Brimer v. Life Insurance Co. of North America

FILED
United States Court of Appeals
Tenth Circuit
UNITED STATES COURT OF APPEALS
February 10, 2012
TENTH CIRCUIT
Elisabeth A. Shumaker
Clerk of Court
KIMBERLY BRIMER; MATTHEW
BRIMER; CHRISTOPHER BRIMER,
Plaintiffs - Appellants,
v. No. 11-5032
(D.C. No. 4:07-CV-00453-GKF-PJC)
LIFE INSURANCE COMPANY OF (N.D. Okla.)
NORTH AMERICA,
Defendant - Appellee.
ORDER AND JUDGMENT*
Before HOLMES, EBEL, and MATHESON, Circuit Judges.
Kimberly Brimer and her sons, Matthew and Christopher Brimer, claim that they
are entitled to benefits under a group accident policy insuring their husband and father,
James Brimer. The district court concluded that Life Insurance Company of North
America (“LINA”) properly denied the Brimers’ claim.
Exercising jurisdiction under 28 U.S.C. § 1291, we affirm.
*This order and judgment is not binding precedent, except under the doctrines of
law of the case, res judicata, and collateral estoppel. It may be cited, however, for its
persuasive value consistent with Fed. R. App. P. 32.1 and 10th Cir. R. 32.1.
I. BACKGROUND
A. Mr. Brimer’s Death1
On March 26, 2006, Kimberly and Matthew Brimer returned home after a
weekend trip and found James Brimer lying on the kitchen floor. He was unresponsive.
Ms. Brimer called 911. When medical personnel arrived, they pronounced her husband
dead.
A police officer at the scene observed dried “foam cap” on Mr. Brimer’s chin area
and on his shirt. The officer also found a bottle of Soma (a muscle relaxant also known as
carisoprodol) on the kitchen table. Thirty-three of the 100 capsules were missing from
the bottle, which had been filled just two days earlier on March 24.2
Mr. Brimer’s physician, Dr. Christopher Klotz, reported to police that he had
prescribed pain medication to Mr. Brimer. According to Dr. Klotz, Ms. Brimer usually
administered the medication to her husband, but because she had been out of town, Mr.
Brimer may have administered the medication himself and exceeded the recommended
1
The facts recounted here about Mr. Brimer’s death and in subsection B about
LINA’s administrative review come from the district court’s opinions. See Brimer v. Life
Ins. Co. of N. Am., No. 07-CV-453-GKF-PJC, 2010 WL 3607632, at *4 (N.D. Okla. Sept.
13, 2010) (Brimer I); Brimer v. Life Ins. Co. of N. Am., No. 07-CV-453-GKF-PJC, 2011
WL 650329, at *1 (N.D. Okla. Feb. 11, 2011) (Brimer II).
2
The district court found that, per Mr. Brimer’s prescription, a maximum of 24
pills were to be taken over the three-day period between the filling of the Soma
prescription and Mr. Brimer’s death. See Brimer II, 2011 WL 650329, at *2 n.2.
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amount.
An autopsy was performed the next day. According to the medical examiner’s
report, Mr. Brimer’s femoral blood tested positive for hydrocodone, codeine,
carisoprodol, and meprobamate. His heart blood tested positive for diazepam,
nordiazepam, and acetaminophen.
The medical examiner noted that Mr. Brimer had a history of hypertension and
back pain. The report concluded that the cause of death was “acute combined drug
toxicity.” Brimer I, 2010 WL 3607632, at *2. Mr. Brimer’s death certificate listed the
same immediate cause of death—acute combined drug toxicity due to the ingestion of
codeine, diazepam, carisoprodol, and hydrocodone. The medical examiner’s report
concluded that the manner of death was “accident.” Id.
B. Administrative Proceedings
As an American Airlines employee, Mr. Brimer was insured under a group
accident policy (the “Policy”) issued by LINA. Under the Policy, LINA
agree[d] to pay benefits for loss from bodily injuries:
a. caused by an accident which happens while an insured is covered
by this policy; and
b. which, directly and from no other causes, result in a covered loss.
