Court Interpretations: Accidental Injury vs. Sickness ... - DRI Today

Life, Health and DisabilityCourt InterpretationsBy Robert J. McKennonand Jenny H. WangAccidental Injury vs.Sickness Provisionsin Disability PoliciesIt is unreasonable foran insured to expectthat disability causedby usual, everydayactivities wouldbe covered as anaccidental occurrence.Disputes often arise under disability income insurancepolicies over whether the insured’s disability was causedby a sickness or by an accidental injury. This resultsbecause typically a shorter period of benefits is providedfor disability caused by sickness or illness(e.g., two or three years, maximum), whileadditional benefits are payable for disabilityresulting from an accident or accidentalinjury (e.g., lifetime payments, or untilage 65).Litigation over this issue often arisesin situations where the insured’s disabilityresulted from the everyday activitiesin which he or she was usually engaged,or where there was no particular traumaticor unexpected event that gave rise tothe disability. Under those circumstances,insureds have argued—some successfully—thatin determining whether thedisability was caused by a sickness or accidentalinjury, the court should focus on theresults of the activities engaged in (i.e., theunintended injury or condition), not themeans by which the injury occurred (i.e.,the usual everyday activities).For the most part, courts have interpreted“accident” or “accidental injury” tomean that there exists a temporal relationshipbetween the disabling injury or conditionand some sudden, unexpected, andunintended event. Some illustrative casesare discussed below.Pre-Existing Health Problemand Usual ActivitiesSome courts have held that a disabilityresults from “accidental injury” if an accidentwas a proximate cause of the disability,whether or not it was the sole cause oreven the major cause. It is enough that theaccident “triggered” or set in motion thechain of events that ultimately resulted inthe insured’s total disability. Thus, “thepresence of a pre- existing disease or infirmitywill not relieve the insurer from liability…if the accident sets in progress thechain of events leading to [disability].”McMackin v. Great Am. Reserve Ins. Co., 22Cal. App. 3d 428, 439 (1971).In McMackin, plaintiff, a highway patrolofficer, claimed total disability benefitsunder the accident provision of a policyn Robert J. McKennon and Jenny H. Wang are partners in the Newport Beach, California, office of Barger& Wolen LLP. Mr. McKennon’s practice focuses primarily on insurance bad faith, ERISA, business and securitieslitigation. He is a member of DRI and its Life, Health and Disability Committee. Ms. Wang’s practiceprimarily involves complex business and tort litigation. She has represented national corporations in state,federal and appellate courts.44 n For The Defense n September 2009© 2009 DRI. All rights reserved.

issued by Great American, which providedthat benefits for total disability caused by asickness were payable for a maximum of 24months, while benefits for total disabilitycaused by an accident were payable for life,as long as the total disability continued.In January 1966, McMackin was liftingcartons of citation forms at work whenhe experienced a sharp pain in his backbetween the shoulder blades. He returnedto work on several occasions and finallystopped working altogether several monthslater, when he claimed permanent, totaldisability resulting from the January 1966incident. Great American paid McMackin24 months of benefits under the policy’ssickness provision, and denied his claim forlifetime total disability benefits.The trial court found that McMackin’sdisability was caused by the January 1966incident, and that the incident constitutedan accidental bodily injury, despite the factthat McMackin had an extensive history ofpre- existing medical problems, including alow back sprain in the 1940s, two tail boneinjuries in 1952, one of which resulted inpartial disability, an injured sacroiliac in1962, and a back injury in 1965. The trialcourt based its finding on testimony by Mc-Mackin’s treating physician that the January1966 incident was totally and permanentlydisabling. Id. at 435. In doing so, the courtrejected the opinion of Great American’s expertthat the total disability was caused byMcMackin’s severe anxiety, tension, degenerativearthritis of the