Wagner v. Minnesota Life Insurance Company

Filing 39

ORDER granting 27 Defendant's Motion for Summary Judgment; denying 31 Plaintiff's Cross-Motion for Summary Judgment; granting in part and denying in part 35 Motion to Strike. This action is DISMISSED. Signed by Judge Dana L. Christensen on 4/20/2016. (ASG, )

FILED
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MONTANA
MISSOULA DIVISION

COREY WAGNER, individually and as
the personal representative of the Estate
ofNancy J. Wagner,

APR 2 2 2016
Clerk, U S District Court
District Of Montana
Missoula

CV 15-4 7-M-DLC

ORDER

Plaintiff,
vs.
MINNESOTA LIFE INSURANCE
COMPANY,
Defendant.

This order resolves cross-motions for summary judgment currently pending
in this case. Defendant Minnesota Life Insurance Company ("Minnesota Life")
moved for summary judgment claiming that there is no genuine issue of material
fact that Plaintiff is not entitled to accidental death benefits under the life
insurance policy. Plaintiff Corey Wagner ("Corey"), individually and as the
personal representative of the Estate ofNancy J. Wagner, submitted a crossmotion for summary judgment, asserting that the policy's Accidental Death and
Dismemberment coverage ("AD&D") allows for basic and voluntary AD&D
benefits. Defendant Minnesota Life then moved to strike Plaintiffs Affidavit and

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Exhibits attached to his cross-motion for summary judgment pursuant to Federal
Rule of Civil Procedure 56(c), on the basis that an administrator's benefits
decision is to be determined solely on the Administrative Record and that Exhibits
3 and 4 are inadmissible hearsay.
For the reasons set forth below, Defendant's motion to strike Plaintiffs
Affidavit and Exhibits is granted in part and denied in part, and summary
judgment is granted in favor of Defendant and against Plaintiff.
FACTUAL AND PROCEDURAL BACKGROUND

This case arises out of an insurance contract dispute. Decedent Nancy J.
Wagner ("Nancy") received life insurance coverage, including AD&D coverage,
under her employer's group life insurance plan, policy numbers 33669 and 33670
(the "Policy"). The group plan is governed by the Employee Retirement Income
Security Act of 1974 ("BRISA"). In pertinent part, the Policy provides an
Accidental Death and Dismemberment Policy Rider which reads as follows:
Accidental Death and Dismemberment (AD&D) Benefit

Accidental death or dismemberment by accidental injury as used in
this rider means that the insured' s death or dismemberment results,
directly and independently of all other causes, from an accidental
injury which is unintended, unexpected, and unforeseen. The
bodily injury must be the sole cause of death or dismemberment.
(Doc. 31 at 19.)
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The rider also contains the following, relevant exclusions:
In no event will we pay the accidental death or dismemberment
benefit where the insured' s death or dismemberment is caused
directly or indirectly by, results from, or whether there is a
contribution from, any of the following:

4) bodily or mental infirmity, illness or disease;
5) infection, other than infection occurring simultaneously with, and
as a direct result of, the accidental injury;

(Id.)

