Loberg et al v. Cigna Group Insurance et al
Filing
63
MEMORANDUM OPINION - The Court will enter summary judgment in favor of the Lobergs and will deny summary judgment to LINA. Ordered by Senior Judge Lyle E. Strom. (TEL)
IN THE UNITED STATES DISTRICT COURT FOR THE
DISTRICT OF NEBRASKA
JANELL M. LOBERG and RUSS
LOBERG,
)
)
)
Plaintiffs,
)
)
v.
)
)
CIGNA GROUP INSURANCE and
)
LIFE INSURANCE COMPANY OF
)
North AMERICA,
)
)
Defendants.
)
______________________________)
8:09CV280
MEMORANDUM OPINION
This matter is before the Court on the parties’ crossmotions for summary judgment (Filing Nos. 35 and 38).
Plaintiffs
Janell and Russ Loberg (the “Lobergs”) brought this action after
defendants CIGNA Group Insurance and Life Insurance Company of
North America (collectively, “LINA”) denied a claim for
accidental death benefits following the death of the Lobergs’
son, Wade Loberg.
The case arises under the Employee Retirement
Income Security Act of 1974 (“ERISA”), 29 U.S.C. §§ 1001-1500.
After reviewing the briefs, evidentiary record, and applicable
law, the Court finds that the Lobergs’ motion should be granted,
and LINA’s motion will be denied.
I.
Background and Procedural History.
A.
The Accidental Death Policy.
At the time relevant
to the events cited herein, Janell Loberg was an employee of
Valmont Industries, Inc. (or one of its related affiliates)
(“Valmont”).
As a Valmont employee, Janell was eligible to
participate in the Group Accident Policy OK 807266 (the “Policy”)
between Valmont and LINA (Filing No. 18, at 59-106).
Under the
Policy, coverage was available for Janell’s spouse and eligible
dependents.
Wade was a dependant of Janell under the Policy.
The Policy provided in pertinent part:
[LINA] agree[s] to pay benefits for loss from
bodily injuries:
a) caused by an accident
which happens while an
insured is covered by
this policy; and
b) which, directly and
from no other causes,
resulted in a covered
loss. (See the
Description of Coverage.)
[LINA] will not pay benefits if the loss was
caused by:
a) sickness, disease, or
bodily infirmity; or
b) any of the Exclusions
listed in the policy.
(Filing No. 18 at 79).
The Policy did not define the meaning of
the term “accident” (See Filing No. 18 at 81).
B. Wade Loberg.
The Lobergs submitted to LINA several affidavits of
Wade’s friends, describing Wade and providing details of the
night before he died (Filing No. 53, at 13-44).
described him as follows:
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Wade’s friends
Wade was a happy guy. He would
never do anything intentional to
take his own life. He was the type
of guy who would say what he
thought and who spoke his feelings
out loud. That’s how I know he was
never sad or down, because if he
were I would have known.
(Filing No. 53, at 25).
Wade was a fun and outgoing guy.
He was a good friend of mine and
the type of guy that would never
harm a fly. Everyone loved Wade
because he had such a charming
personality. He had no enemies.
Wade would never think of harming
himself. I believe the whole
community of Wisner, Nebraska would
attest to that fact.
(Filing No. 53, at 28).
Wade was always a happy guy. He
was a hard guy to get mad. He
would never have taken any actions
to harm himself intentionally.
I have known Wade to drive home
after drinking in the past on a few
different occasions and he made it
home fine.
Wade was not a reckless driver. He
was just normal.
(Filing No. 53, at 35).
Wade died during his first year of college; he had
graduated from Wisner High School the previous May.
Wade was
attending college in Norfolk, Nebraska, for heating, ventilation,
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and air conditioning.
Wade planned to work with his father in
his electrician business when he got out of college.
Wade usually drank beer rather than hard alcohol and
would drink approximately twelve cans of beer during a typical
weekend night out.
