Opinion
No. C00-129 MJM
August 14, 2001
OPINION and ORDER
Plaintiff, Debra Strasser, appeals Defendant UNUM Life Insurance Company of America's decision to deny certain insurance benefits for the death of her son, Shon Houdek. For the reasons that follow, UNUM's decision is affirmed.
I. Background Facts
On October 19, 1999, Shon Houdek died in a single-car accident on US Highway 6, a mile outside of Marengo, Iowa. At approximately 1:27 a.m., Mr. Haddock was driving a Chevy Corsica when he crossed the center line of the highway, crossed the oncoming lane of traffic, entered the ditch on the other side of the highway and struck a culvert at a private drive. His vehicle flipped up out of the ditch and landed upside down in the oncoming lane of traffic and shoulder. Mr. Haddock instantaneously died as a result of the injuries he sustained from the impact. His blood alcohol level content was .194 at the time of the accident — almost twice the .10 level at which Iowa law presumes a driver to be under the influence of and impaired by alcohol. See Iowa Code § 321J.2
Mr. Houdek had been employed by Wendler Engineering and Construction, Inc. Wendler Engineering and Construction provided insurance benefits for its employees, including accidental and dismemberment benefits (hereinafter referred to as AD D), which it purchased from UNUM Life Insurance Company of America. The UNUM policy is an employee benefit plan governed by the Employee Retirement Income Securities Act, (ERISA), 1974, 29 U.S.C. § 1001, et seq., and UNUM is both the insurer and the administrator of the policy plan.
UNUM's policy provides AD D benefits in the amount of $25,000 with an additional benefit for accidental death while driving a car with an air bag in the amount of $5,000.00. The AD D insurance includes what the parties refer to as a "crime exclusion," which precludes coverage for injury or death that occurs due to certain illegal activities. It reads:
Your plan does not cover any accidental losses caused by, contributed to by, or resulting from:
An attempt to commit or commission of a crime under state or federal law.
After Mr. Houdek's death on September 27, 1999, his employer submitted a claim for life insurance benefits and AD D benefits to UNUM. Mr. Houdek had designated his mother, Debra Strasser, as his sole beneficiary. Tracey Mowatt, a UNUM claims representative, was assigned to Ms. Strasser's claim. By a letter dated October 22, 1999, Ms. Mowatt informed Ms. Strasser that the $25,000 life insurance benefit had been approved and the proceeds had been deposited into a money market account set up in Ms. Strasser's name. She also informed Ms. Strasser that the additional $25,000 for AD D benefits was still under review pending receipt of additional information and completion of UNUM's investigation.
Ms. Mowatt conducted the investigation which included talking to the State Medical Examiner's office and reviewing its report, obtaining the report of the investigating officer (submitted by Ms. Strasser), talking to the Iowa County coroner's office and obtaining its report and talking with Sheriff Slockett of the Iowa County Sheriff's Department. The report from the State's Medical Examiner indicated Mr. Houdek died after his vehicle crossed over into a ditch, struck a culvert, went airborne and landed on the front of the car finally coming to rest on the roof. The report also indicated that there were "empty beer cans in car" and the car "smelled of ETOH" (the scientific abbreviation for Ether). The state medical examiner found that Mr. Houdek died instantaneously as a result of the impact. The toxicology report from coroner's office revealed that Mr. Houdek's blood alcohol level was .194 at the time of his death, which is consistent with the results of the chemical blood test indicated on the investigating officer's report, also .194. As for a description of the accident, the investigating officer's report stated Mr. Houdek "apparently fell asleep and crossed the oncoming lane and entered the north ditch," . . . he then "continued eastbound in the ditch until impacting a culvert at a privately-owned drive." His vehicle "flipped up out of the ditch landing upside down upon the westbound lane and shoulder portion of the highway." It also indicated Mr. Houdek was not wearing his seatbelt. This fact however, was not confirmed by Ms. Mowatt during her investigation. Finally, Ms. Mowatt talked to Sheriff Slockett in the Iowa County Sheriff's Department who stated Mr. Houdek was "drunk" at the time of the accident. UNUM's medical department later confirmed that the toxicology report showed a blood alcohol level of .19. Ms. Mowatt did not talk to anyone who was with Mr. Houdek the day or evening of his death. She also did not investigate the scene of the accident.