On April 23, 2014, Nancy died in her home after she attempted to quit
drinking alcohol after several years of alcohol abuse. She stopped drinking
alcohol on her own will and was reportedly sick for several days prior to her death.
Earlier that week, Nancy stumbled in her bedroom and hit her head, denting a
sheetrock wall. During her detoxification on April 23, her husband, Corey, found
her body on the bathroom floor and indicated Nancy was shaking and too weak to
nse. Nancy was found dead shortly thereafter on her bedroom floor.
On April 24, 2014, an autopsy was performed which classified the manner
of Nancy's death as natural. The pathologist's autopsy report stated that "[Nancy]
most likely died as a result of chronic alcohol abuse that resulted in marked
steatosis and hemorrhagic pancreatitis." (Doc. 34 at 2.) The report further found
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no evidence of injury, drug use, or suspicious circumstances. Nancy's death
certificate also indicated the manner of her death as "natural," the causes of which
identified as "(a) Hemorrhagic Pancreatitis; (b) Marked Steatosis; and (c) Chronic
Ethyl Alcohol Abuse." (Id.) The death certificate included the following onsets
of these causes of death: "hemorrhagic pancreatitis: days; marked steatosis: years;
chronic ethyl alcohol abuse: years." (Doc. 20 at 54.)
On or about June 30, 2014, Corey submitted a claim to Minnesota Life for
Nancy's life insurance benefits. Minnesota Life paid Corey $169,000 under the
plan's basic and voluntary life insurance coverage, but denied benefits under the
basic and voluntary AD&D benefits because Nancy's death was not "accidental"
under the terms of the Policy. The total amount of basic and voluntary AD&D
benefits at issue is $238,000.
Corey filed suit against Minnesota Life to recover the additional basic and
voluntary AD&D benefits. Defendant Minnesota Life moved for summary
judgment, arguing that the clear and unambiguous policy language does not allow
AD&D benefits for natural deaths. Minnesota Life argues that because Nancy's
death was caused by pancreatitis, steatosis, and chronic alcohol abuse, her death
was natural and not accidental.
Plaintiff countered, claiming that under the terms of the Policy, Nancy's
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death resulted directly and independently from an accidental bodily injury which
was unintended, unexpected, and unforeseen. 1 Corey contends that Nancy
unintentionally suffered death as a consequence to her detoxification and she
subjectively lacked an expectation of death or injury as the outcome of her actions.
Finally, Corey asserts that the AD&D Rider's exclusion for infection does not
apply because Nancy's pancreatic infection occurred simultaneous with, and as a
direct result of, the accidental injury stemming from her detoxification. Therefore,
Corey claims Minnesota Life's denial of AD&D benefits was unreasonable
pursuant to the Policy.
Minnesota Life responded to Plaintiffs cross-motion and further argued that
the AD&D Rider specifically excludes from the accidental death benefit any death
that results from or is caused directly or indirectly by bodily or mental infirmity,
illness, or disease. Minnesota Life contends that complications from Nancy's
alcohol abuse constitutes a bodily or mental infirmity, illness or disease, which are

1

The Court understands that Plaintiffs response to Defendant's motion for summary
judgment is procedurally improper, as it was not filed within 21 days after Defendant's motion
was filed. However, Plaintiff included his cross-motion for summary judgment within that same
response motion. Thus, the Court will treat this document as Plaintiffs cross-motion for
summary judgment. As such, the motion is timely, pursuant to the parties stipulated deadline to
file substantive motions by January 15, 2016. (Doc. 18 at 2.)
The Court also calls attention to Plaintiffs disregard to the United States District Court
for the District of Montana's local rules. Pursuant to Rule 7.l(d), Plaintiff did not accompany his
brief in support of his cross-motion with an actual motion for summary judgment, nor a
certificate of compliance stating the number of words included in the brief.
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excluded coverage under the Policy.
Finally, Minnesota Life moves to exclude an Affidavit and Exhibits
attached to Plaintiffs cross-motion for summary judgment under Federal Rule of
Civil Procedure 56(e). (Doc. 31 at 15-17; 24-33.) Minnesota Life contends that
these documents are outside the Administrative Record and that Exhibits 3 and 4
are inadmissible hearsay.
LEGAL STANDARD

