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Estate of Richard Paul, Deceased, By Jeffrey Paul, General v. New York Life Insurance Company


August 27, 2012


On appeal from the Superior Court of New Jersey, Law Division, Camden County, Docket No. L-1619-10.

Per curiam.


Argued November 10, 2011

Before Judges Axelrad, Sapp-Peterson and Ostrer.

Plaintiff Jeffrey Paul, decedent Richard Paul's son, appeals from the trial court order granting summary judgment dismissing his complaint in which he sought to recover the accidental death benefits (ADB) payable under an insurance policy issued to Richard*fn1 by defendant New York Life Insurance Company. The motion judge determined that Richard's death was not accidental within the meaning of the policy language precluding recovery of benefits. We affirm.

Richard, at the time of his death, was a nursing home resident. He suffered from a number of chronic medical conditions, including chronic heart failure, chronic obstructive lung disease, and atrial fibrillation. On December 27, 2007, a nurse employed by the nursing home mistakenly gave him another resident's medication. After the error was discovered, Richard was transferred to the intensive care unit of a nearby hospital. His condition quickly deteriorated and he died on January 5, 2008. The death certificate listed the cause of death as lymphoma.

Plaintiff retained the services of Donald J. Corey, M.D., board-certified in internal medicine, who prepared two reports.

In his first report, Dr. Corey expressed the opinion that within a reasonable degree of medical certainty, "the administration of the incorrect medications had a direct causative role in [Richard]'s death[.]" In his second report authored several months later, he opined:

[T]he medications that [Richard] received in error caused a significant change in his mental status where he became lethargic and obtunded. . . . This significant decline in his level of alertness caused an inability to swallow and clear secretions, probably resulting in an aspiration pneumonia. This was a significant insult to a frail and vulnerable individual with several serious chronic medical problems. This insult caused a marked decline in [Richard]'s general medical condition and he died shortly thereafter. I found no evidence . . . that his lymphoma had recurred. With a course of physical and occupational therapy as well as ongoing treatment of his chronic medical problems, [Richard] could have continued living. The medication error that occurred . . . resulted in his death unnecessarily.

At the time of his death, Richard had a life insurance policy with defendant valued at $5,000. He added the ADB rider, which is valued at $25,000. The ADB defined "accidental death" as death occurring while you are insured under the POLICY and the ADB RIDER, that results solely from an accidental injury and: (a) such death is not excluded in the Exclusions section; (b) such death occurs within 365 days of such accidental injury; (c) such accidental injury occurs while YOU are insured under the POLICY and RIDER; and (d) such death is the direct result of the accident and is independent of all other causes.

The following exclusions were included in the ADB rider:

The Accidental Death Benefit is not payable . . . if YOUR death is the result of one of the following: . . . (d) death that is caused or contributed to, by disease or infirmity, except for bacterial infections resulting directly from an accidental wound;

(e) use of a drug unless prescribed or administered by a doctor and taken in accordance with a doctor's instructions . . . (g) sickness or its medical or surgical treatment or diagnosis.

In February 2008, defendant paid $5,027.81 to plaintiff, the named beneficiary under the policy, but denied his claim for the $25,000 under the ADB rider. Plaintiff filed a complaint against defendant alleging it breached the terms of the ADB rider.

Defendant moved for summary judgment. Citing Dinkowitz v. Prudential Ins. Co., 90 N.J. Super. 181 (Law Div. 1966), defendant argued plaintiff failed to establish that Richard's death was accidental, as defined by the terms of the ADB rider, and that Richard's death was independent of all other causes. Additionally, defendant argued the exclusion provisions of the ADB rider bar payment of benefits for death caused or contributed to by disease or an infirmity or death resulting from sickness or medical or surgical treatment. Finally, defendant urged it was entitled to summary judgment on plaintiff's claim that it breached the covenant of good faith and fair dealing because the claim was fairly debatable.

