Jay Richmond v. Life Insurance Company ( 2022 )

United States Court of Appeals
For the Eighth Circuit
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No. 21-3929
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Jay C. Richmond
Plaintiff - Appellant
v.
Life Insurance Company of North America
Defendant - Appellee
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Appeal from United States District Court
for the Northern District of Iowa - Eastern
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Submitted: September 22, 2022
Filed: October 18, 2022
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Before GRUENDER, SHEPHERD, and ERICKSON, Circuit Judges.
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SHEPHERD, Circuit Judge.
Jay Richmond sought accidental death benefits under an employee benefit
plan governed by the Employee Retirement Income and Security Act of 1974
(ERISA), 29 U.S.C. § 1001 et seq., after his wife, Marie Richmond, died from
injecting herself with a cocktail of unprescribed narcotics. The district court 1 upheld
the Life Insurance Company of North America’s (LINA) decision to deny benefits
based on a policy exclusion for the “voluntary ingestion of any narcotic, drug,
poison, gas or fumes, unless prescribed or taken under the direction of a Physician.”
Richmond appeals, contending that the district court erred because LINA’s decision
was unreasonable and not supported by substantial evidence. Having jurisdiction
under 28 U.S.C. § 1291, we affirm.
I.
At the time of her death, Marie was working as a registered nurse, a position
that she had held for almost two decades. Throughout her tenure, Marie was a
qualified participant in her employer’s voluntary accident insurance plan (the Plan),
managed by LINA. She maintained accidental death benefits in the amount of
$500,000. Richmond is the sole beneficiary.
A few hours after work one day, at Marie’s home, family members found her
slumped over the side of her bed, unresponsive. After attempts to revive her failed,
emergency responders pronounced her dead. Shortly thereafter, investigators
discovered a vacutainer blood collection kit, a 20 mL syringe containing 1 mL of red
liquid, a used quick-release tourniquet, and an opened 30 mL bottle of
hydrochloride. The autopsy report identified serial needle punctures in multiple
locations on Marie’s limbs. The medical examiner opined that Marie died of mixed
drug toxicity involving morphine, hydromorphone, meperidine, and fentanyl. Marie
had no prescriptions for any of these drugs. Although the dosage of each of the
medications was within the reported therapeutic range, and none alone would have
been sufficient to kill her, the combination of these drugs was lethal.
1
The Honorable Linda R. Reade, United States District Judge for the Northern
District of Iowa.
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Following Marie’s death, Richmond sought accidental death benefits from
LINA. Under the Plan, such benefits are paid only for deaths resulting from a
“Covered Accident,” which it defines as:
A sudden, unforeseeable, external event that results, directly and
independently of all other causes, in a Covered Injury or Covered Loss
and meets all of the following conditions:
1. occurs while the Covered Person is insured under this Policy;
2. is not contributed to by disease, sickness, mental or bodily
infirmity;
3. is not otherwise excluded under the terms of this Policy.
R. Doc. 18-6, at 36. The Plan then lists certain exclusions. Especially relevant here,
the Plan provides the following:
In addition to any benefit-specific exclusions, benefits will not be paid
for any Covered Injury or Covered Loss which, directly or indirectly,
in whole or in part, is caused by or results from any of the following
unless coverage is specifically provided for by name in the Description
of Benefits Section:
...
10. voluntary ingestion of any narcotic, drug, poison, gas or fumes,
unless prescribed or taken under the direction of a Physician and taken
in accordance with the prescribed dosage.
R. Doc. 18-6, at 40.
After receiving evidence from Richmond, LINA denied his claim on two
separate grounds. First, LINA determined that the voluntary ingestion exclusion
barred recovery of benefits. Second, LINA determined that Marie’s death was not
a Covered Accident because death was a reasonably foreseeable result of self-
injecting a mixture of controlled substances. Richmond appealed LINA’s decision
internally. After reconsideration, LINA upheld its initial denial on the same
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grounds. Richmond then appealed LINA’s decision internally for a second time,
presenting new evidence. After reconsidering Richmond’s claims in light of the new
evidence, LINA upheld its initial denial of benefits on the same grounds. In its eight-
page, single-spaced final denial letter, LINA explained that (1) it can reasonably
interpret terms in the Plan and did so in interpreting “ingestion” to include absorption
via intravenous injection; and (2) even in light of the new evidence, Marie’s death
was not a Covered Accident.