spine, and the residualeffects of his prior back injuries. Id.The appellate court upheld the trialcourt’s finding regarding the accidentalnature of McMackin’s disability, statingthat a pre- existing disease or infirmity willnot prevent a determination that a conditionwas the result of an accident, as longas the accident was the proximate cause ofthe disability. Id. at 439.The California Court of Appeal reacheda different result under similar facts inAlessandro v. Massachusetts Casualty Ins.Co., 232 Cal. App. 2d 203 (1965), affirmingthe trial court’s ruling in favor of Alessandro’sdisability insurer, MassachusettsCasualty. Alessandro injured himself whileworking on a refrigerator. At the time ofthe injury, he had been employed for 16years as the owner and operator of a refrigeratorand air conditioning repair business.Alessandro’s work routinely requiredhim to repair equipment located in cornersor places that were difficult to reach.On the date in question, he was repairinga refrigerator that was sunk about one footin the ground. Alessandro bent forward inan awkward position to replace a control.When he tried to straighten up, he experiencednumbness and pain radiating fromhis back to his leg. Alessandro managed todrive himself home, and was bed- riddenfor days and intermittently confined to bedfor the next three months. He was diagnosedwith degenerative intervertebral discdisease of the lumbar spine.Alessandro submitted a claim for benefitsunder a disability policy issued by MassCasualty, which stated that if the insuredsuffered from “accidental bodily injuryresulting in total disability,” benefits wouldbe paid during the continuance of the disability.The policy further stated that if theinsured suffered “sickness resulting in totaldisability,” Mass Casualty would pay benefitsfor a period not to exceed 24 months.Mass Casualty paid Alessandro underthe sickness provision of the policy. Alessandrosued for breach of contract, assertingthat he was entitled to continuingbenefits under the accidental bodily injuryprovision of the policy. The trial courtentered judgment in favor of Mass Casualtyfollowing a bench trial. Alessandroappealed, and the appellate court affirmed.In so holding, the court stated: “No allinclusive definition of the word accidentcan be given. It has been defined as a casualty—somethingout of the usual course ofevents and which happens suddenly andunexpectedly and without design of theperson injured. It includes any event whichtakes place without the foresight or expectationof the person acted upon or affectedby the event.” Id. at 208.The court observed that in Alessandro’scase, there was no evidence of falling, slipping,overexertion, or of any external forcestriking his body. Rather, Alessandro wasdoing his work in the usual way, albeit in anawkward position, but there was nothingoutside the usual course of events that happenedsuddenly and unexpectedly. Id. at209. The court also cited the fact that Alessandrohad a long history of back problems,and that his own doctor testified that theintervertebral disc disease process couldgive rise to the symptoms that renderedAlessandro disabled. Id. at 209.After Alessandro and McMackin, theCalifornia Court of Appeals decided Williamsv. Hartford Accident and IndemnityCo., 158 Cal. App. 3d 229 (1984). Whilenot involving a disability policy, Williams,like Alessandro, is notable for the propositionthat injury resulting from an insured’sIt is enough that theaccident “triggered” or set inmotion the chain of eventsthat ultimately resulted inthe insured’s total disability.usual activities generally will not be consideredan accidental injury. Williams noticeda circle in his field of vision while sitting inhis office. Five days later, his eyes becameirritated when he tried to wear his contactlenses. The next morning, Williamsnoticed that a pie-shaped portion was missingfrom his right eye’s field of vision. Williamswas not in pain, so he decided to takehis usual two-mile jog. He experienced nopain and noticed nothing out of the ordinaryduring his jog.Later that same morning, Williams wasdiagnosed as having a detached retina andwas hospitalized. Despite surgery to try tocorrect the condition, Williams permanentlylost sight in his right eye. His expertwitness opined that although the retinaltear existed prior to the jog, the jog causedadditional tears, making the subsequentcorrective measures more difficult. Williamsthereafter sought benefits under hisHartford accidental death and dismembermentpolicy. Hartford contended that Williams’loss of vision did not result from anaccident. Williams contended that his routinejog constituted an accident, because itset in motion a series of unexpected andunintended events that gave rise to his detachedretina and resulting loss of vision.In spite of the absence of a definition ofaccident, the trial court determined thatWilliams’ injury did not, as a matter of law,For The Defense n September 2009 n 45

