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Howell v. Liberty Life Assurance Co. of Boston

United States District Court, D. Colorado

September 25, 2019




         This matter is before the Court on Defendant Liberty Life Assurance Company of Boston’s Motion for Summary Judgment or, in the Alternative, Motion for Judgment on the Record (Doc. # 57) and Plaintiff’s Motion for Summary Judgment Pursuant to Fed.R.Civ.P. 56 (Doc. # 59). Both motions have been fully briefed. (Doc. ## 61, 62, 65, 73, 76.) Based on the following reasons, the Court grants Defendant’s Motion and denies Plaintiff’s Motion.

         I. BACKGROUND

         This life insurance dispute arises out of a motorcycle collision that resulted in the death of Plaintiff Wanika Howell’s son, Joel McClain (“Decedent”). On December 13, 2015, Decedent was operating a motorcycle headed eastbound on Sunrise Highway in Merrick, New York. (Doc. # 24-1 at 45.) As Decedent approached the intersection of Sunrise Highway and Hewlett Avenue, a Lexus SUV traveling westbound on Sunrise Highway began to make a left turn onto Hewlett Avenue. Decedent collided with the SUV at a right angle and sustained fatal injuries as a result.

         Witnesses described Decedent traveling at a high rate of speed immediately before the collision. See, e.g., (id. at 63). Additionally, Decedent did not have a valid license to operate a motorcycle, and the registration plate displayed on the motorcycle had been issued for a different vehicle. After investigating the incident, Detective Gary T. Ferrucci concluded, inter alia, that “[o]peration of this vehicle by [Decedent] [was] neither reasonable nor prudent . . . .” (Id. at 48.) Detective Ferrucci later stated that Decedent would have been charged with reckless driving if he had survived the collision. (Id. at 6.)

         At the time of the collision, Decedent was insured as Plaintiff’s dependent under a Group Life Insurance Policy (“the Policy”), which Plaintiff had purchased from Defendant through her employer’s Employee Retirement Income Security Act (“ERISA”) welfare plan. See 29 U.S.C. § 1001, et seq. Defendant was the claims administrator, and pursuant to the terms of the Policy, Defendant had “the authority, in its sole discretion, to construe the terms of [the Policy] and to determine benefit eligibility . . . .” (Doc. # 24 at 51.)

         The Policy offered both life and accidental death and dismemberment (“AD&D”) benefits. Plaintiff filed claims for both types of benefits, and Defendant paid Plaintiff’s life insurance claim in full. (Doc. # 24-1 at 132.) However, Defendant denied Plaintiff’s claim for AD&D benefits.

         The Policy provides AD&D benefits when a covered dependent “suffers a loss solely as the result of an accidental injury that occurs while covered, ” but various exclusions may preclude coverage if they apply to a claim. (Doc. # 24 at 31.) Relevant here, the Policy indicates that “[n]o benefits are payable for any loss that is contributed to or caused by . . . committing or attempting to commit a felony or misdemeanor . . . .” (Id. at 46.) After conducting an investigation, Defendant determined that the felony/misdemeanor exclusion applied to Plaintiff’s claim because Decedent was driving recklessly at the time of the collision, which is a misdemeanor under New York law.

         Plaintiff subsequently appealed the denial of AD&D benefits. However, on September 5, 2017, Defendant informed Plaintiff that it had considered Plaintiff’s appeal and determined that the denial would be maintained. (Id. at 12.) Defendant also informed Plaintiff of her right to file a civil action challenging the adverse benefit determination under section 502(a) of ERISA. (Id. at 15.) This lawsuit followed.


         When both parties move for summary judgment in an ERISA case, “summary judgment is merely a vehicle for deciding the case; the factual determination of eligibility for benefits is decided solely on the administrative record, and the non-moving party is not entitled to the usual inferences in its favor.” LaAsmar v. Phelps Dodge Corp. Life, Accidental Death & Dismemberment and Dependent Life Ins. Plan, 605 F.3d 789, 796 (10th Cir. 2010) (internal quotation marks and citation omitted). As a preliminary matter, however, the Court must determine the appropriate standard to be applied to Defendant’s decision to deny benefits. Id.

         Where, as here, a “benefit plan gives the administrator or fiduciary discretionary authority to determine eligibility for benefits or to construe the terms of the plan, ” the decision is subject to an arbitrary and capricious standard of review.[1] Dardick v. Unum Life Ins. Co. of Am., 739 Fed.Appx. 481, 485 (10th Cir. 2018) (quoting DeGrado v. Jefferson Pilot Fin. Ins. Co., 451 F.3d 1161, 1167 (10th Cir. 2006)).

         Under the arbitrary and capricious standard, the administrator’s decision need not be the only logical one or the best one; the decision will be upheld so long as it is “grounded on any reasonable basis.” Kimber v. Thiokol Corp., 196 F.3d 1092, 1098 (10th Cir. 1999). Thus, reviewing courts “need only assure that the administrator’s decision falls somewhere on a continuum of reasonableness-even if on the low end.” Nance v. Sun Life Assurance Co. of Canada, 294 F.3d 1263, 1269 (10th Cir. 2002). To determine if a decision falls somewhere on a continuum of reasonableness, courts look for “‘substantial evidence’ in the record to support the administrator’s conclusion, meaning ‘more than a scintilla’ of evidence ‘that a reasonable mind could accept as sufficient to support a conclusion.’” Eugene S. v. Horizon Blue Cross Blue Shield of N.J., 663 F.3d 1124, 1134 (10th Cir. 2011) (citation omitted).

         However, “[i]n cases such as this one, where the same entity serves as the administrator and payor, an inherent, dual-role conflict of interest exists.” Loughray v. Hartford Grp. Life Ins. Co., 366 Fed.Appx. 913, 923 (10th Cir. 2010) (citing Metro. Life Ins. Co. v. Glenn, 554 U.S. 105, 108 (2008)). Nevertheless, “[t]he existence of a dual-role conflict does not alter the standard of review, but [courts] weigh the conflict as one of many case-specific factors in determining whether the administrator's decision was an abuse of discretion.” Id. (emphasis added) (citing Glenn, 554 U.S. at 115–16; Holcomb v. Unum Life Ins. Co. of Am., 578 F.3d 1187, 1192 (10th ...

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