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Murray v. United of Omaha Life Ins. Co.

May 19, 1998

JOSEPHINE MURRAY, APPELLANT IN NO. 96-5685
v.
UNITED OF OMAHA LIFE INSURANCE COMPANY; MUTUAL OF OMAHA INSURANCE COMPANY; AMERICAN HOME ASSURANCE COMPANY; HARTFORD ACCIDENT AND INDEMNITY COMPANY; JOHN HANCOCK MUTUAL LIFE INSURANCE COMPANY; LEGIONNAIRE INSURANCE TRUST PROGRAM; INSURANCE COMPANY OF NORTH AMERICA JOSEPHINE MURRAY
v.
UNITED OF OMAHA LIFE INSURANCE COMPANY; MUTUAL OF OMAHA INSURANCE COMPANY; AMERICAN HOME ASSURANCE COMPANY; HARTFORD ACCIDENT AND INDEMNITY COMPANY; JOHN HANCOCK MUTUAL LIFE INSURANCE COMPANY; LEGIONNAIRE INSURANCE TRUST PROGRAM; INSURANCE COMPANY OF NORTH AMERICA HARTFORD ACCIDENT AND INDEMNITY COMPANY, APPELLANT IN NO. 96-5747 AMERICAN HOME ASSURANCE COMPANY, APPELLANT IN NO. 96-5748 MUTUAL OF OMAHA INSURANCE COMPANY AND UNITED OF OMAHA LIFE INSURANCE COMPANY, APPELLANTS IN NO. 96-5749



Before: Becker, Stapleton, Circuit Judges and Feikens, District Judge.*fn*

The opinion of the court was delivered by: Becker, Chief Circuit Judge.

On Appeal From the United States District Court For the District of New Jersey

(D.C. Civ. No. 94-cv-03150)

Argued: January 21, 1998

Filed May 19, 1998

OPINION OF THE COURT

This appeal arises from a suit on five accidental death benefit (ADB) policies (with the five defendant insurance companies), each of which provides benefits for a death that is accidental and independent of all other causes. The plaintiff, Josephine Murray, is the widow of Arthur Murray who, having been admitted to a hospital for treatment of a serious ailment, died after his condition worsened following an accidental fall which resulted in a fractured hip. A jury found that Mr. Murray's death was within the scope and conditions of the policies, and returned a verdict in favor of the plaintiff. The district court, however, determined that, because Mr. Murray suffered from a number of diseases and medical conditions prior to the accident, his death was not independent of all other causes, and entered judgment as a matter of law in favor of the defendants.

At bottom, this appeal forces us to decide whether, under New Jersey law, a jury could reasonably find that Mr. Murray's death was accidental and independent of all other causes. Unfortunately, New Jersey law is opaque on what is the critical question here: whether a plaintiff can prevail if she can prove (1) that the insured's pre-existing condition or disease, though active and symptomatic, was under

medical control, and that the insured was expected to live a productive life for the foreseeable future (measured in terms of years); and (2) that the accident was the direct, efficient, and predominant cause of his death. Lacking a procedure that would enable us to certify this question to the New Jersey Supreme Court, we are forced to predict how that court would decide the issue. We predict that the court would answer in the affirmative, and hence we conclude that the district court incorrectly interpreted New Jersey law. Because the evidence was sufficient to sustain a verdict under New Jersey law as we interpret it, the order of the district court rendering judgment as a matter of law in favor of the defendants must be vacated. Although the district court's charge to the jury was erroneous under the law as we now predict it, the findings necessarily implied by the jury's verdict under the incorrect instructions make clear that the jury would have reached the same Conclusion under correct instructions, and thus we direct the district court to reinstate the original verdict in plaintiff 's favor.

I. Facts and Procedural History

On February 18, 1992, Mr. Murray, age 71, was admitted to the hospital due to swelling and pain in his foot. While hospitalized, he developed gangrene, and on March 2 his foot was amputated. For several weeks following the surgery, his temperature was high and he remained hospitalized. This fever broke on April 6, and he was scheduled to be discharged on April 11. On April 10, however, his temperature began to rise again, and when it continued to rise on the morning of April 11, the discharge plans were canceled. At approximately 11:45 p.m. on the evening of the 11th, Mr. Murray fell while walking from the bathroom to his hospital bed, resulting in a fractured hip.

Mr. Murray's temperature continued to rise on April 12 and he became gravely ill. Although he was a "high risk" for surgery due to pre-existing diabetic, heart, and liver conditions (described infra), Mr. Murray's attending physician determined that he "[would] be totally incapacitated and probably [would] not heal without surgical intervention" on the broken hip. Mr. Murray's condition apparently stabilized over the subsequent week,

and the hip surgery was performed on April 22. Following that surgery, his condition steadily worsened. He suffered acute respiratory distress, progressive sepsis, acute renal failure, and a cardiac arrest. In addition, he also experienced a left pleural effusion. This condition was caused primarily by heart failure and low protein, and only appeared after the hip fracture. Finally, Mr. Murray required an emergency hemodialysis because of hyperkalemia. He died on May 10, 1992. The death certificate listed the causes of death as renal failure, sepsis, and renal transplant.

A. Mr. Murray's Prior Medical Condition

Prior to his fall, Mr. Murray had been diagnosed with a significant number of medical problems; those from which he suffered at the time of his death are catalogued in the margin.*fn1 He had coronary artery disease, a condition relatively common among older Americans, and suffered intermittently from atrial fibrillation. While Mr. Murray's heart was not fibrillating at the time he came into the hospital, he subsequently developed partial atrial fibrillation after the accident. He also had hypertension, which was elevated on the morning of April 11, prior to the accident. Still, Dr. Scotti, plaintiff 's expert, opined that there was no reason to believe that Mr. Murray was in any imminent danger of an acute heart attack. Moreover, the infarctions noted on his discharge summary, see n.1, supra, occurred after the accident, and, according to evidence adduced at trial, were caused by the fall.

