District Court Affirms Denial of ERISA AD&D Claim Finding Death Due to Toxic Ingestion of Prescribed Medication Was Subject to Policy’s Sickness Exclusion

In Jensen v. Life Insurance Company of North America, et al., No. 2:22-CV-293-DAK-DAO, 2024 WL 54433 (D. Utah Jan. 4, 2024), Utah District Judge Dale A. Kimball denied Plaintiff’s motion for summary judgment and affirmed the denial of accidental death and dismemberment (“AD&D”) benefits finding that the sickness exclusion of the policy applied.

Decedent, Plaintiff’s husband, was employed at Codale Electric Supply, Inc., and a participant in their ERISA governed benefits plan, which included an AD&D policy funded by LINA. Plaintiff’s husband was found dead in the bedroom. His autopsy determined that he died of “oxycodone and clonazepam toxicity” and noted that the manner of death was an accident. Plaintiff submitted claims as a beneficiary of both decedent’s life and AD&D benefits. LINA denied the AD&D claim, asserting that decedent had a high toxic/borderline lethal level of oxycodone in his blood, and the level of this drug was higher than would be expected “if taken as prescribed.” LINA also noted that the autopsy diagnosis of pulmonary edema was “consistent with drug overdose and abuse,” the “pill count showed that [decedent] was “short 73 oxycodone,” and decedent “was believed to have previously overdosed on oxycodone.” Based on these findings, LINA concluded that the death was “directly or indirectly, in whole or in part, caused by or the result of his voluntary ingestion of any narcotic, drug namely, oxycodone, that he was not taking in accordance with the prescribed dosage.” LINA also denied the claim based on the policy’s exclusion for any injury or loss caused by or the result of sickness, disease, bodily or mental infirmity because decedent was prescribed the medications for chronic conditions, not to treat any accidental injury or trauma.

Plaintiff appealed, submitting the autopsy report, and arguing that the toxicology results did not show that decedent overdosed or took any amount of oxycodone beyond the prescribed amount. Plaintiff also retained a physician who reviewed the materials and concluded that the concentrations of drugs were consistent with someone taking oxycodone and clonazepam as prescribed. On appeal, LINA abandoned its denial based on misuse of prescribed medications after a further medical reviewer opined that there was no evidence of inappropriate usage prior to decedent’s demise. Instead, LINA affirmed its decision based on the exclusion for loss caused by disease, sickness, mental or bodily infirmity. This lawsuit followed.

The parties disputed whether the Court should apply a de novo or arbitrary and capricious standard of review to the action. It noted that the Plan contained language delegating discretionary authority to LINA, but Plaintiff argued that the de novo standard should apply because LINA was operating under a conflict of interest, and the policy was subject to Utah’s ban on discretionary clauses in insurance policies. The Court found both parties’ arguments compelling but concluded that it did not need to determine which standard applied because it found that even under the de novo standard of review, the Court agreed with LINA’s interpretation of the policy language and found Plaintiff arguments were not persuasive.

The Court found that Plaintiff’s reliance on the Medical Examiner’s finding that the manner of death was by accident is misplaced as such statements are not determinative of whether coverage exists under the Policy. Contrary to Plaintiff’s assertion, the Court concluded that the sickness/disease exclusion was not ambiguous. It noted that the Policy language clearly contemplates that a death resulting from the treatment of a sickness would not be a covered accidental loss and pointed out that other courts have upheld the denial of AD&D claims with identical exclusionary language. Similarly, the Court found no contradiction in the Policy containing both a sickness exclusion and a drug exclusion, explaining that the drug exclusion did not modify the definition of injury, which specifies that “losses resulting from medical treatment of a sickness or disease are not injuries.” Thus, the Court upheld LINA’s denial finding that the undisputed facts establish the circumstances around decedent’s death fell within the scope of the sickness exclusion.

If LINA or your insurance company has denied or terminated your AD&D, life insurance or disability claim, contact us for assistance.