Shaw v. The Prudential Insurance Company of America
Filing
102
ORDER granting 91 Defendant's motion for summary judgment on Count II; denying 93 Plaintiff's motion for summary judgment. Signed on 8/9/12 by District Judge Greg Kays. (Francis, Alexandra)
IN THE UNITED STATES DISTRICT COURT FOR THE
WESTERN DISTRICT OF MISSOURI
SOUTHERN DIVISION
TAMICA SHAW,
Plaintiff,
v.
THE PRUDENTIAL INSURANCE
COMPANY OF AMERICA,
Defendant.
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No. 10-3355-S-CV-DGK
ORDER GRANTING DEFENDANT’S MOTION FOR SUMMARY JUDGMENT
This case arises from Plaintiff Tamica Shaw’s claim for benefits and statutory penalties
under an accidental death and dismemberment (“AD&D”) policy purchased from Defendant The
Prudential Insurance Company of America (“Prudential”) through her employer, JPMorgan
Chase Bank, N.A. (“Chase”).
Pending before the Court are cross-motions for summary judgment on behalf of Plaintiff
Tamica Shaw and Defendant Prudential.1 Having fully considered the arguments on behalf of
both parties, the Court GRANTS Defendant’s motion for summary judgment (Doc. 91) and
DENIES Plaintiff’s motion for summary judgment (Doc. 93).
1
In ruling on these motions, the Court has also considered: Prudential’s “Motion for Summary Judgment on the
Merits” (Doc. 91); Prudential’s “Suggestions in Support” (Doc. 92); Plaintiff’s “Suggestions in Opposition” (Doc.
97); Plaintiff’s “Motion for Summary Judgment” (Doc. 93); Plaintiff’s “Suggestions in Support” (Doc. 94);
Prudential’s “Combined Suggestions in Response to Plaintiff’s Motion for Summary Judgment and Reply in
Support of Prudential’s Motion for Summary Judgment” (Doc. 100); and Plaintiff’s “Reply” (Doc. 101).
1
Background
On March 4, 2006, Plaintiff’s husband, Charles Shaw, was killed in an automobile
accident in Springfield, Missouri.
Subsequently, Plaintiff made a claim for $600,000 in
accidental death and dismemberment insurance (“AD&D”) through Prudential. On June 21,
2006, after reviewing the case, Prudential found that at the time of the accident the decedent had
a blood alcohol level exceeding the legal limit to operate a motor vehicle under Missouri state
law and accordingly denied Plaintiff’s AD&D claim under a coverage exclusion for “an accident
that occurs while operating a motor vehicle involving the illegal use of alcohol.” As support for
its decision, Prudential cited the toxicology report from the medical examiner’s office which
concluded that Mr. Shaw had a blood alcohol level of 0.126% at the time of his death (D003840).
Plaintiff appealed that decision, through her attorney, in two separate letters dated
October 2, 2006 and February 7, 2007, arguing that she was entitled to benefits because neither
the certificate of death nor the police report listed alcohol as a contributing factor in her
husband’s death (D0053, D00133). On March 12, 2007, Prudential issued a letter, upholding its
original claims decision finding that the alcohol exclusion in the AD&D policy prevented
coverage (D00139). After receiving and reviewing additional records for Mr. Shaw, Prudential
revised its letter, citing alcohol consumption and a felony exclusion2 as an additional reason for
denying coverage.
On July 30, 2007, Plaintiff appealed to Prudential’s Appeal Review
Committee for a final decision on Prudential’s May 10, 2007 decision denying her AD&D
2
Specifically, Prudential found that because Mr. Shaw was driving with a suspended license at the time of the
accident, due to four prior criminal convictions, he was committing a class D felony under RSMo § 302.321 and was
not eligible for benefits under the policy.
2
benefits. On September 28, 2007, Prudential issued its final determination denying Plaintiff
coverage.
On July 27, 2010, Plaintiff filed suit against Defendant in the Circuit Court of Greene
County, Missouri, alleging breach of her AD&D policy and seeking damages of at least
$655,000. Prudential removed the action to this Court on September 2, 2010, alleging ERISA
pre-emption, federal question jurisdiction, and diversity jurisdiction.
