Fegan v. State Mut. Life Assur. Co. of America

• Decision Date: 30 September 1996
• Docket Number: Civil No. 95-053-M.
• Citation: 945 F.Supp. 396
• Parties: Joyce A. FEGAN, Plaintiff, v. STATE MUTUAL LIFE ASSURANCE COMPANY OF AMERICA, Defendant.
• Court: U.S. District Court — District of New Hampshire

Page 396

945 F.Supp. 396

Joyce A. FEGAN, Plaintiff, v. STATE MUTUAL LIFE ASSURANCE COMPANY OF AMERICA, Defendant.

Civil No. 95-053-M.

United States District Court, D. New Hampshire.

September 30, 1996.

ORDER

McAULIFFE, District Judge.

Plaintiff, Joyce A. Fegan, sues defendant, State Mutual Life Assurance Company of America ("State Mutual"), to recover accidental death benefits payable under a group insurance policy covering her husband. Both parties have moved for summary judgment. Fed.R.Civ.P. 56(c). For the reasons discussed below, plaintiff's motion for summary judgment is granted and defendant's motion for summary judgment is denied.

I. STANDARD OF REVIEW

Summary judgment is proper "if pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law." Fed.R.Civ.P. 56(c). A material fact "is one `that might affect the outcome of the suit under the governing law.'" United States v. One Parcel of Real Property with Bldgs., 960 F.2d 200, 204 (1st Cir.1992) (quoting Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 2510, 91 L.Ed.2d 202 (1986)). The moving party has the burden of demonstrating the absence of a genuine issue of material fact for trial. Anderson, 477 U.S. at 256, 106 S.Ct. at 2514. The party opposing the motion must set forth specific facts showing that there remains a genuine issue for trial, demonstrating "some factual disagreement sufficient to deflect brevis disposition." Mesnick v. General Elec. Co., 950 F.2d 816, 822 (1st Cir. 1991), cert. denied, 504 U.S. 985, 112 S.Ct. 2965, 119 L.Ed.2d 586 (1992). That burden is discharged only if the cited disagreement relates to a genuine issue of material fact. Wynne v. Tufts Univ. Sch. of Medicine, 976 F.2d 791, 794 (1st Cir.1992), cert. denied, 507 U.S. 1030, 113 S.Ct. 1845, 123 L.Ed.2d 470 (1993).

II. FACTS

The following facts are undisputed. At the time of his death, plaintiff's late husband, Clayton W. Fegan, was employed by Quebecor Printing (USA), Inc., of Brattleboro, Vermont. Plaintiff, Joyce Fegan, is her late husband's sole beneficiary under a group accident insurance policy issued by State Mutual, covering employees of Quebecor Printing. The policy contained a death benefit, as well as an accidental death and dismemberment benefit. Each benefit amounted to one and a half times the covered employee's annual pay, or, in this case, $36,000. The group insurance is a benefit provided through an employee welfare benefit plan established by Quebecor Printing, and so is governed by the Employee Retirement Income Security Act of 1974 (ERISA), 29 U.S.C. § 1001, et seq.

On August 3, 1993, plaintiff's decedent, while at work, got up from a kneeling position and experienced a pain medial to the right patella. He was unable to bend his right knee, and, due to that knee injury, left work. On August 13, 1993, arthroscopic surgery was performed to repair a torn medial meniscus in his knee. The parties agree that the torn medial meniscus qualified as an "injury" under the terms of the group policy. The parties also agree that arthroscopic surgery was an entirely accepted medical treatment for this type of knee injury, and that it was skillfully performed.

On August 16, 1993, Mr. Fegan was examined by his orthopaedic surgeon, who noted "difficulty" in the right calf. A nursing note written the same day describes Mr. Fegan as complaining of calf pain and running a fever. The orthopaedic surgeon prescribed some medication, physical therapy, and hot soaks. On August 20, 1993, Mr. Fegan told his physical therapist that he had been experiencing right calf pain since the surgery. Three days later he again told the physical therapist that his right calf bothered him, that his calf was swollen, that there was a tightness in his chest, and that he was running a fever. On August 23, 1993, Mr. Fegan called his surgeon's nurse and complained that he was running a fever and that he was experiencing chest pain running to his shoulder. He denied any redness or pain with respect to the treated right knee. The nurse apparently decided that the reported symptoms were unrelated to his knee surgery and suggested that Mr. Fegan contact his primary physician.

Tragically, Mr. Fegan died four days later. He had developed phlebothrombosis, a recognized, though relatively rare complication of arthroscopic surgery, which eventually resulted in the development of fatal bilateral pulmonary emboli. An autopsy report noted the existence of pulmonary infarcts in Mr. Fegan's right lung, which had been clear prior to surgery, and declared the cause of death to be multiple bilateral pulmonary thromboemboli.