A party is entitled to summary judgment if it can demonstrate that "there is
no genuine dispute as to any material fact and the movant is entitled to judgment
as a matter of law." Fed. R. Civ. P. 56(a). Summary judgment is warranted where
the documentary evidence produced by the parties permits only one conclusion.
Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 251 (1986). Only disputes over
facts that might affect the outcome of the lawsuit will preclude entry of summary
judgment; factual disputes that are irrelevant or unnecessary to the outcome are
not considered. Id. at 248. In ruling on a motion for summary judgment, a court
must view the evidence "in the light most favorable to the opposing part." Tolan
v. Cotton, 134 S. Ct. 1861, 1866 (2014) (quoting Adickes v. S.H Kress & Co., 398
U.S. 144, 157 (1970)). "[T]he evidence of the nonmovant is to be believed, and
all justifiable inferences are to be drawn in his favor." Id. at 1863 (quoting
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Anderson, 477 U.S. at 255).
In a case governed by BRISA, a summary judgment motion is the proper
vehicle for a federal district court to review the propriety of the administrator's
benefit decision. Tremain v. Bell Indus., Inc., 196 F.3d 970, 978 (9th Cir. 1999).
The appropriate standard of review in federal BRISA cases begins with the general
rule that a benefits decision governed by BRISA is reviewed de novo unless the
benefit plan gives the administrator or fiduciary discretionary authority to
determine eligibility for benefits. If discretionary authority exists, then trust
principles regulate and an abuse of discretion standard is applied. See Metro. Life
Ins. Co. v. Glenn, 554 U.S. 105, 111 (2008); Firestone Tire and Rubber Co. v.
Bruch, 489 U.S. 101, 115 (1989). Pursuant to 29 U.S.C.A. § 1002(16)(A), the
term "administrator" means "(i) the person specifically so designated by the terms
of the instrument under which the plan is operated; (ii) if an administrator is not so
designated, the plan sponsor." Under an abuse of discretion standard, the
appropriate inquiry "is not into whose interpretation of the plan documents [i.e.,
the administrator's or the district court's] is most persuasive, but whether the plan
administrator's interpretation is unreasonable." Safjle, v. Sierra Pac. Power Co.
Bargaining Unit Long Term Disability Income Plan, 85 F.3d 455, 458 (9th Cir.
1996) (citation omitted).
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However, even if an abuse of discretion standard applies, there are
circumstances in which a less deferential standard should be applied: when the
administrator or fiduciary is operating under a conflict of interest. Metro. Life,
554 U.S. at 111-12. If the "plan administrator both evaluates claims for benefits
and pays benefits claims" then a conflict of interest results, and the court should
weigh that conflict of interest as a factor in determining whether there is an abuse
of discretion. Id. at 112, 115. Thus, in the presence of a conflict, a court should
determine, based on the facts and circumstances of the particular case, if the
administrator's decision to deny benefits was motivated by improper
considerations. Montour v. Hartford Life & Acc. Ins. Co., 588 F.3d 623, 630 (9th
Cir. 2009).
ANALYSIS

I.

Appropriate Standard of Review

Here, the Court must first examine whether the terms of the BRISA plan at
issue unambiguously grant discretion to the administrator to determine benefits.
This Court has reviewed the Administrative Record in its entirety and cannot find
an explicit designation anywhere in the Policy or the various Policy documents
whereby Minnesota Life is defined as the administrator. However, the general
definitions of the Policy defines "we, our, us" as Minnesota Life Insurance
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Company. Therefore, since the designation "we" is used throughout the Policy to
confer discretion to Minnesota Life to determine benefits, it appears that
Minnesota Life is the administrator of the Policy. Moreover, given the
circumstances of the case-Minnesota Life denying AD&D benefits-it seems
appropriate that Minnesota Life is the administrator of the Policy.
Nevertheless, in the interest of fairness to Plaintiff, the Court cannot
conclude with absolute certainty that the plan indeed granted discretionary
authority to Minnesota Life as the administrator of the BRISA Policy. As such,
the Court will review Minnesota Life's decision to deny Plaintiffs claim for the
basic and voluntary AD&D benefits under a de novo standard of review.
II.

Motion to Strike

Defendant moves to strike Plaintiffs Affidavit and Exhibits attached to his
cross-motion for summary judgment. A district court is limited "to the
administrative record when the court is reviewing a [benefits decision] on the
merits for an abuse of discretion; consideration of new evidence is permitted only
in conjunction with de novo review of a denial of benefits." Abatie v. Alta Health
& Life Ins. Co., 458 F.3d 955, 969 (9th Cir. 2006) (citation omitted). Evidence not