On October 1, 2010, Plaintiff moved to remand the case to state court arguing that this
Court lacked federal question jurisdiction to hear the case (Doc. 10). On March 21, 2011, this
Court rejected those arguments, holding that Plaintiff’s case was properly removed from state
court because Plaintiff pled federal ERISA claims in her Complaint (Doc. 38).
Plaintiff
subsequently moved to amend her Complaint, and with leave of the Court, filed her First
Amended Complaint, alleging two Counts, one under Missouri State law and the second, in the
alternative, under ERISA (Doc. 45). On February 9, 2012, this Court issued an order granting
Defendant’s motion for partial summary judgment, finding that Plaintiff’s claims were governed
by ERISA and dismissing Plaintiff’s state law claim (Doc. 89). The only issue remaining in the
case is whether Prudential’s denial of Plaintiff’s claim for AD&D benefits should be upheld.
Standard
Summary judgment is proper “if the pleadings, depositions, answers to interrogatories,
and admissions on file, together with the affidavits, if any, show that there is no genuine issue as
to any material fact and that the moving party is entitled to a judgment as a matter of law.” Fed.
R. Civ. P. 56(c). A party who moves for summary judgment bears the burden of showing that
there is no genuine issue of material fact. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 256
(1986). When considering a motion for summary judgment, a court must evaluate the evidence
3
in the light most favorable to the nonmoving party and the nonmoving party “must be given the
benefit of all reasonable inferences.” Mirax Chem. Prods. Corp. v. First Interstate Commercial
Corp., 950 F.2d 566, 569 (8th Cir. 1991).
To establish a genuine issue of fact sufficient to warrant trial, the nonmoving party “must
do more than simply show that there is some metaphysical doubt as to the material facts.”
Matsushita Elec. Indus. Co., Ltd. v. Zenith Radio Corp., 475 U.S. 574, 586 (1986). Instead, the
nonmoving party bears the burden of setting forth specific facts showing there is a genuine issue
for trial. Anderson, 477 U.S. at 248.
Discussion
A. The Court reviews Prudential’s decision under a deferential, arbitrary and
capricious standard.
The first matter the Court must resolve is under what standard it should review
Prudential’s decision to deny Plaintiff AD&D benefits.
“Where an ERISA plan grants the
administrator discretion to determine eligibility for benefits and to interpret the plan’s terms,
courts must apply a deferential abuse-of-discretion standard of review.”
Green v. Union Sec.
Ins. Co., 646 F.3d 1042, 1050 (8th Cir. 2011) (citing Midgett v. Wash. Group Int'l Long Term
Disability Plan, 561 F.3d 887, 893 (8th Cir. 2009)). Under an abuse of discretion standard, the
administrator’s decision should be reversed “only if it is arbitrary and capricious.” Midgett, 561
F.3d at 896. The administrator’s decision should be upheld if it is reasonable and supported by
substantial evidence. Green, 646 F.3d at 1050. Substantial evidence is “such relevant evidence
as a reasonable mind might accept as adequate to support a conclusion.” River v. Edward D.
Jones Co., 646 F.3d 1029, 1033 (8th Cir. 2011). It means “more than a scintilla but less than a
preponderance.” Hobbs v. Hartford Life and Acc. Ins. Co., 751 F. Supp. 2d 1111, 1115 (W.D.
4
Mo. 2010) (quoting Schatz v. Mut. of Omaha Ins. Co., 220 F.3d 944, 949 (8th Cir. 2000)). “The
requirement that the [plan administrator’s] decision be reasonable should be read to mean that a
decision is reasonable if a reasonable person could have reached a similar decision, given the
evidence before him, not that a reasonable person would have reached that decision.” Midgett,
561 F.3d at 897 (emphasis in original). If the ERISA plan does not grant discretion to the plan
administrator to determine eligibility, the court must review the administrator’s decision de novo.