Richmond then filed this action, arguing that LINA’s decision was
unreasonable and not supported by substantial evidence. Shortly thereafter,
Richmond filed a motion for judgment on the administrative record. The district
court granted judgment in favor of LINA. Specifically, it held that LINA had
reasonably interpreted the voluntary ingestion exclusion to include absorption of a
substance through intravenous injection, and even if the exclusion did not apply,
Marie’s death was not an accident within the meaning of the Plan and under this
Court’s precedent. Richmond appeals.
II.
Under ERISA, a covered participant or beneficiary may bring a lawsuit to
recover benefits under an employee welfare benefit plan. 29 U.S.C. § 1132(a)(1).
“We review the district court’s adjudication of this claim de novo, applying the same
standard of review to the plan administrator’s decision as the district court.”
McClelland v. Life Ins. Co. of N. Am., 679 F.3d 755, 759 (8th Cir. 2012). Where,
as here, an ERISA plan grants the plan administrator discretionary authority to
interpret plan provisions and determine claimant eligibility, we review the
administrator’s decision for an abuse of discretion. McIntyre v. Reliance Standard
Life Ins. Co., 972 F.3d 955, 958-59 (8th Cir. 2020). “Because a conflict of interest
exists due to the fact that LINA is both the decision-maker and the insurer, we give
that conflict some weight in the abuse-of-discretion calculation.” McClelland, 679
F.3d at 759.
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To determine whether LINA abused its discretion, we apply a two-step
analysis. First, we must evaluate whether LINA’s interpretation of the Plan language
is reasonable. King v. Hartford Life & Accident Ins. Co., 414 F.3d 994, 999 (8th
Cir. 2005) (en banc). Second, we analyze LINA’s application of that interpretation
to the facts to ensure that it is supported by substantial evidence. Id. At bottom,
LINA’s decision stands if “a reasonable person could have reached a similar
decision, given the evidence before him, not that a reasonable person would have
reached that decision.” Phillips-Foster v. UNUM Life Ins. Co. of Am., 302 F.3d
785, 794 (8th Cir. 2002) (citation omitted). “Any reasonable decision will stand,”
even if we would have found differently in the first instance. Manning v. Am.
Republic Ins. Co., 604 F.3d 1030, 1038 (8th Cir. 2010).
III.
We begin by reviewing LINA’s analysis of the voluntary ingestion exclusion
since it is dispositive of this appeal. “Because it is an exception to coverage, [LINA]
has the burden of proving that the exclusion applies.” Nichols v. Unicare Life &
Health Ins. Co., 739 F.3d 1176, 1184 (8th Cir. 2014).
A.
First, we evaluate LINA’s interpretation of the exclusion. The Plan excludes
coverage for any accident resulting from the “voluntary ingestion of any narcotic,
drug, poison, gas or fumes, unless prescribed or taken under the direction of a
Physician and taken in accordance with the prescribed dosage.” It is undisputed that
the drugs found in Marie’s system were not prescribed or taken under the direction
of a physician. Indeed, the single point of contention here is LINA’s interpretation
of “ingestion.” LINA argues that the term includes self-injections, while Richmond
counters that the term is limited to oral intake for the purposes of digestion. To
determine whether LINA’s interpretation is reasonable, we employ the five-factor
Finley v. Special Agents Mutual Benefit Ass’n, Inc. test and ask:
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whether [LINA’s] interpretation is consistent with the goals of the Plan,
whether [its] interpretation renders any language in the Plan
meaningless or internally inconsistent, whether [its] interpretation
conflicts with the substantive or procedural requirements of the ERISA
statute, whether [it has] interpreted the words at issue consistently, and
whether [its] interpretation is contrary to the clear language of the Plan.
