Malenski v. Standard Insurance Company
Filing
26
OPINION AND ORDER by Magistrate Judge Steven P. Shreder ordering that Standard Insurance Company's decision and review denying Plaintiff Accidental Death and Dismemberment (AD&D) benefits is hereby AFFIRMED. (ndd, Deputy Clerk)
IN THE UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF OKLAHOMA
MICHAEL MALENSKI,
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Plaintiff,
v.
STANDARD INSURANCE
COMPANY,
Defendant.
Case No. CIV-11-408-SPS
OPINION AND ORDER
This matter comes before the Court on the briefs submitted by the parties for the
Court to review on the merits the decision by Defendant to deny Plaintiff’s claim for
Accidental Death and Dismemberment (AD&D) benefits under an ERISA qualified plan.
For the reasons set forth below, the Court finds in favor of Defendant Standard Insurance
Company and upholds its decision to deny AD&D benefits.
I.
Facts
Plaintiff Mike Malenski and Insured Kristi Malenski were married and had two
children. Mrs. Malenski was employed by Arvest Bank Group, Inc. as a loan officer and
was a participant in an employee welfare benefit plan offered by Arvest (the “Plan”) and
governed by the Employee Retirement Income Security Act of 1974, as amended
(“ERISA”), 29 U.S.C. § 1001, et seq.
Plaintiff was the sole beneficiary of Mrs.
Malenski’s ERISA policies, which included a Basic and Additional Term Life policy and
an Accidental Death and Dismemberment (AD&D) policy. This dispute arises under the
AD&D policy.
On Friday, June 4, 2010, Mrs. Malenski performed paid community service with
Arvest, which consisted of acting as co-chairman of the Relay for Life National Cancer
Society. Mrs. Malenski did not participate in the event, but acted as an organizer. On
that day, the temperatures reached ninety degrees. Later that night, Mrs. Malenski was
admitted at Tahlequah City Hospital where it was noted that she had gotten “too hot [at
the] Relay for Life” event. Docket No. 14, STND 11-00843-00341. Medical personnel
also noted that Mrs. Malenski was feeling “very dehydrated” and “had been out in the
sun, [and] not drinking a whole lot.” Docket No. 14, STND 11-00843-00343. The
diagnosis at the time of admission was heat exhaustion and gastroenteritis. Docket No.
14, STND 11-00843-00352. By the next morning, Mrs. Malenski went into respiratory
arrest, was intubated, and became comatose. Docket No. 14, STND 11-00843-00351-52.
Mrs. Malenski was then transferred to St. Francis Hospital in Tulsa, where it was noted
that she was “unresponsive to verbal or painful stimuli” and had no gag reflex. Docket
No. 14, STND 11-00843-00244. An EEG showed no brain activity, and Mrs. Malenski
was pronounced brain dead by the afternoon of June 5, 2010. Docket No. 14, STND 1100843-00245.
Plaintiff thereafter submitted a Proof of Death Claim Form and Beneficiary
Statement to Defendant Standard Insurance Company, the administrator of the Plan,
seeking payment of benefits under Mrs. Malenski’s ERISA plan. At that time, Standard
informed Plaintiff that it was still investigating the claim for Accidental Death &
Dismemberment (AD&D) benefits.
The autopsy, performed by Dr. Joshua Lanter, M.D., revealed that Mrs.
Malenski’s cause of death was due to complications of cerebral edema and herniation due
to dehydration and electrolyte abnormalities and acute gastroenteritis complicated by heat
exhaustion. Docket No. 14, STND 11-00843-00397. Dr. Lanter wrote that because Mrs.
Malenski “began developing symptoms while exposed to outdoor heat on the day of
admission to Tahlequah City Hospital[,]”, the manner of death was ruled an “accident.”
Docket No. 14, STND 11-00843-00397-00401.
On December 3, 2010, after Plaintiff sent Standard a certified copy of Mrs.
Malenski’s death certificate and autopsy report, Standard issued a payment of $166,000
under her Basic Life and Additional Life benefits. Plaintiff was also informed at that
time that Standard was still investigating Mrs. Malenski’s death under the Accidental
Death and Dismemberment (AD&D) policy, and would need medical records from both
Tahlequah City Hospital and St. Francis Hospital. Docket No. 14, STND 11-0084300392.
