Tenth Circuit Affirms Denial of AD&D Benefits Based on Policy Exclusion for Losses Caused by Medical Treatment

In Jensen v. Life Insurance Company of North America, No. 24-4014, 2025 WL 1013456 (10th Cir. Apr. 4, 2025), the Tenth Circuit affirmed Defendant Life Insurance Company of North America’s (“LINA”) denial of accidental death and dismemberment (AD&D) benefits under an Employee Retirement Income Security Act (ERISA)-governed plan. The court’s decision rests on the interpretation of policy exclusions relating to medical treatment and the voluntary ingestion of drugs.

The Tenth Circuit began by addressing the appropriate standard of review for LINA’s decision to deny benefits. Under ERISA, denials are reviewed de novo unless the plan grants the administrator discretionary authority, in which case the review is for abuse of discretion. Although the plan included a discretionary clause, Jensen argued that Utah law, which bans such clauses, should apply. However, the court noted that Delaware law governed the policy under a choice-of-law provision, and Delaware does not prohibit discretionary clauses. The court, however, opted not to resolve the choice-of-law issue, as it determined that even under de novo review, Jensen’s claim would fail.

The central issue was the interpretation of the policy’s exclusion for losses “caused by or result from… medical or surgical treatment” of sickness. Jensen argued that the exclusion was ambiguous under the last-antecedent rule, which suggests a limiting clause should apply only to the final item in a list. According to Jensen, the exclusion for “medical or surgical treatment” applied solely to “bacterial or viral infection” and not to “sickness, disease, bodily or mental infirmity.”

The court rejected this argument, emphasizing that context can override the last-antecedent rule. It highlighted that AD&D insurance typically excludes coverage for losses resulting from medical treatment of illnesses, aligning with the general purpose of AD&D policies to cover accidents alone, without any contribution from sickness-related causes. The court found the exclusion unambiguous, stating it applies broadly to any medical treatment of sickness, disease, or bodily or mental infirmity, not just to bacterial or viral infections.

Jensen contended that the exclusion conflicted with another policy provision—the voluntary-ingestion exclusion—which allows for benefits unless the loss results from voluntary ingestion of drugs not prescribed or taken according to the prescribed dosage. She argued this created ambiguity, as the voluntary-ingestion exclusion seemed to permit coverage for deaths from prescribed medications, contrary to the medical-treatment exclusion.

The court found no conflict, explaining the voluntary-ingestion exclusion is broader, covering any prescribed medication, not limited to those for sickness or disease. Thus, while it carves out coverage for accidental ingestion of prescribed drugs, it does not negate the exclusion for medical treatment related to sickness. The court clarified that taking medication for an accidental injury, within prescribed limits, would not be barred by the medical-treatment exclusion, thereby aligning with the AD&D policy’s intent to cover accident-related losses.

The Tenth Circuit concluded that the medical-treatment exclusion unambiguously precluded coverage for Steven Jensen’s death, which resulted from prescribed medication for his chronic conditions. The court emphasized the consistency of this interpretation with the policy’s overall structure and purpose, affirming the district court’s grant of summary judgment for LINA.