Wade had driven home after drinking in the
past on more than one occasion and had made it home without
incident.
Wade would give his keys away if he thought he had had
too much to drink.
On the evening prior to the accident, Wade drank beer
in a pickup truck with his friends Derrick Marx, Jordan Lierman,
Tanner Marx, and Dexter Lueschen, on a drive from rural Wisner,
Nebraska, to Norfolk, Nebraska, to look at a car.
Derrick Marx
was driving the pickup; Wade did not drive until he headed home
for the night.
On the way to Norfolk, The group drank between 12 - 24
cans of beer, no more than a case.
After not finding the car,
the group went to Riley’s, in Wayne, Nebraska, on their way home.
Riley’s is a place where college students hang out, drink beer,
and dance.
After Riley’s, the group went back to Derrick’s place.
At that point, Tanner Marx needed someone to drive his pickup
into town for a tire alignment scheduled at First Class Glass and
Alignment in Wisner for the next day.
Wade volunteered to drive
Tanner’s pickup to town, and Tanner did not think anything of it
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because Wade seemed fine to drive.
Tanner trusted Wade with the
pickup and did not think there was a danger that he would get in
a wreck.
Tanner specifically asked Wade if he was okay to drive,
and Wade said he was fine.
Derrick also thought that Wade did
not seem like he had had too much to drink and that Wade seemed
fine to drive to town.
Dexter Lueshen left before Wade did to go to First
Class Glass so that Dexter could give Wade a ride back home.
Dexter did not remember anything out of the ordinary with Wade at
the time; Wade did not have slurred speech, did not have trouble
walking or talking, and he seemed fine to drive to town.
did not appear at First Class Glass and Alignment.
Wade
Dexter called
Wade once, and when Wade did not answer, Dexter went home.
C.
Wade’s Accident.
Early in the morning of September
4, 2008, Wade was driving Tanner’s pickup southbound on a county
road near Wisner when the vehicle violently crashed, killing
Wade.
According to the police report, Wade’s vehicle crossed the
center line, entered the east roadside ditch, overcorrected, and
entered the west roadside ditch sideways (Filing No. 18, at 10).
The vehicle began rolling, and Wade was ejected from the
passenger compartment (Id.).
The vehicle rolled over Wade before
coming to rest upside down (Id.).
the crash scene (Id. at 13).
Wade was pronounced dead at
Wade was the vehicle’s only
occupant, and no one else witnessed the crash.
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On September 5, 2008, an autopsy of Wade’s body was
conducted at the Douglas County morgue (Id. at 15-21).
The
autopsy report identified the cause of Wade’s death as “blunt
trauma to the head, chest and abdomen, with multiple injuries”
(Id. at 16).
A forensic toxicology analysis was also performed,
which disclosed that Wade’s blood alcohol concentration (“BAC”)
was 0.172 g/100mL, or 0.172% (Id. at 14, 22).
On September 22,
2008, the State of Nebraska issued Wade’s death certificate,
stating that Wade’s immediate cause of death was “Blunt trauma to
the head, chest and abdomen” due to an “Automobile Accident”
(Id. at 58).
D.
The 2008 Denial Letter.
The Lobergs submitted a
claim for accidental death benefits under the Policy to LINA on
October 3, 2008 (Id. at 53-55).
After reviewing the claim, LINA
denied payment of benefits in a letter dated December 5, 2008
(the “2008 Denial Letter”) (Id. at 3-6).
In the 2008 Denial
Letter, LINA stated that LINA’s Accident Specialist reviewed the
following documents in making his determination: (1) the Lobergs’
Proof of Loss Claim Form for Accidental Death benefits; (2)
Wade’s State of Nebraska Certificate of Death; (3) the State of
Nebraska Investigator’s Motor Vehicle Accident Report; (4) the
Report of Alcohol and Drug Analysis for Nebraska Traffic Crashes;
and (5) the Policy (Id. at 4).