Following several letters informing Plaintiff that the AD&D claim was still under
review, Standard forwarded the claim documents and medical records to Dr. Jeffrey
Wishik, M.D., an independent medical consultant, for review. Docket No. 14, STND 1100843-00160. Dr. Wishik prepared a report dated February 22, 2011 offering his opinion
on Mrs. Malenski’s cause of death based on a review of Mrs. Malenski’s death
certificate, medical records from both Tahlequah City Hospital and St. Francis Hospital,
and the autopsy report. Docket No. 14, STND 11-00843-00153. Dr. Wishik documented
the information found in the medical records and used that information to respond to
specific questions posed by Standard. Docket No. 14, STND 11-00843-00153-55. In
response to those questions, Dr. Wishik wrote that Mrs. Malenski’s gastroenteritis
constituted an existing sickness that contributed to her accidental death, as “[s]he was
probably already dehydrated when she was at the Relay for life event.” Docket No. 14,
STND 11-00843-00154. Dr. Wishik further responded that had Mrs. Malenski not been
suffering from gastroenteritis, “she would have been able to drink enough fluid to avoid
serious dehydration.”
Docket No. 14, STND 11-00843-00155.
Standard informed
Plaintiff by letter dated February 23, 2011 that it was denying benefits under the AD&D
policy. Docket No. 14, STND 11-00843-00144-147. In making the denial, Standard
cited the following policy language related to the AD&D benefits:
A. Insuring Clause
If you have an accident, including accidental exposure to adverse
conditions, while insured for AD&D Insurance, and the accident results in a
Loss, we will pay benefits according to the terms of the Group Policy after
we receive Proof Of Loss satisfactory to us.
B. Definition of Loss for AD&D Insurance
Loss means loss of life, hand, foot, sight, speech, hearing in both ears,
thumb and index finger of the same hand and Quadriplegia, Hemiplegia, or
Paraplegia which meets all of the following requirements:
1. Is caused solely and directly by an accident.
2. Occurs independently of all other causes.
3. With respect to Loss of life, is evidenced by a certified copy of the death
certificate.
E. AD&D Insurance Exclusions
No AD&D Insurance benefit is payable if the accident or Loss is caused or
contributed to by any of the following:
5. Sickness or Pregnancy existing at the time of the accident.
Docket No. 14, STND 11-00843-0021-22; STND 11-00843-00148-149. Based on the
death certificate, autopsy findings, medical records, and Dr. Wishik’s findings, Standard
concluded that Mrs. Malenski’s death was “caused or contributed to by Sickness existing
at the time of her accident.” Docket No. 14, STND 11-00843-00146. At that time,
Standard informed Plaintiff that he had a right to appeal the denial and submit additional
information. Docket No. 14, STND 11-00843-00147.
Plaintiff’s attorney Curtis Parks wrote an appeal letter dated March 21, 2011 in
which he argued that Mrs. Malenski’s gastroenteritis was not a Sickness as defined in the
policy, because it was not of “established or settled character.” Docket No. 14, STND
11-00843-00131. Mr. Parks also alleged inconsistencies in the medical records from both
Tahlequah City Hospital and St. Francis Hospital, as Mr. Parks alleged that Mrs.
Malenski had not been experiencing episodes of increased nausea, vomiting, headache,
and diarrhea for seven days prior to her death. Mr. Parks further alleged that those
inaccuracies had caused Dr. Wishik’s conclusions to be similarly inaccurate. Docket No.
14, STND 11-00843-00131. Plaintiff, however, did not submit any additional medical
evidence or documentation.
Upon review, Defendant enlisted a second independent medical examiner, Dr.
Bradley Fancher, to offer his opinion regarding Mrs. Malenski’s cause of death.
Defendant posed the following questions for Dr. Fancher to answer: 1) Do the clinical
findings support that Ms. Malenski was severely dehydrated and vomiting just prior to
her hospitalization and subsequent death? Does the fact that Ms. Malenski had a normal
bowel movement the day before support that she was recovering from a gastroenteritis?