By a letter dated February 3, 2000, UNUM denied AD D benefits to Ms. Strasser. The letter provided in pertinent part:
I am enclosing a copy of the provision of UNUM Life Insurance Company of America's AD D Policy that defines accidental bodily injury and under what circumstances benefits will be paid. The policy does not cover a loss caused by, contributed to by, or resulting from the attempt to commit or commission of a crime.
The information I have from Sheriff James F. Slockett indicates that at the time your son sustained his fatal injuries, he was driving while intoxicated. His blood alcohol level was .19. It is a crime in Iowa to drive with a blood alcohol level in excess of .10.
Because the policy does not cover a loss that is caused by, contributed to by, or resulting from the attempt to commit or commission of a crime, benefits for this claim are not payable.
The letter also stated that Ms. Strasser was entitled to appeal the decision and could request any documents contained in UNUM's file. Ms. Strasser was assured that upon receipt of notice for appeal, an appeal specialist employed by UNUM would conduct a full and fair review of the claim.
John Utter, president of Executive Benefit Services, Inc. wrote on behalf of Ms. Strasser to UNUM, urging a reconsideration of the denial. UNUM then wrote Ms. Strasser on February 25, 2000, stating that Mr. Utter was not her legal representative and that the appeal was not accepted. On March 17, 2000, Attorney Thomas Buchanan sent notice of appeal on behalf of Ms. Strasser. At that time, he requested a copy of the UNUM file and a copy of the benefits policy. On March 30, 2000, UNUM wrote to Attorney Buchanan indicating that they had received his request for appeal, that the policy and claim file would be sent under separate cover, and that the final decision would be reached within 30 to 60 days. Mr. Buchanan did not receive the policy or the claim file and wrote UNUM again on April 5, 2000, requesting the information. The same day, UNUM mailed the requested information and the parties' correspondence crossed in the mail. However, UNUM denied Ms. Strasser's claim on appeal on April 14, 2000, some 15 to 45 days prior to the time UNUM originally planned to issue its final decision. Mr. Buchanan did not have an opportunity to review the policy and claim file in order to provide additional evidence for UNUM's consideration before UNUM issued its final decision.
Based on the foregoing, Ms. Strasser filed the present suit seeking this Court's review of UNUM's denial of AD D benefits. It was not until after Ms. Strasser filed suit that UNUM offered to review any additional information Ms. Strasser wished to submit. Ms. Strasser declined UNUM's offer. Instead, she filed the affidavit of Jeff King, Mr. Houdek's friend who was him throughout the day, up until ten minutes before his death, and two depositions of UNUM claims representatives, in support of her appeal in this Court.II. Standard of Review
As a threshold matter, the Court must address the proper standard of review in this case. Ms. Strasser avers that the proper standard of review is de novo because the insurer and the administrator of the plan are one and the same. See Armstrong v. Aetna Life Ins. Co., 128 F.3d 1263 (8th Cir. 1997) (holding conflict of interest of plan administrator which also functioned as the insurer warranted a stricter standard of review). By contrast, UNUM maintains that the proper standard of the review is abuse of discretion because there is no inherent conflict of interest simply because the claims administrator and insurer of the plan are the same. See Farley v. Arkansas Blue Cross and Blue Shield, 147 F.3d 774, 776-77 (8th Cir. 1998).
Typically a decision by an ERISA plan administrator or fiduciary is reviewed for an abuse of discretion if the plan specifically gives the administrator or fiduciary the authority to construe the terms of the plan. Firestone Tire Rubber Co. v. Bruch, 489 U.S. 101, 115 (1989). If however, the administrator or fiduciary has a conflict of interest or acts with an improper motive, that must be weighed as a "factor in determining whether there is an abuse of discretion." Armstrong, 128 F.3d at 1265 (quoting Restatement (Second) of Trusts § 187, Comment d (1959), quoted in Firestone Tire, 489 U.S. at 115)).
