This month’s Friday Five explores decisions addressing the burden of proving accidental death, policy language and “any occupation” disability, an interpleader case where the insurer was not dismissed from the case, the weight to be afforded to non-treating expert opinions and SSDI determinations, and the appropriate procedural mechanism for resolving a dispute over LTD benefits.

1. What is an Accidental Death? Accidental Death and Dismemberment Policies are meant to cover those unfortunate situations wherein someone dies (or is dismembered) by accident, but can the policy benefits be withheld if the death is not proven to have been an accident? The Goldfarb Court was faced with the question of what constitutes an accident when its insured died while engaging in a difficult and treacherous mountain climbing adventure in Pakistan. No one knows precisely what happened that led to the insured’s death, but suicide was ruled out. In that case, the insured and his climbing partner embarked on a perilous climb. His partner, who saw what was ahead, advised against the climb for safety reasons, and turned back. The insured decided to take his chances and continue with the climb, even after being told that it was dangerous and life-threatening. A day later, he disappeared without a trace. A body was not found. No clues were left on the mountain. After the beneficiaries sought the benefits from the AD&D Policy, the insurance company alleged that because no one knew what actually happened to the insured, it could not be proven to have been an ”accident,” and therefore no funds would be paid. The lower court disagreed and ruled in favor of the beneficiaries. Relying on common law and First Circuit precedent in Wickman v. Northwestern National Insurance Co., 908 F.2d 1077 (1st Cir. 1990), the appellate court reversed, ruling that the death could not have been “accidental” if “a reasonable person with similar characteristics to the insured would have viewed injury or death as highly likely to occur.” It was undisputed that the deceased’s climbing partner had warned the insured of the perils of continuing the dangerous climb but he continued anyway and that the insured had limited supplies for the climb. Under these facts, the Court found that the insurance company was justified in determining that the death would not be covered under an accidental death policy. Goldfarb v. Reliance Standard Life Ins. Co., Case No. 23-10309, 2024 WL 3271012 (11th Cir. July 2, 2024).
2. “Any Occupation” Policy Language Can Include the Obligation to Undergo Training for a New Profession. Under the LTD policy, as long as plaintiff could perform any job for which she was qualified by “education, training, or experience,” she was not deemed disabled. After reviewing her medical records and considering the conclusions from the medical examination, the insurance company concluded that with some training, the Plaintiff’s education and training would allow her to embark on a new profession and that she was not, therefore, disabled from performing any occupation. Plaintiff averred that she should not have to do so, and instead, because she was unable to do her original job, she should be deemed disabled. The Court disagreed, holding that “[i]t is ‘a fundamental principle of ERISA law—the plain language of the plan controls.’” In other words, the Plaintiff was bound by the “any occupation” standard as set forth in the policy. Jackson v. Hartford Life & Accident Ins. Co., Case No. 2:22-cv-3955, 2024 WL 3218236 (S.D. Ohio June 28, 2024).
3. Interpleaders Are Not Always a Simple and Effective Way to Remove a Party From a Case. In cases involving competing claims for life insurance proceeds, it is fairly typical for insurance companies to interplead the amounts in dispute and extract themselves from the litigation. In Hollingshead, however, the court allowed the insurance proceeds to be interpleaded, but did not permit the insurance company to be removed from the case. In this case, Prudential issued a group life insurance policy to the decedent’s employer. The decedent named his wife as the primary beneficiary. The decedent’s wife passed away due to COVID-19 complications, and only a few hours later, the insured passed away as well. The secondary beneficiaries to each of the decedent and his wife each asserted claims to the death benefits. The insurer was “ready, willing and able” to pay the death benefits, but asserted that because of the competing claims, it was unable to determine who was entitled to the death benefit. The claimed beneficiaries each filed counterclaims against the insurer for the allegedly wrongful failure to disperse the death benefit. The court held that it was “still in dispute” whether the insurer acted properly in not paying out the death benefit and refused to let it out of the case. The Prudential Ins. Co. of Am. v. Hollingshead, Case No. 2:23-cv-58, 2024 WL 3226119 (S.D. Ohio June 27, 2024).
4. Neither Expert Reports from Non-Treating Physicians Nor Social Security Decisions Were Dispositive of Disability Determination. Plaintiff and defendant filed cross-motions for summary judgment on the issue of plaintiff’s disability. In support of his motion, Plaintiff relied upon stipulated facts, a report from an expert who had not examined him, and the Social Security Administration’s prior determination concluding that he was disabled. The court held that this evidence was insufficient. The court gave little consideration to Plaintiff’s expert report in light of the fact that the doctor had not physically examined him, and because many of the expert’s conclusions were based on facts that were not in the medical records at all. Further, while Plaintiff argued that the SSDI determination should be dispositive, the court disagreed stating that “[a] Social Security decision is only one more factor for consideration in an ERISA benefits determination." The court, therefore, upheld the insurer’s determination that the plaintiff was not disabled. Slaughter v. Hartford Life & Accident Ins. Co., Case No. 22 CV 5787, 2024 WL 3251371 (N.D. Ill. July 1, 2024).
5. Rule 52 Trial Rather Than Rule 56 Motion Held to be Appropriate Mechanism for Resolution of LTD Case. In a recent decision from the District of Maryland, the Court held that a bench trial on the paper record pursuant to Federal Rule of Civil Procedure 52, rather than cross-motions for summary judgment pursuant to Rule 56, was the appropriate procedural mechanism for resolving a dispute over the plaintiff’s entitlement to LTD benefits. The Fourth Circuit had previously held that in the context of de novo review in ERISA denial-of-benefits cases, “[w]here there are disputed issues of material fact, a Rule 52 bench trial, which will typically be limited to the administrative record that was before the plan administrator, is appropriate.” Tekmen v. Reliance Standard Life Ins. Co., 55 F.4th 951, 959 (4th Cir. 2022). In the instant case, however, the standard of review was abuse of discretion. The court recognized that “it is unusual to conduct a ‘trial’ under an abuse of discretion standard – in other words, where this Court’s ‘factual findings’ must be made while affording appropriate deference to the reasonable factual findings made by the plan administrator, even if this Court would have reached a different result.” Nevertheless, the court held that a Rule 52 trial conducted on the papers, “while carefully adhering to the abuse of discretion standard,” was the better course. Ward v. Reliance Standard Life Ins. Co., Civ. No. SAG-23-2147, 2024 WL 3206709 (D. Md. June 21, 2024).