Thus, to determine which standard of review to apply, the Court must first determine
whether the ERISA plan at issue in this case grants authority to the plan administrator to
determine eligibility for benefits. This inquiry rests upon the Court’s interpretation of what
constitutes the contested ERISA plan in its entirety. The Court confronted this very issue in
rendering its prior order for partial summary judgment but declined to address it at that time.
However, resolving whether the AD&D policy at issue in this litigation is part of a larger
employee welfare benefit wrap-plan is central to determining what standard of review to apply to
the present action; therefore, the Court will address that issue now.
Plaintiff maintains that the AD&D policy under which Plaintiff claims benefits is not part
of a larger, more comprehensive employer-sponsored welfare benefit plan or administrative
scheme. Accordingly, Plaintiff argues that the court should look only to the language of the
AD&D policy in determining whether the plan grants discretion to the plan administrator to
determine an individual’s eligibility for benefits. Because the language of the AD&D policy
itself does not grant any discretion to Defendant to interpret the terms of the plan or eligibility
under it—such discretion is found only in the Summary Plan Description (SPD)—Plaintiff urges
the Court to adopt a de novo standard of review.
5
Defendant’s position, however, is that the AD&D policy is only one component of a
larger employee welfare benefit wrap-plan—the “Master Plan”—which provides medical, dental,
life insurance, AD&D coverage, disability, and severance benefits to Chase employees. Stated
more clearly, Defendant asserts that Chase has “wrapped” multiple individual policy plans
(AD&D, Basic Life Term Insurance, Long-Term Disability, etc.) into one “Master Plan,” which
is governed not only by the individual policy documents but also by the unifying plan document
(the “wrap plan document”),3 which incorporates the SPDs and vests Defendant with discretion
to interpret the terms of the policy.4
Because the “wrap plan document” contains language
incorporating the SPDs and noting that program administrators and their delegates have
discretion to determine whether a participant is eligible for benefits,5 Defendant maintains that its
decision to deny benefits should be reviewed under a deferential, abuse of discretion standard.
The Court finds Defendant’s argument persuasive. The Eighth Circuit has held that
where a wrap plan document provides the governing structure for the overall plan and “describes
the general procedures for determining participation, funding, administration, and claims under
each individual welfare program,” the “Master Plan” consists of the wrap plan document,
together with the individual policy plan documents established by the employer. Admin. Comm.
3
Accordingly, the “wrap plan document,” together with the individual policy plan documents, form what Defendant
refers to as the “Master Plan.”
4
It is this “Master Plan,” including the “wrap plan document,” that Defendant argues the Court should look to in
determining whether or not the plan administrator has discretion to make policy determinations regarding Plaintiff’s
policy.
5
Plaintiff argues that Defendant should not be allowed to cite to the “wrap plan document” because it was not part
of the administrative record and a review for abuse of discretion should be limited only to evidence that was before
the administrator at the time of his or her decision. Jones v. ReliaStar Life Ins. Co, 615 F.3d 941, 945 (8th Cir.
2010). While this is generally the rule, its applicability makes sense only to the extent the Court is reviewing
whether the administrator’s decision was reasonable. This rule is inapplicable where the Court must determine
which standard of review to apply. In making that decision, one which was not considered at the administrative
level, it is not relevant to consider only that information which was before the administrator. Thus here, in order to
determine the preliminary matter of whether the policy granted discretion to the administrator to determine policy
eligibility such that the Court should use an abuse of discretion rather than de novo standard of review, the Court
finds no need to limit inquiry only to documents that were considered by Prudential on administrative review.
6
of Wal-Mart Stores, Inc. Assocs.’ Health & Welfare Plan v. Gamboa, 479 F.3d 538, 542 (8th Cir.
2007). Other courts agree that a wrap plan document constitutes part of the overall plan for
purposes of determining who has discretion to make eligibility determinations. Admin. Comm.
for Wal-Mart Stores, Inc. Assocs.’ Welfare Plan v. Salazar, 525 F. Supp. 2d 1103, 1111 (D. Ariz.
