Life Insurance and AD&D Benefit Claims

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Good morning, ERISA Watchers!  You may remember the case last year involving a group of Maine dairy delivery drivers who received $5 million in a proposed settlement all due to a missing oxford comma.  (A lack of an Oxford comma cost dairy $5 million.)  In this week’s notable decision, Tyll v. Stanley Black & Decker Life Insurance Program et al., 2019 WL 3081061 (D. Conn. July 12, 2019), it is Federal Insurance Company getting an expensive lesson in policy drafting.

Tyll involves a claim for accidental death and dismemberment insurance benefits.  Ms. Tyll’s late husband was a participant in the Stanley Black & Decker Life Insurance Program which offered, among other benefits, a Business Travel Accident Insurance Program (“the Policy”).  Mr. Tyll died while on board a commercial flight from Paris to New York.  At the time of his death, he was earning a salary of more than one million per year.  Federal Insurance Company, which insures the benefit, initially denied that Ms. Tyll was entitled to any benefit and denied her claim on December 11, 2014.  By April 17, 2017, it reversed its position on her entitlement to benefits but it claimed that Tyll is entitled to benefits capped at one million.  Ms. Tyll argued that she was entitled to a cap of five million.
Continue Reading Say What You Mean or Pay What you Say: Federal Insurance Company’s Four-Million-Dollar Lesson

I’m pleased to report this week’s notable decision is a firm victory in the case of Dowdy v. Metro. Life Ins. Co., No. 16-15824, __F.3d__, 2018 WL 2223722 (9th Cir. May 16, 2018), which involved a denial of benefits under an AD&D Plan.  Dowdy was involved in an automobile accident and sustained a serious injury to his left leg, which was eventually amputated below the knee.  Dowdy and his wife sought accidental dismemberment benefits under an insurance policy provided by his employer and insured and administered by Metropolitan Life Insurance Company.  MetLife denied the benefits on the basis that Plaintiff’s diabetes contributed to the decision to amputate Plaintiff’s leg and the AD&D policy has an exclusion for any loss caused or contributed to by an illness or infirmity.  The district court declined to consider evidence outside of the “administrative record.”  On the merits, the district court found that diabetes caused or contributed to the need for amputation and Plaintiff’s loss was excluded under the policy.
Continue Reading Ninth Circuit Holds That Substantial Contribution Standard Applies to AD&D Policy Exclusion and Reverses Denial of Benefits

Good morning, ERISA Watchers!  This week’s notable decision is Tran v. Minnesota Life Ins. Co., No. 18-1723, __F.3d__, 2019 WL 1894769 (7th Cir. Apr. 29, 2019). The Seventh Circuit reversed the district court’s ruling finding that the insured’s death from autoerotic asphyxiation was an accidental death payable under his life insurance policy.  The Seventh Circuit held that a reasonable person would interpret the insured’s death from autoerotic asphyxiation to be death due to an “intentionally self-inflicted injury,” which is excluded from the life insurance policy.

If in addition to being unable to say “autoerotic asphyxiation” five times fast you also don’t know what it refers to, the Seventh Circuit noted its definition as “a sexual practice by which a person purposefully restricts blood flow to the brain to induce a feeling of euphoria. ‘Asphyxiophilia’ as defined in the DSM-5 is a subset of sexual masochism disorder, by which an ‘individual engages in the practice of achieving sexual arousal related to restriction of breathing.’” (citing to the 5th edition of the American Psychiatric Association, Diagnostic and Statistical Manual of Mental Disorders).  
Continue Reading Seventh Circuit Holds that Death by Autoerotic Asphyxiation Is Excluded under AD&D Policy