Fiffick v. Econ-O-Check Corp.

United States Court of Appeals
Fifth Circuit
F I L E D
IN THE UNITED STATES COURT OF APPEALS January 7, 2004
FOR THE FIFTH CIRCUIT
_______________________ Charles R. Fulbruge III
No. 03-30257 Clerk
_______________________

DAWNE S. FIFFICK,

Plaintiff-Appellant

v.

ECON-O-CHECK CORP., ET AL,

Defendants

AMERICAN BANKERS INSURANCE COMPANY OF FLORIDA,

Defendant-Appellee

--------------------
Appeal from the United States District Court
for the Western District of Louisiana
02-CV-395
--------------------

Before DeMOSS, DENNIS and PRADO, Circuit Judges.

EDWARD C. PRADO, Circuit Judge.*

Appellant Dawne Fiffick appeals from summary judgment

entered in favor of Appellee American Bankers Insurance Company

of Florida, the company that provided accidental death insurance

for her father, Douglas Hardesty. We affirm in part and reverse

and remand in part.

Douglas Hardesty purchased the policy, labeled “Group

*
Pursuant to 5th Cir. R. 47.5, this Court has determined
that this opinion should not be published and is not precedent
except under the limited circumstances set forth in 5th Cir. R.
47.5.4.

1
Accident Insurance,” after it was offered to him as a customer of

Hibernia Bank. By its terms, the policy provided benefits in the

event of bodily injury (including death) caused by an accident.

Additionally, the declaration section of the policy stated, “THIS

IS ACCIDENT ONLY COVERAGE – IT DOES NOT PROVIDE COVERAGE FOR LOSS

FROM SICKNESS.” Nowhere did the policy define “accident.”

The policy also contained two relevant exclusions. The

first excluded coverage for a loss caused by a sickness or a

disease. The second exclusion provided that the policy did not

cover a loss resulting from “the influence of any drug or

narcotic or any other chemical substance other than as prescribed

by a licensed physician.”

Hardesty died in a motel room in Shreveport, Louisiana, on

February 19, 2001. The coroner determined that Hardesty died

from taking a mixture of drugs, or “polypharmacy.” The coroner

found three drugs in Hardesty’s system – Xanax, methadone,1 and

hydrocodone (a prescription narcotic for which Hardesty did not

have a prescription). The Xanax levels in Hardesty’s blood were

particularly elevated, measuring almost two times the therapeutic

dose for the drug.2 This level was significantly higher than the

amount that would have been in a healthy person’s blood if only

1
Hardesty had prescriptions for both Xanax and methadone.
2
The coroner testified that this level was high enough to
have caused Hardesty’s death by itself but that he could not rule
out the other drugs having played a role.

2
the prescribed dose had been taken. But Hardesty was not a

healthy person; as a result of years of alcohol abuse, he

suffered from liver disease. Because of Hardesty’s liver

problems, the coroner could not eliminate either one of the two

possible causes of the elevated Xanax levels: either Hardesty

took an overdose, or his diseased liver was unable to process the

prescribed dose. In either event, the coroner classified

Hardesty’s death as an accident, as opposed to intentional death

or suicide.

American Bankers eventually denied coverage under the

policy. In its denial letter, the company indicated that

Hardesty’s policy had lapsed because he had only paid premiums

through January, 2001.

Fiffick originally sued American Bankers and another

defendant, Econ-o-Check Corporation, in state court. After

removal and discovery, Fiffick dismissed the other defendant from

the suit. Both Fiffick and American Bankers moved for summary

judgment. The district court granted American Bankers’ motion,

determining that the policy was health and accident insurance and

that it did not cover Hardesty’s death. Specifically, the court

concluded that Hardesty’s death was either caused by sickness

(the liver disease) or by taking more Xanax than his doctor had

prescribed. The court ruled that the policy specifically

excluded coverage for both of these possibilities. Fiffick

appeals from this ruling, which we review de novo. Hanks v.

3
Transcon. Gas Pipe Line Corp., 953 F.2d 996, 997 (5th Cir. 1992).

Did the district court properly classify the policy?

Much of the parties’ dispute centers on whether the

insurance policy is considered health and accident insurance or

life insurance under Louisiana law. Fiffick argues that the

policy is individual life insurance. As individual life

insurance, according to Fiffick, the policy cannot condition

benefits on either the insured’s cause of death or his status at

the time of his death.

Louisiana law classifies different kinds of insurance.

Under the current statute, life insurance is defined as:

Insurance on human lives and insurances appertaining
thereto or connected therewith. For the purposes of
this Code, the transacting of life insurance includes
the granting of annuities or survivorship benefits;
additional benefits, including the acceleration of life
or endowment or annuity benefits in advance of the time
they would otherwise be payable, in the event of death
by accident; additional benefits in event of the total
and permanent disability of the insured; and optional
modes of settlement of proceeds.