part of the administrative record should be considered "through the lens of the
traditional rules of summary judgment." Nolan v. Heald College, 551F.3d1148,
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1155 (9th Cir. 2009). An affidavit may support a motion for summary judgment if
it is made on personal knowledge. Fed. R. Civ. P. 56(c)(4). Thus, since this Court
is reviewing the case under a de novo standard, it may consider new evidence not
included in the administrative record if it complies with the Federal Rules of
Evidence and Federal Rules of Civil Procedure.
After reviewing the Administrative Record, Plaintiffs cross-motion for
summary judgment contains some Exhibits that are within the administrative
record and some that are not. Corey R. Wagner's Affidavit comports with Federal
Rule of Civil Procedure 56(c)(4) because all the facts contained therein are based
on his personal knowledge. The Advisory Committee notes to the Federal Rule of
Evidence 802 adhere to this narrow exception admitting Rule 56 affidavits.
Therefore, the Affidavit is admissible.
Exhibits 1 and 2, the AD&D Policy Rider and Minnesota Life claim
records, are found within the Administrative Record and are admissible.
However, Exhibits 3 and 4 are not found within the Administrative Record and are
subject to the Federal Rules of Evidence. Hearsay is "a statement, other than one
made by the declarant while testifying at the trial or hearing, offered in evidence to
prove the truth of the matter asserted." Orr v. Bank ofAm., NT & SA, 285 F.3d
764, 778 (9th Cir. 2002) (citing Fed. R. Evid. 801(c)). Without a procedural rule
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or statute applicable to the evidence, hearsay is inadmissible unless it falls under
Rule 801(d) or a hearsay exception under Rules 803, 804, or 807. Id.
Exhibits 3 and 4, a two page case report for acute haemorrhagic pancreatitis
and a six page review of infection in acute pancreatitis, respectively, are written by
people other than the declarant and are offered by Plaintiff to prove the truth of the
matter asserted, that Nancy's death was sudden and accidental. Thus, these
Exhibits constitute inadmissible hearsay. Being that the Plaintiff did not provide
any supporting evidence as to the Exhibits' admissibility and no exception under
the Federal Rules of Evidence applies to these Exhibits, Exhibits 3 and 4
constitute hearsay and are inadmissible.

III.

Whether the Policy precludes coverage for basic and voluntary
AD&D benefits.

When considering questions of insurance policy interpretation under
BRISA, federal courts must apply federal common law. Padfield v. AIG Life Ins.

Co., 290 F.3d 1121, 1125 (9th Cir. 2002); Firestone, 489 U.S. at 110. Under
federal common law, a court interprets insurance policies "in an ordinary and
popular sense as would a person of average intelligence and experience."

Padfield, 290 F.3d at 1125. "Where a plan instrument does not define a term, [a
court] may 'look to the dictionary definition to determine the ordinary and popular

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meaning."' Vaught v. Scottsdale Healthcare Corp. Health Plan, 546 F.3d 620,
628 (9th Cir. 2008) (citing Gilliam v. Nev. Power Co., 488 F.3d 1189, 1195 (9th
Cir. 2007)).
Here, the AD&D Rider defines the term "accidental death or
dismemberment by accidental injury" as "the insured's death or dismemberment
results, directly and independently of all other causes, from an accidental bodily
injury." (Doc 31 at 19.) The "accidental bodily injury" is defined as an injury
which is "unintended, unexpected, and unforeseen." (Id.) The rider further
provides that the "bodily injury must be the sole cause of death." (Id.) Therefore,
"if the death was not accidental, the policy is not even triggered, and it is
unnecessary to examine the applicability of any exclusion." Padfield, 290 F.3d at
1126.
Since the plan adequately and unambiguously defines the term "accidental
bodily injury," the Court must interpret this definition from the view of an
ordinary person of average intelligence and experience. It is clear that an
accidental bodily injury under the Policy is one that is unintended, unexpected,
and unforeseen. "In determining whether death, or the injury that caused death,
was unexpected or unintentional, courts have undertaken an overlapping
subjective and objective inquiry." Padfield, 290 F.3d at 1126. This two part test
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analyzes: (1) "whether the insured subjectively lacked an expectation of death or
injury" and "whether the suppositions that underlay the insured's expectation were
reasonable, from the perspective of the insured, allowing the insured a great deal
of latitude and taking into account the insured's personal characteristics and
experiences"; and (2) "[i]fthe subjective expectation of the insured cannot be
ascertained, the court asks whether the expectations of a reasonable person, with
background and characteristics similar to the insured, would have viewed the
resulting injury or death as substantially certain to result from the insured's
conduct." Id. The second part of the test is appropriate because "it best allows the
objective inquiry to 'serve as a good proxy for actual expectation."' Id. at 1127.
Plaintiff claims that Nancy lacked an expectation that her cessation from
alcohol would result in death or injury. Plaintiff cites Padfield v. AIG Life

