his wife as promised and did not appear for his business meeting, his
colleague contacted the hotel, which began the process leading to the discovery of Jessen’s body.
The plaintiff timely applied for the benefits under the policy on May 14, 2008. The claim
was evaluated by defendant Life Insurance Company of North America, which is a subsidiary of
underwriter CIGNA Corporation. On August 5, 2008, CIGNA Group Insurance Accident Specialist
Mary Schwarz informed plaintiff’s counsel at the time that the benefits would not be payable
because Jessen’s death was not a result of the accident. AR 120-24. Schwarz wrote:
Information in the claim file supports that Kurt T. Jessen died of mixed drug
toxicity on 4/29/2008 while he was traveling on business for Hewlett Packard.
Policy ABL 960190 states that it is an “accident only policy” and pays
benefits for a loss resulting from an accident.
The information provided to us by you, John T. Panourgias, reveals that Kurt
T. Jessen had a history of drug abuse and that he had attended a drug rehabilitation
program in his past.
Although Kurt T. Jessen is said to have been “clean” when he married Lisa
Jessen in December 2007, it appears that he did abuse illicit drugs while he was
traveling on business in Melbourne, Australia.
...
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Given the evidence of the recent venepuncture mark on his arm with his
sleeve rolled up and syringes and alcohol swabs in his vicinity, it appears that Kurt
T. Jessen intentionally injected morphine into his body. Having attended a drug
rehabilitation program in the past, Kurt T. Jessen would have been aware that illicit
drug use could produce a possible negative outcome. Additionally, Kurt T. Jessen
was a manager with Hewlett Packard, as indicated on the claim form, and thus would
be assumed to be sufficiently educated and intelligent to perform the duties of that
occupation. A person of such education and intelligence cannot be unaware of the
possible negative outcomes of illicit drug use.
Policy ABL 960190 only pays benefits for loss resulting from an accident.
As Kurt T. Jessen cannot have been unaware of the potential for a possible negative
outcome from using illicit drugs, his death would not be considered an accident for
the purposes of this policy. For this reason, no benefits are payable to your client
under policy ABL 960190.
AR 122-23.
The plaintiff appealed this initial denial of benefits. In the course of her appeal, the plaintiff
engaged Dr. Michael Boyle III, D.O., the Medical Director for Maplegrove Center, part of the Henry
Ford Health System in the Metropolitan Detroit area, board-certified in internal and addiction
medicine, to opine on the cause of Jessen’s death. Boyle concluded, after reviewing materials in the
case, that Jessen died of accidental, and not an intentional, overdose. He wrote:
It is my opinion that Mr. Jessen died of an accidental overdose of an
intravenous narcotic, most probably heroin. The toxicology report suggests that as
does the autopsy showing congestion (pulmonary edema) of the lungs. There was
also one recent needle injection site on the left antecubital fossa.
Mr. Jessen had a history of narcotic addiction over the years and had had
periods of time in his life of abstinence. There also was a drug found at the scene
called Suboxone which is used to help heroin addicts abstain by reducing cravings.
I believe that Mr. Jessen was drug free for a significant period of time prior
to his death because only one recent venipuncture was found on his arm and the
statements by his wife do not support that he had been using drugs.
I believe that the compulsion to use heroin returned on or around April 27,
2008 and that Mr. Jessen was unable to cope with the compulsion. He subsequently
was able to secure and inject an amount of heroin that took his life. Because he was
drug free for a significant period of time, his prior tolerance had returned to a lower
level and the amount he thought he had tolerated before was not able to be tolerated
because of this lower tolerance.
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I believe he was not trying to injure himself but only trying to obtain the
euphoric effect of the drug. This scenario I have seen numerous times in my years
of practice. It is an unfortunate and unintended consequence of addiction.
AR 576-77.
Nonetheless, on February 23, 2009, CIGNA’s Life and Accident Claim Services Specialist
Renee Worst issued a final letter upholding denial of benefits. After setting forth the reviewed
evidence, she concluded:
This policy . . . is a Business Travel Accident Policy which pays benefits for
losses incurred only from accidental injuries within the specifications outlined above.
Having reviewed the available record, indications are that Mr. Jessen had a history
of drug abuse and rehabilitation treatments. The information submitted with the
claim supports the fact that Kurt Jessen did abuse illicit drugs while on business in
Melbourne, Australia. This illegal drug use ultimately resulted in his death.
