Opinion
2:19-cv-01834-VAP-FFMx
05-18-2020
Gladys INTERIANO, Plaintiff, v. COLONIAL LIFE AND ACCIDENT INSURANCE COMPANY, Defendant
James T. Hudson, Law Offices of James T. Hudson, Los Angeles, CA, for Plaintiff. Nicole Y. Blohm, Tatiana Semerjian Nunneri, Merserve Mumper and Hughes LLP, Los Angeles, CA, for Defendant.
James T. Hudson, Law Offices of James T. Hudson, Los Angeles, CA, for Plaintiff.
Nicole Y. Blohm, Tatiana Semerjian Nunneri, Merserve Mumper and Hughes LLP, Los Angeles, CA, for Defendant.
Order GRANTING IN PART and DENYING IN PART Defendant Colonial Life and Accident Insurance Company's Motion for Summary Judgment (Dkt. 28) and GRANTING Plaintiff's Cross Motion for Partial Summary Judgment (Dkt. 25)
Virginia A. Phillips, Chief United States District Judge
Before the Court are Defendant Colonial Life and Accident Insurance Company's Motion for Summary Judgment (Dkt. 28) and Plaintiff Gladys Interiano's Cross Motion for Partial Summary Judgment (Dkt. 25), both filed January 27, 2020. The parties each opposed the other's motion on February 3, 2020, (Dkts. 30, 31), and replied on February 10, 2020 (Dkts. 32, 33).
After considering all papers filed in support of, and in opposition to, the motions, the Court GRANTS Plaintiff's Cross Motion for Partial Summary Judgment and GRANTS IN PART and DENIES IN PART Defendant Colonial Life and Accident Insurance Company's Motion for Summary Judgment.
I. BACKGROUND
This case arises from the death of Hazel Burgos and Defendant Colonial Life and Accident Insurance Company's ("Colonial Life") denial of accident insurance benefits to Plaintiff Gladys Pena (aka Interiano), Ms. Burgos' mother and plan beneficiary. Plaintiff commenced this action in Los Angeles Superior Court on January 16, 2019, raising claims for breach of insurance contract, insurance bad faith, and financial elder abuse. Plaintiff seeks damages for failure to provide benefits, general damages for mental and emotional distress, consequential economic damages, and punitive and exemplary damages. Defendants removed the case to the Central District of California on March 13, 2019. (Dkt. 1).
II. LEGAL STANDARD
A motion for summary judgment or partial summary judgment shall be granted when there is no genuine issue as to any material fact and the moving party is entitled to judgment as a matter of law. Fed. R. Civ. P. 56(a) ; Anderson v. Liberty Lobby, Inc. , 477 U.S. 242, 247-48, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986).
"[W]hen parties submit cross-motions for summary judgment, each motion must be considered on its own merits." Fair Hous. Council of Riverside Cty., Inc. v. Riverside Two , 249 F.3d 1132, 1136 (9th Cir. 2001) (internal quotations and citation omitted). Thus, "[t]he court must rule on each party's motion on an individual and separate basis, determining, for each side, whether a judgment may be entered in accordance with the Rule 56 standard." Id. (quoting Wright, et al., Federal Practice and Procedure § 2720, at 335–36 (3d ed. 1998) ). If, however, the cross-motions are before the court at the same time, the court must consider the evidence proffered by both sets of motions before ruling on either one. Riverside Two , 249 F.3d at 1135–36.
Generally, the burden is on the moving party to demonstrate that it is entitled to summary judgment. Margolis v. Ryan , 140 F.3d 850, 852 (9th Cir. 1998). "The moving party may produce evidence negating an essential element of the nonmoving party's case, or ... show that the nonmoving party does not have enough evidence of an essential element of its claim or defense to carry its ultimate burden of persuasion at trial." Nissan Fire & Marine Ins. Co. v. Fritz Companies, Inc. , 210 F.3d 1099, 1106 (9th Cir. 2000). The nonmoving party must then "do more than simply show that there is some metaphysical doubt as to the material facts" but must show specific facts which raise a genuine issue for trial. Matsushita Elec. Indus. Co. v. Zenith Radio Corp. , 475 U.S. 574, 586, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986). A genuine issue of material fact will exist "if the evidence is such that a reasonable jury could return a verdict for the non-moving party." Anderson , 477 U.S. at 248, 106 S.Ct. 2505.
