Carrier Can Deny Widow’s Claim Because Heart Disease Contributed to Crash Victim’s Death

Zurich American Insurance Co. concluded that heart disease killed Joseph Arruda, not the spine fracture he suffered after his vehicle careened across opposite lanes of traffic and collided with an oncoming vehicle.

Zurich denied an accidental death claim filed by Arruda’s widow, asserting that the sales executive’s death was caused or contributed to by a long list of pre-existing health conditions. A federal district court found that the denial was arbitrary and capricious.

But a split panel of the First District Court of Appeals ruled Monday that Zurich acted within its rights.

While the district court had found that the carrier’s decision was not supported by substantial evidence, the 2-1 opinion written by Judge Sandra L. Lynch found that medical records assembled by Zurich’s claims administrator clearly showed Arruda’s medical problems contributed to his death.

The panel’s opinion noted that its holding may not square with decisions by other circuits that determined pre-existing conditions shouldn’t bar coverage unless they were a “substantial factor” in causing death.

Addura met his end on May 22, 2014 while driving on Route 9 toward Amherst, Mass. to attend a work event at the University of Massachusetts. His car crossed the median into the opposing lane, struck another vehicle, hit a curb and rolled several times before coming to rest upright.

A state trooper who responded to the scene ruled out any environmental or mechanical reasons for the crash. He reported that Arruda had suffered “a catastrophic medical event” that caused him to lose control of his car. Witnesses said Arruda was alive briefly after the crash, but lost consciousness before paramedics arrived. An autopsy revealed a fracture to his spine.

Arruda was 57 at the time. Medical records assembled by CS Claims Service revealed that he suffered from numerous health problems, including obesity, hypertension, an enlarged heart, a sedentary lifestyle, depression, anxiety, insomnia, fatigue, bronchitis, kidney stones, and fainting spells. What’s more, a toxicology report showed he had marijuana in his system at the time of the crash.

Arruda’s widow Denise settled a workers’ compensation claim with her husband’s employer, NSTAR Electric and Gas. She also filed a claim with Zurich under the employer-provided accidental death insurance policy.

Mrs. Arruda sued after Zurich denied the claim. She argued that the fact that her husband’s employer had settled his workers’ compensation claim shows that his death was not caused by heart disease.

U.S. District Judge Douglas P. Woodlock in Boston found that Zurich’s argument as to Arruda’s cause of death was “speculative and conclusory.” He also rejected the carrier’s argument that Arruda’s consumption of marijuana had contributed to the crash. Woodlock granted summary judgment in favor of Mrs. Arruda and also ordered Zurich to pay her attorney fees and court costs.

The 5th Circuit majority saw the facts differently. The court said substantial evidence supported the carrier’s conclusion. The decision to deny the claim was not arbitrary or capricious. While Zurich’s medical expert did not state precisely which medical condition killed Arruda, the majority said the doctor did reach a “firm conclusion to a reasonable degree of forensic medical certainty … that some manifestation(s) of Mr. Arruda’s pre-existing conditions caused him to have the accident that killed him.”

The opinion also noted that the Supreme Court had admonished lower courts, when ruling on cases involving insurance plans governed by the Employee Retirement Income Security Act, not “to create a system that is not so complex that administrative costs, or litigation expenses, unduly discourage employers from offering ERISA plans in the first place.”

The court did not address Zurich’s argument that marijuana was a factor in the crash.

Justice Kermit V. Lipez issued a dissenting opinion. He said while Arruda clearly suffered several ailments, there was no evidence that anything other than the blunt impact that fractured his spine caused his death.

“It makes a speculative leap from the proposition that because Mr. Arruda suffered from heart disease over the course of years, the blunt trauma accident which killed him was caused by that pre-existing condition,” Lipez said.