Policy ABL 960190, as quoted previously, is an Accident Policy which pays
benefits for losses incurred only from accidental injuries within the specifications
outlined above. Based on the fact that Mr. Jessen had a history of intravenous drug
use and rehabilitation programs it is extremely unlikely that he was unaware of the
risks associated with his behavior. As mentioned previously, policy ABL 960190
only pays benefits for loss resulting from an accident. Therefore, injury or death
resulting from his intravenous drug use is considered foreseeable and not accidental
and not covered by the provisions of policy ABL 960190.
AR 3-4.
In the meantime, the plaintiff applied for benefits under her husband’s Accidental Death and
Dismemberment policy issued to Hewlett Packard by Prudential Financial. The terms of the
Prudential policy were substantially similar to the terms of the CIGNA policy and required that the
loss be attributable to a “[c]overed [a]ccident,” Prudential paid without incident. Pl.’s Mot. for Sum.
J., Ex. 22, at 34, 37. Like CIGNA’s policy, the Prudential policy contained an exclusion for losses
resulting from suicide or attempted suicide or from intentionally self-inflicted injuries. Prudential
paid the full $300,000 payout without objection. The death benefit in this case is computed as a
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multiple of the insured’s earnings. The parties agree that if coverage obtains, that amount equals
$480,000 in Jessen’s case.
The plaintiff filed the present action on June 12, 2009 under section 502(a)(1)(B) of ERISA,
which authorizes an individual to bring an action “to recover benefits due to him under the terms
of his plan, to enforce his rights under the terms of the plan, or to clarify his rights to future benefits
under the terms of the plan.” 29 U.S.C. § 1132(a)(1)(B). Thereafter, the parties filed their cross
motions on the administrative record.
II.
The general rule in cases challenging the denial of employee benefits under ERISA section
502(a)(1)(B) is that the district court reviews the plan administrator’s decision de novo, unless the
plan gives the administrator discretionary authority to determine participants’ eligibility for benefits,
in which case the court must apply the highly deferential arbitrary and capricious standard of review.
Firestone Tire & Rubber Co. v. Bruch, 489 U.S. 101, 115 (1989); Cox v. Standard Ins. Co., 585 F.3d
295, 299 (6th Cir. 2009). Whether a benefits plan grants discretionary authority is determined by
reference to the plan’s specific language. Although the use of certain terminology is not necessary
to vest discretion and thereby trigger the arbitrary and capricious standard, the plan nonetheless must
contain “a clear grant of discretion [to the administrator] to determine benefits or interpret the plan.”
Perez v. Aetna Life Ins. Co., 150 F.3d 550, 557 (6th Cir. 1998) (quoting Wulf v. Quantum Chem.
Corp., 26 F.3d 1368, 1373 (6th Cir. 1994)). The parties agree that no such language is found in the
plan or the insurance policy.
The de novo standard requires the reviewing Court to “determine whether the administrator
made a correct decision.” Hoover v. Provident Life & Accident Ins. Co., 290 F.3d 801, 808-09 (6th
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Cir. 2002) (internal quotation marks and citation omitted). Review is confined to the evidence in
the administrative record. Wilkins v. Baptist Healthcare Sys., Inc., 150 F.3d 609, 616 (6th Cir.
1998). “[T]he administrator’s decision is accorded no deference or presumption of correctness.”
Hoover, 290 F.3d at 809. Based on the record before the plan administrator, “the court must
determine whether the administrator properly interpreted the plan and whether the insured was
entitled to benefits under the plan.” Ibid.
A.
The plaintiff argues that California law applies to that determination because of a policy
provision that states that “[t]his policy shall be governed by the laws of the state in which it is
delivered.” AR 546. The plaintiff argues that the group policy was purchased by Hewlett Packard
at its corporate office in California, and therefore it was “delivered” there. In making that argument,
the plaintiff seeks to avail herself of an insured-friendly definition of the term “accident,” under
which a death or injury will be covered “even if caused by the insured’s voluntary act[,] . . . unless
the insured virtually intended his injury or death.” Smith v. Stonebridge Life Ins. Co., 582 F. Supp.
2d 1209, 1216 (N.D. Cal. 2008). The defendant counters that the group insurance policy was
delivered in Pennsylvania, where it signed the policy at its principal place of business. But despite
that feature, the defendant insists that federal common law that has developed under ERISA is the
governing law in this case.