In ruling on a motion for summary judgment, a court construes the evidence in the light most favorable to the non-moving party. Barlow v. Ground , 943 F.2d 1132, 1135 (9th Cir. 1991). "[T]he judge's function is not [ ] to weigh the evidence and determine the truth of the matter but to determine whether there is a genuine issue for trial." Anderson , 477 U.S. at 249, 106 S.Ct. 2505.
At the summary judgment stage, a district court should "focus on the admissibility of the [evidence's] contents" and not the form in which the evidence is presented—it is sufficient that a party will be able to produce evidence in its admissible form at trial. See Fraser v. Goodale , 342 F.3d 1032, 1036 (9th Cir. 2003) ; Block v. City of Los Angeles , 253 F.3d 410, 418-19 (9th Cir. 2001). Moreover, "objections to evidence on the ground that it is irrelevant, speculative, and/or argumentative, or that it constitutes an improper legal conclusion are all duplicative of the summary judgment standard itself" and thus need not be considered on a motion for summary judgment. Burch v. Regents of Univ. of Cal. , 433 F. Supp. 2d 1110, 1120 (E.D. Cal. 2006).
III. UNDISPUTED FACTS
The parties have filed a joint statement of facts, the most relevant of which are included below:
Underlying Events
• On July 16, 2013, Hazel Burgos submitted an application for accidental coverage policy to Colonial Life and Accident Insurance Company ("Colonial Life"), designating her mother, Gladys Pena (aka Interiano), as the primary beneficiary for 100% of the policy benefit. (Dkt. 28-3, "Goss Decl.," ¶ 5; Goss Decl. Ex. 1).
• On August 1, 2013, Colonial Life issued Accident Only Policy No. 4437737185 (Dkt. 28-2, "Policy") to Ms. Burgos. (Goss Decl. ¶ 6; Goss Decl. Ex. 2). The policy provides for a $100,000 benefit for Accidental
Death-Common Carrier. (Dkt. 28-20, "Joint Stipulation of Facts" or "JSF," ¶ 3).
• On May 26, 2018, Colonial Life received Plaintiff's claim for accidental death benefits under the Policy. On the claim form, Plaintiff reported that Ms. Burgos died on March 13, 2018 at 7:52 a.m. after developing a pulmonary embolism on a flight from LAX to Taiwan. She died approximately one hour after landing in Taipei. (JSF ¶ 4).
• The majority of the medical evidence provided is listed on Ms. Burgos' death certificate:
• Ms. Burgos' death certificate lists her "cause of death (final disease or condition resulting in death" as an "acute massive pulmonary embolism" specifying further that there was "no evidence of infection disease." (Dkt. 28-5).
• Her "manner of death" is described as "natural death," which is defined as "due solely or nearly totally to disease and/or the aging process." (Dkt. 28-5).
• There are no "other significant conditions" listed on the death certificate. (Dkt. 28-5).
• Colonial Life denied accidental death benefits on June 12, 2018, stating that the information provided with Plaintiff's claim did not support a finding that Ms. Burgos' death was the result of an accidental injury. (JSF ¶ 5).
• Plaintiff unsuccessfully appealed Colonial Life's claim denial on October 25, 2018, and the parties continued to contest the denial of coverage in a series of letters for the next several months (JSF ¶ 6-12). No new medical evidence was provided during this time. (Id.).
Policy Terms
• The Policy defines "accident" as "an unintended or unforeseen bodily injury sustained by a covered person, wholly independent of disease, bodily infirmity, illness, infection, or any other abnormal physical condition." A "covered accident" is one which "occurs on or after the effective date of [the] policy," "occurs while [the] policy is in force," "is of the Accident Type listed on the Policy Schedule page; and is not excluded by specific description in [the] policy." (Dkt. 30 ¶ 6).
• "Injury" is defined in the Policy as "physical harm or damage to the body." (JSF ¶ 3).
• The Policy excludes from coverage losses caused by sickness, defined broadly to mean "[h]aving any sickness or declining process caused by a sickness, including physical or mental infirmity." (Dkt. 30 ¶ 8; Policy at 21). The term "sickness" is defined as "any illness, infection, disease or any other abnormal physical condition which is not caused by an injury." (Policy at 21).
