1 2012-Accidental Death Claims: Illness, Medical Mishap and Overdose Martin E. Rosen - Colorado I. Summary of Law Colorado applies the accidental result test to determine if a death or an injury is an accident under an accidental death or dismemberment policy. Thus, under Colorado law, a voluntary act can be an accident where the consequence of the act is unforeseen or unexpected. But where a policy does not define the term accident, Colorado Courts will construe the term based on the reasonable expectations of the insured. Where an insurer could have easily defined the circumstances at issue to be excluded from the policy, but chose not to, Colorado courts have construed policies to provide coverage. Additionally, in determining whether an accident caused a death or injury, Colorado law focuses on whether the death or injury is the proximate result of the accident. For example, where intoxication or a pre-existing condition causes an accident which in turn causes the insured s death (e.g., car crash or fall) the death is the result of an accident because the accident is the proximate cause of the death (unless the policy specifically excludes coverage for accidents resulting from intoxication or preexisting conditions). II. Relevant Statutes and Regulations C.R.S , a workers compensation statute, defines accident as follows: Accident means an unforeseen event occurring without the will or design of the person whose mere act causes it; an unexpected, unusual, or undesigned occurrence; or the effect of an unknown cause or, the cause, being known, an unprecedented consequence of it. 3 CCR restricts the definition of accident that can be used in a Medicare supplement policy or certificate: No policy or certificate may be advertised, solicited or issued for delivery in this state as a Medicare supplement policy or certificate unless such policy or certificate contains definitions or terms that conform to the requirements of this section. A. Accident, accidental injury, or accidental means shall be defined to employ result language and shall not include words which establish an accidental means test or use words such as external, violent, visible wounds or similar words of description or characterization. 1. The definition shall not be more restrictive than the following: Injury or injuries for which benefits are provided means accidental bodily injury sustained by the insured person which is the direct result of an
2 accident, independent of disease or bodily infirmity or any other cause, and occurs while insurance coverage is in force. C.R.S , provides that the preclusion from enforcing a general suicide exclusion clause after a specified time period does not preclude an insurer from asserting that a suicide is not accidental under an accidental death or injury policy: The suicide of a policyholder after the first policy year of any life insurance policy issued by any life insurance company doing business in this state shall not be a defense against the payment of a life insurance policy, whether said suicide was voluntary or involuntary, and whether said policyholder was sane or insane. Nothing in this section is intended or shall be construed to apply to any accident insurance policy insuring against accidental death or death by accidental means or to those parts or provisions of any life insurance policy insuring specifically against accidental death or death by accidental means. III. Case Law a. What is an Accident? In the context of accidental death and injury policies, Colorado rejects the accidental means test in favor of an accidental results analysis. See Carroll v. CUNA Mutual Insurance Society, 894 P. 2d 746, 753 (Colo. 1995). Thus, under Colorado law, a voluntary act that causes an unforeseeable, unintended, or unexpected result can be considered an accident. Id. (although coverage was denied based on other policy limitations, the decedent s brain aneurysm, which was triggered by sexual intercourse, was deemed an accident under the policy because it was an unexpected result of the sexual intercourse); see also Bobier v. Beneficial Standard Life Insurance Company, 570 P.2d 1094, 1096 (Colo. App. 1977) ( [D]eath by accident in Colorado is not restricted to cases in which the injury is initially incurred through accidental means. Rather, it applies as well to those situations in which an unusual or unanticipated result flows from a common cause) (Emphasis in original). Where accident is undefined in an insurance policy, Courts will construe the term based on the reasonable expectations of the insured. LaAsmar v. Phelps Dodge Corp. Life, 605 F.3d 789, 806 (10th Cir. 2010); Farmers Alliance Mutual Insurance Company v. Cutrone, 448 F. Supp. 2d 1226, 1230 (D.C. Colo. 2006) (construing accident in an uninsured motorist policy from the standpoint of the insured where the term was not defined in the policy). b. Drunk Driving May Be Considered Accidental Under ERISA LaAsmar v. Phelps Dodge Corp. Life, 605 F.3d 789 (10th Cir. 2010). Decedent was driving his truck 20 mph over the speed limit while intoxicated. The vehicle veered off the road and rolled over four and one-quarter times. Decedent and his passenger were both ejected from the truck and pronounced dead at the scene. It was determined