Insurance Co. and Santaella v. Metro Life Insurance in support of his argument.
290 F.3d 1121; 123 F.3d 456 (7th Cir. 1997). Plaintiff is correct that Nancy
subjectively lacked this expectation and that any reasonable person under the same
or similar circumstances would also lack this expectation.
In Padfield, the insured died from an accidental result of autoerotic
asphyxiation. Padfield, 290 F.3d at 1124. Yet, the insurer denied accidental death
benefits on the basis of its policy's suicide exclusion and the intentional self-13-

inflicted injury exclusion. In Padfield, using the two part test, the Ninth Circuit
concluded the plaintiffs subjective expectation was to garner sexual gratification,
not to injure himself, and that, from a purely objective analysis, death was not the
'"substantially certain' result of autoerotic asphyxiation." Id. at 1127. Thus, the
plaintiffs death was accidental and not a suicide.
Looking further into the subjective expectation of the insured, the Ninth
Circuit found that autoerotic asphyxiation is not an intentionally self-inflicted
injury. Id. at 1129. Due to the plaintiffs use of autoerotic asphyxiation for
merely heightened sexual experiences, all evidence suggested that he did not
intentionally attempt to injure himself. Id. It was not until an "accident" occurred,
whereby the plaintiff did not return to consciousness as he normally did under the
same circumstances. Id. Therefore, he had no subjective intent to cause the
injuries that resulted in his death.
Padfield is analytically identical to Santaella. In Santaella, the insured died
from a propoxyphene overdose and the insurer denied accidental death benefits
based on the intentional self-inflicted injury exclusion. The insurer argued that the
plaintiff "reasonably should have foreseen that serious injury or death was likely
to occur as a result of her voluntary ingestion of propoxypehene." Santaella, 123
F .3d at 462. Further, the insurer claimed that the plaintiff abused drugs from some
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time "and, as a result, she had an enlarged spleen and damaged lymph system and
suffered a seizure two months before her death." Id.
Analyzing the situation from the point of the insured, the Seventh Circuit
found the plaintiff had no subjective expectation that she was taking a lethal
amount of the pain reliever propoxyphene. Id. at 463. While the family reported a
history of drug abuse, the record was silent as to the extent of that condition. Id.
The record also indicated that the plaintiff experienced seizures sometime before
her death and took those situations seriously by seeking the proper medical
treatment. Id. at 463-64. No evidence suggested that the plaintiffs drug use
played any part in her seizure episodes. Id. at 464. Even though the plaintiffs
autopsy showed an enlarged spleen and damaged lymph system in her body and
the autopsy report noted that such damage could result from drug abuse, "the
pathologist testified that neither splenomegaly nor lymphadenopathy was a cause
of her death." Id. Moreover, under the circumstances, even a reasonable person in
the plaintiffs situation would lack an expectation that death or injury would be
substantially certain to result from the ingestion of this particular dosage of the
medication. Id. at 463. Therefore, the Seventh Circuit concluded that the
insured's death was an accidental overdose ofpropoxyphene and her act was not a
purposeful self-infliction of injury. Id. at 465.
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The Policy exclusion at issue here is not the suicide exclusion or intentional
self-inflicted injury exclusion at issue in Padfield and Santaella, but is the
exclusion for accidental injuries resulting from bodily or mental infirmity, illness
or disease. First, this Court concludes that under the Ninth Circuit's subjective
and objective test, Nancy's death was an accident. However, the AD&D Rider's
"bodily or mental infirmity, illness, or disease" exception applies and, thus, the
Plaintiff is not entitled to AD&D benefits.
To determine whether Nancy's death was accidental, Padfield and