• The "Accidental Death – Common Carrier" is "payable if, as the result of a covered accident, a covered person is injured while a fare-paying passenger on a common carrier and the injury causes the covered person to die within 90 days after the accident." (Policy, COLONIAL-Interiano-00031). A "common carrier" is defined to include "commercial airplanes." (Id.).
IV. DISCUSSION
This Court is sitting in diversity jurisdiction and therefore applies California substantive law. Erie Railroad Co. v. Tompkins , 304 U.S. 64, 58 S.Ct. 817, 82 L.Ed. 1188 (1938).
A. Breach of Contract
Both parties have moved for summary judgment on the first claim, breach of contract. The parties dispute whether the Policy is an "accidental means" or "accidental death" policy, whether Ms. Burgos' death was the result of an "accident" for the purposes of the Policy, and whether the "sickness" exclusion applies. The Court considers each issue in turn below.
1. Accidental Death Policy
The California Supreme Court has distinguished between accidental death and accidental life policies, and has refused to eliminate the distinction even when expressly invited to do so. See Weil v. Fed. Kemper Life Assurance Co. , 7 Cal. 4th 125, 129–30, 27 Cal.Rptr.2d 316, 866 P.2d 774 (1994) ("[T]he distinction in policy language between ‘accidental means’ and ‘accidental results,’ recognized in our prior decisions, should be preserved[.]"); accord Bilezikjian v. Unum Life Ins. Co. of Am. , 692 F. Supp. 2d 1203, 1212 (C.D. Cal. 2010), aff'd , 443 F. App'x 231 (9th Cir. 2011) (noting preservation of distinction).
California adopts the minority approach on this issue and, notably, one with which Justice Cardozo disagreed. See Landress v. Phoenix Mut. Life Ins. Co. , 291 U.S. 491, 499, 54 S.Ct. 461, 78 L.Ed. 934 (1934) ("The attempted distinction between accidental results and accidental means will plunge this branch of the law into a Serbonian Bog.") (Cardozo, J., dissenting). Other states have abolished the distinction, see, e.g. Equitable Life Assur. Soc. v. Hemenover , 100 Colo. 231, 67 P.2d 80, 81 (1937) ("Whatever kind of bog that is, we concur."), but the California Supreme Court has repeatedly reaffirmed the distinction, and this Court applies it here.
This distinction is "critical," as "policies requiring only that there be proof of accidental death have been construed broadly, ‘such that the injury or death is likely to be covered unless the insured virtually intended his injury or death[.]’ " Olson v. Am. Bankers Ins. Co. , 30 Cal. App. 4th 816, 822, 35 Cal.Rptr.2d 897 (1994) (quoting Weil , 7 Cal. 4th at 140, 27 Cal.Rptr.2d 316, 866 P.2d 774 ). Under policies requiring proof of accidental means, in contrast, "it is not enough that death or injury is unexpected or unforeseen." Id. Instead, "there must be some element of unexpectedness in the preceding act or occurrence which leads to the injury or death." Id.
To be an accidental means policy, an insurance policy must employ the terms "accidental means." "By employing the phrase ‘accidental means,’ insurers can be relatively certain that their policies will be interpreted by the courts to have the limiting effect desired. No such assurance is available when other terms are used." Olson , 30 Cal. App. 4th at 823, 35 Cal.Rptr.2d 897. Indeed, " ‘the whole rationale for insurers choosing to employ the phrase in the first place was to define more precisely the risk that was insured.’ " Id. (quoting Weil , 7 Cal. 4th at 140, 27 Cal.Rptr.2d 316, 866 P.2d 774 ) (emphasis added). Courts have justified this restrictive approach, noting that "the content of an insurance policy is within the control of the parties," and, should, the insurer intend for the policy to be construed more narrowly, it has the power to use the term "accidental means." Weil , 7 Cal. 4th at 139, 27 Cal.Rptr.2d 316, 866 P.2d 774.