Why or why not?; 2) Would you put more weight on the family’s history of the week
prior to Ms. Malenski’s death or Ms. Malenski’s statements when admitted?; and 3) What
is your opinion regarding the cause of Ms. Malenski’s death? Docket No. 14, STND 11-
0843-0094-0094-95.
Dr. Fancher reviewed the medical records and answered the
questions put forth by Standard, stating that laboratory reports established that Mrs.
Malenski was “severely dehydrated” and “still recovering from the effects of fluid losses
for days after a gastroenteritis.” Docket No. 14, STND 11-00843-0095. Dr. Fancher
opined that Mrs. Malenski had died from brain edema cause by hyponatremia, which was
ultimately due to dehydration. Docket No. 14, STND 11-00843-0095. Dr. Fancher
elaborated by stating that the cause of Mrs. Malenski’s dehydration was multifactorial,
including excessive fluid loss due to heat, vomiting, and diarrhea. Docket No. 14, STND
11-00843-0095. Further, Dr. Fancher wrote that it was “more probable than not” that
Mrs. Malenski’s “antecedent history of diarrhea was likely a significant contributor to
[her] death[.]” Docket No. 14, STND 11-00843-0095. Based on Dr. Fancher’s opinions,
Standard denied Plaintiff’s appeal on July 19, 2011. Docket No. 14, STND 11-008430080-87.
II.
Analysis
In the Tenth Circuit, it is well-established that that “[w]here . . . the parties in an
ERISA case both moved for summary judgment and stipulated that no trial is necessary,
‘summary judgment is merely a vehicle for deciding the case; the factual determination
of eligibility for benefits is decided solely on the administrative record, and the nonmoving party is not entitled to the usual inferences in its favor.’” LaAsmar v. Phelps
Dodge Corporation Life, Accidental Death & Dismemberment and Dependent Life
Insurance Plan, 605 F.3d 789, 796 (10th Cir. 2010), quoting Bard v. Boston Shipping
Association, 471 F.3d 229, 235 (1st Cir. 2006). Where, as here, the plan gives the plan
administrator or fiduciary discretionary authority to determine eligibility for benefits or
construe the terms of the plan, the Court employs “a deferential standard of review,
asking only whether the denial of benefits was arbitrary and capricious.” LaAsmar, 605
F.3d at 796, quoting Weber v. GE Group Life Assurance Company, 541 F.3d 1002, 1010
(10th Cir. 2008). Under the arbitrary and capricious standard, the “‘review is limited to
determining whether the interpretation of the plan was reasonable and made in good
faith.’” LaAsmar, 605 F.3d at 796, quoting Kellogg v. Metropolitan Life Insurance
Company, 549 F.3d 818, 825 (10th Cir 2008). The parties agree that the plan in this case
does grant discretionary authority to the decision-maker, so the applicable standard in this
case is the arbitrary and capricious standard. See Docket No. 14, STND 11-00843-00036
(“Except for those functions which the Group Policy specifically reserves to the
Policyholder, we have full and exclusive authority to control and manage the Group
Policy, to administer claims, and to interpret the Group Policy and resolve all questions
arising in the administration, interpretation, and application of the Group Policy.”).
The parties also do not dispute that Standard operates under a conflict of interest.
“A conflict of interest can arise between a plan administrator’s duty to act ‘solely in the
interest of the participants and beneficiaries’ of the plan, 29 U.S.C. § 1104(a)(1), and his
self interest or loyalty to his employer.” Kimber v. Thiokol Corporation, 196 F.3d 1092,
197 (10th Cir. 1999). “[I]f a benefit plan gives discretion to an administrator or fiduciary
who is operating under a conflict of interest, that conflict must be weighed as a ‘facto[r]
in determining whether there was an abuse of discretion.’” Firestone Tire and Rubber
Company v. Bruch, 489 U.S. 101, 115 (1989), quoting Restatement (Second) of Trusts §
187, Comment d (1959). “The standard always remains arbitrary and capricious but the
amount of deference present may decrease ‘on a sliding scale in proportion to the extent
of conflict present, recognizing the arbitrary and capricious standard is inherently
flexible.’”
Kimber, 196 F.3d at 1097, quoting McGraw v. Prudential Insurance
Company, 137 F.3d 1253, 1258 (10th Cir. 1998).