LINA specifically noted that
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“analysis of Wade Loberg’s blood resultd [sic] in a blood alcohol
level of .172%” (Id. at 4).
In summary, LINA stated:
[The Policy] only pays benefits for
loss that was caused by an
accident. The Report of Alcohol
and Drug Analysis for Nebraska
Traffic Crashes documents that Wade
Loberg was operating his vehicle
with a blood alcohol level of
0.172%. Please note that the legal
blood alcohol limit in the State of
Nebraska is 0.08%.
Mrs. Loberg, every state in the
nation has criminalized drunk
driving and has determined, through
the imposition of criminal
punishment for the offense, that
the conduct must be deterred. The
legislative purpose of drunken
driving laws is to protect the
public and guard against the threat
of injury. All licensed motorists
throughout the United States are on
notice, by operation of law, of the
state-declared prohibitions against
drunk driving and its consequences.
Therefore, as Wade Loberg would
have been aware of the risks
involved in operating his vehicle
while under the influence, his
death was not an Accident according
to the terms of the Policy.
Therefore, no Accidental Death
Benefits are payable under [the
Policy].
(Id.).
E.
The Lobergs File a Complaint.
On July 10, 2009,
the Lobergs filed a complaint in the District Court of Cuming
County, Nebraska (Filing No. 1).
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On August 18, 2009, LINA
removed the case to the United States District Court for the
District of Nebraska (Id.).
As this Court has already
determined, the Lobergs’ state law claims are preempted by
federal law (ERISA), and, via the removal process, the Lobergs’
preempted state law claims were converted into a federal claim
under 29 U.S.C. § 1132(a)(1)(B).
Under ERISA, a plan participant
may bring a civil 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).
The parties filed motions for summary judgment on
September 24, 2010 (Filing No. 35), and September 27, 2010
(Filing No. 38).
Subsequently, the Court returned the claim to
LINA for evaluation under the standard set out by Wickman v.
Northwestern National Insurance Co., 908 F.2d 1077 (1st Cir.
1990) as to whether or not Wade’s death was an accident under the
terms of the Policy (Filing No. 46).
F.
The 2011 Denial Letter.
Upon reconsideration under
the Wickman standard, in a letter dated June 29, 2011 (the “2011
Denial Letter”), LINA concluded that “this insurance benefit is
not payable” (Filing No. 53, at 3).
In drawing this conclusion,
LINA relied on the report of independent forensic toxicologist
Dr. Frederick Fochtman.
Dr. Fochtman stated,
[Wade] exhibited a learned
tolerance to alcohol that develops
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with regular heavy consumption. It
is not unusual for an individual
with a learned tolerance to
“appear” to be okay to drive.
However, at a BAC of 0.08% or
greater that person’s reaction
time, judgment, and visual acuity
will still be impaired.
Alcohol is a central nervous system
depressant causing varying degrees
of impairment as the concentration
increases in blood (BAC). A BAC of
0.172% will cause an individual to
have sensory-motor impairment with
decreased levels of attention,
judgment and control. Their
impairment includes reduced visual
acuity, reduced peripheral vision,
increased reaction time, and
increased risk taking. [Wade]
might not have exhibited outward
signs to his friends of being under
the influence, but he would have
been significantly impaired by
alcohol.
At a BAC of 0.172% [Wade] would
have been impaired to the extent
that it was a contributing factor
in the crash that caused his death.
(Filing No. 53, at 4-5).
LINA’s Wickman analysis in the 2011 Denial Letter
concluded, “In this claim, we have examined the facts and
circumstances surrounding Mr. Loberg’s death and have concluded
that he put himself in a position in which he should have known
that serious injury or death were highly likely to occur” (Id. at
5).
LINA asserted that
it cannot be claimed that a
reasonable person would be unaware
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of the dangers of driving under the
influence. As serious injury or
death are highly likely to occur as
a result of operating a motor
vehicle while legally intoxicated,
Wade Loberg’s death would not be
considered to be accidental in
nature as required by this policy.