Life, Health and Disabilityinvolve an accident, based, in its words,on “the teaching of cases such as Geddes& Smith, Inc. v. St. Paul Mercury IndemnityCo., (1959) 51 Cal. 2d 558 [564]… thatinjury or damage resulting from a series ofimperceptible events that finally culminatein a single tangible harm is not accidental;[but that where] there is a specific eventwhich manifests itself at an identifiableThe court held that thewords “accidental bodilyinjury” were unambiguousbecause they were “wordsof common understanding.”time which caused identifiable harm at thetime it occurred, it may be accidental….”Id. at 232. The trial court thus granted summaryjudgment in favor of Hartford.Williams appealed. The appellate courtheld that Williams’ condition was not causedby an accident, where it was due to his usualactivity of jogging and there was no evidenceof falling, slipping, overexertion, orof an external force striking his body. Thecourt stated that to hold otherwise wouldbe tantamount to reading the term “accident”out of the policy. Id. at 235.The holding in Alessandro is consistentwith the Florida appellate court’s decisionin Pennsylvania Life Ins. Co. v. Aron, 739So. 2d 1171 (1999). There, Aron claimedbenefits under a disability policy basedon the loss of vision in his right eye, whichoccurred about four years after he underwentcataract surgery in that eye. PennLife paid Aron benefits to age 65 under thepolicy’s sickness provision, but Aron contendedthat he was entitled to lifetime benefitsunder the policy’s accident provision.The parties stipulated that the cataractsurgery caused the retina in Aron’s eye todetach, which resulted in blindness. Theparties also stipulated that a detached retinawas a known surgical risk of cataractsurgery and that there was no negligence ormalpractice on the part of the surgeon whoperformed the surgery. Under those facts,46 n For The Defense n September 2009the appellate court reversed the trial court’sgrant of summary judgment in favor ofAron on the accident versus sickness issue,holding that the retinal detachment was notthe result of an accident—a term that wasundefined in the policy. Specifically, thecourt stated, “[i]n the absence of a miscueor mishap during medical treatment, theoccurrence of a known or foreseeable complicationis a sickness rather than an accident.”Id. at 1172 (citations omitted).The appellate court disagreed with thetrial court that “accident” was ambiguousbecause it was undefined in the policy. Id.at 1173. In interpreting that policy term, thecourt used an “ordinary language or manon-the-streetdefinition of accident.” Id.at 1174 (quotations omitted). In so doing,the court stated: “There are known complicationsor risks associated with even themost basic or standard of medical treatments.When such complications arise inthe absence of a medical mishap, the averageperson on the street would normallyattribute the complication to a sicknessrather than to an accident.” Id. at 1174 (citationsomitted).Injury Caused by RepetitiveMicro-TraumasThe courts have also addressed the issueof sickness versus accident in cases dealingwith disabilities resulting from “microtraumas.”These are disabilities resultingfrom a repetitive series of imperceptibletraumas that cause slow degenerativechanges over time. Not surprisingly, heretoo the courts have reached differentresults.Gin v. Pennsylvania Life Ins. Co., 134 Cal.App. 4th 939 (2005), involved a disabilitypolicy that provided total disability benefitsfor “injury,” defined in pertinent part as“accidental bodily injury sustained directlyand independently of disease or bodilyinfirmity, or any other causes.” Id. at 942.Gin claimed benefits under that provisionof the policy, asserting that her disabilitywas caused by an accident, not a sickness.The California Court of Appeals