E.D. Wis. Discusses Split on How to Construe "Directly and Independently of All Other Causes" Language in an ERISA Accidental Death Policy

Per Pedersen v. Union Labor Life Ins. Co., Slip Copy, 2006 WL 3474183 (E.D. Wis. 2006):

Central to the instant motion is whether, in an ERISA accidental death policy, language limiting coverage to injury caused "an accident, directly and independently of all other causes" is ambiguous. The Seventh Circuit took up this issue, albeit indirectly, in Mers v. Marriott Int'l Group Acc. Death and Dismemberment Plan, 144 F.3d 1014 (7th Cir.1998). In that case, a policyholder had died from a heart attack during physical exertion after a blood vessel burst in his brain. Id. at 1017. The policy, which fell under ERISA, defined "injury" as "bodily injury caused by an accident ... and resulting directly and independently of all other causes." Id. at 1018. As this limiting language was in the policy but not in the summary plan description ("SPD"), one issue before the court was whether the insurer was estopped by the terms of the SPD from denying coverage for a death having multiple causes. In finding that the insurer was not thus estopped, the court found that the "directly and independently" language in the policy clarified, rather than contradicted, the SPD. Id. at 1024. The court's rationale implied that the "directly and independently" language was clear, as no discussion was given to any potential ambiguity in interpreting that language.

Other circuits have more squarely interpreted accidental death benefits provisions that limit recovery to injuries caused by accident "directly and independently of all other causes." In the Sixth and Tenth Circuits, such language in an ERISA policy is considered unambiguous and thus precludes recovery unless two criteria are met: (1) the loss results directly from accidental bodily injury; and (2) the loss results independently of all other causes. Pirkheim v. First Unum Life Ins., 229 F.3d 1008, 1010 (10th Cir.2000); Criss v. Hartford Acc. & Indem. Co., No. 91-2092, 1992 WL 113370, at *5-6 (6th Cir. May 28, 1992). The Fourth and Eleventh Circuits, concerned that such a strict interpretation would require the claimant to be in perfect health at the time of injury before his policy would benefit him, have adopted a "middle ground" test under which "a pre-existing infirmity or disease is not to be considered as a cause unless it substantially contributed to the disability or loss." [FN4] Adkins v. Reliance Standard Life Ins. Co., 917 F.2d 794 (4th Cir.1990); Dixon v. Life Ins. Co. of N. Am., 389 F.3d 1179, 1184 (11th Cir.2004). In other words, recovery is barred if a pre-existing condition substantially contributed to the injury.


FN4. The fact that federal circuits have split on how to construe "directly and independently of all other causes" in an accidental death benefits policy does not itself create any meaningful ambiguity (such that the court would then need to consider the parties' reasonable
expectations). The Fourth and Eleventh Circuits adopted the middle-ground test on public policy grounds, not because they found such language ambiguous. Adkins, 917 F.2d at 797; Dixon, 389 F.3d at 1184. The Sixth and Tenth Circuits, as explained above, do not find such language ambiguous.