Eighth Circuit: Exhaustion of Administrative Remedies Is Not Required Where ERISA Plan Contains No Review Procedures & Accidental Heroin Overdose Is Not an “Intentionally Self-Inflicted Injury”

In Yates v. Symetra Life Insurance Company, No. 22-1093, __F.4th__, 2023 WL 2174840 (8th Cir. Feb. 23, 2023), the Eighth Circuit Court of Appeals addressed two questions: Is an ERISA plan participant required to exhaust administrative remedies where the written Plan document does not provide for or describe any appeal review procedures? Is an accidental heroin overdose subject to an “intentionally self-inflicted injury” exclusion in an accidental death and dismemberment (AD&D) policy. The court’s answer to both questions: No.

Plaintiff-Appellee Terri Yates sought accidental death benefits under an ERISA-governed benefit plan sponsored by her deceased husband’s former employer and insured by Defendant-Appellant Symetra Life Insurance Company. Sadly, Yates’ husband died from a heroin overdose. Yates submitted a claim for accidental death benefits to Symetra which Symetra denied on the basis of a policy exclusion for losses caused by “intentionally self-inflicted injury, whi[le] sane.” The denial letter stated that Yates could request a review of the decision by submitting a written request within 60 days of her receipt of the letter. It outlined an internal review process and informed Yates she had the right to file a civil action under ERISA after she completed Symetra’s review process. However, the written Plan documents make no mention of this review process or describe any appeal procedures to follow after a denial of benefits. Yates did not appeal to Symetra and instead brought a breach of contract suit in Missouri state court. Following Symetra’s removal of the case to federal court, Yates amended her complaint to bring a denial-of-benefits claim under ERISA Section 502(a)(1)(B). The court granted Symetra summary judgment on the basis that Yates did not exhaust the administrative remedies described in the denial letter. After Yates moved to alter or amend the judgment, the district court reversed course and found that Yates was not required to exhaust administrative remedies and that Symetra’s denial of AD&D benefits was erroneous. The district court granted summary judgment to Yates and Symetra appealed.

The court first held that an ERISA plan participant is not required to exhaust administrative remedies before filing suit when the written plan documents are silent on any review process or administrative remedies. The court offered several reasons supporting this conclusion. First, the court’s past cases requiring exhaustion of administrative remedies have been premised on the remedies expressly prescribed by the written plan documents. Second, the Sixth Circuit recently came to the same conclusion in Wallace v. Oakwood Healthcare, Inc., 954 F.3d 879 (6th Cir. 2020), where the court observed that one of ERISA’s central goals is for plan beneficiaries to learn their rights and obligations by examining their written plan documents. Third, in ERISA courts are to enforce the terms of written plan documents. The court will not impose a requirement on Yates that is not in the Plan. Lastly, the court’s conclusion aligns with ERISA’s implementing regulations which require that ERISA plans establish and maintain reasonable procedures governing the appeal of adverse benefit determinations. The Plan documents here do not satisfy the regulations. As a result, a participant whose claim has been denied is deemed to have exhausted administrative remedies.

On the merits of the benefit decision, the court agreed with the district court that an accidental death caused by a heroin overdose is not a loss caused by an intentionally self-inflicted injury. The court explained that the exclusion distinguishes between a loss and the injury causing that loss so the dispositive question is whether the overdose “injury” was “intentionally self-inflicted.” The court turned to its past decision in King v. Hartford Life & Accident Insurance Co., 414 F.3d 994 (8th Cir. 2005) (en banc), which involved a motorcycle accident death of an insured who was operating the motorcycle with a blood-alcohol level that exceeded the legal limit. The court explained that the exclusion did not include injuries unintended by the insured that were contributed to by alcohol intoxication. The insured did not intend to injure himself by driving his motorcycle. Applying that reasoning here, the court found that using heroin is not itself an intentionally self-inflicted injury. The overdose injury was unintentional. The court rejected Symetra’s argument that the insured’s purposeful act of using an illegal substance means that the injury stemming from the act was purposeful. The exclusion cannot be read to include injuries stemming from reckless, or even negligent, conduct. In short, the death does not fall under the “intentionally self-inflicted injury” exclusion just because it was caused by inherently risky conduct.