In the
United States Court of Appeals
For the Seventh Circuit
No. 10-1448
A UDREY Y. S ELLERS,
Plaintiff-Appellant,
v.
Z URICH A MERICAN INSURANCE C OMPANY,
Defendant-Appellee.
Appeal from the United States District Court
for the Eastern District of Wisconsin.
No. 08 C 224—Lynn Adelman, Judge.
A RGUED S EPTEMBER 30, 2010—D ECIDED D ECEMBER 3, 2010
Before F LAUM, M ANION, and T INDER, Circuit Judges.
F LAUM, Circuit Judge. On November 16, 2006,
Anthony Sellers had surgery to remove a broken wire
from his knee. Tragically, Mr. Sellers died nine days
later from an acute pulmonary embolism with infarct,
caused by his immobilization following the operation.
The wire that necessitated the November 16 surgery
had been inserted over a year earlier during a previous
2 No. 10-1448
operation to repair Mr. Sellers’s patella tendon, which
he tore while performing training exercises at work.
At issue in this case, which arises under the Employee
Retirement Income Security Act of 1974 (“ERISA”), 29
U.S.C. §§ 1001 et seq., is whether Mr. Sellers’s death is
covered by the accidental death and dismemberment
(“AD&D”) insurance policy in his employer’s employee
welfare benefit plan. The AD&D policy covers accidental
deaths occurring within 365 days of the accident. Thus,
the question before us is whether Mr. Sellers’s death can
be traced to an accident that occurred within a year of
his death. Zurich American Insurance Company, which
issued the AD&D policy, concluded that it could not,
and the district court deferred to that determination.
For the following reasons, we affirm the district
court’s judgment.
I. Background
Mr. Sellers worked at Time Warner Cable
Company and participated in Time Warner’s ERISA-
governed employee welfare benefit plan, which in-
cluded an AD&D policy. On September 15, 2005,
Mr. Sellers tore a tendon in his knee while performing
training exercises at work. Mr. Sellers underwent
surgery to repair the torn tendon on September 29, 2005.
His surgeon, Dr. Rosemary Schultz, inserted a metal wire
in Mr. Sellers’s knee to assist in the healing process.
Prior to the surgery, Dr. Schultz explained that she likely
would remove the wire four to six months after surgery.
No. 10-1448 3
On April 3, 2006, Mr. Sellers saw Dr. Schultz for a follow-
up appointment. Because Mr. Sellers was not having
any knee pain at that time, Dr. Schultz decided not to
remove the wire until symptoms occurred. Mr. Sellers
saw Dr. Schultz for another office visit later
that spring, at which time he complained that his knee
was swelling. Dr. Schultz recommended that Mr. Sellers
undergo surgery to remove the wire after x-rays
revealed that it had broken into three pieces. On Novem-
ber 16, 2006, Mr. Sellers had surgery to remove the
broken wire. Dr. Schultz’s surgical notes stated that the
fact that the wire had broken was, “in many degrees, . . .
expected.” Nine days later, on November 25, 2006,
Mr. Sellers died from what an autopsy determined to
be acute pulmonary embolism with infarct, due to im-
mobilization following the wire removal.
In March of 2007, Audrey Sellers, Mr. Sellers’s widow,
submitted a claim for benefits under the AD&D policy to
Zurich, the Plan administrator. The accidental death
provisions of the policy provide that benefits are due
“[i]f injury to a Covered Person results in Loss of Life . . .
within 365 days of the accident.” The policy defines
“injury” as “an accidental bodily injury which is a
direct result, independent of all other causes of a hazard
set forth in the ‘Description of Hazards.’ ” The policy
does not define “accident,” or “accidental.” Instead, it
grants Zurich “discretionary authority to determine
eligibility for benefits and to construe the terms of the
plan.” Expressly excluded from coverage under the
policy are deaths caused by “illness[,] . . . sickness,
disease, bodily infirmity or medical or surgical treatment
4 No. 10-1448
thereof, or bacterial or viral infection, regardless of
how contracted.”
