Dean et al v. Zurich American Insurance Company et al
Filing
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MEMORANDUM OPINION AND ORDER granting defendants Zurich American Insurance Company and Zurich N.A. Insurance Company 14 MOTION for Summary Judgment. Signed by Judge John T. Copenhaver, Jr. on 3/3/2017. (cc: attys; any unrepresented party) (tmr)
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF WEST VIRGINIA
AT CHARLESTON
JON DEAN
individually and as administrator
of the estate of
TABATHA NICOLE DEAN
deceased,
Plaintiff,
v.
Civil Action No.: 15-11379
ZURICH AMERICAN INSURANCE
COMPANY and
ZURICH N.A. INSURANCE COMPANY,
Defendants.
MEMORANDUM OPINION AND ORDER
Pending is the motion for summary judgment filed by
defendants Zurich American Insurance Company and Zurich N.A.
Insurance Company on October 19, 2015 (ECF No. 14).1
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Defendant Zurich N.A. Insurance Company joins the pending
motion for summary judgment only on the signature line. No
arguments are presented specifically distinguishing Zurich N.A.
Insurance Company’s involvement from Zurich American Insurance
Company’s involvement. The complaint alleges that Zurich N.A.
Insurance Company made the decision to deny benefits under the
decedent’s policy, which Zurich American Insurance Company
issued. Compl. ¶ 3. Defendants’ answer states that Zurich N.A.
is not a proper party to this suit because it is a “trade style”
and not a legal entity. Answer ¶ 2. Because the decision to
deny benefits is the crux of the pending motion, the court will
treat the motion as a petition for summary judgment by both
defendants.
I.
Factual and Procedural Background
Plaintiff’s spouse, Tabitha Nicole Dean, was found
deceased in her home on July 14, 2011.
The chief medical
examiner of West Virginia’s report stated that Ms. Dean died as
a result of “[o]verused prescribed promethazine together with
overingestion of alcoholic beverages in the setting of
prescribed methadone treatment.”
(hereinafter “AR”).
accident.
Administrative Record 293
The autopsy classified her death as an
Additionally, Ms. Dean’s attending physician, Dr.
Dorai T. Rajan, found as follows:
The toxicology report reveals that the level of
Promethazine [in Ms. Dean’s blood] is well above the
toxic level, the level of Ethanol is above the legal
limit with the use of Methadone, Acetaminophen and
Topiramate. I would be inclined to agree, with all
reasonable degree of medical certainty that the cause
of death in the case of Ms. Tabatha Dean is Drug
Overdose with the manner of death being accidental.
Ms. Dean clearly had a history of addiction and
overuse of prescription drugs, recreational drugs as
well as alcohol.
AR 83.
Ms. Dean was insured as an employee under YRC
Worldwide, Inc.’s employee benefit plan, a plan governed by the
Employee Retirement Income Security Act of 1974 (“ERISA”).
Plaintiff claimed Accidental Death Benefits under Policy No. GTU
0030578 (the “Policy”), issued by Zurich American Insurance
2
Company.
The Policy invests the administrator with
“discretionary authority” over the eligibility decision.
AR 55.
The Accidental Death Benefit coverage, set out in
Section V (“Benefits”) of the Policy, provides that “[i]f a
Covered Person suffers a loss of life as a result of a Covered
Injury, We will pay the applicable Principal Sum.”
AR 44.
The
key term is that of a “Covered Injury,” which is defined as
follows:
Covered Injury means an Injury directly caused by
accidental means which is independent of all other causes,
results from a Covered Accident, occurs while the Covered
Person is insured under this Policy, and results in a
Covered Loss.
AR 40.
An “Injury” is simply defined as “a bodily Injury,” and
two additional defined terms are important in the above
definition.
First, “Covered Accident” is defined as an
“Accident that results in a Covered Loss.”
An “Accident” is
defined as follows:
Accident or Accidental means a sudden, unexpected, specific
and abrupt event that occurs by chance at an identifiable
time and place during the Policy term.
AR 40.
Second, the term “Covered Loss” is central.
It has the
following definition, subject to the exceptions set out in
Section VII of the Policy:
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Covered Loss means a loss which meets the requisites of one
or more benefits or additional benefits, results from a
Covered Injury, and for which benefits are payable under
this Policy.
AR 40.
However, Section VII (“General Exclusions”)
specifically excludes certain losses from the definition of
“Covered Loss.”
The Section states that “[a] loss will not be a
Covered Loss if it is caused by, contributed to, or results
from” any of nine events.