Although there is a conflict of interest present in this case, Plaintiff argues only
that it operates to shift the burden to Defendant of proving the reasonableness of its
decision by citing Fought v. UNUM Life Insurance Company of America, 379 F.3d 997,
1006 (10th Cir. 2004). But the Tenth Circuit has recognized the abrogation of Fought in
that the mere presence of a conflict does not operate to shift the burden to Standard to
prove that that the sickness exclusion was applicable to Plaintiff’s claim. See Holcomb v.
Unum Life Insurance of America, 578 F.3d 1187, 1193 (10th Cir. 2009) (“In prior cases
where a plan administrator has operated under a similar conflict, we have shifted the
burden to the administrator ‘to establish by substantial evidence that the denial of benefits
was not arbitrary and capricious.’ Fought, 379 F.3d at 1005; see Flinders v. Workforce
Stabilization Plan of Phillips Petroleum Company, 491 F.3d 1180, 1190 (10th Cir. 2007).
[The Supreme Court] expressly rejects and therefore abrogates this approach.”), citing
Metropolitan Life Insurance Company v. Glenn, 554 U.S. 105, 116 (2008) (holding it is
not “necessary or desirable for courts to create special burden-of-proof rules, or other
special procedural or evidentiary rules focused narrowly upon the evaluator/payor
conflict”). Considering the fact that Standard did take steps to minimize any potential
conflict by enlisting the services of independent medical examiners to offer opinions
regarding Mrs. Malenski’s cause of death and that Plaintiff has pointed to no further
evidence that Standard’s conflict of interest in any way affected its decision, the Court
finds that the conflict of interest in this case is of little importance. See Holcomb, 578
F.3d at 1193 (“A conflict ‘should prove more important (perhaps of great importance)
where circumstances suggest a higher likelihood that it affected the benefits decision . . .
[and] should prove less important (perhaps to the vanishing point) where the
administrator has taken active steps to reduce potential bias and to promote accuracy . . .
‘”), quoting Glenn, 554 U.S. at 117.
Plaintiff argues that Standard’s decision to deny benefits under the AD&D policy
was an “arbitrary conclusion” and points specifically to Standard’s conclusion that Mrs.
Malenski was already dehydrated due to her gastroenteritis at the time of her exposure to
outdoor heat. In support of this argument, Plaintiff cites the following: i) the finding that
Mrs. Malenski had been suffering from gastroenteritis for seven days prior to the Relay
for Life event was inaccurate, and ii) Standard’s independent examiner Dr. Fancher did
not believe that either Mrs. Malenski’s hydration level or gastroenteritis was material to
her cause of death.
Plaintiff’s arguments are unconvincing. First, Defendant’s decision “‘need not be
the only logical one nor even the best one. It need only be sufficiently supported by facts
within [its] knowledge to counter a claim that it was arbitrary or capricious. The decision
will be upheld unless it is not grounded on any reasonable basis.’”
Hancock v.
Metropolitan Life Insurance Company, 590 F.3d 1141, 1155 (10th Cir. 2009), quoting
Finley v. Hewlett-Packard Company Employee Benefits Organization Income Protection
Plan, 379 F.3d 1168, 1176 (10th Cir. 2004). There is no evidence in the administrative
record which would tend to support Plaintiff’s assertions. Although given an opportunity
to submit additional information in connection with his request for review, see Docket
No. 14, STND 11-00843-00147 (“If you request a review, you will have the right to
submit additional information in connection with your claim. For example, if you can
provide us with medical documentation that Mrs. Malenski’s existing Sickness did not
cause or contribute to her death, we will review the claim again.”), the Plaintiff failed to
do so. The Court is not obliged to venture outside of the administrative record in
reviewing Defendant’s decision under an arbitrary and capricious standard. See Hall v.
UNUM Life Insurance Company of America, 300 F.3d 1197, 1203 (10th Cir. 2002) (“[I]n
reviewing a plan administrator’s decision for abuse of discretion, the federal courts are
limited to the ‘administrative record’ – the materials compiled by the administrator in the
course of making his decision.”), citing Sandoval v. Aetna Life and Casualty Insurance
Company, 967 F.2d 377, 380-81 (10th Cir. 1992); Woolsey v. Marion Laboratories, Inc.,
934 F.2d 1452, 1460 (10th Cir. 1991).
Moreover, the administrative record in this case demonstrates that Mrs. Malenski
herself reported that she felt very dehydrated and had been out in the sun and not drinking
much when she presented at Tahlequah City Hospital’s emergency room. Docket No. 14,
STND 11-00843-00343. After Mrs. Malenski was transported to Saint Francis, Mrs.