957 F.2d 617, 621 (8th Cir. 1992). Importantly, while these factors inform our
analysis, “[t]he dispositive principle remains . . . that where plan fiduciaries have
offered a ‘reasonable interpretation’ of disputed provisions, courts may not replace
[it] with an interpretation of their own—and therefore cannot disturb as an ‘abuse of
discretion’ the challenged benefits determination.” King, 414 F.3d at 999(alterations in original) (citation omitted).
The first Finley factor asks whether LINA’s interpretation is consistent with
the Plan’s goals. Id. Richmond argues that it is not, quoting a recent district court
opinion stating that “[t]he primary goal of the Plan, and specifically accidental death
coverage, is to provide benefits in the case of the insured’s accidental death.” Boyer
v. Schneider Elec. Holdings, Inc., 350 F. Supp. 3d 854, 862 (W.D. Mo. 2018), rev’d,
993 F.3d 578 (8th Cir.), cert. denied, 142 S. Ct. 566 (2021). Yet we recently reversed
this decision, specifically stating that a plan administrator “need not pursue that goal
to the exclusion of all others.” Boyer, 993 F.3d at 583. LINA emphasizes this
language and argues that the primary goal of the Plan is instead to pay only
meritorious claims, thereby preserving the actuarial soundness of the Plan. We have
indeed suggested that this is an important goal of ERISA plans generally. See
Farfalla v. Mut. of Omaha Ins. Co., 324 F.3d 971, 975 (8th Cir. 2003) (“[T]he
purpose of the Plan is to benefit all covered employees, a purpose that is not
furthered by paying an uncovered claim.”). But there is an inherent circularity in
both parties’ arguments here. Richmond presumes Marie’s death is covered under
the Plan for purposes of arguing that the primary goal of the Plan is to pay covered
claims. LINA, on the other hand, presumes Marie’s death is not covered under the
Plan for purposes of arguing that the primary goal of the Plan is to only pay covered
claims. Thus, this first factor does not weigh in either party’s favor.
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The second Finley factor requires us to determine whether LINA’s
interpretation renders any Plan language meaningless or internally inconsistent.
King, 414 F.3d at 999. Richmond argues that it does, suggesting that LINA’s
interpretation would mean that “drug-related deaths are by their very nature
nonaccidental,” rendering the voluntary ingestion exclusion superfluous. This
argument lacks merit, as the exclusion specifically excepts all accidents resulting
from ingesting prescribed drugs under the direction of a physician. It also implicitly
excepts any accidents resulting from taking drugs involuntarily. Additionally, as
LINA convincingly argues, if we were to interpret “ingestion” in Richmond’s way,
i.e., to mean only for the purpose of digestion, it would render the part of the
exclusion about gas or fumes nonsensical. Thus, the second factor weighs in LINA’s
favor.
The third Finley factor asks whether LINA’s interpretation conflicts with
ERISA’s substantive or procedural requirements. Id. Substantively, Congress
enacted ERISA “to ensure that employees would receive the benefits they had
earned, but Congress did not require employers to establish benefit plans in the first
place.” Conkright v. Frommert, 559 U.S. 506, 516 (2010). Further, “ERISA does
not prohibit exclusions in plan benefits where the exclusion has a legitimate business
purpose.” Davidson v. Wal-Mart Assocs. Health & Welfare Plan, 305 F. Supp. 2d
1059, 1087 (S.D. Iowa 2004). Procedurally, ERISA requires administrators to write
plan documents in a way that the “average plan participant” can understand. 29
U.S.C. § 1022(a). Richmond argues that interpreting “ingestion” to mean self-
injection misleads plan participants and stretches the definition beyond all applicable
meaning. But as LINA persuasively counters, the average plan participant would
read the voluntary ingestion exclusion to cover any death caused by willingly using
unprescribed narcotics. Since LINA’s interpretation and ERISA do not conflict, this
factor supports LINA.
