Slagle was insured by an ERISA-governed accidental death and dismemberment policy, which provided:
We agree 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.
We will not pay benefits if the loss was caused by:
a) sickness, disease, or bodily infirmity; or
b) any of the Exclusions listed in the policy.
Slagle died after fainting in a parking lot and hitting his head on the ground, resulting in an intracranial hemorrhage. At the time of his death, Slagle was taking Coumadin, an anticoagulant medication, to reduce the risk of stroke associated with two conditions with which he had been diagnosed – hypertension and atrial fibrillation.
Hospital records stated that Slagle’s death was caused by subarachnoid, subdural, and intracranial hemorrhages, and that other significant conditions were hypertension and atrial fibrillation. Slagle’s death certificate described the immediate cause of death as "acute intracerebral and subarachnoid hemorrhage and systemic arterial hypertension and anticoagulation," and stated that other significant conditions contributing to death were "blunt force trauma of the head with subdural hematoma." The death certificate described the death as due to an accident.
When Slagle’s wife claimed accidental death benefits, LINA submitted her husband’s medical records to an independent medical reviewer. The reviewer determined that atrial fibrillation substantially contributed to Slagle’s death, because he had been anticoagulated with Coumadin, which prevented his blood from clotting adequately and which contributed substantially to the intracranial hemorrhages.
Based on this report, LINA determined that benefits were not payable, based on the policy exclusion for loss resulting from sickness, disease, or bodily infirmity. LINA also determined that fainting was not an accident, as that term is generally understood and as defined by the policy.
Mrs. Slagle sued to recover accidental death benefits, and the parties filed cross-motions for summary judgment.
The federal district court first considered whether a policy provision stating that benefits "will be paid as soon as we receive proper written proof of loss" granted discretionary authority to LINA to make claim decisions. The court rejected LINA’s argument that discretion was granted, distinguishing "proper written proof" from language in other policies requiring that proof be "acceptable to the plan" or "satisfactory to us." The court held that discretion was not granted by the phrase "proper written proof."
LINA next argued that discretionary authority was granted by the summary plan discription, which stated that the claims administrator "shall have full and final discretionary authority as set forth in this paragraph to determine claims and appeals." The court held that this language – although an express and unambiguous grant of discretion – was invalid because it conflicted with the language of the policy, which prohibited changes other than in writing signed by an officer of the insurance company. Thus, the court applied the de novo standard of review.
Turning to LINA’s reasoning in support of its claim decision, the court rejected the argument that fainting and dizziness are internal bodily processes, not external events constituting an accident. Finding that the term "accident" was ambiguous and construing it against LINA, the court determined that, under a broad reading, fainting constituted an accident within the terms of the policy. The court also rejected LINA’s argument that Slagle’s fainting was due to a sickness or disease, because the administrative record did not establish that Slagle fainted due to atrial fibrillation, rather than some other cause, such as hunger or fatigue. For these reasons, the court determined that Slagle’s fall was an "accident" as described by the policy.
The court then considered LINA’s argument that the sickness, disease, or bodily infirmity exclusion applied. The court rejected the argument that atrial fibrillation contributed to death because it required anticoagulation therapy, which, in turn, reduced blood clotting and led to intracranial hemorrhages. The court reasoned that anticoagulation is not a disease, but the result of treatment, and that LINA was wrong to apply the disease exclusion.
Finally, the court considered LINA’s argument, asserted for the first time during the litigation, that benefits were not payable because Slagle’s death was not caused "directly and by no other causes" by an accident. The court concluded that Slagle’s anticoagulation therapy – a non-accidental cause – substantially contributed to his death, because it prevented his blood from clotting appropriately. Thus, the court held that LINA’s claim decision was de novo correct.
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