1st Circuit reinstates ERISA plan's denial of death benefits.

Byline: Eric T. Berkman

An insurance carrier did not abuse its discretion by attributing the death of an ERISA plan participant in a car crash to a pre-existing condition and denying his widow's claim for accidental death benefits, the 1st U.S. Circuit Court of Appeals has ruled.

Decedent Joseph Arruda suffered from heart disease, cardiac arrhythmia, and a number of other related conditions. Recently treated for a cardiac episode, he was driving to a work event when his car crossed the median, leading to a fatal crash.

Relying on independent medical reviews, an autopsy report, and a crash investigation report theorizing that Arruda's underlying conditions contributed to the accident, defendant Zurich American Insurance Co. ruled that the death was not accidental "independent of all other causes" and thus not covered by the accident policy.

Finding Zurich's denial to be based on "conclusory and speculative" evidence, a U.S. District Court judge ruled that the insurer abused its discretion in denying the claim.

But the 1st Circuit reversed.

"The descriptions in the record before Zurich of the causes that contributed to Mr. Arruda's death were all consistent that his crash was caused, at least in part, or was contributed to by his pre-existing medical conditions," Judge Sandra L. Lynch wrote for the court. "Zurich's conclusion is not undermined because [the plaintiff's medical expert's] opinion differed."

[box type="shadow" align="alignright" width="325px"]Arruda v. Zurich American Insurance Company, Lawyers Weekly No. 01-035-20 (43 pages)

THE ISSUE: Did an insurer abuse its discretion by attributing an ERISA plan participant's death in a car crash to a pre-existing condition and denying his widow's claim for accidental death benefits?

DECISION:No (1st U.S. Circuit Court of Appeals)

LAWYERS: Mala M. Rafik and Sarah E. Burns, of Rosenfeld & Rafik, Boston (plaintiff)

Kristyn M. Kelley, Allen N. David and Jane A. Horne, of Peabody & Arnold, Boston (defense)[/box]

Standard application?

Boston attorney Mala M. Rafik, who represented the plaintiff, declined to comment on the record, as did one of Zurich's attorneys, Allen N. David of Boston.

But Stephen Rosenberg, a Boston attorney who represents plan administrators, described the decision as a "standard application" of the arbitrary-and-capricious standard.

"The ruling paid homage to the idea that while there's a lot of leeway for insurers and administrators, [the standard] is supposed to have some...