The pertinent events in this case are
as follows:
1. suicide or any attempt at suicide or intentionally
self-inflicted Injury or any attempt at
intentionally self-inflicted Injury;
. . . .
8. being under the influence of any prescription drug,
narcotic, or hallucinogen, unless such prescription
drug, narcotic, or hallucinogen was prescribed by a
physician and taken in accordance with the
prescribed dosage.
AR 53.
On July 11, 2014, defendants denied plaintiff’s claim
on the basis that Ms. Dean’s death was excluded under the
provisions just cited.
Plaintiff appealed this decision to
defendants’ ERISA Committee (the “Committee”) on August 11,
2014, and the Committee affirmed the denial of benefits on
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October 10, 2014, because Ms. Dean died as a result of a
combined overdose of prescribed drugs and overingestion of
alcohol.
Plaintiff filed this case in West Virginia state court
on July 16, 2015, appealing the decision of the Committee.
Plaintiff asserted that defendants’ decision to deny benefits
was “wrong, malicious, arbitrary and capricious.”
Compl. ¶ 7.
Plaintiff also alleged that defendants breached certain duties
under W. Va. Code § 33-11-4(9) and that defendants’ denial of
benefits exhibited common law bad faith.
On July 21, 2015,
defendants removed this case to federal court on the basis of
federal subject matter jurisdiction.
Defendants argue that the Committee’s denial decision
was reasonable and well-supported in view of the deferential
standard applicable here.
Defendants also aptly contend that
plaintiff’s state law claims are preempted by ERISA.
Plaintiff
responds that the Committee relied on certain deficient doctors’
reports and that defendants have a conflict of interest in
administrating their own ERISA claims, and therefore that the
Committee’s decision was unreasonable.
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II.
Discussion
Summary judgment is appropriate only “if the movant
shows 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).
“Material” facts are those necessary to
establish the elements of a party’s cause of action.
See
Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986); see
also News & Observer Publ’g Co. v. Raleigh-Durham Airport Auth.,
597 F.3d 570, 576 (4th Cir. 2010) (same).
A “genuine” dispute
of material fact exists if, in viewing the record and all
reasonable inferences drawn therefrom in a light most favorable
to the non-moving party, a reasonable fact-finder could return a
verdict for the non-moving party.
Anderson, 477 U.S. at 248.
At bottom, a party is entitled to summary judgment if
the record as a whole could not lead a rational trier of fact to
find for the non-moving party.
820, 823 (4th Cir. 1991).
Williams v. Griffin, 952 F.2d
Conversely, summary judgment is
inappropriate if the evidence is sufficient for a reasonable
fact-finder to return a verdict in favor of the non-moving
party.
Anderson, 477 U.S. at 248.
“When . . . an ERISA benefit plan vests with the plan
administrator the discretionary authority to make eligibility
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determinations for beneficiaries, a reviewing court evaluates
the plan administrator’s decision for abuse of discretion.”
Williams v. Metro. Life Ins. Co., 609 F.3d 622, 629–30 (4th Cir.
2010) (upholding district court’s decision that the
administrator of an employee benefit plan abused its discretion
when it terminated plaintiff’s long-term disability benefits).
“Under this standard, [a court] should affirm a discretionary
decision of a plan administrator if it is the result of a
‘deliberate, principled reasoning process’ and is supported by
‘substantial evidence,’ even if [it] would reach a different
decision independently.”
Helton v. AT & T Inc., 709 F.3d 343,
351 (4th Cir. 2013) (quoting Williams, 609 F.3d at 630).
“A
paramount principle of contract law requires us to enforce the
terms of an ERISA insurance plan according to ‘the plan’s plain
language in its ordinary sense,’ . . .”
Johnson v. American
United Life Ins. Co., 716 F.3d 813, 819-20 (4th Cir. 2013)
(quoting Wheeler v. Dynamic Eng'g, Inc., 62 F.3d 634, 638 (4th
Cir. 1995)).
In Metropolitan Life Insurance Co. v. Glenn, the
Supreme Court clarified that the presence of a plan
administrator’s conflict of interest does not alter the abuseof-discretion standard of review for benefits decisions.
U.S. 105, 115 (2008).
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554
Instead, the Court explained, the presence of such a
conflict is “but one factor among many that a
reviewing judge must take into account.” . . . In
particular, the Supreme Court counseled that the
conflict of interest should not itself lead to
“special burden-of-proof rules, or other special
procedural or evidentiary rules.”
Williams, 609 F.3d at 630–31 (citation omitted) (quoting Glenn,
554 U.S. at 116).
Other factors shepherd the review of administrative
reasonableness in the Fourth Circuit.