Aplt. Appx. at 1. LINA would not pay benefits if the loss fell within one of the Policy’s
seven enumerated exclusions. In relevant part, the Policy’s exclusions provide the
following:
No benefits will be paid for loss resulting from:
1. [I]ntentionally self-inflicted injuries, or any attempt thereat.
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...
6. Benefits will not be paid for loss covered by or resulting from
sickness, disease, bodily infirmity or medical or surgical
treatment thereof . . . .
7. Voluntary self-administration of any drug or chemical substance
not prescribed by, and taken according to the directions of, a
licensed physician. (Accidental ingestion of a poisonous
substance [is] not excluded.)
Id.
Ms. Brimer and her sons, Matthew and Christopher, are beneficiaries under the
Policy and submitted a claim for benefits on or about November 14, 2006. LINA began
collecting information relevant to the Brimers’ claim, including a toxicological opinion.
The toxicologist opined “within a reasonable degree of scientific certainty” that “Mr.
Brimer had not taken carisoprodol according to his prescribed dosage” and that the
“concentrations of codeine, carisoprodol, and meprobamate found in Mr. Brimer’s post-
mortem blood are greater than what would be expected with therapeutic doses.” Brimer
II, 2011 WL 650329, at *2. LINA denied the Brimers’ claim under Exclusion 7 of the
Policy.
The Brimers began an administrative appeal of LINA’s decision. They argued
that Exclusion 7 applies to the voluntary self-administration of non-prescription drugs
and that “Mr. Brimer ingested medication for which he had a valid prescription.” Aplt.
Appx. at 6. On June 15, 2007, LINA informed the Brimers that it needed more time to
evaluate the appeal and to determine whether the loss was covered under the Policy. It
requested that the Brimers submit additional information, including “any information
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which [they felt supported] the fact that . . . Mr. Brimer’s death was not the result of
medical or surgical treatment or the result of a sickness, disease or bodily infirmity.” Id.
at 5. The Brimers did not submit additional information. LINA requested this
information again on July 11, 2007.
On July 12, 2007, a day after its second request for further information, LINA
affirmed its adverse benefit determination. It based its decision on four grounds: (1) Mr.
Brimer’s death was not accidental, (2) Exclusion 1 applies, (3) Exclusion 6 applies, and
(4) Exclusion 7 applies. LINA informed the Brimers that they had exhausted all
administrative appeal levels.
On July 23, 2007, the Brimers brought an action in state court alleging breach of
contract and breach of the covenant of good faith and fair dealing. LINA removed the
action to federal district court based on diversity jurisdiction and because the Brimers’
claim involved a plan governed by the Employee Retirement Income Security Act
(“ERISA”) and thus presented a federal question.
C. District Court Proceedings
In the district court, the Brimers sought judicial review of LINA’s decision to deny
benefits under the Policy. The district court issued two opinions, an initial and a revised
opinion, affirming LINA’s denial of benefits.
In the initial opinion, Brimer I, the court rejected the Brimers’ argument that
because LINA based the initial denial of their claim solely on Exclusion 7, “‘fundamental
fairness’ require[d] LINA be held . . . to Exclusion 7.” 2010 WL 3607632, at *4. The
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court concluded that the Brimers “had ample opportunity to supplement the
Administrative Record prior to administrative appeal and to address the new grounds for
exclusion in their briefs for this case.” Id. It also noted that “the remedy for LINA’s
untimely notice of the additional grounds for denial is to allow plaintiff to bring this suit
and file additional evidence pertaining to the new grounds of denial. Plaintiffs have had
that opportunity, and thus no further remedy is necessary.” Id.
The district court affirmed LINA’s denial of benefits. It concluded that the
Brimers had failed to carry their burden to prove that Mr. Brimer’s death was an accident.
Id. at *6. Moreover, even assuming that the death had been accidental, the court ruled
that Exclusion 6 barred the Brimers’ claim. In considering Exclusion 6, the court noted
that “LINA’s cited authority is uncontested that an exclusion in an [insurance] policy for
medical treatment of a sickness or disease unambiguously includes death caused by
accidentally overdosing on a drug prescribed by a doctor for a medical condition.” Id.