2007) (“Therefore, the Court finds the Wrap Document . . . as well as the SPD, shall be
considered the Plan governing Plaintiff’s ERISA claim.”); Admin. Comm. of Wal-Mart Assocs.
Health & Welfare Plan v. Willard, 302 F. Supp. 2d 1267, 1272 & n.8 (D. Kan. 2004) aff'd sub
nom. Admin. Comm. Of Wal-Mart Associates Health And Welfare Plan v. Willard, 393 F.3d
1119 (10th Cir. 2004). Consistent with these cases, the Court holds that the “Master Plan”
consists of the constituent policy plan documents and the “wrap plan document” and, therefore,
the Court must consider all these documents in determining who has discretion to make
eligibility decisions under the plan. See Jobe, at 479 (“As is often the case, the plan is embodied
in more than one document.”).
With this established, the Court considers the specific documents in this case. Plaintiff
likens her case to Jobe v. Med. Life Ins. Co. in which the Eighth Circuit considered which
standard was appropriate6 to review an administrator’s denial of an insured’s claim where the
SPD purported to grant full discretion to the plan administrator to determine eligibility for plan
benefits but the policy itself was silent regarding such discretion. 598 F.3d 478, 481 (8th Cir.
2010). In its extensive analysis of the issue, the Eighth Circuit held that the language of an SPD
prevails over the language in an ERISA plan document in cases where the SPD grants a
beneficiary certain rights or privileges that the plan language does not. Id. However, where the
SPD contradicts the terms of the plan in a way that is less favorable to the insured, the plan and
6
The Eighth Circuit was deciding between an abuse of discretion standard and de novo review.
7
not the SPD controls. Id. at 483 (“Where the entity seeking enforcement of the summary
provision drafted the more detailed policy and can be presumed to know its terms, allowing that
party to rely on the summary plan description—which it also drafted—would do little to enhance
either party’s understanding of their legal rights and responsibilities.”).7
Thus, the Court
determined that because the SPD at issue purported to give the insurer greater benefits than it
had under the plan, the plan and not the SPD controlled.
Given the Court’s interpretation of what constitutes the plan at issue in this case, the
Court finds that the present case is distinguishable from Jobe in several important ways. First, in
Jobe, there was no evidence that the plan incorporated the SPD by reference. See Young v.
United Parcel Services, Inc. Employees' Short Term Disability Plan, 416 F. App'x 734, 738 (10th
Cir. 2011) (finding that Jobe does not apply because the plan at issue in UPS expressly
incorporates the terms of the SPD, while the plan at issue in Jobe does not). Here, however,
while the individual AD&D policy does not incorporate the SPDs by reference, the “wrap plan
document” states that the individual SPDs and administrative sections for the component plans
are “specifically incorporated by reference” (D00611). Additionally, in Jobe, the plan itself was
silent with respect to the program administrator’s discretion. Here, however, Section 4.2 of the
“wrap plan document” provides that the program administrators or their delegates have
discretion to determine whether a participant is eligible for benefits (D00620). Thus, Jobe’s
reasoning—that the plan documents control where the SPD, and not the plan documents, vest
discretion with the administrator to determine eligibility for benefits—is not applicable here,
7
The Eighth Circuit went on to note that three other circuits had reached similar conclusions that “a grant of
discretion to the plan administrator, appearing only in a summary plan description, does not vest the administrator
with discretion where the policy provides a mechanism for amendment and disclaims the power of the summary
plan description to alter the plan.” Id. at 484 (citing Schwartz v. Prudential Ins. Co. of Am., 450 F.3d 697, 699 (7th
Cir. 2006); Shaw v. Conn. Gen. Life Ins. Co., 353 F.3d 1276, 1283–84 (11th Cir. 2003); Grosz–Salomon v. Paul
Revere Life Ins. Co., 237 F.3d 1154, 1161–62 (9th Cir. 2001)).