Malenski’s family told physicians upon her admission that she had been having “episodes
of increasing nausea and vomiting as well as worsening headache and diarrhea for the
past 7 days.” 1 Docket No. 14, STND 11-00843-00246.
In addition, the autopsy and both independent physician reports support Standard’s
decision to deny AD&D benefits. The autopsy findings of Dr. Joshua Lanter were that
Mrs. Malenski’s exposure to outdoor heat at the Relay for Life event caused symptoms
that exacerbated the electrolyte abnormalities caused by Mrs. Malenski’s pre-existing
gastroenteritis. Docket No. 14, STND 11-00843-00401. Independent medical examiner
Dr. Jeffrey Wishik’s report, which took into consideration the death certificate, medical
records from both Tahlequah City Hospital and Saint Francis Hospital, and the autopsy
report, concluded that Mrs. Malenski suffered from the sickness of gastroenteritis which
contributed to her accidental death. Docket No. 14, STND 11-0843-00154. Dr. Wishik
further opined that had Mrs. Malenski not been afflicted with the underlying sickness of
gastroenteritis, she would not have died as “she would have been able to drink enough
fluid to avoid serious dehydration.” Docket No. 14, STND 11-0843-00155.
With regard to independent medical examiner Dr. Fancher’s follow-up report,
Plaintiff argues that Dr. Fancher discounted, omitted, and ultimately found that whether
Mrs. Malenski had gastroenteritis or was dehydrated was immaterial to Defendant’s
decision. See, Docket No. 21-1, Plaintiff’s Simultaneous Response Brief, p. 7. Plaintiff
mischaracterizes Dr. Fancher’s statements. Dr. Fancher actually opined that he would
1
Plaintiff asserts that the documentation from St. Francis which states that family members
reported that Mrs. Malenski had been experiencing nausea, vomiting, headache, and diarrhea for
seven days prior to her admission is disputed by the Plaintiff. But there is no evidence in the
administrative record to support this assertion. Moreover, the Court tends to find the written
recordings of a physician who is disinterested in the outcome of these proceedings and taken at
the time of Mrs. Malenski’s admission to the hospital to be credible.
not characterize either possible cause of death as an “accidental death.” Docket No. 14,
STND 11-0843-00095. Dr. Fancher’s statement in this regard carries no weight, because
he had no authority to interpret the policy language.
Elsewhere, Dr. Fancher’s
conclusions state that it would be “improbable . . . that the claimant would have
developed a severe as hyponatremia as occurred without being substantially dehydrated
going into the day of June 5, 2010.” Docket No. 14, STND 11-0843-00094. Further, Dr.
Fancher wrote that individuals “can certainly be still recovering from the effects of fluid
losses for days after a gastroenteritis.” Docket No. 14, STND 11-0843-00095. In his
opinion regarding Mrs. Malenski’s death, Dr. Fancher opined that it was more probable
than not that Mrs. Malenski’s “antecedent history of diarrhea was likely a significant
contributor to the claimant’s death” and he suspected that she was partly dehydrated on
the day of the Relay for Life event prior to becoming exposed to sun and heat. Docket
No. 14, STND 11-00843-00095.
Based on the foregoing discussion, the Court finds that Defendant’s decision to
deny benefits under Mrs. Malenski’s AD&D policy to be supported by facts sufficient to
counter Plaintiff’s claim that it was arbitrary and capricious.
III.
Conclusion
In summary, the Court finds that Defendant Standard Insurance Company’s
decision regarding Plaintiff’s claim for AD&D benefits was reasonable and was therefore
not arbitrary and capricious. IT IS THEREFORE ORDERED AND ADJUDGED that
Standard Insurance Company’s decision and review denying the Plaintiff AD&D benefits
is hereby AFFIRMED.
DATED this 17th day of October, 2014.
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