“In determining which state’s law applies in an ERISA case, this court’s ‘analysis is
governed by the choice of law principles derived from federal common law.’” DaimlerChrysler
Corp. Healthcare Benefits Plan v. Durden, 448 F.3d 918, 922 (6th Cir. 2006) (quoting Medical Mut.
of Ohio v. deSoto, 245 F.3d 561, 570 (6th Cir. 2001)). Under those rules, choice-of-law provisions
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in an ERISA plan that prefer one state’s laws over another generally will be honored, unless an
overriding policy consideration requires a different choice. Ibid. (citing Restatement (Second) of
Conflict of Laws § 187 (1971)). “Enforcing choice of law provisions in ERISA plans takes the
object of uniformity one step further by ensuring that all issues not preempted by federal law will
be resolved by application of the chosen state’s law. In general, this too will add certainty to the
claim administration process leading to more efficiency and less litigation.” Id at 928.
However, ERISA generally “supersede[s] any and all State laws insofar as they may now or
hereafter relate to any employee benefit plan.” 29 U.S.C. § 1144(a). ERISA’s preemption provision
is “deliberately expansive, and designed to ‘establish pension plan regulation as exclusively a federal
concern.’” Stevens v. Employer-Teamsters Joint Council No. 84 Pension Fund, 979 F.2d 444, 454
(6th Cir. 1992) (quoting Pilot Life Ins. Co. v. Dedeaux, 481 U.S. 41, 45-46 (1987) (internal
quotation marks and citation omitted)). Where ERISA does not address an area of benefit
entitlement, and the plan does not contain relevant provisions, “federal common law is expected to
develop and address rights and obligations arising under the Act.” Auto Owners Ins. Co. v. Thorn
Apple Valley, Inc., 31 F.3d 371, 374-75 (6th Cir. 1994) (citing Pilot Life Ins. Co., 481 U.S. at 56);
see also Thomas v. Miller, 489 F.3d 293, 297 (6th Cir. 2007) (stating that “ERISA authorizes the
courts ‘to fashion a body of federal common law to enforce the agreement[s] that these statutes bring
within their jurisdiction’” (quoting Armistead v. Vernitron Corp., 944 F.2d 1287, 1298-1300 (6th
Cir. 1991))).
In Medical Mutual of Ohio v. K. Amalia Enterprises, Inc., 548 F.3d 383 (6th Cir. 2008), the
Sixth Circuit disregarded a choice-of-law provision in an insurance contract because the provision
did not address the interaction between state and federal law. The court explained:
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The presence in the parties’ contract of a choice-of-law provision stating that the
contract will be governed by “the laws of the state of Ohio” does not change [the rule
that ERISA benefits claims under 29 U.S.C. § 1331(a)(3) are interpreted using
federal common law]. As we have observed elsewhere, “‘the normal purpose of such
choice of law clauses is to determine that the law of one state rather than that of
another state will be applicable; they simply do not speak to any interaction between
state and federal law.’” Ferro Corp. v. Garrison Indus., Inc., 142 F.3d 926, 938 (6th
Cir. 1998) (quoting Volt Info. Sciences, Inc. v. Bd. of Trustees, 489 U.S. 468, 488
(1989) (Brennan, J., dissenting)).
Id. at 391.
Such is the case here. The statement on the front page of the policy that the “policy shall be
governed by the laws of the state in which it is delivered” does not alter the default rule that in
evaluating questions of policy interpretation under ERISA, federal courts must develop and apply
a body of substantive federal common law. The language in the policy does not resolve a conflict
between state and federal law. Nor can it be read properly to prefer the law of a particular state over
federal common law. The core dispute in this case revolves around the meaning of the term
“accident” within the group policy. The term is not defined in the policy. “[W]here the crucial
terms of an accident policy are defined with surpassing vagueness, . . . to deploy the federal common
law of ERISA to give some unity to the concept of ‘accident’ is sound judicial policy.” Buce v.
Allianz Life Ins. Co., 247 F.3d 1133, 1146-47 (11th Cir. 2001). Therefore, federal common law must
provide the rules for decision in this case.
B.