3 that Decedent s BAC was.227, almost three times the legal limit of.08 in Colorado. Decedent s death certificate indicated that the cause of his death was head and internal injuries due to blunt force trauma. Id. at Decedent was a participant in his employer s group coverage for accidental death and dismemberment and life insurance. His parents were the beneficiaries under the plan. They submitted claims to the insurer for life insurance benefits and accidental death and dismemberment benefits. The insurer paid the life insurance benefits but denied the claim for accidental death and dismemberment benefits on the grounds that: 1) due to Decedent s intoxication, the accident was not the sole cause of his death; 2) because the crash was a reasonably foreseeable result of driving while intoxicated, it was not an accident; and 3) benefits were not payable under the plan because Decedent injured himself on purpose by driving while intoxicated. Id. at 795. The district court, reviewing the insurer s claim determination de novo, held that Decedent s crash was an accident under the plan. The Tenth Circuit affirmed, relying on its earlier decision in Kellogg v. Metropolitan Life Insurance Co., 549 F.3d 818 (10th Cir. 2008). The Court first considered whether the crash was the sole cause of Decedent s death. In Kellogg, the Tenth Circuit held that a Decedent s car accident was the sole cause of his death even though the accident was caused by a seizure. Refusing to apply an exclusion for losses caused by physical illness, the Kellogg Court noted that the plan did not exclude losses due to accidents caused by physical illnesses. Thus, because Kellogg died from the car accident rather than directly from the seizure his loss was not excluded under the Plan. Similarly, because the decedent in LaAsmar died from the car crash, and not from alcohol intoxication, the Tenth Circuit reasoned that the sole cause of his death under the plan language was the crash. Id. at 802. The Court next considered whether the crash was an accident under the plan s terms. In doing so, the Court expressly refused to adopt a blanket rule that all vehicle crashes involving intoxicated drivers were either accidents or not accidents. Id. Rather, the Court reasoned that because the term accident was ambiguous in the plan, it had to construe the term based on what a reasonable person in Decedent s position would have expected the term to mean. Id. at 803. The Court also noted that [i]t is not too much to ask of ERISA insurers to set forth explicitly what is and is not an accident covered by their AD&D policy, and to state unambiguously whether death and disability caused by the insured s drunk driving is accident. Id. The Court further observed that an insured s own actions often contribute to their injuries, but they are still nonetheless considered accidents (e.g., speeding, talking on a cell phone, driving while sleepy, turning around to talk to a child, etc.). The Court then concluded that an insured would reasonably expect that the term accident included an unintended death resulting from a vehicle crash where the driver had a blood alcohol content of 2.8 times the legal limit. Id. at 808.
4 Finally, the Court concluded that Decedent s death did not fall under the Plan s exclusion for purposefully inflicted injuries because there was nothing in the record suggesting that Decedent intended to injure himself on purpose on the night of the vehicle crash. Id. at 814.; see also Meek V. Zurich North America Insurance Company, 704 F. Supp. 2d 1069, 1076 (D.C. Colo. 2010) (where plan did not define accident, the plan s exclusion for self-inflicted injuries did not apply on de novo review where the decedent died in motorcycle accident while intoxicated). c. Pre-Existing Illness May Not Bar Recovery Under ERISA Pavicich v. Aetna Life Insurance Company, 2010 U.S. Dist. LEXIS (D.C. Colo. September 27, 2010). Decedent was a participant in his employer s life and accidental death and dismemberment insurance plan. Id. at *2. He was on bipolar medication and had been hospitalized multiple times due to suicide attempts. Id. at *3-4. He suffered a seizure, likely due to his medication, which caused him to fall, hit his head and injure his spine. Id. at *5. The fall rendered him a quadriplegic, and he underwent C-spine fusion surgery. A week later he died from cardiac arrest and renal failure while still hospitalized. Id. Decedent s death certificate indicated that he died from Complications of cervical spine injury sustained during seizure activity. Id. at *7. Decedent s wife submitted a claim for life insurance benefits and accidental death and dismemberment benefits. Aetna paid the life insurance claim but denied the accidental death and dismemberment claim on the grounds that the loss was excluded because Decedent s death was caused by or contributed to by a bodily infirmity, disease and medical treatment. Id. at *9-10. Reviewing Aetna s decision under the abuse of discretion standard