In Armstrong, the case relied upon by Ms. Strasser, the court held there was an apparent conflict of interest and improper motive "where the claims reviewers themselves apparently received direct personal financial benefits for rejecting claims." Schatz v. Mutual of Omaha Ins. Co., 220 F.3d 944, 947 n. 5 (8th Cir. 2000) (citing Davolt v. The Executive Comm. of O'Reilly Automotive, 206 F.3d 806, 809 (8th Cir. 2000)). This "is different in kind from the sort of background conflict created by the mere fact that the same company is both the plan administrator and the plan insurer." Id. In Davolt, the Eighth Circuit specifically noted that there is no "blanket rule mandating de novo review in all cases where the insurer of a health benefits plan is also the plan administrator. Rather, . . . the inquiry is fact specific and limited to instances where the relationship places the ERISA benefits plan administrator in a `perpetual' conflict of interest." Davolt, 206 F.3d at 809 (holding district court erred in assuming "automatic" conflict of interest merely because insurer and administrator were same entity).
Ms. Strasser contends that a fact specific inquiry in the instant case would reveal procedural irregularities in UNUM's appeals process warranting a more stringent review than the traditional abuse of discretion standard — if not the de novo review of the Armstrong court, then the "sliding scale" review utilized by the Eighth Circuit in Woo v. Deluxe Corp., 144 F.3d 1157, 1160-61 (8th Cir. 1998). To obtain the less deferential review utilized in Woo, Ms. Strasser must present material, probative evidence demonstrating that "(1) a palpable conflict of interest or a serious procedural irregularity existed, which (2) caused a serious breach of the plan administrator's fiduciary duty to her." Woo, 144 F.3d at 1160-61 (citing Buttram v. Central States, S.E. S.W. Areas Health Welfare Fund, 76 F.3d 896, 900 (8th Cir. 1996). With respect to the second part of this requirement Ms. Strasser must only show that the conflict or procedural irregularity has "some connection to the substantive decision reached." Woo, 144 F.3d 1161 (quoting Buttram, 76 F.3d at 901).
UNUM contends that Ms. Strasser has failed to establish a "palpable conflict of interest" sufficient to warrant a heightened standard of review. With regard to the procedural irregularities, UNUM points out that it offered to review any additional materials submitted by Ms. Strasser but she declined the offer.
The Court finds Ms. Strasser's decline of UNUM's offer to be a reasonable response given UNUM failed to properly adhere to its appeals process up until that point.
Having said all this, the Court finds that, after thoroughly reviewing the parties briefs and the record, even under the most stringent standard of review, UNUM's denial of Ms. Strasser's claim was appropriate. Accordingly, the Court will assume without deciding that the proper standard of review is de novo.
Prior to reaching the merits of Ms. Strasser's claim, however, the Court must determine how to handle the additional evidence not originally submitted to UNUM. The Eighth Circuit has held that the ability of a district court to review additional evidence not before the plan administrator when making its decision "is ruled out on deferential review" and is discouraged when conducting a de novo review. Brown v. Seitz Foods, Inc. Disability Benefit Plan, 140 F.3d 1198, 1200-01 (8th Cir. 1998) (quotations omitted). This is to "ensure expeditious judicial review of ERISA benefit decisions and to keep district courts from becoming substitute plan administrators." Id. at 1200-01; see also Cash v. Wal-Mart Group Health Plan, 107 F.3d 637, 641-42 (8th Cir. 1997) (finding review under the deferential standard is limited to evidence that was before the Committee (quotations omitted); Collins v. Central States Southeast and Southwest Areas Health Welfare Fund, 18 F.3d 556, 560 (8th Cir. 1991) (finding "[i]n deciding whether the Trustees' denial of benefits was arbitrary or capricious, we limit our review to the evidence that was before the Trustees"); and Donatelli v. Home Ins. Co., 992 F.2d 763, 765 (8th Cir. 1993). Because in this instance, the additional evidence offered by Ms. Strasser does not warrant a different result from that reached by UNUM, the Court will assume without deciding that it may appropriately consider additional evidence in its review of Ms. Strasser's claim.
III. Review of UNUM's Denial of Benefits
Ms. Strasser appeals UNUM's denial of AD D benefits for the death of her son, Shon Houdek. She poses three challenges to UNUM's denial of benefits: (1) UNUM's investigation of Mr. Houdek's death was inadequate; (2) UNUM failed to apply policy language concerning the exclusion; and (3) a fair and full internal review was not provided since Ms. Strasser was not given the opportunity to submit additional information in support of her claim. Ms. Strasser's third challenge is alleviated by this Court's de novo review of her claim and its consideration of additional evidence. Her first and second challenges are interrelated and will be dealt with in that vein.