(emphasis added) (quotations omitted). Having affirmed LINA’s denial of benefits on
these grounds, the court did not reach the application of Exclusions 1 and 7. Id. at *5.
The Brimers then filed a “Motion for New Trial” under Rule 59 of the Federal
Rules of Civil Procedure, seeking to reverse the court’s judgment.3 In response to the
Brimers’ motion, the district court issued a revised opinion and order, Brimer II.
However, “because the revisions [did] not merit a substantive alteration of the
3
Although the Brimers styled their motion as a “Motion for New Trial,” no trial
occurred below. LINA does not challenge the form of the Brimers’ motion on appeal.
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Judgment,” the court denied the Brimers’ motion. Brimer II, 2011 WL 650329, at *1.
In Brimer II, the district court “reverse[d] its previous decision” regarding the
accidental nature of Mr. Brimer’s death. Id. at *4. It concluded that “[t]he Brimers have
carried their burden of proving that Mr. Brimer lost his life from bodily injuries caused
by an accident.” Id.
The court also addressed Exclusions 1 and 7. It ruled that Exclusion 1 was “not a
legitimate basis for LINA to deny the Brimers’ claim,” id. at *5, and that Exclusion 7 was
ambiguous, id. at *8. Because of Exclusion 7’s ambiguity, the court construed this
exclusion against LINA and adopted the reading of a “reasonable policyholder” that
Exclusion 7 applies to “loss relating only to non-prescribed drugs or chemical
substances.” Id. Because Mr. Brimer had overdosed on prescription medication, LINA
did not “meet its burden of showing that the loss falls within Exclusion 7.” Id.
The court reaffirmed LINA’s denial of the Brimers’ claim under Exclusion 6.
Although the Brimers objected that LINA did not raise Exclusion 6 as a basis of denial
until the administrative appeal, the court was unpersuaded that it should “reopen the case
to permit the Brimers to present additional evidence.” Id. at *7. It agreed with the
Brimers that they had not been given a “reasonable basis to know that they were under an
obligation [during the administrative appeal] to address additional grounds for the
adverse benefit decision.” Id. at *6. Nonetheless, this procedural shortcoming at the
administrative level entitled them “to present additional evidence in the district court and
to have the district court consider it.” Id. The Brimers did not seek leave to present
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additional evidence. Id.
Regarding Exclusion 6, the district court again noted that “[c]ourts have
consistently held that a medical treatment exclusion applies to accidental death caused by
overdose of drugs prescribed by a doctor in the course of medical treatment.” Id. at *5.
Even though the overdose in this case was due to Mr. Brimer’s actions, not his
physician’s, the court ruled that “the medical treatment exclusion still applies.” Id.
Finally, the district court rejected the Brimers’ argument “that Exclusion 6 should
be read out of the policy because it conflicts with Exclusion 7.” Id. at *7. The Brimers
raised this argument for the first time in their reply brief on their Motion for New Trial.
Due to the untimely nature of this argument, the court did not address it. Id.
The Brimers filed a timely notice of appeal challenging the district court’s
judgment.
II. DISCUSSION
On appeal, the Brimers challenge LINA’s denial of their claim under Exclusion 6.
First, they argue that LINA’s assertion of Exclusion 6 at the administrative appeal stage
was procedurally improper under ERISA and “deprived [them] of the opportunity to
challenge Exclusion 6 in both the administrative appeals process and on review by the
trial court.” Aplt. Reply Br. at 8.
Second, the Brimers argue that the district court erred when it declined to consider
their argument that Exclusions 6 and 7 conflict when read together, which renders
Exclusion 6 ambiguous. They urge this court to address the alleged conflict between the
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exclusions.
Unless the ERISA-governed plan provides to the contrary, we review a denial of
benefits under a de novo standard. See Metro. Life Ins. Co. v. Glenn, 554 U.S. 105, 111
(2008); Allison v. UNUM Life Ins. Co. of Am., 381 F.3d 1015, 1021 (10th Cir. 2004).