of review, the district court nonetheless held that the loss was covered. Id. at * The district court relied on the Tenth Circuit decision in Kellog, supra, stating that the phrase loss caused or contributed by means only where the illness causes the hospitalization and death and not where the illness causes an accident that causes the death. Id. at *25. In other words, coverage is excluded where the illness directly causes the death, but not where the illness indirectly causes death by causing an accident that sets forth a chain of events leading to death. Id. at *26. Quoting Kellogg, the Court noted that courts have long rejected attempts to preclude recovery on the basis that the accident would not have happened but for the insured s illness. Id. The Court then concluded that the loss was covered because Decedent s illness caused the accident, but the accident itself caused his death. As in LaAsmar, the Court noted that if the insurer wanted to exclude coverage under these facts, it could have articulated such an exclusion in the Plan. Id. at *30. Compare Pirkheim v. First Unum Life Insurance Company, 229 F. 3d 1008 (10th Cir. 2000). There, Decedent had a congenital heart defect that was corrected with surgery but required implantation of a pacemaker to control cardiac arrhythmias that
5 resulted from the surgery. Decedent died when his pacemaker stopped working as a result of battery depletion. At the time of his death, he was insured for accidental death under an ERISA-governed group insurance coverage purchased through his father s employer. Id. The plan provided coverage when the death resulted from accidental bodily injury that occurred independently of all other causes. The district court granted summary judgment in favor of the insurer, holding that the plan language was unambiguous and that Decedent s bodily injury was not independent of all other causes. Id. at The Tenth Circuit affirmed, holding that the accidental bodily injury did not result independently of all other causes because the death was due to Decedent s cardiac arrhythmias that occurred after the pacemaker stopped functioning. Id. at (Or perhaps the result may be rationalized as consistent with the Kellogg court s kind of analysis: The accident caused the pacemaker to stop working, but it was the resultant arrhythmias that caused the death.) d. Intentional Reckless Conduct May Bar Recovery Baldwin v. Stonebridge Life Insurance Co., 283 F. Supp. 2d 1148 (D.C. Colo. 2003). Decedent died when she jumped from a vehicle moving 55 mph during a heated argument with her husband. Id. at The insurer denied the claim for accidental death benefits on the grounds that the policy excluded coverage for intentionally selfinflicted injuries. Id. Decedent s husband sued the insurer, and the insurer moved for summary judgment. Id. The district court denied the motion, holding that there was a disputed issue of fact as to whether Decedent intended to exit the vehicle while it was moving. Id. at General American Life Insurance Company v. Priest, 301 F. 3d 390 (10th Cir. 1962) (interpreting Missouri law). Decedent s death was determined to be accidental when he was shot by his wife after he pointed a gun at her. Id. at 392. The general rule is that when [an] insured assaults another and is killed as a consequence of his attack, his death is accidental unless it was a natural and probable result of his own actions, reasonably foreseeable by him or a reasonably prudent man in his position. Id. at 394. e. Suicide Withey v. Metropolitan Life Insurance Company, 1994 U.S. Dist. LEXIS (March 7, 1994). Decedent died from a self-inflicted gun shot wound following a heated argument with his wife. Id. at *3. Plaintiff made a claim for group accidental death benefits. She alleged that the death was accidental because the gun was always kept unloaded and Decedent would have been operating under the belief that the gun was unloaded. Id. at *3-4. The police department and coroner determined that the death was a suicide. Id. * Applying the abuse of discretion standard of review, the Court held that it was reasonable for the claim administrator to rely on the police report and coroner report, especially because the only contradictory evidence came from the plaintiff s self-serving declarations. Id.
6 f. Exclusions Krane v. Aetna Life Insurance Company, 698 F. Supp. 220 (D.C. Colo. 1988). Decedent died during surgical exploration of a parathyroid gland. His official cause of death was cardiac arrest while under general anesthesia. Decedent was insured under an accidental death and dismemberment policy, and his beneficiaries sued the insurer after their claim was denied. Id. at 221. His policy excluded coverage for death or injury resulting from medical or surgical treatment, unless the operation was made necessary by an injury otherwise covered under the policy. Id. at The insurer moved for summary judgment. The district court granted the summary judgment, holding that the plain language of the policy excluded coverage, even if the physicians acted negligently. Id. at 222.
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