Zurich denied Mrs. Sellers’s claim. To the extent that
Mr. Sellers’s death could be traced to the September 15,
2005 knee injury, Zurich concluded that Mrs. Sellers
was not entitled to benefits because the accident occurred
more than 365 days before Mr. Sellers’s death. Zurich
rejected Mrs. Sellers’s position that the wire breakage
constituted an “accidental bodily injury,” reasoning
that such medical device failures are not accidents
under the policy.
After exhausting her internal appeals, Mrs. Sellers
brought suit against Zurich under ERISA, 29 U.S.C.
§ 1132(a)(1)(B), to recover death benefits. The parties
filed cross-motions for summary judgment. The district
court found that Zurich had failed to support its con-
clusion that the break in the wire was not an accident
under the policy with adequate findings and reasoning.
For that reason, the district court remanded the case to
Zurich for a new determination of Mrs. Sellers’s claim.
Upon reconsideration, Zurich again denied Mrs.
Sellers’s claim, concluding that the wire breakage was
not an accidental injury under the policy. In reaching
that conclusion, Zurich defined the term “accident” as an
“unexpected event[ ] of a fortuitous nature.” Relying on
the statement in Dr. Schultz’s notes that “the wire has
broken, which in many degrees, is expected,” Zurich
concluded the wire breakage could not be considered
accidental because it was expected. Mrs. Sellers
appealed, relying, in part, on our decision in Senkier v.
No. 10-1448 5
Hartford Life & Acc. Ins. Co., 948 F.2d 1050 (7th Cir. 1991).
Mrs. Sellers argued that, under Senkier, if a patient dies
as a result of surgery that is necessitated by an accident,
their death is accidental. Mrs. Sellers contended that
Mr. Sellers underwent the November 2006 surgery
because of the wire break—which she argued was an
accident—and thus his death should be deemed acciden-
tal. Zurich responded by maintaining that the wire break
was not an accident.
After Zurich’s second denial of Mrs. Sellers’s claim,
the parties again filed cross-motions for summary judg-
ment in the district court. In an order dated February 19,
2010, the district court granted Zurich’s motion for sum-
mary judgment. Applying an arbitrary and capricious
standard of review, the district court concluded that
Zurich’s decision denying Mrs. Sellers a benefit because
the wire break was expected was reasonable. Mrs. Sellers
timely appealed.
II. Discussion
We review a district court’s decision on cross-motions
for summary judgment without deference, construing
all inferences in favor of the party against whom the
motion under consideration is made. Tegtmeier v.
Midwest Operating Eng’rs Pension Trust Fund, 390 F.3d
1040, 1045 (7th Cir. 2004). Summary judgment is proper
when there is no genuine issue of material fact and
the moving party is entitled to judgment as a matter of
law. Fed. R. Civ. P. 56(c); Anderson v. Liberty Lobby Inc.,
477 U.S. 242, 255 (1986).
6 No. 10-1448
In the context of a denial of benefits under ERISA, the
proper standard of review turns on two factors:
(1) whether the plan gives the plan administrator dis-
cretion to construe policy terms, and (2) the basis for
the decision to deny coverage. Where the plan gives the
plan administrator discretion to construe policy terms,
and the decision to deny coverage is based on an inter-
pretation of the plan, we apply an arbitrary and
capricious standard of review. See Hess v. Reg-Ellen
Machine Tool Corp., 423 F.3d 653, 658 (7th Cir. 2005).
Where either the plan grants no such discretion, or the
denial of benefits determination is based on an inter-
pretation of law, we apply a de novo standard of review.
See id.; Meyer v. Duluth Bldg. Trades Welfare Fund, 299
F.3d 686, 689 (8th Cir. 2002) (“where a plan’s decision
to deny benefits is based on its construction of existing
law, the plan’s interpretation of a controlling principle
of law is reviewed de novo”); Penn v. Howe-Baker Engrs., Inc.,
898 F.2d 1096, 1100 (5th Cir. 1990) (“in contrast to the
great deference we grant the Committee’s interpretations
of the Plan, which involve contract interpretation, we
accord no deference to the Committee’s conclusions
as to the controlling law, which involve statutory inter-
pretation”).