The California Court of Appeal specifically has rejected the argument that "a policy [can] contain a variant of the phrase ‘accidental means,’ and ... remain an ‘accidental means’ policy," instead reaffirming "the requirement that the term "means" be used." Id. at 824, 35 Cal.Rptr.2d 897 (1994). In Olson , the insurer argued that, "[b]ecause the subject insurance policy pa[id] for loss of life due to ‘bodily injury caused solely by an accident,’ ... the means of death must be accidental" to be covered. Olson , 30 Cal. App. 4th at 824, 35 Cal.Rptr.2d 897. The court found that the specific language requirement to be especially important "considering the case history referred to by the Weil court and the carefully preserved distinction between the types of policies." Id. "Because [the insurer] failed to use the term ‘means,’ " the court further found that "the policy [was] ambiguous." Id. Thus, "[s]ince uncertainties in an insurance contract are resolved against the insurer and in favor of imposing liability," the court found the policy to be an accidental death policy. Id. at 824–25, 35 Cal.Rptr.2d 897.
Courts in this district have reached the same conclusion. In Paulissen , the Central District of California, considering "a policy covering ‘loss solely as a result of an injury caused by an accident,’ " found that, because the insurance company did not use the term "accidental means," the policy was ambiguous and therefore must be considered to be an accidental death policy. Paulissen v. U.S. Life Ins. Co. in City of New York , 205 F. Supp. 2d 1120, 1128 (C.D. Cal. 2002) (internal citation omitted). Accord Jones v. Fed. Ins. Co. , No. 14-CV-00313-HSG, 2015 WL 4187864, at *2 (N.D. Cal. July 10, 2015) (noting that policy language was, "[a]t best ... ambiguous" and "certainly does not clearly and unambiguously" limit the Policy to an "accidental means" policy[,]" and therefore "follow[ing] the reasoning articulated in Olson and Paulissen [to resolve] the uncertainties in the Policy against the insurer, and [found] that the Policy is of the ‘accidental death’ variety" (internal quotations and citations omitted)).
Here, as in Olson and Paulissen , the term "accidental means" is entirely absent from the Policy. The Policy provides that benefits are only payable under the Accidental Death—Common Carrier provision "if any covered person is injured as the result of a covered accident while a fare paying passenger on a common carrier and the injury causes the covered person to die within 90 days after the covered accident." (Policy at 14). As in Olson , the Policy does not employ the phrase "accidental means," and despite Defendant's arguments to the contrary, its "variant" phrasing cannot be construed, consistent with California law, to transform the accidental death policy into an accidental means policy. The Court finds, therefore, that the Policy is an accidental death policy.
2. Accidental Injury
Having concluded that the Policy is an accidental death policy, the Court next considers whether a pulmonary embolism qualifies as an accident. "In California, the burden is on the person claiming the accidental death benefits to establish that the insured's death resulted from an accident." Heighley v. J.C. Penney Life Ins. Co. , 257 F. Supp. 2d 1241, 1251 (C.D. Cal. 2003) (citing, inter alia, Ells v. Order of United Comm. Travelers of Am. , 20 Cal.2d 290, 304, 125 P.2d 457 (1942) ).
It is well settled that, "[t]o recover under an accidental death policy, the beneficiary is not required to show that something unforeseen, unexplained or unusual occurred in the acts preceding the injury[.]" Croskey, et al., Cal. Prac. Guide: Insurance Litigation 6:482.1 (The Rutter Group 2019) (emphasis added) (citing Olson , 30 Cal. App. 4th at 826, 35 Cal.Rptr.2d 897 ). Instead, an accidental death policy requires only that the insured's death was not intended or anticipated by the insured. That is, "accidental death" is an unintended result, even if it was caused by the insured's voluntary acts. See, e.g., Weil , 7 Cal. 4th at 134, 27 Cal.Rptr.2d 316, 866 P.2d 774.
Defendant relies heavily on Khatchatrian v. Cont'l Cas. Co. , in which the Ninth Circuit stated that, to qualify as an "accidental death," "a death must occur from external rather than natural causes." 332 F.3d 1227, 1228 (9th Cir. 2003). The California Supreme Court in Weil , in contrast, repudiated this approach, holding that "policies requiring only that there be proof of accidental death have been construed broadly, ‘such that the injury or death is likely to be covered unless the insured virtually intended his injury or death[.]’ " Weil , 7 Cal. 4th at 140, 27 Cal.Rptr.2d 316, 866 P.2d 774.
It is true that, in Weil , the court ultimately upheld the insurance company's denial of coverage. It did so, however, on the basis that death resulted "directly and independently of all other causes from bodily injuries effected through external, violent and accidental means...." as required by the policy language. Id. at 137, 27 Cal.Rptr.2d 316, 866 P.2d 774 (quoting policy language). As Plaintiff notes, there is no mention of "external" in the Policy at issue here.
