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Audrey Y. Sellers v. Zurich American Insurance Company

December 3, 2010


Appeal from the United States District Court for the Eastern District of Wisconsin. No. 08 C 224-Lynn Adelman, Judge.

The opinion of the court was delivered by: Flaum, Circuit Judge.


Before FLAUM, MANION, and TINDER, Circuit Judges.

On November 16, 2006, Anthony Sellers had surgery to remove a broken wire from his knee. Tragically, Mr. Sellers died nine days later from an acute pulmonary embolism with infarct, caused by his immobilization following the operation. The wire that necessitated the November 16 surgery had been inserted over a year earlier during a previous operation to repair Mr. Sellers's patella tendon, which he tore while performing training exercises at work.

At issue in this case, which arises under the Employee Retirement Income Security Act of 1974 ("ERISA"), 29 U.S.C. §§ 1001 et seq., is whether Mr. Sellers's death is covered by the accidental death and dismemberment ("AD&D") insurance policy in his employer's employee welfare benefit plan. The AD&D policy covers accidental deaths occurring within 365 days of the accident. Thus, the question before us is whether Mr. Sellers's death can be traced to an accident that occurred within a year of his death. Zurich American Insurance Company, which issued the AD&D policy, concluded that it could not, and the district court deferred to that determination.

For the following reasons, we affirm the district court's judgment.

I. Background

Mr. Sellers worked at Time Warner Cable Company and participated in Time Warner's ERISA-governed employee welfare benefit plan, which included an AD&D policy. On September 15, 2005, Mr. Sellers tore a tendon in his knee while performing training exercises at work. Mr. Sellers underwent surgery to repair the torn tendon on September 29, 2005. His surgeon, Dr. Rosemary Schultz, inserted a metal wire in Mr. Sellers's knee to assist in the healing process. Prior to the surgery, Dr. Schultz explained that she likely would remove the wire four to six months after surgery.

On April 3, 2006, Mr. Sellers saw Dr. Schultz for a follow-up appointment. Because Mr. Sellers was not having any knee pain at that time, Dr. Schultz decided not to remove the wire until symptoms occurred. Mr. Sellers saw Dr. Schultz for another office visit later that spring, at which time he complained that his knee was swelling. Dr. Schultz recommended that Mr. Sellers undergo surgery to remove the wire after x-rays revealed that it had broken into three pieces. On November 16, 2006, Mr. Sellers had surgery to remove the broken wire. Dr. Schultz's surgical notes stated that the fact that the wire had broken was, "in many degrees, . . . expected." Nine days later, on November 25, 2006, Mr. Sellers died from what an autopsy determined to be acute pulmonary embolism with infarct, due to immobilization following the wire removal.

In March of 2007, Audrey Sellers, Mr. Sellers's widow, submitted a claim for benefits under the AD&D policy to Zurich, the Plan administrator. The accidental death provisions of the policy provide that benefits are due "[i]f injury to a Covered Person results in Loss of Life . . . within 365 days of the accident." The policy defines "injury" as "an accidental bodily injury which is a direct result, independent of all other causes of a hazard set forth in the 'Description of Hazards.' " The policy does not define "accident," or "accidental." Instead, it grants Zurich "discretionary authority to determine eligibility for benefits and to construe the terms of the plan." Expressly excluded from coverage under the policy are deaths caused by "illness[,] . . . sickness, disease, bodily infirmity or medical or surgical treatment thereof, or bacterial or viral infection, regardless of how contracted."

Zurich denied Mrs. Sellers's claim. To the extent that Mr. Sellers's death could be traced to the September 15, 2005 knee injury, Zurich concluded that Mrs. Sellers was not entitled to benefits because the accident occurred more than 365 days before Mr. Sellers's death. Zurich rejected Mrs. Sellers's position that the wire breakage constituted an "accidental bodily injury," reasoning that such medical device failures are not accidents under the policy.

After exhausting her internal appeals, Mrs. Sellers brought suit against Zurich under ERISA, 29 U.S.C. § 1132(a)(1)(B), to recover death benefits. The parties filed cross-motions for summary judgment. The district court found that Zurich had failed to support its conclusion that the break in the wire was not an accident under the policy with adequate findings and reasoning. For that reason, the district court remanded the case to Zurich for a new determination of Mrs. Sellers's claim.

Upon reconsideration, Zurich again denied Mrs. Sellers's claim, concluding that the wire breakage was not an accidental injury under the policy. In reaching that conclusion, Zurich defined the term "accident" as an "unexpected event[ ] of a fortuitous nature." Relying on the statement in Dr. Schultz's notes that "the wire has broken, which in many degrees, is expected," Zurich concluded the wire breakage could not be considered accidental because it was expected. Mrs. Sellers appealed, relying, in part, on our decision in Senkier v. Hartford Life & Acc. Ins. Co., 948 F.2d 1050 (7th Cir. 1991). Mrs. Sellers argued that, under Senkier, if a patient dies as a result of surgery that is necessitated by an accident, their death is accidental. Mrs. Sellers contended that Mr. Sellers underwent the November 2006 surgery because of the wire break-which she argued was an accident-and thus his death should be deemed accidental. Zurich responded by maintaining that the wire break was not an accident.

After Zurich's second denial of Mrs. Sellers's claim, the parties again filed cross-motions for summary judgment in the district court. In an order dated February 19, 2010, the district court granted Zurich's motion for sum-mary judgment. Applying an arbitrary and capricious standard of review, the district court concluded that Zurich's decision denying Mrs. ...

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