8
where both the “wrap plan document” and the SPD state that the plan administrator has
discretion to determine a participant’s eligibility for benefits and the “wrap plan document”
incorporates the SPD by reference. See Kenitzer v. Reliastar Life Ins. Co., 2:09CV599DAK,
2011 WL 165313 (D. Utah Jan. 19, 2011) (finding that because the group policy expressly
incorporated the SPD, Jobe was not on point). Because both the plan, as evidenced by the “wrap
plan document,” and the SPD states that the claims administrator has sole discretion to determine
whether a participant is eligible for benefits (D00620) and because the “wrap plan document”
incorporates the individual SPDs by reference (D00611), the Court will review the
administrator’s decision under an abuse of discretion standard.
B. There is no genuine issue of material fact that Defendant’s decision to deny
Plaintiff benefits was not an abuse of discretion.
Under the abuse of discretion standard of review, the Court must next determine if
substantial evidence supports the Defendant’s decision to deny Plaintiff benefits, even if the
court believes a different, reasonable interpretation could have been made. Midgett, 561 F.3d at
897. In applying this standard of review, the Court must consider only that evidence that is part
of the administrative record. Barnhart v. UNUM Life Ins. Co. of Am., 179 F.3d 583, 590 (8th
Cir. 1999).
The language of Plaintiff’s AD&D policy provided that:
Benefits for accidental Loss are payable only if all these conditions are met:
(1) The person sustains an accidental bodily Injury while a Covered
Person.
(2) The Loss results directly from that Injury while a Covered Person.
(3) The person suffers the Loss within 365 days after the accident.
***
A Loss is not covered if it results from any of these:
***
9
(9) Commission of or attempt to commit a felony.
***
(11) An accident that occurs while operating a motor vehicle involving the
illegal use of alcohol, PCP, LSD or other hallucinogens, cocaine, heroin,
or other narcotics, amphetamines or other stimulants, barbiturates or other
sedatives or tranquilizers or any combination of these substances.
(D00341-43).
In making its decision to deny Plaintiff benefits, Defendant relied upon a toxicology
report from the Green County Medical Examiner’s Office which indicated that Mr. Shaw’s
alcohol level was .126% at the time of his death,8 in violation of Section (11) of the AD&D
policy.9
Additionally, Prudential denied Plaintiff’s claim on the basis that Mr. Shaw was
operating his vehicle while his license was under suspension, thereby committing a felony10 in
violation of Section (9) of the policy.
Defendant argues the administrative record clearly
substantiates that Plaintiff was not entitled to benefits since Mr. Shaw was legally intoxicated at
the time of his death and was also committing a felony.
Plaintiff contests Defendant’s determination for many reasons. First, Plaintiff contends
the evidence does not support Defendant’s conclusion that Mr. Shaw was driving while
intoxicated because neither Mr. Shaw’s death certificate nor the police report indicated that Mr.
Shaw was driving while legally intoxicated. However, the death certificate and police report
were not the only evidence that Prudential considered in rendering its decision. In fact, in their
denial letters, Prudential specifically addressed its consideration of these two arguments, noting
8
The level for legal intoxication in Missouri is 0.08%. Mo. Rev. Stat. § 577.012.
Based on this information, Prudential concluded “Carl Shaw’s death does not meet the definition of a covered
accidental Loss as outlined in Group Policy G-22454. Therefore, we are denying this claim for dependent accidental
death benefits” (Doc. 92, at 8).
10
Mr. Shaw’s driver’s license had been suspended for a one-year period due to his refusal to take a sobriety test on
March 15, 2005 (D00201). Additionally, Mr. Shaw had four prior felony convictions. Mr. Shaw’s prior convictions
are a matter of public record, of which this Court can take judicial notice. See, e.g., Criminal Case No. 2294104086-01 (1995); No. 22961-01757B-01 (1996); No. 22981-01887-01 (1998) (all in the 22nd Judicial Circuit, Saint
Louis, Mo.). Accordingly, Mr. Shaw’s unlicensed driving, in combination with his four prior felony convictions,
constituted a felony under Missouri law. See Mo. Rev. Stat. § 302.321.
9
10
that the death certificate and police report are not conclusive on the matter and that the
toxicology report had not yet been performed at the time these documents were written.