The Court follows the California Supreme Court's approach. Where federal authority conflicts with precedent from the highest court in a state on an issue of substantive state law, state court holdings prevail. See West v. AT & T , 311 U.S. 223, 236, 61 S.Ct. 179, 85 L.Ed. 139 (1940) ("[T]he highest court of the state is the final arbiter of what is state law. When it has spoken, its pronouncement is to be accepted by federal courts as defining state law[.]"); Emery v. Clark , 643 F.3d 1210, 1215 (9th Cir. 2011) (noting that a contrary opinion from the California Supreme Court "overruled" conflicting Ninth Circuit holdings); Jenkins v. Paramo , No. CV 15-0356-RT (RNB), 2015 WL 10458850, at *8 (C.D. Cal. May 11, 2015), report and recommendation adopted , No. CV 15-0356-DMG (PLAx), 2016 WL 953184 (C.D. Cal. Mar. 10, 2016) (noting that the "California Supreme Court's interpretation of a California statute overrides any contrary Ninth Circuit interpretation").
Khatchatrian , though decided after Weil , not only fails to distinguish Weil , but makes no reference to the case at all. Furthermore, even if it were not clear that the California Supreme Court's interpretation takes precedence on an issue of California law, it is a "well-settled principle[ ] of insurance law" that a court "constru[es] ambiguities in favor of coverage." Granite Mgmt. Corp. v. Aetna Cas. & Sur. Co. , 37 F. App'x 262, 267 (9th Cir. 2002) ; see also AIU Ins. Co. v. Superior Court , 51 Cal. 3d 807, 822, 274 Cal.Rptr. 820, 799 P.2d 1253 (1990) (noting that "[i]n the insurance context," courts "generally resolve ambiguities in favor of coverage."). Even if there were a true split in authority, the approach favoring coverage should prevail. This Court therefore adopts the approach espoused in Weil and concludes that Ms. Burgos' "death is likely to be covered unless [she] virtually intended [her] injury or death[.]" Weil , 7 Cal. 4th at 140, 27 Cal.Rptr.2d 316, 866 P.2d 774 (internal quotations omitted).
The Policy language is consistent with this approach. The Policy defines "accident" as "an unintended or unforeseen bodily injury sustained by a covered person, wholly independent of disease, bodily infirmity, illness, infection, or any other abnormal physical condition." (Policy at 11). The first part of the definition, requiring that the injury itself be "unintended or unforeseen," imposes the same requirements that a general "accidental death" policy imposes. The second part of the definition, requiring that the accident be "wholly independent of disease, bodily infirmity, illness, infection, or any other abnormal physical condition," requires that the accident not result from "sickness," defined in the Policy as "any illness, infection, disease or any other abnormal physical condition which is not caused by an injury." (Policy at 21). The Court will address the sickness exclusion in the following section, and focuses its analysis on the "accident" prong here.
Defendant cites Williams v. National Union Fire Co. to stand for the proposition that the Ninth Circuit has held that "a pulmonary embolism sustained on an ordinary and uneventful flight is not an ‘accident’ as a matter of law absent evidence of ‘unusual circumstances.’ " 792 F.3d 1136, 1141 (9th Cir. 2015). Defendant's reliance on Williams is misplaced, as that case concerned an ERISA claim and the court therefore applied federal common law." Williams , 792 F.3d at 1140. Moreover, in Williams , the policy itself required that the "injury" be the result of an "accident," a term undefined in the policy, and taken by the court to mean "external to the body." Williams at 1140-41,. Here, in contrast, the term "accident" is defined in the Policy, and there is no language regarding externality to the body.
Furthermore, the issue is contested, even in the ERISA context. Indeed, Plaintiff has cited an ERISA case out of the Northern District of Illinois that reached the opposite conclusion. See Yasko v. Reliance Standard Life. Co. , 53 F. Supp. 3d 1059 (N.D. Ill. 2014).
