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Of Serbonian Bogs, Eggshell-Skulled Insureds, and Bad-Faith Insurers

“A gulf profound as that SERBONIAN Bog
Betwixt DAMIATA and mount CASIUS old,
Where Armies whole have sunk:”
John Milton, Paradise Lost, Book II (1667)
 
The Serbonian Bog, supposedly located in lower ancient Egypt near Palestine, was a place from which there was no way of extricating oneself. It became a noted part of Supreme Court jurisprudence in 1934 when Justice Cardozo stated, in his dissent in Landress v. Phoenix Mut. Life Ins. Co., 291 U.S. 491, 54 S. Ct. 461, 78 L. Ed. 934 (1934), that the majority’s opinion to create a distinction between accidental results and accidental means would plunge the branch of the law dealing with accident insurance into a Serbonian Bog.
 
In Landress, a widow sought to recover under two accident insurance policies after her husband suffered a sunstroke and died while playing golf. Justice Stone, speaking for the 8-1 majority (which included such judicial luminaries as Justice McReynolds and Justice Van Devanter), wrote “That an injury was accidental in the understanding of the average man -- that the result was something unforeseen or extraordinary -- is not enough to establish liability under a policy which limits liability to such injuries as are effected by external accidental means.”
 
The policies were payable if the death of the insured was caused by “external, violent and accidental means”. The autopsy showed that the deceased had been in good health and that his death was not caused by any disease or physical infirmity. The majority held that even if the death by sunstroke was by an accidental result, the death was not caused by external and accidental means.
 
Justice Cardozo opined that “The attempted distinction between accidental results and accidental means will plunge this branch of the law into a Serbonian Bog…. When a man has died in such a way that his death is spoken of as an accident, he has died because of an accident, and hence by accidental means…. If there was no accident in the means, there was none in the result, for the two were inseparable…. There was an accident throughout, or there was no accident at all.”
 
The role of the Serbonian Bog in accidental death insurance law was resurrected last month in federal court in the case of Scanlon v. Life Ins. Co. of N. Am., 2009 U.S. Dist. LEXIS 106198 (W.D. Wash. Nov. 13, 2009).
 
In 2003, the plaintiff purchased through her employer a $ 500,000 accidental-death-and-dismemberment insurance policy for her husband. The policy covered bodily injuries that were caused by an accident which happened while an insured was covered by the policy and which, directly and from no other causes, resulted in a covered loss. The policy also excluded losses that resulted from sickness, disease, or bodily or mental infirmity.
 
The husband suffered from heart problems and multiple sclerosis, which made it difficult for him to walk and rendered him prone to falls. Two years after the plaintiff purchased the policy, the husband moved into an assisted-living facility. Although his health was declining at that time, he was still somewhat independent, moving about with the aid of a walker and leg brace, dressing and undressing himself, and showering.
 
Eleven months after moving into the assisted-living facility, the husband was found lying unresponsive on his bathroom floor, and he passed away the next day. The hospital physicians and the county medical examiner all determined that the husband died from a brain injury that occurred when he fell in his bathroom and his head struck the hard tile floor. Although he had suffered from heart problems, these physicians did not attribute his death to a heart attack.
 
The plaintiff filed a claim for benefits, which was denied by claims representative on the basis of a two sentence report from the insurer’s physician, who concluded that the husband had suffered a heart attack and fell after he lost consciousness. The insurer’s physician also concluded that husband’s anticoagulant heart medication contributed to his death. The plaintiff then obtained and forwarded to the insurer a report from a board-certified clinical pathologist who concluded that the husband died from the fall and not a heart attack. The insurer then had a second physician review the claim, and the insurer’s second physician concluded that the husband had died as a result of an accident. In spite of that report by its own physician, the insurer then reaffirmed its denial of the claim, asserting that the husband’s multiple sclerosis and anticoagulant drugs contributed to his fall and his death. The plaintiff then filed her lawsuit, seeking damages for bad-faith breach of the insurance contract and for emotional distress. The insurer in response sought summary judgment, and the plaintiff likewise sought summary judgment.
 
The district court started from the premise that Washington state law required insurance contracts to be read through the eyes of the average person and any ambiguities were to be applied in favor of the insured. The court noted that judges had long struggled with defining what constituted an accident, referring not only to Justice Cardozo’s Serbonian Bog reference in Landress, but to decisions that were more than one-hundred years old. The court found that Washington had adopted the ‘'eggshell-skulled insured” rule.
 
“These cases are directly on point. In each case, an insured party suffered from a condition that made him more vulnerable to the particular injuries his accidents caused. The Washington State Supreme Court distinguished a pre-existing health condition from the direct and proximate cause of a policy holder's injury. In short, Washington State has embraced the "eggshell-skulled insured" rule, requiring an insurance company to "take its policyholder as it found him[.]" See Scales, Man, God and the Serbonian Bog, 86 IOWA L. REV. at 227. Under Plaintiff's theory, Mr. Scanlon, whose medical conditions left him weaker than healthier individuals, fell onto the hard tiles of his bathroom floor, thereby suffering fatal brain injury. Plaintiff concedes that a healthier person might have survived, but argues that Washington law contemplates that Mr. Scanlon might have nonetheless suffered a compensable accident. This Court agrees.”
 
The court thus ruled that the plaintiff would be entitled to recover under the policy if she was able to prove that her husband’s death was caused by the fall.
 
“The insurance policy therefore forecloses many of Defendant's summary-judgment arguments sounding in questions of fact. For example, Defendant argues that the fall was not an accident because Mr. Scanlon "had repeatedly fallen due to balance and gait problems associated with multiple sclerosis," (Def. Resp. 10 (Dkt. No. 75)), and that Mr. Scanlon "would not have died from the subdural hematoma if he was not on the anticoagulant therapy." (Id. 14). These arguments are foreclosed to Defendant as a matter of law. Defendant agreed to provide accident insurance to a man who suffered from particular health conditions. Whether those health conditions rendered him more likely to suffer an accident or more vulnerable to its effects is immaterial. As the State Supreme Court stated in Smith v. Safeco Ins. Co., "The legal inquiry shapes what is a material fact." 78 P.3d at 1277.
 
The court examined and accepted the medical evidence submitted by the plaintiff, while rejecting the insurer’s report from its first physician – a “bald assertion in a two-sentence memorandum report does not rise to the level of evidence.” The court thus granted summary judgment to the plaintiff on her breach of contract claim, “Because Plaintiff has submitted substantial circumstantial evidence tending to show that Mr. Scanlon died from a fall which caused a brain injury, and Defendant has offered nothing to rebut that evidence.” The court then granted summary judgment to the insured on her bad-faith claim, denied the insurer’s motion for summary judgment on the emotional distress claim, and ruled that the plaintiff was entitled to reasonable attorney fees.