Life, Health, Disability and ERISA Litigation Group :
Joseph M. Hamilton , co-chair

First Circuit Rules that an ERISA Claim Denial Supported by Substantial Evidence Shall be Upheld
In Arruda v. Zurich American Insurance Company , 951 F.3d 12 (1 st Cir. 2020), a split panel of the First Circuit Court of Appeals ruled in favor of Zurich, in a case involving an ERISA governed accidental death policy, holding Zurich’s conclusion that Arruda’s death was caused, in part, by pre-existing medical conditions was supported by substantial evidence. Since the plan included appropriate discretionary clause language, the court held that Zurich’s denial of benefits was reasonable and not arbitrary and capricious.
On May 22, 2014, Arruda, a 57 year old sales executive, was driving his car on a four lane road on his way to a work appointment. His car veered across all lanes of traffic, struck a car traveling in the opposite direction, hit a curb, rolled over and landed on its wheels on the opposite side of the road. Arruda, briefly alive after the accident, quickly succumbed to his injuries. Arruda was covered by an accidental death policy that excluded coverage for losses “caused by, contributed to, or results from …illness or disease, regardless of how contracted… .” Arruda’s beneficiaries filed a claim for benefits.
The investigation of the claim uncovered significant evidence regarding Arruda’s pre accident medical history. Those records revealed evidence of obesity, hypertension, and hypertrophic cardiomyopathy (heart enlargement with arrhythmias and heart failure). Importantly, the information included details of an event four months before the accident where Arruda felt weak, vomited and fainted. He subsequently underwent surgery and had an implantable cardioverter (“ICD”) inserted. The claim investigation included the results of two medical examiners, who both concluded the CAUSE OF DEATH to be “Hypertensive Heart Disease.” Zurich enlisted the assistance of two independent medical experts to opine on the cause of death. They concluded that Arruda’s death was contributed to by his heart disease. Zurich denied the claim.
Arruda’s beneficiaries appealed and submitted reviews from their own medical expert who opined that the cause of Arruda’s death was “neck injuries due to blunt force trauma in the circumstance of a motor vehicle accident.” The expert did not opine on whether the underlying medical conditions contributed to Arruda’s death. The expert focused on the readings of the ICD device implanted in Arruda that had benign pre accident readings. In response, Zurich enlisted the opinion of another medical expert. The expert reviewed the record and gave detailed findings that Arruda’s death was caused by and contributed to by a multitude of heart conditions and the adverse reactions to medications. The beneficiaries’ expert countered the new findings with an additional rebuttal. After considering all of the evidence, the denial was upheld on appeal.
The District Court found that Zurich’s denial was arbitrary and capricious. Zurich appealed.
The First Circuit reversed and found that Zurich had properly relied on substantial evidence in its denial and therefore it was required to uphold Zurich’s decision.

The Arruda decision should give ERISA claim fiduciaries and administrators confidence that carefully investigated claims bearing the opinions of credible experts should withstand judicial review and be upheld under the deferential standard of review.  
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