LINA concedes that a de novo standard of review is appropriate. In addition, we review
the district court’s legal conclusions de novo. See Graham v. Hartford Life & Accident
Ins. Co., 589 F.3d 1345, 1353 (10th Cir. 2009).
With these standards in mind, we affirm the district court’s judgment in favor of
LINA. Although the Brimers argue that they should have been given the opportunity to
present evidence regarding Exclusion 6 at the administrative appeal level and in the
district court, the Brimers concede in their appellate briefs that the only evidence relevant
to Exclusion 6 is the Policy itself. See Aplt. Br. at 28-29. Because the Policy was before
the district court, the Brimers have failed to show prejudice from LINA’s procedural
violation of ERISA and the district court’s consideration of Exclusion 6. See DiGregorio
v. Hartford Comprehensive Emp. Benefit Serv. Co., 423 F.3d 6, 16 (1st Cir. 2005)
(requiring appellant to “show prejudice in a relevant sense” due to a procedural violation
of ERISA (quotations omitted)).
As for the Brimers’ theory that Exclusions 6 and 7 conflict, resulting in
ambiguity, we conclude that the Brimers forfeited this argument. We also do not address
this forfeited argument because the Brimers do not argue plain error on appeal. See
Richison v. Ernest Grp., Inc., 634 F.3d 1123, 1127-28 (10th Cir. 2011).
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A. Procedural Violation
1. Full and Fair Review Standard
Every benefit plan governed by ERISA must contain a two-step procedure for
denying claims. See 29 U.S.C. § 1133. First, the plan participant or beneficiary shall
receive “adequate notice . . . setting forth the specific reasons for [a] denial.” Id.
§ 1133(1); see also 29 C.F.R. § 2560.503-1(g)(1)(i)-(ii). Second, the plan must “afford a
reasonable opportunity to any participant whose claim for benefits has been denied for a
full and fair review by the appropriate named fiduciary of the decision denying the
claim.” 29 U.S.C. § 1133(2). This full and fair review must concern “the claim and the
adverse benefit determination.” 29 C.F.R. § 2560.503-1(h)(1). Among other
requirements, the full and fair review must give the claimant “the opportunity to submit
written comments, documents, records, and other information relating to the claim for
benefits.” Id. § 2560.503-1(h)(2)(ii).
Under this framework, a claimant does not receive a full and fair review if the
administrative appeal decision justifies the denial of benefits based on newly asserted
grounds. Such grounds do not concern “the decision denying the claim,” 29 U.S.C.
§ 1133(2), do not address “the adverse benefit determination” in the first instance, 29
C.F.R. § 2560.503-1(h)(1), and deny a claimant the opportunity to submit materials that
rebut the original adverse determination and support a claim for benefits, id. § 2560.503-
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1(h)(2)(ii). Denying a claim at the administrative appeal stage based on grounds not
asserted in the initial claim denial is thus a violation of ERISA’s procedural requirements.
See Robinson v. Aetna Life Ins. Co., 443 F.3d 389, 393-94 (5th Cir. 2006); Saffon v. Wells
Fargo & Co. Long Term Disability Plan, 522 F.3d 863, 871-72 (9th Cir. 2008).
Nonetheless, courts can require a showing of prejudice due to an ERISA violation as a
prerequisite to ordering a remand. See, e.g., DiGregorio, 423 F.3d at 16 (“Claimant must
demonstrate how a plan’s flawed procedure prejudiced review of her claim.”);
Schleibaum v. Kmart Corp., 153 F.3d 496, 503 (7th Cir. 1998) (concluding that remand
to the administrator based on a § 1133 violation “was not required . . . because a remand
would be futile”).
2. Application of the Standard
We agree with the district court that “LINA . . . denied the Brimers their right
under ERISA to an administrative appeal of the adverse benefit determination as
premised on the medical treatment exclusion.” Brimer II, 2011 WL 650329, at *6.
LINA’s administrative process was flawed. It relied on Exclusion 7 for the initial denial
of coverage. Next, on administrative appeal, LINA relied on a finding of no accident and
on Exclusions 1, 6, and 7 to affirm the denial of coverage without clearly providing the
Brimers an opportunity to present evidence on the new grounds for denial—in particular,
evidence on Exclusion 6.