Plaintiff cross-moved for summary judgment, contending:

(1) Richard's death was the direct result of being administered the wrong medication; (2) contrary to defendant's contention, the death certificate's listing of lymphoma as the cause of death was not dispositive; and (3) the death certificate was not judicially noticeable. In addition, plaintiff urged Richard's death did not fall within the exclusions because his death was not caused or contributed to by a disease or infirmity.

Plaintiff also argued the decision in Dinkowitz is distinguishable because the facts there involved a physician's negligence, while the claim here arose out of nursing care negligence. Finally, plaintiff maintained that the terms of the policy were ambiguous because one exclusion provision expressly excepts from coverage death resulting from the use of a drug unless prescribed or administered by a doctor and taken in accordance with the physician's instructions, while another "impliedly . . . would seem to affirm coverage."

In an oral opinion rendered following oral argument, the motion judge granted summary judgment to defendant, chiefly relying upon the expert reports authored by plaintiff's expert.

The judge noted that Dr. Corey, in his July 20, 2009 report, described the administration of the wrong medicine to Richard as "'a significant insult . . .' referring to the administering of the wrong drugs, '. . . to a frail and vulnerable individual with several serious chronic medical problems. The insult caused a mark[ed] decline in [Richard]'s general medical condition and he died shortly thereafter.'" The judge interpreted this language as meaning that Richard had problems "which exasperated the effects of the administering of the wrong drug which contributed to his demise. Although the doctor doesn't actually say that." The judge then noted that Dr. Corey's March 31, 2009 report indicated that administering the wrong medication to Richard had a direct causal role in Richard's death, but did not indicate this fact was the "exclusive reason" for Richard's death. He concluded:

I think here [on] a reading of Dinkowitz [v. Prudential Ins. Co., 90 N.J. Super. 181, 189 (1966)] that this unfortunate occurrence did happen when plaintiff was being treated for sickness or in his medical or surgical treatment or diagnosis and that's when a malpractice occurred. So, I think it is accidental. . . . I think these exclusions prevent the recovery and that will be the order of the [c]court.

The present appeal followed.

On appeal, plaintiff contends that Richard's death satisfies the definition of "accidental death" and his death did not fall within any of the policy's exclusions. We are satisfied Dr. Corey's report raises a genuinely disputed issue of fact whether administering the wrong medicine was the direct cause of Richard's death and was independent of all other causes. We nonetheless conclude defendant was entitled to summary judgment as a matter of law because the receipt of medication, albeit the wrong medication, was part of Richard's "medical treatment" and therefore the exclusionary provision of the ADB rider, exclusion (g), applied to preclude coverage.

It is well settled that "an insurance policy is a contract, and like other contracts, the terms of the policy define the parties' rights and obligations." Webb v. Witt, 379 N.J. Super. 18, 33 (App. Div. 2005). "Exclusionary clauses are presumptively valid and are enforced if they are 'specific, plain, clear, prominent, and not contrary to public policy.'" Flomerfelt v. Cardiello, 202 N.J. 432, 441 (2010) (quoting Princeton Ins. Co. v. Chunmuang, 151 N.J. 80, 95 (1997)). However, because insurance contracts are contracts of adhesion, exclusionary clauses are narrowly construed. Homesite Ins. Co. v. Hindman, 413 N.J. Super. 41, 46 (App. Div. 2010). The burden is upon the insurer to prove the exclusion applies and any ambiguity in the terms of the exclusion will be construed in favor of the insured. Ibid. A trial court's interpretation of an insurance contract implicates a question of law which, on appeal, we review de novo, owing no deference to the trial court's legal interpretation. Kieffer v. Best Buy, 205 N.J. 213, 222-23 (2011).