LA. REV. STAT. ANN. §22:6(1).

In contrast, health and accident insurance is currently

defined as:

Insurance of human beings against bodily injury,
disablement, or death by accident or accidental means,
or the expense thereof, or against disablement, or
expense resulting from sickness or old age, or against
major expenses incurred by an employee benefit plan due
to the illness or injury of a covered employee, or
against major expenses incurred by a health care
provider at financial risk for provision of health care
to persons under an agreement, and every insurance

4
 appertaining thereto...

LA. REV. STAT. ANN. §22:6(2)(a).

The statute in effect when Hardesty died contained one

difference that Fiffick considers critical. Instead of defining

health and accident insurance with an “or” between the accident

and sickness provisions, the earlier statute used the conjunction

“and.” Thus, the relevant definition of health and accident

insurance read: “Insurance against bodily injury, disablement or

death by accident and against disablement resulting from sickness

and every insurance appertaining thereto.” (emphasis added).

In its summary judgment order, the district court quoted the

revised statute’s language. Both parties agree that this was

error. They disagree, however, about the significance of this

error. According to Fiffick, the legislative change from “and”

to “or” altered the meaning of the statute and the classification

of the policy, but American Bankers argues that the change did

not affect the policy’s classification.

Fiffick’s interpretation of the statute is similar to the

interpretation in a now-overruled Louisiana Supreme Court case,

Tabb v. Louisiana Health Services & Indemnity Company, 361 So.2d

862 (La. 1978). In Tabb the court concluded, like Fiffick argues

now, that a hospital and medical care policy was not health and

accident insurance because “[i]t did not insure against injury,

disablement or death.” Id. at 863. The court determined,

5
therefore, that the policy that only covered hospitalization was

a “miscellaneous” one.3 Id.

The Louisiana Supreme Court overruled Tabb in Rudloff v.

Louisiana Health Services & Indemnity Co., 385 So.2d 767, 770

(La. 1980) (on rehearing). In Rudloff, the court concluded that

a hospitalization and medical care policy should, in fact, be

classified as health and accident policy. Id. Although the

court did not expressly address this point, the hospitalization

policy still did not insure against injury, disablement or

death. Rudloff, while not about accidental death and

dismemberment policies, strongly indicates that a policy does not

need to provide all the coverage listed in the older “health and

accident” definition to be classified as health and accident

insurance.

As the district court noted, other cases also support

American Bankers’ position. For example, in Daigle v. Travelers

Insurance Co., 421 So.2d 302 (La. App. 1st Cir. 1982), an

accidental death and dismemberment policy was viewed as a health

and accident policy. Also in Willis v. Willis, 287 So.2d 642,

647 (La. App. 3d Cir. 1974) (per curiam) (on rehearing), the

3
Like health and accident insurance and life insurance,
miscellaneous insurance is another category of insurance under
Louisiana law. It covers insurance for “[a]ny other kind of
loss, damage, or liability properly the subject of insurance and
not within any other kind or kinds of insurance as defined in
this Section, if such insurance is not contrary to law or public
policy.” LA. REV. STAT. ANN. §22:6(14).

6
appeals court concluded that a policy that paid benefits for

accidental death or bodily injury was a health and accident

policy, not a life insurance policy.4

Nevertheless, Fiffick can point to one intermediate

appellate case to assist her. In American Health & Life Ins. Co.

v. Binford, 511 So.2d 1250, 1253 (La. App. 2d Cir. 1987), the

court determined that an accidental death policy that also

provided for lump-sum payments for various accident-related

injuries was properly classified as life insurance. The court

referred to the requirement that the death be accidental as “a

limiting factor,” but then indicated that this limiting factor

did not prevent the policy from being life insurance.5 Id.

Finally, the statutory language supports American Bankers’

interpretation. The life insurance statute refers to

“additional” benefits for accidental death. LA. REV. STAT. ANN.

§22:6(1) Accidental death and dismemberment benefits, however,

were not additional to other benefits in Hardesty’s policy.

Rather, these benefits were the ones contracted for: the policy

4
Incidentally, one of the cases that Fiffick cites for
another point, distinguishes a policy for “Indemnity for Loss of
Life, Limb, Sight or Time Caused by Bodily Injuries Effected
through Accidental Means” from a life insurance policy. Duhon v.
Colonial Life & Acc. Ins. Co., 277 So.2d 234, 235, 237 (La. App.
3d Cir. 1973).