LINA argues that it put the Brimers on notice that Exclusion 6 was at issue when it
asked during its administrative appeal process for “any information which you feel
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supports the fact that . . . Mr. Brimer’s death was not the result of a medical or surgical
treatment or the result of a sickness, disease or bodily infirmity.” Aplt. Appx. at 5.
Although this request parrots the language of Exclusion 6, it did not adequately remedy
the procedural violation. The request makes no mention of Exclusion 6, and the Brimers
could reasonably have believed that the information sought related to Exclusion 7, the
sole basis for the original claim denial.
We therefore agree with the district court that LINA violated ERISA’s
requirement of a full and fair review when its administrative appeal decision added
Exclusion 6 as a justification for denying the Brimers’ claim. But, as discussed below,
we conclude that the Brimers have not shown they were prejudiced by LINA’s violation
of ERISA and the district court’s consideration of Exclusion 6.
3. Remedy
The Brimers complain that LINA’s violation of ERISA “deprived [them] of the
opportunity to challenge Exclusion 6 in both the administrative appeals process and on
review by the trial court.” Aplt. Reply Br. at 8. LINA argues that the Brimers cannot
show that they suffered prejudice as a result of a procedural violation. Aplee. Br. at 41.
We agree with LINA because the Brimers concede on appeal that the Policy is the only
relevant evidence for determining whether Exclusion 6 bars coverage. Because the
Policy was before the district court, the court properly considered LINA’s denial of
benefits under Exclusion 6.
The district court noted that the Brimers could have sought leave to introduce
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evidence regarding Exclusion 6, but that the Brimers had failed to do so and “never
apprised the court of their claimed right to present additional evidence.” Brimer II, 2011
WL 650329, at *6. The court also stated, “perhaps most importantly, the Brimers do not
suggest the existence of any relevant evidence outside the administrative record that may
have a bearing on the issue of whether Exclusion 6 applies.” Id. at *7. There was
“nothing to suggest that the procedural irregularity in this case prevented full
development of the administrative record.” Id. at *7 n.6.
On appeal, the Brimers do not suggest that the district court lacked extrinsic
evidence to review LINA’s denial of their claim under Exclusion 6. They concede that
“there is really no new evidence to be gleaned from the accidental death of Mr. Brimer,”
Aplt. Br. at 28, and “that the only evidence necessary is the policy itself,” id. at 29. The
Brimers’ concession that the court need not consider any evidence extrinsic to the Policy
resolves their claim of procedural error against them.
In light of the Brimers’ failure in the district court to present evidence that
Exclusion 6 does not apply, and especially their concession on appeal that the Policy is
the only relevant evidence for determining whether Exclusion 6 bars their claim, we
conclude that the Brimers have failed to show prejudice from LINA’s violation of ERISA
and the court’s consideration of Exclusion 6. See Recupero v. New England Tel. & Tel.
Co., 118 F.3d 820, 840-41 (1st Cir. 1997) (affirming a district court’s conclusion that no
remedy was warranted for a violation of 29 U.S.C. § 1133 because the plan participant
“had not proffered evidence sufficient to support a finding of prejudice in any relevant
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sense”).
The district court reviewed de novo LINA’s denial under Exclusion 6 using the
only relevant evidence, the Policy itself. Whether Exclusion 6 precludes the Brimers’
claim as a matter of law is an issue that the district court was well suited to resolve. See
LaAsmar v. Phelps Dodge Corp. Life, Accidental Death & Dismemberment & Dependent
Life Ins. Plan, 605 F.3d 789, 806 n.12 (10th Cir. 2010). “[N]o purpose would be served
by a further, but procedurally correct, review” of the Brimers’ claim. Sage v.
Automation, Inc. Pension Plan & Trust, 845 F.2d 885, 895 (10th Cir. 1988); see also
Recupero, 118 F.3d at 840 (noting the futility of remand where the appellant “entirely
failed . . . to make any proffer of relevant evidence” or factual dispute regarding a plan
interpretation).