It is undisputed that the Plan gives Zurich discretion
to construe policy terms and to determine eligibility for
benefits. Therefore, the proper standard of review
depends on the basis for Zurich’s denial of Mrs. Sellers’s
claim. As noted above, Zurich based its denial of benefits
decision on its construction of the Plan term “accident.”
That justification is subject to review under an arbitrary
No. 10-1448 7
and capricious standard. In denying Mrs. Sellers’s claim,
Zurich also rejected her position that Senkier compelled
the conclusion that Mr. Sellers’s death was accidental.
We review Zurich’s reading of Senkier de novo.
We begin with Zurich’s conclusion that the wire
break was not an accident under the policy because
Mr. Sellers’s doctor expected it to occur. The question
before us is whether Zurich’s interpretation of the term
“accident,” as used in the Plan, has “rational support in
the record.” Davis v. Unum Life Ins. Co. of Am., 444 F.3d
569, 576 (7th Cir. 2006). Because the Plan is governed
by ERISA, federal common law principles of contract
interpretation apply. Swaback v. American Information
Technologies Corp., 103 F.3d 535, 540 (7th Cir. 1996). Those
principles require that Plan terms be interpreted in “an
ordinary and popular sense, as [they] would [be under-
stood by] a person of average intelligence and experience.”
Cannon v. Wittek Co. Intern., 60 F.3d 1282, 1284 (7th Cir.
1995). Consistent with that rule, we have stated that the
construction of the term “accident” should be left to
“common understanding as revealed in common
speech.” Senkier, 948 F.2d at 1052. See also Cozzie v. Metro-
politan Life Ins. Co., 140 F.3d 1104, 1110 (7th Cir. 1998)
(a result is accidental where “the insured did not believe
that the result would occur,” and that “estimation can
be considered reasonable”) (citing Wickman v. North-
western Nat’l Ins. Co., 908 F.2d 1077, 1088 (1st Cir. 1990));
Santaella v. Metropolitan Life Ins. Co., 123 F.3d 456, 462-
63 (7th Cir. 1997) (in determining whether a certain
result is accidental—meaning unexpected or uninten-
8 No. 10-1448
tional—we consider the result from the point of view of
a reasonable person in the insured’s position).
In light of these principles, we conclude that
Zurich’s decision that the wire break was not an
accident because it was expected was not reasonable.
Zurich interpreted the term “accident” as an event that
Dr. Schultz, a medical professional, would consider to
be “unexpected” or “fortuitous.” Zurich’s construction
of “accident” as “unexpected” is not the problem; we
have found comparable interpretations to be reason-
able. See Cozzie, 140 F.3d at 1109 (finding insurer’s inter-
pretation of the term “accident” as an event that is not
“reasonably foreseeable” to be reasonable). It is Zurich’s
application of that definition—from the point of view of
a doctor, rather than “a person of average intelligence
and experience” in Mr. Sellers’s shoes—that was arbi-
trary. See Senkier, 948 F.2d at 1054 (the proper in-
quiry is whether “the average person would say that
the decedent had died in an accident” or not). By failing
to interpret the Plan as would a person of average intel-
ligence and experience, Zurich acted arbitrarily and
capriciously. See Swaback, 103 F.3d at 540-42 (finding
that ERISA plan administrator acted arbitrarily and
capriciously where it deviated from the plan language
as it would be understood by a person of average intelli-
gence and experience); Dabertin v. HCR Manor Care, Inc.,
373 F.3d 822, 829 (7th Cir. 2004) (ERISA plan administra-
tor’s definition of plan term “defied common sense and
was not in accord with the ordinary and popular
meaning of the term, and therefore was arbitrary and
capricious”).
No. 10-1448 9
Unfortunately for Mrs. Sellers’s position, we neverthe-
less are compelled to affirm by our holding in Senkier.
