In Arruda v. Zurich Am. Ins. Co., 951 F.3d 12, 13 (1st Cir. 2020), the First Circuit held that a claims administrator's decision to deny accidental death and dismemberment benefits was not an abuse of discretion where substantial evidence in the record indicated that the participant's pre-existing medical condition caused and/or contributed to the motor vehicle accident which led to his death.

The now-deceased Joseph Arruda ("decedent") was a covered participant in an ERISA-governed Plan established by his former employer, which provided basic life and accidental death and dismemberment ("AD&D") insurance benefits. The decedent's wife, Denise Arruda ("Arruda"), was the designated beneficiary for any death benefits.

On May 22, 2014, the decedent was driving to work when his car crossed all lanes of traffic, collided with an oncoming car, and rolled over. Decedent briefly survived the accident, but succumbed to his significant injuries and was pronounced dead at the scene.

Arruda submitted a claim for AD&D benefits to Zurich American Life Insurance Company ("Zurich"), the insurer and claims administrator for the Plan with discretionary authority "to determine eligibility for benefits and to construe the terms of the plan."

The Plan provided AD&D benefits "[i]f an Insured suffers a loss of life as a result of a Covered Injury." The Plan defined Covered Injury to mean "an Injury directly caused by accidental means which is independent of all other causes." The Plan, however, expressly excluded a Covered Loss that "is caused by, contributed to, or results from . . . illness or disease, regardless of how contracted, medical or surgical treatment of illness or disease; or complications following the surgical treatment of illness or disease . . . ."

Zurich obtained Decedent's medical records, which revealed that Decedent had a medical history related to heart disease, as well as several other conditions. About four months prior to the accident, the decedent had an implantable cardioverter defibrillator ("ICD") placed in his chest to monitor his heart rate and rhythm. The Chief Medical Examiner's report concluded that the primary cause of death was hypertensive heart disease, with contributing factors of an upper cervical spine fracture due to blunt impact. The death certificate also listed the primary cause of death as "hypertensive heart disease." The State Police report concluded that the decedent "had suffered a catastrophic medical event which caused him to be unable to control his vehicle."

Two independent medical doctors retained by Zurich reviewed the records and concluded that the decedent's heart condition caused or contributed to his losing control of his vehicle and the fatal crash.

Based on all this information, Zurich denied Arruda's claim stating, first, that the decedent's death was not "independent of all other causes," and second, that the death was excluded from coverage because it was "caused by, contributed to, or results from" an "illness or disease."

Arruda submitted an appeal and the opinion of her own medical expert that the decedent did not experience "a natural death at the wheel" as he was briefly alive after the accident; the decedent's death was due to neck injuries and blunt force trauma; the "exact reason [decedent] traveled across several traffic lanes and into the other vehicle is unclear"; and that the ICD "showed no abnormal heart rhythms recorded prior to the collision."

Zurich retained a third independent medical expert who ruled out several other possible causes of decedent's loss of control of the vehicle and opined that the "accident was caused by several possible pre-existing illnesses or diseases, singly or in combination," including, but not limited to, the decedent's "cardiac arrhythmia resulting from pre-existing heart disease."

Arruda filed a lawsuit seeking benefits under 29 U.S.C. 1132 (a)(1)(B). The district court entered summary judgment in Arruda's favor. The First Circuit reversed.

The First Circuit found that evidence and reports in the record "were all consistent that [decedent's] crash was caused, at least in part, or was contributed to by his pre-existing medical conditions." The court further found that the contrary opinions of Arruda's expert did not render Zurich's decision arbitrary or capricious.

Finally, the First Circuit held that Zurich's interpretation of the Plan language was reasonable. While the court noted that other circuits—namely the Fourth and Ninth Circuits—have chosen to adopt a "substantial factor" test to aid their interpretation of whether a pre-existing illness cause or "contributed to" a covered loss under an insurance policy, because the standard of review was for discretionary, the court found the substantial factor test to be "in tension with our circuit law on the abuse of discretion test." In that regard, the court noted that under the abuse of discretion standard of review, the courts do not determine "best reading" of the ERISA plan, but rather whether the administrator's interpretation was reasonable.