* * *
We hold that LINA’s administrative process was flawed and violated ERISA’s
requirement of a full and fair review. In spite of this procedural blunder, the district court
correctly considered LINA’s denial of benefits under Exclusion 6 because the Brimers
concede that the only evidence needed to decide whether Exclusion 6 applies is the
Policy itself.
B. Exclusions 6 and 7—Conflict and Ambiguity Issue
The Brimers contend that the district court erred when it declined to consider their
argument that Exclusion 6 is ambiguous when read in conjunction with Exclusion 7.
LINA responds that the Brimers first raised this argument in their reply brief on their
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Motion for New Trial and that this argument therefore was not preserved for our review.
We agree that the Brimers forfeited this argument by not raising it in a timely fashion
before the district court. The Brimers also did not carry their burden on appeal of
showing that plain error occurred.
“It is the general rule . . . that a federal appellate court does not consider an issue
not passed upon below.” Singleton v. Wulff, 428 U.S. 106, 120 (1976); see also Richison,
634 F.3d at 1127. “Consequently, when a litigant fails to raise an issue below in a timely
fashion and the court below does not address the merits of the issue, the litigant has not
preserved the issue for appellate review.” F.D.I.C. v. Noel, 177 F.3d 911, 915 (10th Cir.
1999). We deem such arguments forfeited and “will reverse a district court’s judgment
on the basis of a forfeited theory only if failing to do so would entrench a plainly
erroneous result.” Richison, 634 F.3d at 1128. Under this plain error standard, it is the
burden of the party asserting error to “establish the presence of (1) error, (2) that is plain,
which (3) affects substantial rights, and which (4) seriously affects the fairness, integrity,
or public reputation of judicial proceedings.” Id.
The Brimers forfeited their argument that reading Exclusions 6 and 7 together
renders Exclusion 6 ambiguous because the Brimers first raised it in their reply brief on
their Motion for New Trial. See Noel, 177 F.3d at 915 (holding an issue was unpreserved
when a party raised it in a reply brief on a post-trial motion). In addition, the Brimers
have failed to “argue for plain error and its application on appeal,” which “surely marks
the end of the road for an argument for reversal.” Richison, 634 F.3d at 1131. We
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therefore do not reach this issue.4
Finally, we note that before their reply brief on the Motion for New Trial, the
Brimers did not challenge LINA’s interpretation of Exclusion 6 in the district court.
LINA cited extensive authority supporting its argument that Exclusion 6 bars the
Brimers’ claim, and this authority was “uncontested.” Brimer I, 2010 WL 3607632, at
*6. Aside from their forfeited argument that Exclusion 6 is ambiguous in light of
Exclusion 7, the Brimers also do not challenge the district court’s interpretation of
Exclusion 6 on appeal. See Aplt. Br. at 11 (“Reading Exclusion 6 in isolation would
reasonably yield an interpretation excluding coverage for loss resulting from voluntary
ingestion of medicine taken for the purpose of treating disease.”).
We hold that the Brimers forfeited their argument that Exclusion 6 is ambiguous
due to a conflict with Exclusion 7, did not argue plain error on appeal, and otherwise left
unchallenged the district court’s interpretation of Exclusion 6.
CONCLUSION
Because the procedural defect in the administrative appeal did not prejudice the
4
Although the Brimers have not carried their burden of addressing the elements of
plain error on appeal, they do challenge the district court’s interpretation of Exclusion 6
as erroneous in light of the alleged conflict with Exclusion 7. They do so based on the
language of the exclusions, as well as authority from other jurisdictions. Assuming the
Brimers are correct that error occurred, their argument would fail under the second
element—that the error was plain—because the Brimers point to no U.S. Supreme Court
or Tenth Circuit precedent showing the error is “clear under current law.” United States
v. Cordery, 656 F.3d 1103, 1106 (10th Cir. 2011) (quotations omitted). Nor can we say
that “the district court’s interpretation [of Exclusion 6] was clearly erroneous.” Id.
(quotations omitted).