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Instead, "[t]he rule of law established is that if the death of the insured was objectively unexpected and unintended by the insured and happened out of the usual course of events, his death was accidental." Bornstein v. J.C. Penney Life Ins. Co. , 946 F. Supp. 814, 819 (C.D. Cal. 1996). That is precisely the case here. Ms. Burgos' death was caused by "an unusual or unanticipated result flowing from a commonplace cause." Paulissen , 205 F. Supp. 2d at 1128. As Defendants argue, Ms. Burgos’ "flight was ordinary and uneventful[.]" (Dkt. 28-1 at 17). Furthermore, Defendant provides no evidence to support the claim that pulmonary embolism is a "common or expected" result of air travel. (Dkt. 33 at 8).
Defendant instead argues that "if there is any element of foreseeability as to the circumstances surrounding the insured's death, it cannot be considered an accident." (Dkt. 28-1 at 19). This assertion, however, is explicitly contradicted by California case law. That a pulmonary embolism is a known risk of prolonged periods of sitting does not establish that Ms. Burgos' death was not unexpected. See, e.g., Armstrong World Indus., Inc. v. Aetna Cas. & Sur. Co. , 45 Cal. App. 4th 1, 72–73, 52 Cal.Rptr.2d 690 (1996) ("What is expected or intended is different from that which was reasonably foreseeable or which should have been known."). Indeed, California courts have clearly held that "[a]n insurance policy exclusion from manufacturing activities which carry a risk of causing environmental harm, although not known or intended to cause harm in the insured's business conduct, would create an exclusion swallowing the entire purpose of insurance protection for unintended consequences." Id. (emphasis added).
Defendant's argument that a "pulmonary embolism is a foreseeable result of being static for a prolonged period time, such that a fatality from it cannot be considered ‘accidental’ absent evidence of some external circumstances" therefore runs counter to both the Policy, which does not require that an accident result from "external circumstances." (Dkt. 28-2 at 22). It is also contravened by well-settled California law, which explicitly maintains that the foreseeability of an event does not preclude it from being "accidental." Instead, "[t]he issue is whether [an insured's] death was unexpected, unintended, and happening out of the usual course of events." Bornstein v. J.C. Penney Life Ins. Co. , 946 F. Supp. at 819. Here, Plaintiff has established that it was, and the Court concludes that Ms. Burgos' death was an "accident" for the purposes of the accidental death Policy.
3. Sickness Exclusion
Having found that Ms. Burgos' death was accidental, the Court concludes that Plaintiff is entitled to recover unless her death was the result of "any illness, infection, disease or any other abnormal physical condition which is not caused by an injury." (Policy at 21). In general, sickness "provisions are strongly construed against the insurer[.]" New York Life Ins. Co. v. Wilson , 178 F.2d 534, 536 (9th Cir. 1949) (as amended); see also Paulissen , 205 F. Supp. 2d at 1129-30 (citing New York Life and noting that although "[s]ickness, disease, and illness have broad, generic definitions[, ...] the definitions are narrowly construed in the context of insurance policies.). The defendant bears the burden of showing that an insured's death was the result of sickness. Paulissen , 205 F. Supp. 2d at 1129. Here, Defendant has failed to provide any evidence that Ms. Burgos' death was caused by disease.
Defendant argues that Ms. Burgos' death resulted from sickness, but cites only to non-binding, out-of-state district court decisions to support this argument. (Dkt. 28-1 at 21). Defendant also cites reports from various clinicians "document[ing] Ms. Burgos' cause of death as ‘natural’ and as a ‘disease.’ " ( [Def's Motion] Dkt. 28-1 at 5, 23); (see JSF ¶ 4). The fact that the term "disease" was used in various medical records, however, is unpersuasive. First, the evidence is mixed as to whether the pulmonary embolism was a disease or an injury. Ms. Burgos' "abstract of medical record" from Landseed Hospital lists "Acute Massive Pulmonary Embolism" in the field titled "Name and symptom of disease or injury diagnosed." (Dkt. 28-2 at 2) (emphasis added). Ms. Burgos' death certificate, also from Landseed Hospital, states that there was "[n]o evidence of infection disease," but also lists the death as a "natural death," defined as a death "due solely or nearly totally to disease and/or the aging process." (Dkt. 28-5).