(Id. at 5).
After LINA’s second denial of benefits in the 2011
Denial Letter, this Court ordered the parties to file new briefs
if they wished to renew their motions for summary judgment.
The
parties filed new briefs supporting their motions for summary
judgment on January 23, 2012 (Filing Nos. 55 and 57) and filed
reply briefs on January 30, 2012 (Filing Nos. 60 and 61).
Because a case out of the District of Minnesota with
similar facts was in the appeal process to the United States
Court of Appeals for the Eighth Circuit (McClelland v. Life Ins.
Co. of N. Am., CIV. 08-4945 MJD/AJB, 2010 WL 3893695 (D. Minn.
Sept. 30, 2010)), this Court declined to rule on the newly
briefed motions until the appeal was resolved.
The Eighth
Circuit issued its decision on May 24, 2012, in McClelland v.
Life Ins. Co. of N. Am., 679 F.3d 755 (8th Cir. 2012) and denied
petitions for rehearing en banc and for rehearing by the panel on
July 16, 2012.
II.
Applicable Law.
Summary judgment is appropriate when, viewing the facts
and inferences in the light most favorable to the nonmoving
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party, “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); see Celotex Corp. v. Catrett, 477 U.S. 317, 321–23
(1986).
“The inquiry performed is the threshold inquiry of
determining whether there is the need for a trial -- whether, in
other words, there are any genuine factual issues that properly
can be resolved only by a finder of fact because they may
reasonably be resolved in favor of either party.”
Liberty Lobby, Inc., 477 U.S. 242, 250 (1986).
Anderson v.
“Where the
unresolved issues are primarily legal rather than factual,
summary judgment is particularly appropriate.”
Koehn v. Indian
Hills Cmty. Coll., 371 F.3d 394, 396 (8th Cir. 2004).
“When an ERISA plan grants the administrator
‘discretionary authority to determine eligibility for benefits or
to construe the terms of the plan,’ courts review the
administrator’s benefit decisions for an abuse of that
discretion.”
Khoury v. Grp. Health Plan, Inc., 615 F.3d 946, 952
(8th Cir. 2010) (quoting Firestone Tire & Rubber Co. v. Bruch,
489 U.S. 101, 115 (1989)).
The Policy appoints LINA as the plan
fiduciary for reviewing claims for benefits and grants LINA
discretionary authority to interpret the Policy and make benefits
determinations.
See Memorandum & Order, Filing No. 29, at 4.
Therefore, the Court will apply an abuse of discretion standard
of review.
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A.
The Wickman Standard. In Wickman, the United
States Court of Appeals for the First Circuit was tasked with
analyzing, as a matter of first impression, the definition of the
term “accident” under an ERISA-governed accidental death and
dismemberment insurance policy.
Wickman, 908 F.2d at 1079.
The
dispute in Wickman arose after the decedent fell from a forty to
fifty foot bridge and died from the injuries he sustained.
at 1080.
Id.
The defendant insurance company denied accidental death
benefits to the policy beneficiary because the insurance company
did not believe the decedent’s death resulted from an “accident”
under the policy.1
Id. at 1081.
On appeal, the First Circuit
determined the decedent’s death was not an accident.
Id. at
1089.
In determining what constitutes an “accident,” the
First Circuit created a three-part, subjective-objective test.
Id. at 1088.
First, “the reasonable expectations of the insured
when the policy was purchased is the proper starting point for a
determination of whether an injury was accidental under its
terms.”
Id.
Second, “[i]f the fact-finder determines that the
insured did not expect an injury similar in type or kind to that
suffered, the fact-finder must then examine whether the
1
The insurance company also denied benefits under the
policy’s suicide exclusion. Id. at 1081.
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suppositions which underlay that expectation were reasonable.”