Zurich argues that the wire breakage was a complication
of the original knee surgery, and thus, under Senkier,
cannot be deemed an accident.1 In Senkier, the insured
was admitted to the hospital because of complications
associated with Crohn’s disease. 948 F.2d at 1051. “A
catheter was inserted in a vein beneath [the insured’s]
1
In denying Mrs. Sellers’s claim, Zurich both relied on Senkier
and concluded that the wire breakage was not an accidental
injury because it was an expected complication of medical
treatment. However, it is not clear that Zurich previously
linked the two, arguing, as it does now, that the wire breakage
was not an accident because it was an injury due to medical
treatment, which cannot be an accident under Senkier. To the
extent that Zurich is raising this argument for the first time,
we nevertheless will address it. “The matter of what questions
may be taken up and resolved for the first time on appeal is
one left primarily to the discretion of the courts of appeals, to
be exercised on the facts of individual cases.” Singleton v. Wulff,
428 U.S. 106, 121 (1976); see also Sprosty v. Buchler, 79 F.3d
635, 645-46 (7th Cir. 1996). We conclude that entertaining
Zurich’s argument is appropriate for a number of reasons.
First, Mrs. Sellers has relied on Senkier throughout this case,
including in her opening brief on appeal. Therefore, that Senkier
would be an issue before this Court comes as no surprise.
Second, the issue has been fully briefed, as Mrs. Sellers had
an opportunity to address Zurich’s interpretation of Senkier
in her reply brief. Third, because we are reviewing the issue
de novo, it is irrelevant that we have no district court or Plan
administrator decision to which to defer.
10 No. 10-1448
clavicle for the purpose of administering nourishment
intravenously,” which is a standard treatment for
Crohn’s. Id. The insured died when the catheter became
detached and punctured her heart, an occurrence that is
considered a standard complication of the treatment. Id.
at 1051, 1053. We concluded that the insured’s death
was not covered by her ERISA-governed AD&D policy,
holding that “a policy of accident insurance does not
reach . . . injuries resulting from medical treatment.” Id. at
1051. Noting that any medical procedure involves “a risk
that the procedure will inflict an injury,” we reasoned that
while that such “injuries are accidental in the sense of
unintended and infrequent[,] . . . they are not ‘accidents’
as the term is used in insurance policies for accidental
injuries.” 948 F.2d at 1051-52. Rather, where an individual
dies as a result of “standard complications of [a]
standard medical treatment[ ]” for an illness, their death
is the result of the underlying illness for which they
were receiving treatment. Id. at 1053.
Both parties contend that, under Senkier, where an
individual dies because of complications associated with
medical treatment for an accident, that accident is the
cause of death. We agree. The reasoning set forth in
Senkier applies equally regardless of whether an indi-
vidual is being treated for an accident or an illness when
a medical mishap leads to injury or death. In either
case, the cause of the injury or death is the underlying
reason for the treatment.
The parties’ dispute centers on whether the wire
break, assuming for the moment that it was the under-
No. 10-1448 11
lying reason for Mr. Sellers’s November 2006 surgery,
constituted an accidental bodily injury. Mrs. Sellers
contends that it did. While we are sympathetic to
Mrs. Sellers’s attempt to avoid the harsh impact of the
policy’s 365-day bar, Senkier requires us to disagree.
That the wire might break was a risk associated with
the original operation, as evidenced by the fact that
Dr. Schultz expected it to break.2 Therefore, to the extent
that the breaking of the wire was an injury, it was a
result of the first surgery. Under Senkier, such “injuries
resulting from medical treatment” are not accidents as
that term is used in AD&D policies. 948 F.2d at 1051-52.
Because the wire break is exactly the type of complica-
tion we discussed in Senkier, it cannot be characterized
as an accident.
The discussion above indicates that, to the extent that
Mr. Sellers’s death can be traced to any accidental
injury, it is to the September 2005 injury. However,
because that injury predated his death by more than 365
days, Mrs. Sellers is not entitled to benefits under the
AD&D policy.
2
Mrs. Sellers argues that the wire break should not be consid-
ered a complication of the original injury, because, by the time
the wire broke, Mr. Sellers’s knee had fully healed and the wire
no longer was treating that injury. But the wire would not have
been implanted in Mr. Sellers’s knee but for the September 2005
accidental knee injury. Therefore, the wire breaking—and the
ensuing second surgery—cannot logically be separated from the
initial operation.
12 No. 10-1448
III. Conclusion
For the foregoing reasons, we A FFIRM the district
court’s judgment.
12-3-10