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Brimers or foreclose judicial review of Exclusion 6, because the Brimers forfeited their
argument that Exclusion 6 conflicts with Exclusion 7 and failed to argue plain error, and,
finally, because the Brimers have not otherwise challenged the district court’s conclusion
that Exclusion 6 precludes coverage, we affirm.
ENTERED FOR THE COURT
Scott M. Matheson, Jr.
Circuit Judge
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11-5032, Brimer v. Life Ins. Co. of Am.
EBEL, Circuit Judge, dissenting
I agree with the majority’s opinion as it relates to the procedural irregularity in
LINA’s handling of Brimers’ claim, and that it was not error for the district court to reject
Brimers’ argument that she should be able to introduce additional evidence on the
applicability of Exclusion 6. However, I cannot agree with the majority’s conclusion that
Brimers’ “forfeiture” of the argument regarding the conflict between Exclusions 6 and 7
prevents this Court from addressing that conflict. I therefore respectfully dissent.
The district court relied solely on Exclusion 6 (“medical treatment”) to uphold
LINA’s denial of Brimer’s claim, and Brimers appeal that decision. The de novo
standard of review in this ERISA case requires this Court to determine the correctness of
that decision—i.e., the applicability of Exclusion 6—by examining the plan documents as
a whole. A party’s reference to, or failure to refer to, a specific provision of the policy
before the district court does not alter this Court’s obligation to examine the whole
policy. Reading the policy as a whole, and the exclusions in conjunction with one
another, I find a conflict between Exclusions 6 and 7 that renders Exclusion 6 ambiguous
as to the question before us, i.e., whether James Brimer’s death from an overdose of
prescribed drugs, notwithstanding that it was accidental, resulted from “medical
treatment.” Resolving this ambiguity in favor of Brimer, as required by the doctrine of
contra proferentem, I would hold that LINA may not rely upon Exclusion 6 to deny
coverage, and I would reverse and remand with instructions to enter judgment in
Brimers’ favor.
The policy does not define “medical treatment.” The interpretation of the
undefined terms of an ERISA plan is governed by federal common law. LaAsmar v.
Phelps Dodge Corp. Accidental Death & Dismemberment & Dependent Life Ins. Plan,
605 F.3d 789, 817 (10th Cir. 2010) (citing Santaella v. Metro. Life Ins. Co., 123 F.3d
456, 461 (7th Cir. 1997)); see Miller v. Monumental Life Ins. Co., 502 F.3d 1245, 1249-
50 (10th Cir. 2005). In interpreting an ERISA plan, this Court must “examine the plan
documents as a whole, and, if unambiguous, construe them as a matter of law.” Miller,
502 F.3d at 1250 (internal quotations omitted). Reading the documents as a whole
includes reading all exclusions in conjunction. See King v. Hartford Life and Acc. Ins.
Co., 414 F.3d 994, 1004 (8th Cir. 2005) (“But even if [the insurer’s] reading of [one
exclusion] might be a reasonable interpretation of the language standing alone, . . . it is
not reasonable in the context of this policy, because it renders meaningless other
important policy language[, including the next exclusion listed].”) (internal citation
omitted); Clark v. Metropolitan Life Ins. Co., 369 F. Supp. 2d 770, 778 (E.D. Va. 2005)
(reading exclusions “in conjunction”). If, employing a de novo standard of review, we
find a plan term ambiguous, the doctrine of contra proferentem—construing all
ambiguities against the drafter—requires the ambiguity to be resolved in favor of
coverage. See LaAsmar, 605 F.3d at 805; Rasenack ex rel. Tribolet v. AIG Life Ins. Co.,
585 F.3d 1311, 1318 (10th Cir. 2009); Miller, 502 F.3d at 1249.
Whether a plan term or provision is ambiguous depends on the “circumstances
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presented” and the “question at issue in a given situation.” LaAsmar, 605 F.3d at 803-04
(citing Rasenack, 585 F.3d at 1318); id. at 804 n.10. A plan provision is ambiguous if it
“is reasonably susceptible to more than one meaning, or where there is uncertainty as to
the meaning of the term.” Id. at 804 (quoting Rasenack, 585 F.3d at 1318). The inquiry
is not into what the insurer, as drafter, “unilaterally intended the terms of the Plan to
mean, but what a reasonable person in the position of the [insured] would have
understood those terms to mean.” Id. at 801 (citing Rasenack, 585 F.3d at 1318).