The fourth Finley factor requires us to ask whether LINA has interpreted
“ingestion” consistently. King, 414 F.3d at 999. There is no evidence of LINA’s
past interpretations of “ingestion.” In cases involving this fourth factor, we have
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never decided definitively how to weigh the absence of past interpretations. See,
e.g., Cash v. Wal-Mart Grp. Health Plan, 107 F.3d 637, 644 n.7 (8th Cir. 1997)
(finding that factor four supported plan administrator’s interpretation when neither
party presented argument on the fourth factor); Donaldson v. Nat’l Union Fire Ins.
Co., 863 F.3d 1036 1041 (8th Cir. 2017) (finding that factor four supported plan
administrator’s interpretation when there was no indication that it had “taken
inconsistent positions in the past.”); see also West v. Aetna Life Ins. Co., 171 F.
Supp. 2d 856, 896 (N.D. Iowa 2001) (giving factor four no weight when there was
no evidence of the plan administrator’s past interpretations of “accident”). Without
deciding, we give Richmond the benefit of the doubt and assume that this fourth
factor does not weigh in either party’s favor.
Finally, the fifth Finley factor asks whether LINA’s interpretation is contrary
to the Plan’s clear language. Where, as here, a plan document does not define a
term, “[r]ecourse to the ordinary, dictionary definition of words is not only
reasonable, but may be necessary.” Finley, 957 F.2d at 621 (citation omitted). We
also look to the context in which the word is used. Kutten v. Sun Life Assurance
Co. of Canada, 759 F.3d 942, 945-46 (8th Cir. 2014). Richmond cites one dictionary
definition of “ingest” which is: “to take in for . . . digestion.” Richmond argues that,
under this definition, since Marie did not introduce the drugs into her digestive tract,
LINA’s interpretation is contrary to the clear language of the voluntary ingestion
exclusion. LINA counters by citing another dictionary definition of “ingestion” as
“the process of taking food, drink, or another substance into the body by swallowing
or absorbing it.” According to LINA, “ingestion” then, means the “process of
absorbing a substance”—including drugs taken intravenously. Neither of these
interpretations are unreasonable. However, the context controls here. Indeed, as
discussed in our analysis of factor two, part of the exclusion refers to the ingestion
of “gas or fumes,” both of which are typically inhaled through the nose or mouth to
the lungs, not the digestive system. Consequently, LINA’s interpretation is more in
line with the Plan’s clear language, as Richmond’s would render part of the
exclusion meaningless. Thus, the fifth factor weighs in LINA’s favor.
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After weighing all five, the Finley factors tilt slightly in LINA’s favor.
Crucially, the dispositive question on abuse of discretion review is merely whether
LINA “offered a ‘reasonable interpretation of [ingestion.]’” King, 414 F.3d at 999(citation omitted). Since the Finley analysis suggests that it has, LINA’s
interpretation stands.
B.
Having decided that LINA’s interpretation of “ingestion” was reasonable, we
now turn to whether LINA’s application of its interpretation to the facts is supported
by substantial evidence. Id. Substantial evidence means “such relevant evidence as
a reasonable mind might accept as adequate to support a conclusion.” Id. Here,
Marie undisputedly died because she willingly injected herself with a combination
of unprescribed narcotics. Therefore, there is sufficient evidence to support LINA’s
application of the voluntary ingestion exclusion to Marie’s death. Ultimately, since
“a reasonable person could have reached a similar decision” as LINA given the
evidence before it, Phillips-Foster, 302 F.3d at 794, LINA’s decision must stand,
even if we might have found differently in the first instance, Manning, 604 F.3d at
1038.
IV.
Because we agree with the district court’s conclusion that LINA’s denial of
benefits was justified in light of the voluntary ingestion exclusion, we need not
address LINA’s assertion that Marie’s death was not accidental, River v. Edward D.
Jones Co., 646 F.3d 1029, 1034 (8th Cir. 2011), and we do not reach that issue today.
Finally, Richmond argues that LINA did not provide him with a “full and fair
review” of his claim as required by 29 U.S.C. § 1133. However, LINA’s due
consideration of Richmond’s evidence and arguments; gratuitous two-stage appeal
process; well-reasoned, eight-page, single-spaced final denial letter citing nearly all
the evidence of record; and our analysis demonstrate otherwise.
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For the foregoing reasons, we affirm the judgment of the district court.
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