The defendant argues that it was correct in its decision to deny payment of the death benefit
because the decedent’s death was not caused by a loss included as a “covered peril” in the grant of
coverage, and two policy exclusions prohibit the payment of benefits. For reasons stated below, the
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Court believes that the defendant did not interpret the plan language properly and improperly failed
to pay the plaintiff the benefits to which she is entitled.
1.
The plaintiff contends that Kurt Jessen died as a result of an “accident . . . while . . . on a
business trip” in Australia for Hewlett Packard. The defendant’s main contention is that because
Jessen voluntarily injected himself with heroin, which caused his death, his death cannot be
considered an accident.
The facts of the case are not much in dispute. It is quite clear that Jessen had suffered from
drug addiction in the past, had used heroin on multiple occasions, and had sought treatment for his
addiction. His family believed (mistakenly, as it turns out) that he had conquered his addiction by
the time he left town for his business trip. Two more things are apparent: Jessen voluntarily injected
himself with heroin, and his death was caused by an overdose of the drug or from a complication
of using the drug. Finally, there is no direct evidence that Jessen took the drug with the intention
to kill or injury himself.
In light of these facts, the question of coverage initially turns on the definition of “accident”
as that term is used in the policy. The policy contains no definition of the term, and there is no
exclusion of coverage for the specific activity involved here, that is, the use of non-prescribed,
illegal drugs that causes or contributes to death or injury.
Two decisions from the Sixth Circuit most recently have discussed the construction of the
term “accident” by ERISA plan administrators when death or injury occurs following the voluntary
ingestion of foreign substances. The first case, Lennon v. Metropolitan Life Insurance Co., 504 F.3d
617 (6th Cir. 2007), does not provide much guidance because the court deferred to the plan
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administrator’s construction of the term under an arbitrary-and-capricious standard of review. The
court upheld the denial of life insurance benefits to a plan beneficiary where the decedent had
ingested alcohol and had a blood alcohol content of 0.321% by weight, drove his vehicle the wrong
way down a one-way street at high speed, and crashed the car into a wall, killing himself. The plan
administrator determined that the decedent’s death was not an “accident,” because his conduct
rendered the risk of injury or death “reasonably foreseeable.” The court found that the plan
administrator’s equating reckless conduct with intentional conduct was not arbitrary or capricious
and therefore upheld the decision denying benefits.
The case generated three opinions. In addition to the lead opinion, one judge dissented and
another concurred. The lead opinion acknowledged that the court was not attempting to define the
term “accident” as used in such insurance policies, explaining:
Of course, “accidental” could perhaps be more broadly defined to include dangerous
activity as long as injury is not intended or substantially certain. Drunk driving
injuries might fit within such a definition. If our review were de novo, this
possibility would require serious consideration. FN6
...
But under arbitrary-and-capricious review we need not decide what is the best
reading of words in the insurance policy, but whether the plan administrator’s
interpretation is arbitrary. Interpreting the result of reckless drunk driving as not
“accidental” for the driver is not arbitrary.
________________________
FN6. The concurrence unfortunately misreads this opinion as “address[ing] the
question whether it was correct, as a matter of substantive law, for MetLife to deny
benefits here, rather than the question whether or not it was merely arbitrary and
capricious to do so.” As a fair reading of this opinion — and particularly of the
statement here in the text — shows, I would base affirmance entirely on the
arbitrary-and-capricious scope of review, and reserve judgment on the correctness
(without regard to deference) of treating the incident as an accident under the policy.
Moreover, while the concurrence would rely only on other federal court cases, which
in turn rely simply on likelihood of harm, to uphold the insurance company’s
determination under the arbitrary-and-capricious standard, such reliance without
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more implies that high likelihood of injury is sufficient to uphold denial of accident
insurance whenever the arbitrary-and-capricious standard applies. The instant
opinion is intended to avoid making that implication in favor of the insurance
companies. There may be cases — different from the instant case — in which high
likelihood of injury is not sufficient to say that activity was not accidental. We need
not go beyond reckless conduct to conduct that is simply “highly likely” to cause
injury, and I would not do so.
Id. at 623-24 & n.6.