Additionally, as Prudential notes, there is nothing in the plan documents that requires the death
certificate to be controlling or binding on the applicability of plan exclusions.
Plaintiff also argues against the validity of the toxicology report, specifically maintaining
that the blood alcohol test, upon which the toxicology report relied, failed to comply with
Missouri’s regulations requiring that: (1) blood testing take place within three hours of the
incident; and (2) the person drawing the blood be a licensed physician, registered nurse or trained
medical technician and use a sterile needle and container and non-alcoholic antiseptic (D0053). 11
However, these arguments all rely upon the mistaken assumption that Prudential should be
required to satisfy a standard of proof that applies to criminal cases. The only applicable
Missouri statute governing the present situation states that, “The coroner or medical examiner
shall make . . . such tests as are necessary to determine the presence and percentage
concentration of alcohol, and drugs if feasible, in the blood of the deceased. The results of these
tests shall be included in the coroner's or medical examiner’s report to the state highway patrol . .
. .” RSMo § 58.445. Additionally, there is evidence in the record that Prudential contacted the
11
Plaintiff cited RSMo § 577.029, and related case law for the proposition that the blood must be drawn by a
qualified professional, using a sterile needle and container and non-alcoholic antiseptic (D0053, D00133). Plaintiff
also cited RSMo § 577.026, stating that to be valid, blood tests should be done according to the methods and devices
approved by the State of Missouri’s Department of Health. She also cited RSMo §§ 577.020.3, § 577.020.4, §
577.037.1, § 577.037.4; 13 CSR 50-140.020(1), 13 CSR 50-140.020(5), 13 CSR 50-140.030; and 19 CSR section
25-30.070 and 20-30-.070, as the rules governing the blood analysis procedure. These are all criminal statutes.
RSMo § 58.445, which governs the tests to be administered at the time of a fatal accident, states in part: “The
coroner or medical examiner shall make, or cause to be made, such tests as are necessary to determine the presence
and percentage concentration of alcohol, and drugs if feasible, in the blood of the deceased. The results of these tests
shall be included in the coroner's or medical examiner's report to the state highway patrol or the Missouri state water
patrol, as required by subsection 1 of this section.”
11
Missouri State Highway Patrol and the coroner to confirm that they used appropriate procedures
in drawing, handling, and testing Mr. Shaw’s blood samples.12
Plaintiff also argues that the toxicology report should be discounted because its results
were released nearly two months after the accident occurred whereas the death certificate and
police reports were issued immediately after the accident. According to the Criminalist at the
Missouri Highway Patrol Crime Laboratory, however, it is not unusual for the Crime Lab to
perform testing several months after the accident because tests are “batched” depending on the
lab’s backlog at the time the blood sample is received (D00201-02).13
Plaintiff also argues that the alcohol exclusion in the AD&D policy must be stricken,
contending that the language of the policy is ambiguous because it does not define “the illegal
use of alcohol” and does not indicate “who” must be illegally using the alcohol for the exclusion
to apply. The Court finds this argument without merit. By its plain terms, the alcohol exclusion
applies where “[a]n accident . . . occurs while operating a motor vehicle involving the illegal use
of alcohol.” Here, such language clearly refers to Mr. Shaw’s car accident that occurred while
he was operating his wife’s car under the influence of alcohol above Missouri’s legal limit. It is
well settled that ambiguities may not be injected into a contract where none exist.14
12
Angela Heckman clarified the procedure followed in this case in a letter received by Prudential on December 13,
2006 (D00126). Ms. Heckman explained that between April 12 and April 20, 2006, at least 4 different tests were
performed regarding Mr. Shaw’s blood to reach the conclusion he had an alcohol level of 0.126% at the time of the
accident (Id.; D00282). Ms. Heckman also related the procedures followed in the laboratory to ensure blood was not
contaminated.