Id.
Finally, if the fact-finder, in
attempting to ascertain the
insured’s actual expectation, finds
the evidence insufficient to
accurately determine the insured’s
subjective expectation, the
fact-finder should then engage in
an objective analysis of the
insured’s expectations. . . . In
this analysis, one must 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.
Id. (citing City of Carter Lake v. Aetna Cas. & Surety Co., 604
F.2d 1052, 1058-59 & n.4 (8th Cir. 1979)) (internal citation
omitted).
The Wickman standard has become a cornerstone for
cases interpreting whether alcohol-related automobile crashes
constitute accidents.
See Stamp v. Metro. Life Ins. Co., 531
F.3d 84, 89-90 (1st Cir. 2008) (collecting cases utilizing
Wickman in cases involving alcohol-related injuries and deaths);
see also LaAsmar v. Phelps Dodge Corp. Life, Accidental Death &
Dismemberment & Dependent Life Ins. Plan, 605 F.3d 789 (10th Cir.
2010).
B.
The Wickman Standard as Interpreted by McClelland.
Anthony McClelland (“Anthony”) had insurance coverage for
accidental death benefits through an ERISA qualified employee
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benefit plan.
McClelland, 679 F.3d at 757.
Anthony perished in
a motorcycle accident:
Witnesses indicated that he seemed
to be playing “follow the leader”
with another motorcycle and
possibly a Saturn vehicle by
weaving in and out of traffic for
approximately six miles. At the
time of the accident, Anthony was
not wearing a helmet, and witnesses
estimated the speed of the weaving
vehicles to be, at times, around 90
miles per hour. Witnesses noted
that there was a curve in the road
where the accident occurred, and
that there was a “soft” or gravel
shoulder at the curve. One of the
eyewitnesses to the accident opined
that Anthony simply “couldn’t make
the curve.” The same witness noted
that the driver of the Saturn also
nearly lost control at the same
curve. Toxicology reports
indicated that Anthony’s blood
alcohol content (“BAC”) was over
.20.
Id. at 758.
Dawn McClelland, Anthony’s wife, submitted a claim
for accidental death benefits, but “LINA denied benefits, based
upon its position that Anthony’s death was not a ‘covered
accident’ because it was foreseeable due to his intoxicated state
at the time of the crash.”
Id.
“Following the parties’ cross-motions for summary
judgment, the district court remanded the matter to the insurer
for further proceedings, finding that LINA had employed an
unreasonable definition of the term ‘accident’ in denying
coverage.”
Id.
As in this case,
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[t]he court ordered LINA to
determine on remand whether
Anthony’s death resulted from an
“accident” as defined by [Wickman].
Upon remand, both parties submitted
expert reports, and Dawn submitted
affidavits regarding Anthony’s
behavior on the morning in
question. Following consideration
of these materials, and heavily
relying upon the report of its
expert, Dr. Berman, LINA again
decided Anthony’s death was not a
covered accident. Dawn again
appealed this determination to the
district court. Upon cross-motions
for summary judgment, the district
court ruled in favor of Dawn,
finding that LINA abused its
discretion by applying an
unreasonable interpretation of the
term “accident” as defined by
Wickman. The court found that LINA
did not reasonably analyze
Anthony’s subjective expectations
on the morning of the accident.
Id. at 758-59 (internal citation omitted).
In analyzing LINA’s assessment of the Wickman standard,
the Eighth Circuit stated,
To properly apply the Wickman test,
LINA should have taken into account
Anthony’s characteristics on the
day of the accident, rather than
relying solely upon its expert’s
rather categorical conclusion that
those who drink and drive should
reasonably expect to be killed. On
October 27 in particular, Anthony
had plans to complete yard work in
the afternoon and the
uncontroverted evidence was that he
showed no obvious signs of
intoxication in the hours leading
up to his accident. Based on the
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evidence before LINA, Anthony’s
behavior on the morning of October
27 was normal while visiting with
several people, including a
sheriff, and he had no problems
with balance or orientation. He
was in a good mood and joked with
the people that he had visited.