The second Sixth Circuit case did offer a definition of the term “accident” as used in
employer-provided insurance policies reviewed under ERISA. The case, Kovach v. Zurich
American Insurance Co., 587 F.3d 323 (6th Cir. 2009), also concerned the denial of benefits to a
plan beneficiary injured in a drunk driving accident. (The injured person had a blood alcohol
content of 0.148%, tested positive for opiates and benzodiazepines, and ultimatelt lost his leg in the
motorcycle-automobile accident after running a stop sign.) The court applied the arbitrary-andcapricious standard of review and reversed, rejecting the plan administrator’s reasoning that injuries
resulting from drunken driving are reasonably foreseeable and therefore not “accidental.” In
reaching that conclusion, the court established a few principles that furnish guidance when
interpreting accidental death and injury insurance policies under ERISA. First, the court reiterated
the statutory command that “ERISA . . . benefit plans must be ‘written in a manner calculated to be
understood by the average plan participant.’” Id. at 332 (quoting 29 U.S.C. § 1022(a)). From that
premise, the court determined that when defining the term “accidental,” “‘the administrator must
adhere to the plain meaning of its language as it would be construed by an ordinary person.’” Ibid.
(quoting Morgan v. SKF USA, Inc., 385 F.3d 989, 992 (6th Cir. 2004)). As its source for such a
definition, the court turned to Webster’s dictionary, which defines “accidental” as:
2a: occurring unexpectedly or by chance b: happening without intent or through
carelessness and often with unfortunate results
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Id. at 333.
Next the court held that categorically excluding injuries that result from engaging in risky
behavior because they are reasonably foreseeable is “arbitrary and capricious in light of the typical
policyholder’s expectations” because that practice “would bar accidental injury coverage in
numerous situations in which the typical policyholder would expect to be covered.” Id. at 335-36.
Finally, the court determined that “the time [was] ripe for this court to adopt a uniform
standard for determining whether an injury is ‘accidental’ in ERISA cases where the word is not
otherwise defined in the applicable policy.” Id. at 336-37. The court chose the rule established in
Wickman v. Northwestern National Insurance Co., 908 F.2d 1077 (1st Cir. 1990). Id. at 337.
This Court has discussed and applied the Wickman rule in a previous case involving an
accident resulting from the voluntary ingestion of substances. See Harrell v. Metro. Life Ins. Co.,
401 F. Supp. 2d 802 (E.D. Mich. 2005). The rule requires a two-stage inquiry, consisting of a
subjective and an objective component. If the insured subjectively intended to cause himself injury
or death when engaging in a voluntary act, then there is no “accident” under the ordinary meaning
of that term. But in cases where the insured intended the act but “did not intend the harm that befell
him, ‘the fact-finder must then examine whether the suppositions which underlay that expectation
were reasonable.’” Id. at 812 (quoting Wickman, 908 F.2d at 1088). As the Kovach Court
explained, that inquiry requires the court to ask “whether a reasonable person, with background and
characteristics similar to the insured, would have viewed the injury as highly likely to occur as a
result of the insured’s intentional conduct.” Kovach, 587 F.3d at 337 (quoting Wickman, 908 F.2d
at 1088). The Kovach Court quantified the Wickman rationale, declaring that “highly likely” must
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mean more than a 50% possibility; instead, “one might contemplate a 75% or higher probability
before the average person would be persuaded that a collision was ‘highly likely’ to occur.” Ibid.
Applying those principles to the facts in this case leads to the conclusion that Jessen’s death
was “accidental” within the plain meaning of the insurance policy. The defendant offers a token
challenge to coverage based on the decedent’s subjective intent in a footnote in its brief arguing that
Jessen took the drugs with an intention to overdose. The evidence does not bear such an assertion,
but rather establishes the contrary conclusion. As Dr. Michael Boyle’s report explains and the
autopsy and police reports corroborate, Jessen “was not trying to injure himself but only trying to
obtain the euphoric effect of the drug.” AR 577. The similar conclusions of the Australian police
and autopsy examiner on the cause of Jessen’s death resulted from thorough and methodical
investigations. The detectives were physically present and acquired first-hand knowledge of the
circumstances of Jessen’s death. Consequently, those opinions are entitled to significant weight.
See Smakula v. Weinberger, 572 F.2d 127, 132 (3d Cir. 1978) (noting that “the medical ascription
of cause of death, be it on a death certificate, an autopsy report or a report of an examining
physician, may be conclusive, if reliable”). Although there is a hearsay report of a co-worker that
Jessen acted bizarrely on the day he died, there is nothing in the record supporting the defendant’s
hypothesis of an intentional overdose. Moreover, there are multiple accounts of the plans that Jessen
made for his return to the United States, including the gifts he would bring for his wife and the trip
that he and his family would take. Jessen also changed his ticket to return one day earlier than
originally scheduled. There is no direct evidence of Jessen’s subjective intent to kill or injure
himself, and the circumstantial evidence persuasively establishes the absence of such intent.