13
Plaintiff presents additional arguments and evidence challenging Prudential’s determination in this case, e.g.
witness statements regarding whether witnesses recalled the smell of alcohol. However, to the extent that Plaintiff
presents arguments and evidence that were not raised prior to the conclusion of the administrative claims process
and the close of the administrative record, the Court will not consider these arguments. This order reviews only
Defendant’s September 28, 2007 decision, upholding, on second reconsideration, its determination that Plaintiff was
not entitled to collect AD&D benefits. Because Plaintiff offers no reason as to why such information and arguments
were not advanced earlier, the Court declines to consider them.
14
See, e.g., Bond v. Cerner Corp., 309 F.3d 1064, 1067-68 (8th Cir. 2002).
12
The Eighth Circuit recently considered a case analogous to the one before this Court and
found no abuse of discretion. River v. Edward D. Jones, 646 F.3d 1029 (8th Cir. 2011). In
River, the plaintiff claimed AD&D benefits under the decedent’s ERISA plan after he died due to
injuries sustained in a motorcycle accident. In denying coverage, the insurer relied, in part, on a
certified toxicology report by the Missouri State Highway Crime Laboratory Division stating that
the decedent’s blood alcohol content was 0.128% at the time he died.
Although several
witnesses stated that right before the accident, the decedent did not appear to be intoxicated,
under an arbitrary and capricious review, the Eighth Circuit specifically held that “[t]he
toxicology report constituted evidence that a ‘reasonable mind might accept as adequate to
support a conclusion,’ … and therefore satisfies the substantial evidence standard.” River, 646
F.3d at 1034 (citing Ratliff, 489 F.3d at 346).
Plaintiff contends this case is distinguishable from River in two ways: (1) that there were
no procedural irregularities alleged in the blood testing in that case; and (2) that the alcohol
exclusion in River was more adequately defined than the exclusion in this case.15 While there
are small differences between the cases, they are sufficiently analogous to merit the same
conclusion here. River stands for the proposition that a claims administrator can reasonably rely
on a toxicology report, showing an alcohol level higher than the legal limit, to apply an alcohol
exclusion in an AD&D policy. Accordingly, the Court finds that Prudential’s determination to
deny Plaintiff coverage due to the policy’s alcohol exclusion was not unreasonable and must be
upheld. See also Lankford v. Webco, Inc., 545 F. Supp. 2d 961, 970-72 (W.D. Mo. 2008)
15
In River, the alcohol exclusion provided that “We will not pay benefits under this section for any loss if the
injured party is intoxicated at the time of the incident and is the operator of a vehicle or other device involved in the
incident.” Under the policy, the insured was deemed “intoxicated” when “[his or her] blood alcohol level met or
exceeded the level that creates a legal presumption of intoxication under the laws of the jurisdiction in which the
incident occurred.” Here, the policy did not use the word “intoxicated.” Rather, it said “involving the illegal use of
alcohol,” which the Court finds to be more clear than the use of the word “intoxicated.”
13
(upholding a plan administrator’s denial of coverage based on an exclusion for injuries resulting
from the use of alcohol “in excess of a state or federal statute”).
Thus, the Court finds that Prudential’s decision to deny Plaintiff’s claim for AD&D
benefits, based on the alcohol exclusion in the AD&D policy, is supported by substantial
evidence. Additionally, the Court finds that the Defendant offered an adequate and reasoned
explanation for its denial of Plaintiff’s claim, and conducted a fair process for doing so.
Therefore, Defendant’s decision is upheld. Because Prudential’s decision to deny coverage
based on the alcohol exclusion is reasonable, the Court declines to evaluate Prudential’s decision
to deny coverage based the AD&D policy’s felony exclusion.
Conclusion
Given the administrative record, the Court finds that a reasonable person could have
come to the same determination as Prudential; such a determination is, therefore, not arbitrary
and capricious. Defendant’s motion for summary judgment on Count II is GRANTED (Doc. 91)
and Plaintiff’s motion for summary judgment is DENIED.
The Court declines to award
attorneys’ fees.
IT IS SO ORDERED.
Date: August 9, 2012
/s/ Greg Kays
GREG KAYS, JUDGE
UNITED STATES DISTRICT COURT
14
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