disagreedunder the following facts.In 1994, Gin went to work for UnitedParcel Service as a data entry clerk, enteringpayroll information. Her job requiredher to sit at a computer, and Gin estimatedthat she spent 40 hours per week plus overtimeperforming those duties. In 1996, Ginapplied for benefits under the Penn Lifedisability policy, asserting disability dueto carpal tunnel syndrome. Gin testifiedthat she was working in the UPS accountingoffice when she began to experiencepain in her shoulders, arm, and neck. Shesaid she was typing and that there was noparticular traumatic event that occurredbefore she felt the pain. On her disabilityclaim form, Gin stated that she injured herselfby the repetition of entering data via thekeyboard. Penn Life denied Gin’s claim onthe basis that her disability was not causedby an accidental bodily injury as requiredby the policy. The trial court granted summaryjudgment in favor of Penn Life, findingthat Gin’s disability was not caused byan “accidental bodily injury.”The appellate court affirmed, stating:“[U]nder California case law, a disabilitythat is the culmination of repetitive stressescaused by the insured’s normal, everydayactivities is not the result of an ‘accidentalbodily injury’ and therefore does notfall within the coverage of the policy.” Id.at 575.Gin argued that an event is an accidentif it either causes injury or it is the consequenceof a causative occurrence (typing atwork). She asserted that her disability wascaused by an accident because it was theresult of a series of imperceptible “microtraumas”from repetitive typing that finallyculminated in a tangible harm (carpal tunnelsyndrome).The court rejected Gin’s argument ona number of grounds. In determiningwhether a condition was caused by an accident,the court said it was concerned “[w]ith a series of specific events each of whichmanifested itself at an identifiable time andeach of which caused identifiable harm atthe time it occurred.” Id. at 945 (citationsomitted) (emphasis in original). Moreover,the court reasoned:If, as Gin contends, an event is an “accident”for the purposes of an accidentbenefit policy “if it either causes an injuryor if it is the consequence of a causativeoccurrence,” then it is difficult to imaginewhat would fall outside of the definition.Every event may be considered, insome sense, the “consequence of a causativeoccurrence.” Accepting such a definitionwould effectively remove the word

‘accidental’ from the phrase “accidentalbodily injury.” [I]f it is to be held that anactivity normally engaged in by an insuredbecomes an “accident” becausethe effect thereof, without more, is on agiven occasion extraordinary, the termaccident has, for insurance coveragepurposes at least, no meaning at all.Id. at 946 (citations omitted). The courtstated that typing at a keyboard was anactivity in which Gin normally engaged,and it did not become an accident simplybecause the cumulative effect of a longperiod of typing was the onset of carpaltunnel syndrome. Id. at 946.The Gin court distinguished the GeorgiaSupreme Court’s decision in Provident Lifeand Accident Ins. Co. v. Hallum, 576 S.E.2d849 (2003), primarily due to a discrepancybetween Georgia and California law; specifically,Georgia law did not require “a specificincident that resulted in the insured’scondition” before the disability would bedeemed the result of an “accidental bodilyinjury.” Id. at 946.In Hallum, the Georgia court heldthat Hallum’s carpal tunnel syndrome—brought on by 30 years of voluntary repetitivehand movements in connection withhis occupational activities as an OB/GYN—was the result of an accidental bodily injury.The court reasoned that because the policyin that case used “accidental” to modify“bodily injuries,” the policy “[p]laces thefocus of coverage on the injuries, not themeans that caused the injury. Accordingly,an unexpected physical injury that disablesthe insured is covered as an ‘injury’ under[Hallum’s] policy.” Id. at 851.In an unpublished decision, the UnitedStates District Court for the Southern Districtof Georgia did not follow Hallum. SeeProvident Life and Accident Ins. Co. v. Futch,2008 WL 4724827 (S.D. Ga. Oct. 24, 2008).In Futch, the court held that Futch’s disability—severeosteoarthritis in the right hipthat, according to Futch, was caused by therepetitive occupational trauma of standingfor prolonged periods