Dinkowitz, supra, is the only published case in New Jersey to address the applicability of an accidental death benefit exclusionary clause to a death involving medical negligence. 90 N.J. Super. 181. There, the insured's death similarly resulted from the negligent diagnosis and treatment of his illness. Id. at 182. The court held the insured's policy precluded recovery for his death based on the "Exclusions and Reductions" language in the policy which precluded recovery for loss resulting "from or is caused, directly or indirectly by . . . disease or bodily or mental infirmity, or medical or surgical treatment thereof." Id. at 183.

While there are no other reported decisions in New Jersey addressing this issue, a number of decisions from other jurisdictions have followed the court's reasoning in Dinkowitz. In Reid v. Aetna Life Ins. Co., 440 F. Supp. 1182 (D. Ill. 1977), the court found the circumstances surrounding the decedent's death were within the exclusion provisions of the decedent's ADB policy that excluded coverage for death caused by surgical or medical treatment. There, a nurse erroneously administered a muscle relaxant instead of a saline solution to the patient, causing the patient's death. Id. at 1182-83. In response to the plaintiff's argument that the drug was not administered by the doctor or by the patient himself, the district court stated "[s]uch distinction[] [is] of no significance and . . . overlook[s] the fact that here the prescribed antibiotic . . . was administered by the nurse as planned and directed by the doctor, the error being the liquid carrier[.]" Id. at 1184.

In Pickard v. Transamerica Occidental Life Ins. Co., 663 F. Supp. 126 (D. Mich. 1987), the patient, in preparation for a colonoscopy, was administered a liter of potassium chloride twenty percent solution to drink, rather than GoLytely Solution, causing the patient's death. The court found the patient's death was within the exclusion provisions of the patient's ADB policy and that although administered by the patient "it was given [to] him in preparation for a diagnostic procedure undertaken as part of his treatment and that he was told to drink it by a medical person." Id. at 127.

A similar result was reached in Castorena v. Colonial Life & Accident Ins. Co., 760 P.2d 152, 153 (N.M. 1983), where the plaintiff claimed the amputation of his arm was accidental within the meaning of his policy because it resulted from the improper insertion of an intravenous needle into his left hand. The New Mexico Supreme Court disagreed. Id. at 154. Citing Dinkowitz, supra, 90 N.J. Super. at 188, the court stated, "[a] mistake by a physician in treating a patient's illness constitutes an 'accident' or 'unintended occurrence'; but, because that mistake occurs during the 'medical treatment' of the patient, it is not a risk assumed by the insurance company within the language of the policy." Castorena, supra, 760 P.2d at 154.

Plaintiff's contention that Dinkowitz is inapplicable because the negligence was committed by a physician is without merit. Medical and surgical treatment is not limited to the actions of doctors and surgeons. See Barkerding v. Aetna Life Ins. Co., 82 F.2d 358 (5th Cir. 1936) (noting that medical and surgical treatment also "includes the things done by the patient to carry out specific directions given for these ends by a physician"). The focus of the definition is thus not on the actor, but on the actions being performed and whether these actions are "taken to effect a cure of the injury or disease." Pfahler v. Eclipse Pioneer Div. of Bendix Aviation Corp., 21 N.J. 486, 491 (1956). Moreover, under N.J.S.A. 45:11-23(b), the definition of nursing includes "executing medical regimens as prescribed by a licensed or otherwise legally authorized physician or dentist."

In the present matter, Richard received the medication as a part of his treatment. That it was administered by the hand of a nurse and not a physician is of no consequence. Administering medication to Richard was "executing medical regimens as prescribed by a licensed . . . physician," even if executed negligently. Thus, the motion judge properly concluded, as a matter of law, that exclusion (g) applied.

Because we are satisfied that "medical treatment" under exclusion (g) includes administering the wrong medication, we need not address plaintiff's contention that exclusion (e) "seemingly" contradicts exclusion (g). Finally, plaintiff's claim that defendant breached the covenant of good faith and fair dealing is without sufficient merit to warrant discussion in a written opinion. R. 2:11-3(e)(1)(E).


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