Ms. Strasser maintains that UNUM failed to duly investigate the cause of her son's death. Specifically, she contends that UNUM improperly focused on her son's blood alcohol level and did not consider "any [other] reasonable explanations" for his car leaving the highway.
The scope of Ms. Mowatt's investigation must be viewed in the light of the policy's "crime exclusion" clause which, as stated earlier, reads as follows:
Your plan does not cover any accidental losses caused by, contributed to by, or resulting from:
An attempt to commit or commission of a crime under state or federal law.
The crime exclusion, by its own terms, precludes coverage for Mr. Houdek's death if it is was "caused by, contributed to by, or resulted from" criminal behavior. It is undisputed that Mr. Houdek was driving while intoxicated as defined by Iowa law. Driving while intoxicated is a crime that would appear to fall squarely within the policy's exclusion.
Ms. Strasser contends however, that UNUM misapplied the crime exclusion. Specifically, she argues that a causal link must be shown between the criminal conduct and resulting death, and Ms. Mowatt failed to establish this link when she failed to investigate whether her son's criminal behavior — driving while intoxicated — was the cause of his death. This an extremely tenuous argument to make. In essence, Ms. Strasser is requesting that UNUM ignore commonly understood ramifications of driving with a blood alcohol level that is nearly twice the legal limit, and instead carry out an investigation in an effort to disprove other possible scenarios for her son's death, of which there are no outward indicators, in order to discern whether Mr. Houdek's intoxicated state actually caused or contributed to his death.
The understanding that driving while intoxicated could result in death or serious bodily injury is evident from the vast majority of other courts which have upheld the denial of benefits for injuries or death due to motor vehicle accidents where the driver was intoxicated. For instance, in Cozzie v. Metropolitan Life Ins. Co., 140 F.3d 1104 (7th Cir. 1998), the Seventh Circuit affirmed the denial of a claim for AD D benefits under similar circumstances. There Mr. Cozzie was killed in a car accident. According to investigators, Mr. Cozzie's vehicle was found overturned in a field, where it had come to a rest, after missing a curve in the road, striking an embankment and rolling over three times. Mr. Cozzie had a blood alcohol level of .252%. This amount is more than 2+ times the legal limit under Illinois law at the time of the accident. . . . There were no witnesses to the accident and no apparent cause other than Mr. Cozzie's impaired condition. Id. at 1106. The claims fiduciary in Cozzie defined the term "accident" (which was not defined in the policy) in terms of "reasonable foreseeability" and concluded that it was reasonably foreseeable that Mr. Cozzie "would suffer a fatal injury if he got behind the wheel of an automobile in such a state of inebriation." Id. at 1108. The court of appeals upheld that conclusion, noting, "given the amount of alcohol ingested here and the exclusion of any other cause for the accident, we cannot say that it was arbitrary and capricious for MetLife to determine that this particular vehicular death was no accident." Id. at 1111. The Cozzie court concluded that "a death that occurs as a result of driving while intoxicated, although perhaps unintentional, is not an `accident' because that result is reasonably foreseeable." Id. Similar reasoning has been applied by numerous other federal courts. Smith v. Life Ins. Co. of N. America, 872 F. Supp. 482, 484-85 (W.D.Tenn. 1994) (finding "it is clear that decedent's voluntary consumption of alcohol resulting in his blood alcohol level of .23, was at least a partial cause of the collision. Thus, the collision did not occur solely by accidental means as required by the policy."); Cates v. Metropolitan Life Ins. Co., 14 F. Supp.2d 1024 (E.D.Tenn. 1996) (holding "[i]t is neither unreasonable nor irrational in light of the Plan's provisions for Metropolitan to conclude `the act of driving while [intoxicated at BAC 00.18] rendered the infliction of serous [sic] injury or death reasonably foreseeable and hence, not accidental as contemplated by the [P]lan.'") (brackets in original); Fowler v. Metropolitan Life Ins. Co., 938 F. Supp. 476, 480 (W.D.Tenn. 1996) (finding "the hazards of drinking and driving are widely known and widely publicized. It is clearly foreseeable that driving while intoxicated