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Lloyd v. Federal Insurance Co.

United States District Court, E.D. Tennessee, Knoxville Division

November 10, 2014

Gladys Yarboro Barnette Lloyd, Plaintiff,
v.
Federal Insurance Company, et al., Defendants.

MEMORANDUM OPINION

PAMELA L. REEVES, District Judge.

After her son died, Federal Insurance Company denied Gladys Lloyd's claim for accidental death benefits because they believe Ms. Lloyd's son William Sallee Jr.'s death was caused in whole or in part by his underlying medical conditions-a loss not covered by the policy. Ms. Lloyd argues instead that Mr. Sallee died of a multiple drug interaction or overdose, which she contends is covered by the accidental death policy. She has filed this action under 29 U.S.C. ยง 1132(a)(1)(B) seeking review of the denial. Presently before the Court are the parties' cross-motions for judgment on the pleadings. [R. 42, 44]. The Court has carefully reviewed the parties' pleadings and the administrative record in light of the controlling law. Because Federal's denial of Ms. Lloyd's claim was not arbitrary and capricious, the defendants' motion for judgment on the pleadings will be granted. Ms. Lloyd's motion will be denied.

I. Standard of Review

The parties agree that the appropriate standard of review is the arbitrary and capricious standard-not the de novo standard. The arbitrary and capricious standard is the least demanding form of judicial review of administrative action. When it is possible to offer a reasoned explanation, based on the evidence, for a particular outcome, that outcome is not arbitrary and capricious. Killian v. Healthsource Provident Admn. Inc., 152 F.3d 514, 520 (6th Cir. 1998). Under this standard, the court will uphold the administrator's decision, "if it is the result of a deliberate, principled reasoning process and if it is supported by substantial evidence. The administrator's decision must be rational in light of the plan's provisions." Helfman, 573 F.3d at 392.

The court must accept a plan administrator's rational interpretation of the plan, "even in the face of an equally rational interpretation offered by the participants." Gismondi v. United Technologies Corp., 408 F.3d 295, 298 (6th Cir. 2005), quoting Morgan v. SKF USA Inc., 385 F.3d 989, 992 (6th Cir. 2004). The court's review is limited to the record before the Appeals Committee at the time it made its decision. Wilkins v. Baptist Healthcare Sys. Inc., 150 F.3d 609, 616 (6th Cir. 1998).

While the arbitrary and capricious standard of review is highly deferential, it is not "without some teeth;" the deference must not be abject. McDonald v. Western-Southern Life Ins. Co., 347 F.3d 161, 172 (6th Cir. 2003). The courts are not to "rubber stamp" a plan administrator's decision, but must "review the quantity and quality of the medical evidence on each side." Schwalm v. Guardian Life Ins. Co., 626 F.3d 299, 308 (6th Cir. 2010) (citing Evans v. UnumProvident Corp., 434 F.3d 866, 875 (6th Cir. 2006)).

Finally, courts should be aware of conflicts of interest and "consider it as a factor in determining whether the decision to deny benefits was arbitrary and capricious." Gismondi, 408 F.3d at 298. "[T]here is an actual, readily apparent conflict, not a mere potential for one, when the company or plan administrator is the insurer that ultimately pays the benefits." Id. at 299 (internal punctuation and citation omitted). In this case, such a conflict is undisputed, and will be considered in deciding if the denial of benefits was arbitrary or capricious.

II. Background

William Edgar Sallee Jr. was a 50-year old engineer who worked for the Fluor Corporation. [AR 218]. Mr. Sallee was morbidly obese; he stood 6'3" and weighed 326 pounds. [AR. 1620]. Mr. Sallee also suffered from severe high blood pressure, a "massively enlarged heart, " back pain, dental problems, and possibly sleep apnea. [AR. 1874-77]. In May 2009, Mr. Sallee had an extensive amount of dental work done for which he was prescribed oxycodone. Id. He was also prescribed alprazolam (Xanex) and promethazine. Id.

On May 19, 2009, when Mr. Sallee failed to arrive at work, his employer sent the police to his residence to check on him. [AR. 1619]. They found Mr. Sallee dead in his apartment sitting in his recliner with the television on. [AR. 1618]. His body was in an advanced state of decomposition. [AR. 373]. There was no evidence of external trauma. [AR. 374]. Dr. Stephen Pustilnik, of the Galveston County, Texas Medical Examiner's Office performed an autopsy the following day and determined the cause of death was "multiple drug intoxication." [AR. 373].

At the time of his death, Mr. Sallee had a $1, 000, 000 accidental death policy. Ms. Lloyd was the beneficiary under the policy, and she filed a claim with the defendants in August of 2009. [AR. 134]. Federal first investigated whether Mr. Sallee's death was the result of "drug abuse, " as was noted on the death certificate. Federal's investigator spoke with the detective who was present for the autopsy as well as the medical examiner's staff and determined that Mr. Sallee was not "abusing" his medications as the phrase is commonly understood. [AR. 1422-26].

Federal then referred the claim to Dr. Brent Morgan for a review of the medical evidence. [AR. 878-79]. Dr. Morgan reviewed Dr. Pustilnik's report and found a conversion error. Dr. Pustilnik's report noted that the concentration of alprazolam in the tested sample was 0.36 mg/L when the correct value was 0.036 mg/L-one tenth the amount noted by the report. Dr. Morgan explained that the levels of alprazolam, oxycodone, and promethazine were not "extremely elevated, " and were consistent with someone taking the medications as prescribed; however, Dr. Morgan noted that there was a possibility of post mortem redistribution-where after death blood taken from the heart can contain higher concentrations of drugs than blood taken from elsewhere. Id. Accordingly, one must be careful comparing these samples (if they were taken from the heart) to other post mortem studies involving blood taken from peripheral blood vessels or samples taken from live patients.

Dr. Morgan explained that the drugs in Mr. Sallee's system could "have an additive effect of compromising the respiratory drive." A patient with a history of coronary artery disease and a previous myocardial infarction "could be more susceptible to a cardiac arrhythmia secondary to low oxygen blood concentration brought about by drug induced respiratory depression." Finally, Mr. Sallee was morbidly obese, and it is possible he may have had sleep apnea, which made him "potentially more susceptible to respirator compromise from narcotics." Id.

Federal referred the claim to a second physician-Dr. Paul Hoyer-who concluded that "[t]he cause of death is uncertain although a heart attack is most likely. It is possible but not likely that he died from the combined effects of his medications." [AR. 1543]. Dr. Hoyer noted Mr. Sallee received a physical examination on April 29, 2009 where he "documented severe high blood pressure" and was advised to go to the emergency room. Id. At the emergency room, a chest x-ray showed ...


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