Second, and more importantly, although a court may take medical evidence into account, medical determinations are not dispositive of the legal question of whether a given event was due to "disease" for the purposes of the Policy. "Although testimony from medical experts can help inform the legal decision maker about the nature of these afflictions, it does not dictate the proper legal interpretation of this policy term.... This is the province of courts rather than doctors." Chale v. Allstate Life Ins. Co. , 353 F.3d 742, 749 (9th Cir. 2003) (internal citation omitted); see also Paulissen , 205 F. Supp. 2d at 1127 n.8 ("The definition of ‘sickness’ " is a "legal, rather than factual, question[ ], and must be determined by the Court."). Defendant has provided no binding legal authority supporting its argument that a pulmonary embolism is a "sickness" as defined in the Policy.
Even though she does not bear the burden of proof, Plaintiff has provided authority supporting her argument that Ms. Burgos' pulmonary embolism is not properly classified as a disease. In Paulissen , the Central District of California considered whether a similar condition, high altitude pulmonary edema ("HAPE"), was properly considered a "disease" and concluded that it was not. 205 F. Supp. 2d. Although Paulissen concerned HAPE, not a pulmonary embolism, the fact pattern is similar here. In that case, the court noted that the plaintiff's HAPE "did not arise from some organic cause, but rather from exposure to high altitudes." Id. at 1130. Here, similarly, Ms. Burgos' pulmonary embolism did not organically occur, but rather was likely induced by long periods of sitting, as is typical on a transcontinental flight.
Finally, there is no evidence in the record suggesting that Ms. Burgos had a disease or condition that gave rise to the pulmonary embolism that ultimately killed her. Even if there were, California courts have held that "a preexisting disease or illness although contributing to the loss resulting from the accident, does not relieve the insurer of liability where the accident is the proximate cause of death." Bornstein v. J.C. Penney Life Ins. Co. , 946 F. Supp. at 819.
As Defendant has failed to meet its burden of showing that the sickness exclusion applies here, the Court concludes that Ms. Burgos' death was covered by the Policy. The Court accordingly GRANTS Plaintiff's Cross Motion for Partial Summary Judgment and DENIES Defendant Colonial Life and Accident Insurance Company's Motion for Summary Judgment as to the breach of contract claim.
B. Breach of the Duty of Good Faith and Fair Dealing
Defendant also moves this court to grant summary judgment on Plaintiff's bad faith claim on the basis that 1) there was no breach of contract and 2) a genuine dispute over benefits exists. (Dkt. 28-1 at 25). The first argument fails because the Court has already found that there was a breach of contract. The Court considers the second argument below.
It is "settled law in California that an insurer denying or delaying the payment of policy benefits due to the existence of a genuine dispute with its insured as to the existence of coverage liability or the amount of the insured's coverage claim is not liable in bad faith even though it might be liable for breach of contract." Chateau Chamberay Homeowners Ass'n v. Assoc. Int'l Ins. Co. , 90 Cal. App. 4th 335, 347, 108 Cal.Rptr.2d 776 (2001), as modified on denial of reh'g (July 30, 2001). Thus, on summary judgment, courts must consider if a factual issue exists concerning whether the failure to pay benefits was reasonable. McCormick v. Sentinel Life Ins. Co. , 153 Cal. App. 3d 1030, 1043, 200 Cal.Rptr. 732 (1984). The breach of the duty of good faith and fair dealing is heavily focused on the facts. See Wilson v. 21st Century Ins. Co. , 42 Cal. 4th 713, 723, 68 Cal.Rptr.3d 746, 171 P.3d 1082 (2007).
"The insurer has a duty to protect the insured's interests as if it were its own, and it may not deny a claim without thoroughly investigating it." Mariscal v. Old Republic Life Ins. Co. , 42 Cal. App. 4th 1617, 1623, 50 Cal.Rptr.2d 224 (1996), as modified (Mar. 28, 1996), as modified (Mar. 29, 1996). "An insurer must liberally construe claim forms and the policy in favor of coverage; exclusions are strictly interpreted against the insurer." Id. To protect an insured's contractual interest, an insurer must "fully inquire into possible bases that might support the insured's claim" before denying it. Egan v. Mutual of Omaha Ins. Co. , 24 Cal. 3d 809, 819, 169 Cal.Rptr. 691, 620 P.2d 141 (1979).