In addition, Mr. Murray suffered from renal disease, which had necessitated two earlier kidney transplants (the first in the 1970s and the second in the 1980s) and required continuous medication to suppress his immune system and to prevent his body from rejecting the transplanted organ. As a result, he had "some immune deficiency." Dr. Scotti testified, however, that Mr. Murray's kidney function was "fine" prior to the accident, and that he did not appear to be in any danger of imminent kidney failure at that time.

Sometime after his second kidney transplant, Mr. Murray developed Diabetes Mellitus. According to Dr. Nasberg, an endocrinologist, this condition was also under control prior to the accident. Additionally, he suffered from peripheral vascular disease (i.e. the obstruction or narrowing of the blood vessels to the legs and feet), which led to the trans- metatarsal amputation of his foot. Dr. Scotti nonetheless testified that "there was no evidence that his foot was a problem" after the amputation. Although Mr. Murray still suffered from peripheral vascular disease after the amputation -- which could have lead to complications if he was to suffer another similar injury -- he did not have any active gangrene or any specific symptoms prior to his fall.

As noted supra, Mr. Murray also suffered from a fever of unknown origin while in the hospital for treatment of his foot. Although the defendant offered testimony at trial that this fever was indicative of pneumonia, and that it was that pneumonia that lead to Mr. Murray's death, Dr. Scotti testified to the contrary. In his opinion, Mr. Murray's clear chest and lack of cough prior to the accident would make the possibility of pneumonia highly unlikely. Furthermore, he had suffered from hepatitis for the fifteen-year period prior to 1992, and Dr. Scotti hypothesized that the most likely cause of the pre-accident fever was chronic active liver disease.

B. Dr. Scotti's Theory

It was not disputed by Dr. Scotti at trial that had Mr. Murray been a perfectly healthy seventy-one year old man at the time of the accident, he would probably not have died as a result thereof. Yet, it was Dr. Scotti's testimony that the accident caused Mr. Murray's death. In sum, Dr. Scotti opined that the hip fracture triggered a"cascade of events" that directly lead to Mr. Murray's death-- and that had it not been for the fracture, Mr. Murray would not have died on April 11.

Briefly put, the "cascade" theory works as follows. According to Dr. Scotti, all of Mr. Murray's pre-existing conditions (heart problems, kidney disease, etc.) were under control at the time he went into the hospital for treatment of his foot. The fall and subsequent hip fracture either aggravated the pre-existing conditions out of their controlled state, or caused new conditions (such as the Non-Q-wave infarction) to arise, which ultimately lead to death. For example, Dr. Scotti testified that the Fat Emboli Syndrome noted on Mr. Murray's discharge summary was specifically caused by the fractured hip.*fn2 It was this condition which most likely caused his temperature to rise significantly after the accident. Moreover, it was Dr. Scotti's opinion that the fall ultimately spurred on Mr. Murray's liver disease (i.e. hepatitis B).

As for Mr. Murray's renal failure, it too appears that the jury could have reasonably inferred from the testimony that this problem also was triggered by the accident. Dr. Scotti testified that "the end stage renal failure was certainly a result of the cascade effect" caused by the fall. Indeed, Dr. Genovese-Stone, defendants' expert at trial, conceded that Mr. Murray was not in kidney failure the day before he fell, that there was nothing in the medical records to indicate that his kidney was about to fail, and that, with his medication, Mr. Murray's kidney condition was under control prior to the fall.

C. Mr. Murray's Insurance and the Litigation Thereon

At the time of Mr. Murray's death, he owned accidental death benefit policies worth various amounts from the five defendant insurance companies.*fn3 Plaintiff Josephine Murray was the named beneficiary under each of these policies, and after Mr. Murray died, she filed claims for benefits pursuant to them. Each of the insurance companies independently reviewed Mrs. Murray's claim, determined that Mr. Murray's death was not accidental, and refused to pay benefits.

On May 10, 1994, Mrs. Murray filed a complaint in Superior Court, Monmouth County, New Jersey, against the insurance companies, who removed the case to the District Court for the District of New Jersey. On September 13, 1996, a jury returned a verdict in Mrs. Murray's favor. After the jury was excused, the district court granted the insurance companies' renewed motion for judgment as a matter of law, and dismissed the complaint with prejudice. Mrs. Murray appeals.*fn4 The insurance companies cross- appeal, contending that the district court erred in charging the jury.

II. The District Court's

The parties have stipulated that Mrs. Murray is entitled to recover benefits under the present ADB policies only if her husband's death "was the result of bodily injury directly from an accident and independent of all other causes."

Company ($80,200.00); American Home Assurance Company ($25,000.00); Hartford Life Insurance Company ($75,000.00); John Hancock Mutual Life Insurance Company ($26,250.00). Mr. Murray also owned accidental death policies from Legionnaire Insurance Trust Program and the Insurance Company of North America. Although these latter two companies were named in the complaint, they settled with Mrs. Murray and are not parties to this appeal.

They also agree that this language must be interpreted according to the law of New Jersey. Sitting in diversity, we must predict how the highest court of New Jersey would rule. See Robertson v. Allied Signal, Inc., 914 F.2d 360, 378 (3d Cir. 1990). We begin by reviewing the district court's interpretation and application of New Jersey's law in this matter.

In its opinion granting judgment as a matter of law to the defendants, the district court read New Jersey law to require a case by case evaluation which takes into account both the mechanism by which death occurs and the "nature and severity of the underlying conditions or diseases." (See Amended Transcript of Trial, Sept. 13, 1996 at 12-13 [hereinafter "Transcript"].) ...


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