Santaella provide the Court with guidance. Similar to Padfield, where the insured
died from an accidental use of autoerotic asphyxiation, and Santaella, where the
insured's use of drugs was considered an accidental overdose, here Nancy
accidentally died as a result of her voluntary decision to quit drinking alcohol.
First, the Court must inquire into the subjective expectation of the insured. The
evidence suggests that Nancy's subjective expectation was to survive the
experience of her alcohol cessation. Nothing in the record suggests that Nancy
subjectively expected otherwise.
There is no conclusive evidence that reveals Nancy understood the harmful
effects and potentially fatal consequence of her immediate cessation. During the
few days leading up to her death, Nancy was very ill from her detoxification, but
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decided against seeking medical help. Both Nancy's husband, Corey, and their
son reported to authorities on the day of her death that throughout the day she was
weak. Her son noted that she was shaking, pale, and appeared dehydrated since
her eyes were looking dry. All of this evidence simply indicates the basic signs of
alcohol withdrawal from a person that immediately quit drinking alcohol in hopes
to better her health, and does not suggest Nancy was subjectively aware of her
potential death. Furthermore, the record does not indicate whether she had
previously attempted to stop drinking alcohol. Thus, this likely being Nancy's
first attempt to completely cease alcohol consumption, and since she planned a
long future watching her children grow and attending their events, her expectation
of survival certainly was reasonable. (Doc. 31 at 16.)
Under an objective analysis, the same conclusion results. Death is not a
"substantially certain" result of quitting drinking alcohol. Any reasonable person
in Nancy's situation would believe that the cessation of alcohol consumption is
done to better one's health, and that the immediate withdrawal symptoms would
only be temporary. Minnesota Life presented an in-house medical opinion to
support the denial of the claim that death from hemorrhagic pancreatitis brought
on by alcohol abuse is well documented in the literature. This Court is not
persuaded that the in-house medical literature accurately indicates death is a
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"substantially certain" result of alcohol cessation, nor that a reasonable person has
common knowledge of this potentially fatal outcome. Therefore, even an
objective analysis confirms that from a reasonable person's standpoint, Nancy's
voluntary act to quit drinking alcohol resulted in her accidental death.
Regardless of whether Nancy's death was accidental as defined under the
Policy, Minnesota Life's denial of AD&D benefits was proper because the "bodily
or mental infirmity, illness or disease" exception precludes recovery. Examining
the exclusion in its "ordinary and popular sense as would a person of average
intelligence and experience," Padfield, 290 F.3d at 1125, it is clear that the
provision applies in this circumstance. Both Nancy's husband and son attest to
Nancy's alcohol abuse and reported that Nancy had been consuming large
amounts of alcohol for several years. The parties do not dispute that she suffered
from alcoholism.
The Webster Dictionary defines "infirmity" as "an unsound, unhealthy, or
debilitated state," "illness" as "an unhealthy condition of the body or mind," and
"disease" as "an impairment of the normal state of the living animal or plant body
or of any of its components that interrupts or modifies the performance of vital
functions." Philip Babcock Gove, Webster's Third New International Dictionary
648, 1127, 1159 (1983). Using these common sense definitions, Nancy's
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alcoholism is clearly a bodily infirmity, illness, or disease. The exclusion applies
if the insured's death is "caused directly or indirectly by, results from, or where
there is a contribution from" the bodily illness. (Doc. 31 at 19.) Therefore,
because Nancy's voluntary cessation of alcohol stemmed from her alcoholism, the
bodily infirmity exclusion applies and coverage is precluded.
CONCLUSION

Minnesota Life properly denied AD&D benefits to its insured, Corey
Wagner, individually and as the personal representative of the Estate ofNancy J.
Wagner, because while Nancy's unfortunate death was accidental, her death
resulted from her alcoholism. Therefore, the bodily or mental infirmity, illness or
disease exclusion under the AD&D Rider is triggered and benefits are precluded
in this circumstance.
Accordingly, IT IS ORDERED that:
(1) Defendant's Motion for Summary Judgment (Doc. 27) is GRANTED
and Plaintiffs Cross-Motion for Summary Judgment (Doc. 31) is DENIED.
(2) Defendant's Motion to Strike (Doc. 35) is GRANTED in part and
DENIED in part, consistent with this opinion.
(3) This action is DISMISSED.

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"'

DATED this 2.0 day of April, 201

Dana L. Christensen, Chief Judge
United States District Court

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