The parties have stipulated, for purposes of resolving this benefit eligibility dispute, that the postoperative medical care Mr. Fegan received fell below accepted standards of medical practice, and at least implicitly agree that an acceptable level of care would have prevented Mr. Fegan's death.

The terms of the insurance policy underlying the plan provide for payment of accidental death benefits when: (1) an insured sustains an injury while covered for the benefit; (2) solely as a result of the injury, the insured suffers a specified loss (here, death); and (3) the loss occurs within 90 days of the injury. The policy also contains an exclusion for any loss that "directly or indirectly results from ... physical or mental sickness."

The policy itself does not define either "accidental" or "injury." A few months after Mr. Fegan's death, however, individual certificates of insurance were issued to employees that defined "sickness" as an "illness, disease, complication of pregnancy or normal pregnancy or its termination," and defined "injury" as "a trauma or damage to some part of the body caused solely by accident and not contributed to by any other cause." (See Stipulated Facts No. 9-11.) The parties accept these definitions as being both reflective of the plan's benefit eligibility criteria and applicable to this case.

State Mutual, as insurer of the plan, paid plaintiff the regular death benefits under the policy, but declined to pay the additional "accidental death benefit," citing the "sickness" exclusion and claiming that Mr. Fegan's death was not caused "solely" by the accidental knee injury. Plaintiff sues for the accidental death benefit.

III. DISCUSSION

Currently pending are cross-motions for summary judgment. The parties agree, and the court finds, that there are no disputed issues of material fact and judgment can be entered as a matter of law.

Because the issues in this case arise under ERISA, but are not directly addressed by ERISA, the court must look to "federal common law principles suitable for the governance of pension and employee benefit trusts" in order to resolve the dispute. Senkier v. Hartford Life & Acc. Ins. Co., 948 F.2d 1050, 1051 (7th Cir.1991); see also Wickman v. Northwestern Nat. Ins. Co., 908 F.2d 1077, 1084 (1st Cir.), cert. denied, 498 U.S. 1013, 111 S.Ct. 581, 112 L.Ed.2d 586 (1990). The parties agree that State Mutual's denial of plaintiff's accidental death benefit claim constituted a denial of benefits under an ERISA-regulated employee welfare benefit plan,¹ which in this case is reviewed under a de novo standard, the administrator or fiduciary having not expressly retained the right to construe ambiguous plan terms. Firestone Tire & Rubber Co. v. Bruch, 489 U.S. 101, 115, 109 S.Ct. 948, 956-57, 103 L.Ed.2d 80 (1989).

Resolution of this case turns, then, on whether Mr. Fegan was the victim of an "accident" that caused an "injury," which injury was the "sole cause" of his death, and, if so, whether that cause of death (injury) is nevertheless excluded from coverage under the "sickness" exclusion.

Plaintiff argues that two potentially qualifying accidents occurred. One "accident" consisted of or resulted in the knee injury and, plaintiff says, the knee injury (unquestionably a "trauma or damage to some part of his body caused solely by accident") was sufficiently causally related to death as to constitute the sole cause. (See Plaintiff's Motion for Summary Judgment, at 3-4.) Another "accident" consisted of postoperative medical negligence, and, plaintiff says, the medical negligence itself can be considered the sole cause of death. (See Plaintiff's Motion for Summary Judgment, at 7-9.)

Defendant counters that although it is willing to concede that the knee injury qualified under the policy as an accidental injury, the knee injury was not the sole cause of death, as required by the policy, because the stipulated post-operative medical malpractice was also causally connected to the death, and hence was at least another cause. "The failure to diagnose the phlebothrombosis in the decedent's right leg is causally related to his death." Stipulated Fact No. 46; see also Stipulated Facts Nos. 29-45. Defendant further argues that medical malpractice cannot qualify as an "accident" within the policy's meaning. Moreover, defendant says phlebothrombosis or pulmonary emboli are not "injuries" as those terms are used in the policy. At a minimum, defendant says, those conditions also constitute "illness" or "disease" and, to the extent they caused Mr. Fegan's death, coverage is excluded.

Both parties agree that, with respect to decedent's knee injury, two of the three prerequisites for coverage are met in this case: (1) the knee injury was an accident; and (2) the insured's death occurred within 90 days of that accidental injury. The parties disagree, however, as to the third prerequisite: that death resulted solely from that accidental injury.

Because the insurance policy at issue here also operates as an employee welfare benefit plan, its terms are to be defined or construed in the ERISA context. "[T]erms [under ERISA] must be given their plain...