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That leaves the question whether a reasonable person with Jessen’s background and
experience would have concluded that Jessen’s voluntary use of heroin on April 29, 2008 was highly
likely to cause death or serious injury. That question must be answered in the negative as well.
Absent from the record is any information on the likelihood of death following heroin
injection in the general population. However, Jessen’s own survival for a period of almost twenty
years of intermittent heroin use is a testament that the use of the drug does not inevitably lead to
death. A report from the Center for Disease Control and Prevention of the U.S. Department of
Health and Human Services states that in 2007, the number of deaths involving, legal opioid
analgesics, which include prescription drug pain killers such as oxycodone, hydrocodone, and
methadone, was 1.93 times the number involving cocaine and 5.38 times the number involving
heroin. See Unintentional Drug Poisoning in the United States, 2010 CDC Report, available at
http://www.cdc.gov/HomeandRecreationalSafety/pdf/poison-issue-brief.pdf. In absolute numbers,
about two thousand drug overdose deaths in 2007 were due to heroin use, compared to about 6,000
deaths attributable to cocaine use and over 11,000 deaths attributable to opioid analgesic. Ibid. One
study comparing causes of unintentional poisoning deaths in eleven states over a eleven-year period
ranked deaths due to alcohol poisoning (8%) as comparable to deaths by heroin overdose (7%). See
Center for Disease Control, Unintentional and Undetermined Poisoning Deaths — 11 States,
1990-2001, available at http://www.cdc.gov/mmwr/preview/mmwrhtml/mm5311a2.htm. Even if
information was offered into the record dealing with the relative risk of death due to the over-use
of foreign substances, there does not appear to be much reason to treat heroin users categorically
different from alcohol users when construing the terms of the accidental death insurance policy. In
all events, the record does not support the transition of death as a consequence of heroin use into the
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realm of likelihood. The possibility of death certainly is less likely to result from use of heroin by
an experienced user when compared to, say, the over use of alcohol and prescription drugs
immediately before riding a motorcycle.
Also, when examining the objective reasonableness of the unlikeliness of harm in light of
the “background and characteristics [of a person] similar to the insured,” Kovach, 587 F.3d at 337,
the Court must consider the amount of the drug taken by Jessen. The evidence supports the
conclusion that Jessen overdosed on heroin because of his diminished tolerance in the aftermath of
extended heroin abstinence. Dr. Boyle’s report sheds some light on the concept of tolerance. Boyle
explains: “Because [Jessen] was drug free for a significant period of time, his prior tolerance had
returned to a lower level and the amount he thought he had tolerated before was not able to be
tolerated because of this lower tolerance.” AR 577. The autopsy report confirms that diminished
tolerance may result in an overdose:
In an intravenous heroin addict, it is important to appreciate the concept of tolerance.
This is a phenomenon whereby increasing doses of heroin are required to achieve the
same effects. Levels of tolerance can develop within days and after abstinence from
heroin it can take days and possibly weeks to diminish. Disappearance of tolerance
has nothing to do with a remaining craving or desire for the drug. A drug addict
unaware of the concept of tolerance may inadvertently overdose by injecting the
same dose he/she used prior to a period of abstinence.
AR 58.
Jessen’s mother’s and wife’s testified that Jessen had not used drugs for some extended time
prior to his alleged overdose. There were Suboxone pills in Jessen’s room, which suggests that
Jessen had been trying actively to combat his drug addiction. This record supports an inference that
while Jessen intended to administer heroin, he did not intend to administer a fatal dose of the
substance, and it was not objectively unreasonable of him to expect to simply get high — yet stay
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alive — as a result of consuming the dosage. Under Wickman, Jessen’s death was not highly likely
to occur as a result of his voluntary conduct, and therefore the death must be considered an accident.
See Sheehan v. Guardian Life Ins. Co., 372 F.3d 962, 967 (8th Cir. 2004) (reversing denial of
benefits where the insured was a drug user, but “all of the evidence indicated that [he] accidentally
ingested a lethal dose of morphine”); Santaella v. Metro. Life Ins. Co., 123 F.3d 456, 463 (7th Cir.
