Injury Resulting From Medical Treatment Is Not An "Accident" Under AD&D Policy
SELLERS v. ZURICH AMERICAN INSURANCE CO. (December 3, 2010)
On September 15, 2005, Time Warner Cable employee Anthony Sellers suffered a torn tendon in his knee while at work. His surgeon, Dr. Schultz, repaired the tear and inserted a metal wire in the knee to facilitate Sellers' recovery. The wire was originally scheduled to be removed after several months. Dr. Schultz decided to leave it in, however, because Sellers was experiencing no pain. He eventually removed the wire on November 16, 2006, after Sellers complained of swelling and x-rays showed that the wire had broken into three pieces. Tragically, Sellers died nine days later from acute pulmonary embolism. Anthony's widow Audrey Sellers made a benefits claim under Sellers' accidental death and dismemberment policy, a part of Time Warner's employee welfare benefit plan. The plan provided for accidental death benefits if an "injury" results in death within a year of the "accident." Zurich American Insurance Company, which issued the policy, denied benefits. Its position was that the death occurred more than one year after the accident. It rejected Sellers' position that the wire breakage was an "injury." Sellers brought suit under ERISA. The district court remanded for more expansive findings and rationale on whether the wire breakage was an injury. Zurich again denied the claim. Its rationale was that an accident is an "unexpected event" and that, as evidenced by the Schultz's notes, the wire breakage was expected. On the renewal of the cross-motions for summary judgment, Judge Adelman (E.D. Wis.) granted summary judgment to Zurich. Sellers appeals.
In their opinion, Seventh Circuit Judges Flaum, Manion, and Tinder affirmed. The Court first noted that it was applying an arbitrary and capricious standard of review, because Time Warner's benefit plan gives Zurich discretion to construe policy terms and Zurich based its decision on a construction of the plan's terms. On the merits, the Court found Zurich's construction of the plan arbitrary and capricious because it applied its definition of accident through the eyes of a doctor instead of a person of average intelligence and experience. Nevertheless, the Court affirmed the denial of benefits based upon its decision in Senkier. In that case, the court held that a death that is the result of complications of a standard medical treatment is the result of the underlying cause for the treatment. Here, the wire breakage was not an accident because it was an expected risk of the original surgery. Thus, the accident is the original tear and Sellers' death did not occur within a year.
Michael Rigney practices in the law offices of GVC Ltd. in Chicago. In this blog, he reports on select