while performingsurgeries—did not constitute an accidentalbodily injury. The court granted summaryjudgment in Provident’s favor. The courtdistinguished Hallum (even though Hallum’spolicy and Futch’s policy were identicalin all material respects), and foundthat there was no probative evidence thatFutch’s osteoarthritis resulted from a seriesof injuries over an extended period.The reasoning of Hallum was adoptedby the Illinois Court of Appeals, however,in Carney v. The Paul Revere Life Ins. Co.,359 Ill. App. 3d 67 (2005). Paul Revere paidCarney, a cardiovascular surgeon, total disabilitybenefits under the sickness provisionof his policy because he was disableddue to pronator teres syndrome (nervecompression at the elbow, as opposed to thewrist as in carpal tunnel syndrome).When Carney’s sickness benefits wereabout to expire, he sued Paul Reverefor continuing benefits under the accidentprovision of the policy, assertingthat his condition was caused by repetitivetrauma associated with the use of hissurgical instruments in performing hisoccupation.Paul Revere contended that Carney’sdisability was not caused by an “accidentalbodily injury” (those terms were notfurther defined in the policy), because itresulted from his normal, everyday activitiesover a long period of time. The partiesfiled cross- motions for summary judgment,and the trial court ruled in Carney’sfavor.Paul Revere appealed, and the appellatecourt affirmed. The appellate court reasonedthat although the means of Carney’sdisability (his normal, everyday activities asa surgeon) was not accidental, because theresulting injury (pronator teres syndrome)was unexpected, Carney’s disability constitutedan accidental injury. Carney, supraat 80, 82 (“[a]ccidental bodily injury… inthe context of this policy and under Illinoislaw, means bodily injury that was unexpectedbut that could have arisen from aconscious or voluntary act”).In another notable decision involvinga repetitive injury disability, the MichiganSupreme Court in Nehra v. ProvidentLife and Accident Ins. Co., 559 N.W.2d 48(1997), held that disability resulting fromcarpal tunnel syndrome brought on bymany years of work as a dentist did not constitutean “accidental bodily injury” withinthe meaning of a disability policy that didnot further define that term.Provident paid Nehra’s claim under thesickness provision of the policy. When thebenefits were due to expire, Nehra sought tore-characterize his disability as one causedby an accident to qualify for continuingbenefits (the policy had a longer benefitperiod for disability caused by an accidentalbodily injury). Provident disagreed,and Nehra sued. Provident moved for summaryjudgment on the breach of contractclaim, and the trial court granted Provident’smotion. The intermediate appellatecourt reversed, finding that Nehra’s carpaltunnel syndrome was not an accidentalbodily injury.The Michigan Supreme Court thenreversed and reinstated the trial court’sorder granting Provident’s motion for summaryjudgment. The court reasoned theundisputed evidence showed that no singleevent caused Nehra’s disability, andthat Nehra suffered no discrete injury.Even Nehra’s own expert testified that carpaltunnel syndrome was the product ofprolonged repetition of hand movements.The court held that the words “accidentalbodily injury” were unambiguous becausethey were “words of common understanding,”and that, accordingly, they shouldbe given their ordinary meaning. Id. at51. Borrowing from no-fault insurancecases, the court found that the term “accident”involved both temporal and spatialelements (e.g., a single event that is unexpectedand unintended). Id. at 50–51.ConclusionInsurers are well advised to focus the court’sattention on the means by which the injuryor sickness occurred, rather than the resultof the injury (a sudden, unexpected, unintendedevent temporally associated withthe onset of a condition). Even in policieswhere the term “accident” or “accidental”is not further defined and is deemedambiguous such that the reasonable expectationsof the insured arguably become relevantin interpreting the policy, insurersshould argue that it is unreasonable for aninsured to expect that disability caused byhis or her usual, everyday activities—particularlythose engaged in with respect tohis or her occupation—would be coveredas an accidental occurrence.For The Defense n September 2009 n 47