may result in death or bodily harm. As the decedent should have foreseen the consequences of driving while intoxicated, Met Life's determination that his death was not accidental was reasonable."); Schultz v. Metropolitan Life Ins. Co., 994 F. Supp. 1419, 1422 (M.D.Fla. 1997) (finding "[t]he horrors associated with drinking and driving are highly publicized and well known to the public. . . . Mr. Rector knew, or should have known, that he was risking his life in a real and measurable way by driving while intoxicated. Any other expectation would have been unreasonable. Consequently, Defendant did not act arbitrarily and capriciously in denying Benefits under the Plan to Plaintiff."); but see Bruce v. Nat. Serv. Ind., Inc., 74 F. Supp.2d 1272 (N.D.Ga. 1999) (noting first that "[a] reasonable person would have foreseen that driving with a blood alcohol level of .22 grams percent was highly likely to result in injury or death," id. at 1276, the court ultimately held that "[d]eath as a result of a car wreck is the quintessential accident under general understanding of that term," and therefore, concluded that "[i]t is arbitrary and capricious for an insurer to deny a claim based upon an interpretation of `accident' that is not stated in the policy and that is contrary to the expectations of the ordinary insured." Id. at 1279).
In an attempt to bolster her argument that there is no causal link between Mr. Houdek's death and his intoxicated state, Ms. Strasser offers the affidavit of Jeff Smith, a friend of her son's who was with Mr. Houdek throughout the day and night, up until ten minutes prior to his death. A review of Mr. Smith's affidavit does not eradicate the likelihood that intoxication caused or contributed to Mr. Houdek's death. Indeed, it has quite the opposite effect. Mr. Smith testifies that Mr. Houdek began drinking before an afternoon football game. He then drank after the game at a tail-gate party and continued to drink at a bar after leaving the tail-gate. The two men then went to another bar where Mr. Houdek ordered another drink which he did not consume. Nowhere does Mr. Smith state precisely how many beers Mr. Houdek consumed, or even estimate how many beers he had through the course of the day. Ms. Strasser's reliance on Mr. Smith's affidavit appears to be based on Mr. Smith's impression that Mr. Houdek was not impaired when he left Mr. Smith at 1:30 a.m. From this, Ms. Strasser extrapolates that Mr. Houdek could have simply been tired and fell asleep at the wheel causing him to veer off the road. While it is true that absent alcohol, the driver can be inadvertently distracted or fall asleep at the wheel on occasion, the Court agrees that alcohol cannot be so neatly excised from the equation.
Ms. Strasser's argument is falsely premised on the presumption that were there intervening causes for her son's loss of control of his vehicle, such as those posited in her brief — swerving to miss a deer, looking for something in his vehicle, or falling asleep at the wheel — those causes could be neatly dissected from his intoxicated state such that an investigator could render a decision that swerving to miss a deer, for example, was the cause of Mr. Houdek's loss of control of his vehicle and his intoxication played no role. Even were the Court to accept the supposition that there was an alternate intervening cause for Mr. Houdek's accident, the suggestion that his blood alcohol level did not cause or contribute to the accident simply has no basis in the record.
Here the record reveals that there were no other cars involved in the accident, there were no other passengers in the vehicle, there were empty beer cans in the vehicle, and the investigating officer smelled ether in the vehicle when he arrived at the scene. Most importantly a toxicology report puts Mr. Houdek's blood alcohol level at .194 at the time of the accident. Given these facts, the Court need not hypothesize about other possible reasons for distraction or fatigue. Mr. Houdek consumed a large amount of a depressant, alcohol, and then attempted to drive. While he could have been fatigued for other reasons as well, the alcohol was most certainly a contributing factor which is all the policy requires.
IV. Conclusion
Because, the circumstances surrounding Ms. Strasser's son's death fall squarely within the crime exclusion of the UNUM benefit's policy, UNUM's denial of benefits must be affirmed.
ORDER
In accordance with the opinion filed herewith, it is ORDERED:
Plaintiff's Appeal of Defendant UNUM's Denial of Benefits is DENIED.