I disagree with the district court’s conclusion that an overdose of prescription
drugs “unambiguously” falls within the scope of the medical treatment exclusion.
Rather, I find the plain language of the exclusion is ambiguous in this context. In light of
the “question at issue in [this] situation,” id. at 803-04—i.e., whether “medical treatment”
includes an accidentally self-administered overdose of prescribed medication—the term
“medical treatment” is “reasonably susceptible to more than one meaning,” see id. at 804.
Because at least one of those possible meanings would result in coverage, the doctrine of
contra proferentem requires that it be construed against LINA as the drafter. See id. at
805.
Even if Exclusion 6 were not facially ambiguous, it would most certainly become
ambiguous when read in conjunction with Exclusion 7, which excludes losses resulting
from “[v]oluntary self-administration of any drug or chemical substance not prescribed
by, and taken according to the directions of, a licensed physician.” The district court
correctly found this provision ambiguous. Consider just the interpretation urged by
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LINA before the district court, i.e., that the policy should be meant to cover losses related
to voluntary, self-administered drug ingestion only if the drug was both prescribed by,
and taken according to the instructions of, a licensed physician. This is impossible to
square with the district court’s reading of Exclusion 6, which would hold any action by
the patient with respect to a prescribed drug as part of “medical treatment.” If the policy
is meant to cover losses that result from self-administering prescribed medication in
accordance with a doctor’s instructions, then that means that self-administering
prescribed medication in accordance with the doctor’s instructions is not “medical
treatment” of a “sickness, disease, or bodily infirmity” within the meaning of Exclusion
6. And if self-administration of prescribed medication in accordance with the doctor’s
instructions is not “medical treatment” within the meaning of Exclusion 6, it is difficult to
see how self-administration of a prescribed medication contrary to a doctor’s instructions
could be “medical treatment.” Conversely, if “medical treatment” encompasses the
taking of any drug on the advice of a doctor, then there cannot be any exception to the
drug exclusion, regardless of whether the prescribed drug is taken “according to the
instructions of” a doctor, contrary to the language of Exclusion 7. All of this places
Exclusions 6 and 7 at odds with one another, a conflict that must, in light of our de novo
review, be resolved in favor of coverage. See id. at 805; Rasenack, 585 F.3d at 1318;
Miller, 502 F.3d at 1249; cf. Scruggs v. Exxon Mobil Pension Plan, 585 F.3d 1356, 1366
(10th Cir. 2009) (rule of contra proferentem inapplicable under arbitrary and capricious
standard).
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Although the majority denies the Brimers relief in this case on a procedural
ground, the next similarly situated beneficiary will avoid this fate by arguing the conflict
between Exclusions 6 and 7 from the outset. Insurers would do well to make clear in
their policies precisely what they intend to cover and what they intend to exclude.
According to the Centers for Disease Control, deaths resulting from accidental
prescription drug overdoses are epidemic,1 and even a cursory review of the case law
shows that such deaths have spurred extensive litigation between beneficiaries and
insurers. It would not be unreasonable for an insurer to decide that it does not wish to
insure against the risk of such deaths. And nothing prevents an insurer that makes that
decision from simply, and explicitly, writing a policy that excludes deaths resulting from
accidental drug overdoses. But an insurer should not benefit from poor drafting and
ambiguities in its own policy to avoid paying benefits where they are due. Here, LINA
drafted a policy that is ambiguous on the question of whether a self-administered
accidental overdose of prescription medications is within the exclusion for “medical
treatment.” That ambiguity should have been resolved in the Brimers’ favor.
I respectfully dissent.
1
Centers for Disease Control, Policy Impactf: Prescription Painkiller Overdoses,
http://www.cdc.gov/homeandrecreationalsafety/rxbrief/ (last updated Dec. 19, 2011)
(noting that drug overdose death rates have more than tripled since 1990, and that sales of
prescription painkillers have increased more than 300% since 1999).
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