In Tommy Dowdy and Sharon Morris-Dowdy v. Metropolitan Life Insurance Company, the U.S. Court of Appeals for the Ninth Circuit held that Tommy Dowdy and his wife were entitled to receive accidental dismemberment benefits under Mrs. Dowdy’s MetLife disability policy she had through her work at Bank of the West. The appellate court remanded the case to the district court for a determination of “the amount of benefits owed.”

It all started in September 2014 when Tommy Dowdy was in a car accident. His left leg was severely injured, almost severing it at the ankle. Attempts to save his leg were unsuccessful due to a wound infection that would not heal. Finally, five months after the accident, the leg was amputated just below the knee.

Mr. Dowdy’s physician wrote a letter to MetLife recounting the loss. The doctor included one line that said, “the loss was contributed to by the diabetes.” Based on that, and really no other evidence, MetLife denied benefits on the grounds that “under the terms of the Plan a loss caused or contributed [to] by an illness or treatment for that illness is excluded by the Plan from payment.”

The Dowdy’s administrative appeal was denied, so they filed an ERISA lawsuit. When the California Federal District Court agreed with MetLife, the Dowdy’s appealed. It was a good move on their part since the Court of Appeals agreed with them and ordered MetLife to pay accidental dismemberment benefits.

Diabetes Did Not “Substantially Contribute” to Mr. Dowdy’s Loss

MetLife first claimed the loss was not even covered by the policy. The Ninth Circuit found that the Dowdy’s were entitled to benefits if the car accident was the “direct and sole cause” of the loss, and if amputation “was a direct result of the accidental injury, independent of other causes.”

After an in depth review of the policy language and Mr. Dowdy’s medical records, the Court held that “the record establishes that diabetes was a factor in the injury. Nonetheless, the factual record does not support a finding that diabetes substantially contributed to Mr. Dowdy’s loss.” Therefore, “coverage should not have been denied on the basis of the Coverage Provision.” The Court’s final decision on this issue was that diabetes was a “complicating factor, but it was not identified as a substantial contributor to the ultimate loss.” Therefore, coverage should not have been denied.

The Illness or Infirmity Exclusion

MetLife then argued that even if there was coverage, the loss was excluded under the “Illness or Infirmity Exclusion” because Mr. Dowdy’s diabetes “caused or contributed to the loss.” The Appellate Court again disagreed with MetLife, finding that exclusion clauses are construed narrowly. For the exclusion to apply, the “illness or infirmity must be substantial.” The Court held that, for the same reasons it determined there was coverage, the exclusion did not apply. Although the wound healing was complicated by the diabetes, the ultimate amputation was “related to the original injury” and the diabetes was not the substantial cause of the loss.

This case was not handled by our office, but we think it may be helpful to those pursuing claims for accidental dismemberment. If you have any questions about this case, or any aspect of your disability claim, feel free to contact one of our disability attorneys at Dell & Schaefer for a free consultation.