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Anderson v. Liberty Mutual Insurance

United States District Court, D. Maine

July 20, 2018

GALE ANDERSON, et al., Plaintiff,



         A beneficiary of an accidental death and dismemberment insurance policy challenges the insurer's decision to deny benefits under the policy. Because the beneficiary's claim is barred for failing to exhaust internal remedies and because the insurer's denial for failure to provide requested documents was reasonable, the Court grants judgment in favor of the insurer.


         A. The Parties

         John R. Anderson (Decedent) was an employee of Bangor Publishing Company or a related entity (BPC) and participated in an employee benefit plan (the Plan). Administrative Record (AR) 1, 53. John Anderson's mother is Nancy Anderson, and his father is Gale Anderson. Compl. ¶¶ 1-2 (ECF No. 1); AR 6-7. Gale Anderson is the sole beneficiary under the Plan. AR 28, 50.

         Liberty Life Assurance Company of Boston (Liberty Life, named in the caption as Liberty Mutual Insurance) issued a group life insurance policy (the Policy) funding life insurance benefits available through the Plan. AR 54-88. Liberty Life also administers claims for life insurance benefits the Plan makes available. AR 64, 71, 82-85. The Plan provides basic life and accidental death and dismemberment (AD&D) benefits to covered employees of BPC. AR 55-57.

         B. The Plan

         Under the Plan, AD&D “benefits are payable when a Covered Employee suffers a loss solely as the result of accidental Injury that occurs while covered.” AR 74. However, AD&D benefits are not payable “for any loss that is contributed to or caused by . . . controlled substances . . . that are voluntarily taken, ingested or injected, unless as prescribed or administered by a Physician.” AR 79. Benefits are also not payable for any loss caused or contributed by “the presence of alcohol in the Covered Person's blood which raises a presumption that the Covered Person was under the influence of alcohol and contributed to the cause of the accident.” Id.

         Under the “Notice and Proof of Claim” provision of the Plan, “Satisfactory Proof of loss must be given to Liberty Life no later than 30 days after the date of loss.” AR 85. “Failure to furnish such proof within [30 days] shall not invalidate or reduce any claim if it was not reasonably possible” to provide proof in that time, but “[s]uch Proof must by furnished as soon as reasonable possible, and in no event, except in the absence of legal capacity of the claimant, later than one year from the time Proof is otherwise required.” Id. Liberty Life also “reserves the right to determine if the Covered Person's Proof of loss is satisfactory, ” id., and possesses “the authority, in its sole discretion, to construe the terms of [the Plan Document] and to determine benefit eligibility.” AR 84.

The “Appeal Process” provision of the Plan states:
Liberty will notify in writing any Covered Person or beneficiary whose claim is denied in whole or part. That written notice will explain the reasons for denial. If the claimant does not agree with the reasons given, he may request an appeal of the claim. To do so, the claimant should write to Liberty within 60 days after the notice of denial was received.

AR 82.

         Under the “Legal Proceedings” provision of the Plan, “Legal actions are contingent upon first having followed the Claims and Appeals procedure outlined in this policy.” AR 84.

         C. The Claim

         On January 30, 2016, John Anderson died while operating a snowmobile when it collided with a tree. AR 29, 48. At the time of his death, the decedent had $45, 000 in basic life coverage and $45, 000 in AD&D coverage under the Plan. AR 25, 50. On February 22, 2016, the decedent's employer sent an “employee proof of death” form, a death certificate, and a beneficiary designation form to Liberty Life. AR 49-52.

         D. The Documents Requests

         On February 25, 2016, Liberty Life sent the beneficiary, Gale Anderson, a letter stating that it “will proceed with our review of the [AD&D] claim submitted by [BPC].” AR 42. Liberty Life also requested certain documents from him to complete its investigation, including a police report, witness statements, a toxicology report, an autopsy report, and a signed authorization. Id. The letter also recited the Plan's AD&D exclusions. AR 42-43.

         On April 1, 2016, Liberty Life sent a second letter requesting the same list of documents set forth in its February 25, 2016 letter. AR 39. On May 4, 2016, Liberty Life sent a third letter, reducing its document requests to the police report, toxicology report, and a signed authorization from Mr. Anderson in order to complete its “investigation of the AD&D Benefits.” AR 36. Liberty Life sent two more letters to Mr. Anderson requesting the same reduced set of documents on June 9, 2016, and July 15, 2016. AR 30, 33.

         On July 27, 2016, Liberty Life paid the beneficiary, Mr. Anderson, $45, 000 through his attorney for basic life insurance benefits. AR 22, 25. In the letter enclosing the payment for the basic life insurance claim, Liberty Life again requested the expanded list of documents it first requested on February 25, 2016 in order to complete its investigation of the AD&D claim. AR 22.

         On August 25, 2016, Liberty Life spoke with the assistant to Mr. Anderson's attorney, who said she saw something come through the other day and that she would send something to Liberty Life. AR 6. On August 29, 2016, Liberty Life left a telephone message with Mr. Anderson's attorney. Id. On August 31, 2016, Mr. Anderson's attorney advised Liberty Life that he had additional information that he would send to Liberty Life by the end of the week. AR 5. Mr. Anderson's attorney said that he thought there was going to be a disagreement on the exclusion for intoxication, and he indicated that he did not agree with the manner in which the measurement was taken. AR 5-6.

         On September 30, 2016 and October 31, 2016, Liberty Life left further telephone messages for Mr. Anderson's attorney. AR 5. Liberty Life sent another letter requesting the documents to Mr. Anderson's attorney on November 2, 2016. AR 18.

         E. The Denial

         On December 5, 2016 Liberty Life sent another letter to Mr. Anderson's attorney requesting the documents. AR 15. In bold text, Liberty Life advised the attorney:

Please note, if these documents have not been received within the next 30 days or by January 05, 2017, the AD&D portion of this claim will be closed due to failure to provide[.]

AR 15.

         On January 11, 2017, Liberty Life sent Mr. Anderson's attorney a letter recounting the series of communications and informing him that no AD&D benefits are payable under the Policy because “the requested documents for the AD&D claim were not provided to Liberty within the Notice and Proof of Loss time frame required under the policy.” AR 10-12. The denial letter also excerpted the “Notice and Proof of Claim” provision, AR 11, and indicated that he “may request a review of this denial by writing to the Liberty representative signing this letter” and “[i]f Liberty does not receive your written request within 60 days of your receipt of this notice, our claim decision will be final, this file will remain closed, and no further review of this claim will be conducted.” AR 12.

         There is no evidence in the record that Mr. Anderson appealed Liberty Life's adverse determination or that Mr. Anderson (or his counsel) ever sent the requested documents to Liberty Life.

         F. ...

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