1997) (reversing denial of benefits where the insured did not know that the amount of pain reliever
she took would turn out to be lethal). The Plan administrator’s denial of benefits because “Jessen
cannot have been unaware of the potential for a possible negative outcome from using illicit drugs”
rests on the application of the wrong definition of the term “accident,” because a “possible negative
outcome” does not square with the requirement that the peril must be “highly likely to occur.”
Kovach, 587 F.3d at 337.
The defendant attempts to distinguish this case from Kovach by emphasizing the lack of
social utility in heroin use compared to the obvious utility of driving motor vehicles. It is true that
one is hard-pressed to find social utility in injecting heroin, or in many of the other activities that
may be considered risky behavior, such as sky diving, bungee jumping, or NASCAR racing.
However, the defendant’s comparison is imperfect. Rather than equating heroin use with driving,
the defendant must to compare heroin use with alcohol consumption. Although the latter is legal
and the former is outlawed, neither have much social utility. And of course, the defendant could
have chosen to cover only accidents resulting from legal activities, which it did not do in favor of
defining coverage based on “accidental” occurrences. The decedent’s death qualifies as an accident,
as that term is commonly understood.
2.
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The defendant also argues that recovery is barred by an exclusion of “benefits for loss caused
by or resulting . . . whenever a covered person injures himself on purpose, while sane or insane.”
AR 555. The defendant reasons that because Jessen’s consumption of heroin was voluntary and he
must have been aware of the dangers of using heroin, the self-inflicted injury exclusion prevents his
widow from recovering. The defendant places heavy reliance on Holsinger v. New England Mutual
Life Insurance Co., 765 F. Supp. 1279 (E.D. Mich. 1991), where the Court articulated a four-part
test for determining whether an injury was intentionally self-inflicted.
As an initial matter, the Plan administrator never denied the benefits based on the selfinflicted-injury exclusion. That argument was first proposed as a justification for the denial by
defense counsel during the present litigation. As this Court observed, there is something unseemly
about allowing the counsel to “shore up a decision . . . after the matter is in litigation, possible
deficiencies in the decision are identified, and an attorney is consulted to defend the decision by
developing creative post hoc arguments.” Harrell, 401 F. Supp. 2d at 808 (quoting Univ. Hosps.
of Cleveland v. Emerson Elec. Co., 202 F.3d 839, 849 n.7 (6th Cir. 2000)). The tardy argument is
not forfeited, but the Court must carefully scrutinize any such post-hoc rationalizations, and review
them de novo, which is the applicable standard of review in this case anyway. See University
Hospitals of Cleveland, 202 F.3d at 849 n.7.
In interpreting what falls within a self-inflicted injury exception, the Kovach Court adopted
the reasoning of the Eighth Circuit in King v. Hartford Life & Accident Insurance Co., 414 F.3d 994
(8th Cir. 2004) that “‘the exclusion for injuries contributed to by “intentionally self-inflicted injury
. . .” does not include injuries that were unintended by the participant, but which were contributed
to by alcohol intoxication.’” Kovach, 587 F.3d at 339 (quoting King, 414 F.3d at 1004). Based on
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that reasoning, the court held that the self-inflicted injury exception did not apply where the insured
“acted intentionally in drinking to excess and then riding his motorcycle” but where he did not do
so “with a mind towards harming himself.” Ibid. The court explained:
[The administrator’s] interpretation of the exclusion in question conflates
intentional actions with intentional results. [The insured’s] injuries, in other words,
were the result of the collision, not simply a consequence of his acts of drinking and
driving. After all, “[o]ne rarely thinks of a drunk driver who arrives home safely as
an ‘injured’ party.” [King, 414 F.3d at 1004. The insured’s] intoxication likely
contributed to the collision, but to define his excessive drinking as a “purposely
self-inflicted wound” would be an illogical and “startling construction.” Id. [The
administrator’s] denial of [the plaintiffs’] claim on this basis was therefore arbitrary
and capricious.
Kovach, 587 F.3d at 339.
