District Court Finds Benefits Not Payable Under AD&D Policies Because Dismemberment Was Not the Sole Proximate Cause of an Accidental Injury

In Gray v. Minnesota Life Insurance Company, No. CV H-19-4672, 2021 WL 861298 (S.D. Tex. Mar. 8, 2021), the court had to decide whether a dismemberment is payable under the terms of an ERISA-governed accidental death and dismemberment (“AD&D”) policy. Ruling in favor of Minnesota Life Insurance Company, the court determined that the dismemberment was not caused by an accident.

The basic facts of the dispute are as follows. The insured, Mr. Gray, had AD&D coverage through his employer. He also purchased voluntary AD&D coverage such that the total coverage was $816,000. The policies provide payment for dismemberment by accidental injury, which means that the “dismemberment results, directly and independently of all other causes, from an accidental bodily injury which is unintended, unexpected, and unforeseen.” The policies exclude coverage for a dismemberment that is “caused directly or indirectly by, results from, or where there is a contribution from…bodily or mental infirmity, illness or disease.” Lastly, the policies require that “[t]he injury must occur while the insured’s coverage is in force” and the “dismemberment must occur within 365 days after the date of injury.” It is the insured’s burden to submit proof of loss showing that the dismemberment resulted from an accidental injury.

In 2015, Mr. Gray began having episodes of transient intermittent spells of altered awareness. In January 2016, he was involved in a car accident, after which he began having seizures. After that accident, he had many seizures that were not well-controlled by medication. While visiting family in November 2016, Mr. Gray had more seizures. One afternoon while preparing lunch, he had another seizure and fell backwards, hitting his head on the tile floor twice. He began bleeding and vomiting and had two grand mal seizures. He was rushed to an emergency care facility and underwent a craniectomy to evacuate a subdural hematoma. “As a result of his seizure and fall, Mr. Gray suffered a total loss of sight to his right eye and paralysis on the right side of his body so that both his right arm and right hand are no longer functioning.”

Minnesota Life denied Mr. Gray’s AD&D claim on the basis that Mr. Gray’s injury was not “unexpected or unforeseen,” where he had a known uncontrolled seizure disorder. Injuries caused by “bodily or mental infirmity, illness or disease” are excluded. Since the seizure disorder caused his fall, his injuries are excluded from coverage.

Mr. Gray argued that AD&D benefits should be payable for this loss because the fall was not caused by a seizure. The court rejected this argument because “the evidence overwhelmingly suggests otherwise.” Mr. Gray had an extensive history of seizures and a physician who treated him after the fall noted that he had a seizure disorder and that he “seemingly had a seizure” and fell and hit his head.

Mr. Gray also argued that his seizures were caused by the January 2016 car accident which occurred within 365 days of his dismemberment. Thus, benefits should be payable because the dismemberment resulted from an accidental injury. The court also rejected this argument. It explained that even if the car accident caused Mr. Gray’s seizure disorder, Mr. Gray is not entitled to coverage. The accidental injury must be “directly and independently of all other causes.” There is no dispute that Mr. Gray’s traumatic brain injury from the fall caused his blindness and hemiplegia. “Therefore, the January 2016 car accident that caused Mr. Gray’s seizure disorder is only a cause of a cause of a cause. The car accident caused the seizure disorder that caused Mr. Gray’s seizures.” The car accident in January 2016 was not the “sole proximate cause” of his injuries.

Additionally, the court found that Mr. Gray is not entitled to coverage because his injuries were not unexpected or unforeseen as required by the AD&D policies. Mr. Gray had a long history of seizures and had a seizure just the day before the fall. The seizure that caused the fall did not happen unexpectedly or without warning. For these reasons, the court found that Minnesota Life properly denied Mr. Gray’s AD&D claim.

If you have a denied claim under an ERISA-governed AD&D policy, it is important to consult with an experienced insurance attorney to understand your rights under the policy. As the above decision demonstrates, there may be terms and exclusions that prevent coverage.