Life Insurance and AD&D Benefit Claims

Subscribe to Life Insurance and AD&D Benefit Claims via RSS

Think of someone driving 17 miles per hour over the speed limit on an unpaved road.  What words initially come to mind?  If one of them is “crime” then you might agree with the outcome in this week’s notable decision, Caldwell v. Unum Life Insurance Company of America, No. 17-8078, __F.App’x__, 2019 WL 4463495 (10th Cir. Sept. 18, 2019).

Caldwell involves a dispute over accidental death and dismemberment (AD&D) benefits for the death of the insured who died “when he was thrown from the vehicle he was driving at 74 mph on an unpaved road.”  Unum Life Insurance Company of America denied payment of AD&D benefits based on an exclusion in its policy for losses “caused by, contributed to by, or resulting from … an attempt to commit or commission of a crime.”  The district court found that Unum’s interpretation of “crime” to include speeding (which is a misdemeanor under Wyoming law) was reasonable and made in good faith.  Caldwell v. Unum Life Ins. Co. of Am., 271 F. Supp. 3d 1252, 1264 (D. Wyo. 2017), aff’d, No. 17-8078, 2019 WL 4463495 (10th Cir. Sept. 18, 2019).  It explained that the term “crime” is not ambiguous; it is a violation of the law.  Even if some level of speeding is deemed normal in Wyoming, people understand speeding to be a crime.  The district court granted summary judgment to Unum.
Continue Reading Tenth Circuit Affirms Denial of AD&D Benefits for Death Related to Speeding

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