The Kovach holding casts doubt on the validity of the formulation of the self-inflicted-injury
exception suggested by the Court in Holsinger. The four-part test used by that Court for determining
whether a drug overdose fell under the self-inflicted-injury exclusion was set forth as follows:
First, was the ingestion of drugs intentional? Second, did the decedent know
that the ingestion of drugs would be likely to cause an injury? Third, did the
ingestion of drugs cause an injury? Fourth, did the loss result from the injury?
Holsinger, 765 F. Supp. at 1282.
When applying that test, the Holsinger Court lowered the bar further below the prevailing
“highly likely” standard, reasoning: “For example, when the loss is death, it is not necessary that the
person ingesting the drugs know that death could result. If the person ingesting the drugs has a
general cognizance that the drugs could produce some injury, it is enough that there is some causal
relation between the injury caused and the ultimate loss.” Ibid. (emphasis added).
As many other courts observed, the Holsinger standard cannot be correct. Andrus v. AIG
Life Ins. Co., 368 F. Supp. 2d 829, 833-34 (N.D. Ohio 2005); Gower v. AIG Claim Servs., Inc., 501
-22-
F. Supp. 2d 762, 775 (N.D. W. Va. 2007). Rather than focusing on intentional ingestion of the drug,
the inquiry must focus on whether the action is “purposeful towards a goal.” Andrus, 368 F. Supp.
2d at 834. As this Court pointed out in Harrell, “it is not reasonable to read the self-inflicted-injury
exclusion . . . to include unintended injuries that result from voluntary engaging in risky behavior.
To do so would require reading additional requirements into the plan.” 401 F. Supp. 2d at 811.
Although “death can be a foreseeable consequence of overdosing on drugs, . . . many results are the
foreseeable consequence of risky actions.” Andrus, 368 F. Supp. 2d at 834. “[I]t is not sufficient
merely that a serious risk was willingly undertaken, so long as injury was not intended and,
objectively, was not likely to occur.” Critchlow v. First UNUM Life Ins. Co. of Am., 378 F.3d 246,
263 (2d Cir. 2004) (concluding that the provision excluding loss resulting from intentionally selfinflicting injuries does not apply to death from autoerotic asphyxiation).
The conduct at issue does not fall within the self-inflicted-injury exception for much the
same reasons that it constitutes an accident. As discussed earlier, there is no evidence that Jessen
intended his death or should have known that death was highly likely to occur as a result of taking
the drugs. Cf. Minshew v. Fed. Ins. Co., 255 F. Supp. 2d 714, 719-20 (E.D. Mich. 2003) (Feikens,
J.) (affirming arbitration panel’s award of benefits applying Michigan law and concluding that where
a heroin user merely intended to “get high,” death was not a result of a self-inflicted injury). The
self-inflicted-injury exclusion does not bar recovery.
3.
Finally, the defendant relies in this litigation on the suicide exclusion. However, for the
reasons discussed above, the evidence does not support the idea that Jessen intentionally killed
himself.
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III.
The Court concludes that the defendant did not make the correct decision when determining
that Kurt Jessen’s death was not a covered peril within the meaning of Hewlett Packard’s group life
insurance policy. Jessen’s death was an “accident,” according to the accepted meaning of that term
under Sixth Circuit law, and none of the policy exclusion to coverage apply. The plaintiff also has
requested an award of attorney’s fees, which may be appropriate under 29 U.S.C. § 1132(g)(1).
However, the defendant contends the request is premature. The Court finds that the defendant has
the better argument. The plaintiff may apply for attorney’s fees under Federal Rule of Civil
Procedure 54(d) and E.D. Mich. LR 54.1.2.
Accordingly, it is ORDERED that the plaintiff's motion to reverse the decision of the
defendant plan administrator [dkt # 19] is GRANTED.
It is further ORDERED that the defendant's motion to affirm the decision of the plan
administrator [dkt # 22] is DENIED.
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It is further ORDERED that the matter is remanded to the defendant plan administrator with
directions to pay to the plaintiff, Lisa Jessen, the death benefit under the Travel Accidental Death
Policy in the amount of $480,000 plus applicable interest.
s/David M. Lawson
DAVID M. LAWSON
United States District Judge
Dated: June 21, 2011
PROOF OF SERVICE
The undersigned certifies that a copy of the foregoing order was served
upon each attorney or party of record herein by electronic means or first
class U.S. mail on June 21, 2011.
s/Deborah R. Tofil
DEBORAH R. TOFIL
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