In Williams, the court
enumerated “eight nonexclusive factors” that are relevant to
review of ERISA decisions:
(1) the language of the plan; (2) the purposes and
goals of the plan; (3) the adequacy of the materials
considered to make the decision and the degree to
which they support it; (4) whether the fiduciary's
interpretation was consistent with other provisions in
the plan and with earlier interpretations of the plan;
(5) whether the decisionmaking process was reasoned
and principled; (6) whether the decision was
consistent with the procedural and substantive
requirements of ERISA; (7) any external standard
relevant to the exercise of discretion; and (8) the
fiduciary's motives and any conflict of interest it
may have.
609 F.3d at 630.
Glenn makes clear that the final factor in
this litany is to be given no special primacy where a conflict
of interest exists.
Plaintiff argues that a conflict of interest exists
because defendants are both arbiter and payor of a beneficiary’s
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claims.
While plaintiff is correct that an ostensible conflict
exists, plaintiff has not argued that defendants’ conflict
deserves any unusual or special scrutiny.
The mere fact that an
insurer both pays and evaluates claims is unremarkable.
The key
inquiry remains whether the Committee’s decision was reasonable
on balance.
Helton, 709 F.3d at 351.
Plaintiff emphasizes in particular that the
Committee’s decision relied on two physicians’ reports that were
deficient.
Plaintiff argues that the fact that these reports
concur in the autopsy’s characterization of Ms. Dean’s death as
“accidental,” as well as the fact that they fail to identify her
prescribed promethazine dosage, make the Committee’s denial
unreasonable.
Of course, “the adequacy of the materials
considered to make the decision” is one of the relevant factors
discussed in Williams.
609 F.3d at 630.
The Committee’s
decision relied in part on the medical report of Dr. Manion, an
independent medical reviewer, and Dr. Rajan, Ms. Dean’s treating
physician.
See Defs.’ Reply 4.
Dr. Manion explicitly stated
that Ms. Dean
had not been taking Promethazine in the prescribed
dosage and this led to her having a very high level of
the drug at a toxic range that combined with alcohol
and methadone led to her death from combined drug
intoxication. . . . I agree with Dr. Mock that the
manner of death is “accident.”
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AR 91.
Likewise, as earlier noted, Dr. Rajan observed that
[t]he toxicology report reveals that the level of
Promethazine is well above the toxic level, the level
of Ethanol is above the legal limit with the use of
Methadone, Acetaminophen and Topiramate. I would be
inclined to agree, with all reasonable degree of
medical certainty that the cause of death in the case
of Ms. Tabatha Dean is Drug Overdose with the manner
of death being accidental. Ms. Dean clearly had a
history of addiction and overuse of prescription
drugs, recreational drugs as well as alcohol.
AR 83.
The Committee reiterated the doctors’ findings as
follows:
The death certificate, autopsy report
and toxicology reports indicate that the cause of
death was a combined overdose of methadone,
promethazine, topiramate and alcohol
intoxication. The amendment to the Medical
Examiner’s Report states that Ms. Dean overused
prescribed promethazine with over-ingestion of
alcoholic beverages in the setting of prescribed
methadone treatment.
Our independent medical reviewer, Dr.
William Manion, opined that Ms. Dean was not
taking promethazine in the prescribed dosage and
this led to her having a very high level of the
drug at a toxic range and that, combined with the
alcohol and methadone, led to her death of
combined drug intoxication. The attending
physician, Dr. Rojan [sic], agreed with Dr.
Manion’s findings, stating the level of ethanol
was above the legal limit with the use of
methadone, acetaminophen and topiramate. Dr.
Rajan also indicated that Ms. Dean had a history
of addiction and overuse of prescription drugs,
recreational drugs as well as alcohol.
AR 2.
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Although plaintiff is correct that neither doctor
identified her prescribed dosage for promethazine, each doctor
did identify overdose as the cause of death.
As her treating
physician, Dr. Rajan would have known her dosage firsthand, and
he confirmed Dr. Manion’s report.
Furthermore, descriptions of
the “manner of death” as “accidental” do not end the inquiry.
While an intentional death would certainly disqualify a
beneficiary under the Policy’s suicide exclusion, there is a
second exclusion relevant here, namely, the exclusion for drug
overuse.
The Policy describes this exclusion as “being under
the influence of any prescription drug, narcotic, or
hallucinogen, unless such prescription drug, narcotic, or
hallucinogen was prescribed by a physician and taken in
accordance with the prescribed dosage.”
AR 53.
Courts have
consistently upheld benefits denials on the basis of similar
overdose language in ERISA contracts.