5
Because the issue was the inheritance of the insurance
proceeds, the court did not address whether this limiting factor
was valid.

7
was “[i]nsurance against bodily injury, disablement or death by

accident.” LA. REV. STAT. ANN. §22:6(2)(a).

Further, despite American Health, the Louisiana caselaw

indicates that this policy is considered health and accident

insurance. The Louisiana Supreme Court’s opinion in Rudloff

seems to compel this result, and the other cases support this

conclusion, as well.6 The district court correctly concluded

that the policy was health and accident insurance.

Was Hardesty’s death an accident?

With the issue of policy classification resolved, the

district court ruled that Hardesty’s death was not covered by the

policy because neither of the two possible causes of death would

be covered. The district court determined that if Hardesty’s

death was caused by his diseased liver’s failure to metabolize

the drugs, then the death was caused by illness, not by an

accident. Alternatively, Hardesty’s death was caused by taking

Xanax beyond the prescribed levels. The court concluded that the

policy excluded this cause of death, too. Based on this

6
Fiffick also argues that the district court erred by
refusing to determine whether the policy was individual or group
insurance. Fiffick argues that this distinction is important
because under LA. REV. STAT. ANN. § 22:170(B), an individual life
insurance policy may not base liability on death being “caused in
a certain specified manner.” Fiffick makes no argument, however,
about individual health and accident insurance. As the district
court concluded, this distinction only matters if the policy is
life insurance under Louisiana law. Because the district court
correctly concluded that this policy was health and accident
insurance, the court did not err in not deciding whether the
policy was group or individual insurance.

8
reasoning, the district court granted American Bankers’ summary

judgment motion.

To establish coverage under the insurance policy, Fiffick

must first establish that an “accident” was the predominant cause

of Hardesty’s death.7 See Murphy v. Continental Cas. Co., 269

So. 2d 507, 518 (La. App. 1st Cir. 1972). Courts in Louisiana

have provided several definitions for the term “accident.” The

Louisiana Supreme Court held that the test for an accident “is

whether the average man, under the existing facts and

circumstances, would regard the loss so unforeseen, unexpected,

and extraordinary that he would say it was an accident.”

Schonberg v. New York Life Ins. Co., 235 La. 461, 477, 104 So.2d

171, 177 (La. 1958) (quoting Preferred Accident Ins. Co. v.

Clark, 144 F.2d 165, 167 (10th Cir. 1944)). Louisiana courts

have also defined an accident as “an immediate or traumatic

incident inflicted upon a human body causing injury.” Fruge v.

First Continental Life & Accident Ins. Co., 430 So.2d 1072, 1075

(La. App. 4th Cir. 1983). Examples of deaths that have been held

to be death by “accident” or “accidental means” include

anaphylactic shock from a blood transfusion,8 a ruptured

7
Although the policy limits coverage to injuries resulting
“directly and independently of all other causes” from an
accident, identical policy language has been interpreted as
requiring the accident only to be the “predominant cause” of the
death. See, e.g., Murphy v. Continental Cas. Co., 269 So. 2d
507, 518 (La. App. 1st Cir. 1972).
8
Schonberg, 235 La. at 478, 104 So.2d at 177-78.

9
esophagus from eating a plum (even though the decedent previously

had esophagus problems),9 and a spider bite through which the

decedent received a staph infection.10 Other causes of death

have not been considered accidents, however. For example, a

heart attack – even one allegedly caused by work-related stress –

was determined not to be an accident. Hebert v. Hughes Tool Co.,

539 So.2d 789 (La. App. 3d Cir. 1989). An aneurysm, too, was not

an accident. Fruge v. First Cont’l Life & Accident Ins. Co., 430

So.2d 1072 (La. App. 4th Cir. 1983). The U.S. District Court for

the Eastern District of Louisiana, likewise, held that a heart

attack suffered after working hard was not accident: “The

decedent weighed 300 pounds; he had a history of heart disease;

he worked 10 hours in very hot, cramped conditions, had an

infarction and died ... the result would not seem unexpected nor

unforeseen under the circumstances.” Barnewold v. Life Ins. Co.

of N. Am., 633 F. Supp. 432, 436 (E.D. La. 1986).

Fiffick describes Hardesty’s accident as the unexpected

interaction of prescription medicines. She analogizes Hardesty’s

death to that in Schonberg, placing Hardesty’s death in the line

of cases holding that unexpected reactions to medicines, or

9
Murphy, 269 So. 2d at 518.
10
Carnes v. Continental Cas. Co., 212 So. 2d 441 (La. App.
2d Cir. 1968).

10
medical procedures, are accidents.11 In particular, Fiffick

argues that, according to the coroner, the liver disease caused

an unexpected reaction to the medications and that this

unexpected reaction caused his death. Thus, Fiffick argues that

Hardesty’s death was an accident.