"[A]n insurer may breach the duty of good faith without acting maliciously or immorally. Such a breach may occur merely by unreasonably denying a claim for benefits." McCormick v. Sentinel Life Ins. Co. , 153 Cal. App. 3d at 1046–47, 200 Cal.Rptr. 732 (internal citations omitted). Thus, "an insurer may breach the covenant of good faith and fair dealing when it fails to properly investigate its insured's claim." Egan v. Mutual of Omaha Ins. Co. , 24 Cal. 3d 809 at 817, 169 Cal.Rptr. 691, 620 P.2d 141. The inquiry focuses on the "reasonableness of the insurer's conduct under the facts of the particular case," and the analysis "must be evaluated in light of the totality of the circumstances surrounding its actions." Wilson v. 21st Century Ins. Co. , 42 Cal. 4th at 723, 68 Cal.Rptr.3d 746, 171 P.3d 1082.
Plaintiff argues that Defendant failed to investigate her claim before denying it. Indeed, Defendant denied accidental death benefits on June 12, 2018, stating that the information provided with Plaintiff's claim did not support a finding that Ms. Burgos' death was the result of an accidental injury, (JSF ¶ 5), but does not provide any evidence of having investigated the claim until November 19, 2018, after Plaintiff appealed the initial denial. (Dkt. 28-14, Ex. A at 2). Nevertheless, Defendant did eventually investigate the claim, and when it did so, it had a reasonable legal basis for doing so. Defendant relies heavily on a Ninth Circuit case Khatchatrian v. Continental Casualty Co. , 332 F.3d 1227, 1228 (9th Cir. 2003), and its holding that, to qualify as an "accidental death," "a death must occur from external rather than natural causes," to support its denial of coverage. Although, as explained above, the Court has found that case unpersuasive, Defendants' reliance on the case was not unreasonable. The Court therefore GRANTS Defendant's Motion for Summary Judgment as to the Breach of the Duty of Good Faith and Fair Dealing Claim.
Plaintiff also seeks punitive damages for Defendants' breach of the duty of good faith. "[B]ad faith by an insurer is subject to tort remedies, including punitive damages." Amadeo v. Principal Mut. Life Ins. Co. , 290 F.3d 1152, 1161 (9th Cir. 2002). Here, however, the Court has concluded that Defendants did not act in bad faith, and Plaintiff's claim for punitive damages must fail. The Court therefore GRANTS Defendants' Motion for Summary Judgment on the question of punitive damages.
C. Elder Abuse
Finally, Defendant moves for summary judgment on Plaintiff's elder abuse claim. The Elder Abuse Act provides, in relevant part:
(a) "Financial abuse" of an elder or dependent adult occurs when a person or entity does any of the following:
(1) Takes, secretes, appropriates, obtains, or retains real or personal property of an elder or dependent adult for a wrongful use or with intent to defraud, or both.
(2) Assists in taking, secreting, appropriating, obtaining, or retaining real or personal property of an elder or dependent adult for a wrongful use or with intent to defraud, or both.
Cal. Welf. & Inst. Code § 15610.30.
"The statutory language of the Elder Abuse Act" is "broad in scope." Crawford v. Cont'l Cas. Ins. Co. , No. SA-CV-1400968-CJC-JCGx, 2014 WL 10988334, at *2 (C.D. Cal. July 24, 2014). Courts in this district have found that, where a plaintiff has pleaded bad faith breach of an insurance contract, "the pleaded facts [alleging bad faith], taken in light of the breadth of the statutory language, [can] support a claim under the Elder Abuse Act." Id. In Crawford , the court considered a long-term coverage insurance policy under which the elder was insured directly, whereas in this case, plaintiff contests the denial of benefits to an elder as a result of a denial of accident benefits. The fundamental reasoning, however, is the same: a beneficiary of an insurance policy, an "elder," was denied insurance benefits, allegedly in bad faith.
As discussed above, Defendant has shown here that its denial of coverage was not in bad faith, and therefore, as a matter of law, Plaintiff's elder abuse claim fails. Thus, for the reasons set forth above, the Court GRANTS Defendant's Motion for Summary Judgment as to elder abuse claims.
V. CONCLUSION
The Court therefore GRANTS Plaintiff's Cross Motion for Partial Summary Judgment. The Court GRANTS Colonial Life and Accident Insurance Company's Motion for Summary Judgment as to the punitive damages and elder abuse claims, and DENIES Defendant Colonial Life and Accident Insurance Company's Motion for Summary Judgment as to the breach of contract claim.