The objective evidence that Anthony
was traveling at a high rate of
speed with an elevated blood
alcohol level does not alter this
subjective evidence. . . . There
was overwhelming evidence that
subjectively, Anthony, an
experienced motorcyclist, intended
to ride his Harley to visit friends
and then return safely home to do
yard work. There was not even a
scintilla of evidence that Anthony
thought his death was highly likely
to occur.
Id. at 760-61.
The Eighth Circuit cited the deficiencies in
LINA’s Wickman analysis, stating,
LINA used Dr. Berman’s report to
decide what Anthony’s expectations
must have been on the day of the
accident. This amounted to a
faulty objective evaluation of the
evidence, ignoring the subjective
components of the Wickman test that
directs LINA to first determine the
expectations of the insured, based
upon the insured’s personal
characteristics and experiences.
Only when the evidence is
insufficient to accurately
determine the insured’s subjective
expectations at the time of the
accident should the objective
analysis be so heavily relied upon.
Here, subjective evidence was
readily available, and all of the
subjective facts, and even some of
the objective ones, point to the
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fact that Anthony reasonably did
not think it highly likely that he
would die on October 27, 2007
. . . . LINA distances itself from
the idea that someone who
regularly, or at least in the past,
has driven after drinking would
subjectively believe that death is
highly unlikely to occur in this
situation.
McClelland, 679 F.3d at 761 (citing Wickman, 908 F.2d at 1088).
The Eighth Circuit concluded,
In the final analysis, . . . we
cannot escape the conclusion that
Anthony’s fatal motorcycle accident
was just that, an accident.
Because there were no applicable
policy exclusions, see River v.
Edward D. Jones Co., 646 F.3d 1029,
1031 (8th Cir. 2011) (for an
example of an ERISA qualified plan
which wrote an intoxication
exception into its plan), it was
covered within the meaning of
LINA’s policy. Though we
acknowledge that our review is
deferential, we find that LINA
committed an abuse of discretion in
denying benefits because its
interpretation is contrary to the
language of the plan that it will
cover “loss of life” based upon an
“accident” and because substantial
evidence does not support its
decision.
McClelland, 679 F.3d at 761-62.
III.
Discussion.
As with McClelland, the Court takes into account Wade’s
characteristics on the date of the accident.
On that evening,
Wade had plans to help his friend by driving the friend’s truck
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into town.
There is no evidence that Wade intended to crash his
friend’s truck or injure himself, much less to die.
The evidence
suggests, instead, that Wade intended to ride back to his home
with Dexter after Wade delivered the truck to town.
According to
the affidavits of his friends, Wade showed no obvious signs of
intoxication in the hours leading up to his accident, and his
behavior was normal while interacting with many people.
There
was not a “scintilla of evidence” that Wade thought he was going
to die.
As with McClelland, the Court finds that LINA neglected
the subjective part of the Wickman test in favor of both the
opinions of its expert, Dr. Fochtman, and also LINA’s own
objective conclusion that any reasonable person would expect
serious injury or death under the circumstances.
On the
contrary, this Court “cannot escape the conclusion” that Wade’s
fatal truck accident “was just that, an accident,” and that it
was covered within the meaning of the Policy.
Accordingly, the
Court will enter summary judgment in favor of the Lobergs and
will deny summary judgment to LINA, in so far as LINA’s denial of
coverage was an abuse of discretion.
The Lobergs also request a hearing regarding attorney
fees and prejudgment interest.
The Court will consider these
topics upon appropriate motion.
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A separate order will be entered in accordance with
this memorandum opinion.
DATED this 14th day of August, 2012.
BY THE COURT:
/s/ Lyle E. Strom
____________________________
LYLE E. STROM, Senior Judge
United States District Court
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