Fiffick further points to the coroner’s testimony that liver

disease alone did not cause Hardesty’s death. The evidence

clearly indicates that Hardesty did not die from liver failure.

According to the coroner, the liver disease only might have

contributed to Hardesty’s possible inability to metabolize Xanax.

An accident that exacerbates an underlying disease, which

then results in death is an accident. See Murphy, 269 So.2d at

518. Courts do not appear to have addressed the situation where

a disease renders an otherwise harmless combination of medicines

toxic. Yet, this sudden toxicity is consistent with the idea of

an accident – an unexpected, unintentional result or a sudden

trauma. It is also consistent with Dodge, which holds that an

allergic reaction to a drug is an accident. Mutual Life Ins. Co.

v. Dodge, 11 F.2d 486 (4th Cir. 1926). Fiffick has presented

evidence that, without taking the medications, Hardesty would not

11
The cases she refers to for this proposition are Schonberg
and two non-Louisiana cases that Schonberg cites, American
National Insurance Co. of Galveston v. Blech, 100 F.2d 48, (4th
Cir. 1938); Mutual Life Insurance Co. of New York v. Dodge, 11
F.2d 486 (4th Cir. 1926). Dodge involves a reaction to
novocaine, and Blech involves shock from an injection. Schonberg,
104 So.2d at 177.

11
have immediately died. We conclude that there is a genuine issue

of fact as to whether Hardesty’s taking of the combination of

drugs prior to his death constitutes an “accident” within the

meaning of the policy, which renders the summary judgment by the

trial court on this question inappropriate.

Assuming without deciding that the “polypharmacy”constitutes

an accident, the burden would shift to American Bankers to prove

that the policy excluded Hardesty’s cause of death. See

Willis,287 So.2d at 645. American Bankers points to two possible

exclusions: illness and taking medications other than as

prescribed.

To establish an illness exclusion, the insurer must prove

that illness was “the predominant cause of death.” Murphy, 269

So. 2d at 518. In other words, once the beneficiary establishes

that the death was an accident, the insurer bears the burden of

showing that “without the injury, death would have occurred when

it did due to illness or disease.” Id. American Bankers has not

produced the kind of evidence that would establish this

exclusion. In fact, the only evidence indicates that Hardesty

did not, in fact, die from liver disease.

Likewise, American Bankers cannot establish that an overdose

was the predominant cause of Hardesty’s death. The coroner

testified that he was unable to determine which cause was more

likely – the diseased liver’s inability to metabolize a normal

dose or an overdose of Xanax. The coroner’s report and deposition

12
are the only causation evidence cited by either party. It

appears that, because American Bankers only relies on the

coroner’s evidence, it has failed to establish that it is

entitled to summary judgment. Yet Fiffick, too, has failed to

establish her entitlement to summary judgment on liability.

Policy Termination

Fiffick also moved for summary judgment on American Bankers’

defense that the policy had terminated before Hardesty died. In

its pleadings, American Bankers presented two explanations for

this termination: first, that Hardesty had failed to pay the

premium and second, that Hardesty closed his account with

Hibernia Bank. The district court denied Fiffick’s motion for

summary judgment on these defenses. We decline to reverse the

district court’s ruling.

Analyzing Fiffick’s motion as if it were American Bankers’,

the district court first concluded that a fact issue prevented it

from finding that the policy terminated for nonpayment. But as

Fiffick points out, American Bankers did not move for summary

judgment on this issue. Only Fiffick’s motion addressed this

defense. Regardless, a fact issue still exists: the claims

administrator’s affidavit, attached as evidence, indicates that

Hardesty’s last payment was on December 3, 2000 and that

subsequent attempts to debit the account failed on January 3,

2001 and February 3, 2001. This evidence is sufficient to defeat

Fiffick’s summary judgment motion. Thus, although the district

13
court might have incorrectly assigned the burden, the end result

– a fact question about termination – remains the same.

Similarly, American Bankers contends that Hardesty’s closure

of his Hibernia bank account terminated his policy. Challenging

this defense, Fiffick argues that under Louisiana law, individual

life insurance policies cannot condition benefits on the

insured’s status at the time of his death. LA. REV. STAT. ANN.

§22:170(B). Based on this statute, Fiffick contends that

Hardesty’s status as an account-holder must be irrelevant.

Section 22:170(B) does not apply to health and accident

insurance, however, and thus the district court properly denied

Fiffick’s motion on this issue. The defenses of non-payment and

eligibility both remain for trial.

AFFIRMED IN PART, REVERSED AND REMANDED IN PART.

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