See, e.g., Cogdill v. Am.
Gen. Assur. Co., No. 3:08-03466-CMC, 2009 WL 3261556, at *4
(D.S.C. Oct. 8, 2009) (upholding ERISA benefits denial where
decedent overused multiple prescription drugs on basis of policy
exclusion language for drugs not taken “as prescribed by a
doctor”), aff'd, 380 F. App'x 263 (4th Cir. 2010); Hummel v.
Cont'l Cas. Ins. Co., 254 F. Supp. 2d 1183, 1185 (D. Nev. 2003)
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(noting that “as prescribed by” language was clear and
unobjectionable under ERISA); Dice v. Gen. Elec. Capital Assur.
Co., 93 F. App'x 68, 70 (6th Cir. 2004) (unpublished decision)
(upholding ERISA benefits denial on basis of policy exclusion
language for drugs not taken “on the advice of a physician”).
Such precedent affirms, and plaintiff does not
dispute, that the Policy exclusion for instances in which drugs
are not taken “in accordance with the prescribed dosage”
complies with ERISA’s requirements.
Moreover, a death may be
“accidental” – that is, not a suicide – while still resulting
from drug overdose.
A patient may ingest too much of a drug
cocktail without also intending death.
In such a situation, an
“accidental” death may be excluded from coverage under the
Policy.
The evidence supports the Committee’s conclusion that
just such an exclusion applied to Ms. Dean’s death.
Like the
doctors’ reports, the autopsy report identified the cause of
death as drug overdose, together with overingestion of alcohol.
AR 293.
The Committee reviewed numerous additional reports and
documents in support of its finding.
AR 26-29.
Furthermore,
several of the Williams factors align in favor of the
Committee’s finding.
The language of the plan is unambiguous
that a death that results from or coincides with overdose is
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excluded from coverage, and the Committee’s interpretation was
consistent with other provisions in the Policy.
See Defs.’ Mem.
in Supp. of Summ. J. 3.
Finally, the complaint also alleges that defendants
breached several legal duties under common law and W. Va. Code §
33-11-4(9), which include failing to adopt reasonable standards
for the investigation of claims, failing to attempt a fair and
reasonable settlement of plaintiff’s claim, and compelling
plaintiff to institute litigation to recover amounts owed.
Defendants argue that ERISA preempts the application of these
state law duties to Ms. Dean’s employee benefit plan.
Defs.’ Mem. in Supp. of Summ. J. 9-11.
See
Plaintiff has failed to
raise a genuine issue regarding whether the Policy is governed
by ERISA, and defendants are in fact correct that ERISA
supersedes state law governing employee benefits plans, save for
limited exceptions not relevant here.
See 29 U.S.C. § 1144(a)
(ERISA preemption clause) (“[T]he provisions of this subchapter
and subchapter III of this chapter shall supersede any and all
State laws insofar as they may now or hereafter relate to any
employee benefit plan . . . .”).
“Congress clearly intended to
occupy the field and to exclude from the field any effort by the
states to regulate ERISA matters.”
Custer v. Pan Am. Life Ins.
Co., 12 F.3d 410, 418 (4th Cir. 1993); Prince v. Sears Holdings
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Corp., __ F.3d __, __, No. 16-1075, 2017 WL 383370, at *3 (4th
Cir. Jan. 27, 2017) (noting that challenges to plan
administration are “core” ERISA claims for which state law is
preempted).
In Custer, the court found that ERISA governs an
employee insurance claim against an insurer and preempts W. Va.
Code § 33-11-4(9), the exact statute at issue here, as well as
common law with respect to that plan.
12 F.3d at 419-20.
Inasmuch as Ms. Dean’s employee benefit plan falls squarely
within the ambit of ERISA, plaintiff’s state law claims must
fail.
Consequently, in light of the Committee’s wellreasoned and principled decision, AR 1-3, and this court’s
deferential standard of review, no genuine issue of material
fact remains, and the Committee’s decision must be upheld.
III.
Conclusion
For the foregoing reasons, it is ORDERED that
defendants’ motion for summary judgment be, and it hereby is,
granted.
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the undersigned, unless canceled.
directed to appear.
Lead counsel
02/29/2016
Entry of scheduling order.
03/08/2016
Last day to serve F.R. Civ. P 26(a)(1) disclosures.
The Clerk is directed to transmit copies of this order
The Clerk is requested to transmit this Order and
to all counsel counsel of and any and to any unrepresented
Notice to all of record record unrepresented parties.
parties.
DATED:
ENTER:
January 5, 2016
March 3, 2017
John T. Copenhaver, Jr.
United States District Judge
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