[00:00:03] Speaker 04:
All right, I'll call the third case on the docket.

[00:00:06] Speaker 04:
Case number 244014, Jensen versus Life Insurance, Company of North America.

[00:00:12] Speaker 04:
Please proceed.

[00:00:14] Speaker 01:
Good morning, your honors.

[00:00:16] Speaker 01:
May it please the court.

[00:00:17] Speaker 01:
Brian King on behalf of the plaintiff, Jill Jensen.

[00:00:20] Speaker 01:
Ms.

[00:00:21] Speaker 01:
Jensen is with us in the courtroom today also.

[00:00:24] Speaker 01:
We have a tragic case involving a loss of Stephen Jensen.

[00:00:29] Speaker 01:
He had been prescribed oxycodone for treatment of chronic pain.

[00:00:34] Speaker 01:
And then on January 30 of 2019, he was prescribed clonazepam to treat anxiety.

[00:00:41] Speaker 01:
Two days later, he passed away.

[00:00:43] Speaker 01:
his autopsy and the toxicology report indicated that he passed away from a toxic combination of those two drugs.

[00:00:52] Speaker 01:
And they ruled his death an accident.

[00:00:55] Speaker 01:
The evidence suggested that Steven was taking the medications appropriately, but that there was a combination of the two that caused his death.

[00:01:05] Speaker 01:
submitted, Jill on his behalf submitted a claim to Lina for accidental death and dismemberment benefits.

[00:01:16] Speaker 01:
And Lina refused to pay those benefits, arguing just two things.

[00:01:21] Speaker 01:
Initially they argued that there was a common exclusion which excluded coverage for voluntary ingestion of drugs unless those drugs were prescribed.

[00:01:30] Speaker 01:
or taken as prescribed.

[00:01:33] Speaker 01:
It also initially relied on common exclusion number seven, which Lyna argued excluded coverage for death resulting from medical treatment of any sickness, disease, bodily or mental infirmity or any bacterial or viral infections.

[00:01:48] Speaker 01:
There was some back and forth in the pre-legation appeal process.

[00:01:52] Speaker 01:
Ms.

[00:01:52] Speaker 01:
Jensen retained an attorney, Mr. Higley, who provided information to show that in fact there was no non-prescribed or overdose of the medication, that there was nothing about the autopsy or the toxicology report that suggested that Mr. Jensen had done anything other than take those drugs as prescribed.

[00:02:14] Speaker 02:
This was provided to line up pre-suit?

[00:02:17] Speaker 01:
Yes, it was, Your Honor.

[00:02:19] Speaker 01:
And also pre-suit, Lyna issued a final denial that it was a little ambiguous exactly what they were doing.

[00:02:28] Speaker 01:
They had a report from Dr. Tovar that they had retained a doctor who himself suggested and stated that he could find no reason to think there was any improper taking of the prescription medication, that there was no overdose on the part of Mr. Jensen.

[00:02:46] Speaker 01:
They came down as a final basis for denial and said, it's exclusion seven that we're relying on.

[00:02:53] Speaker 01:
And there have been attempts made once we were in litigation to suggest that maybe exclusion 11 was something that came into play.

[00:03:01] Speaker 01:
But I think it's a fair statement and undisputed that the last thing they ended up saying in their denial letter in the pre-litigation appeal process was that exclusion seven applies.

[00:03:12] Speaker 01:
So, the question is, the District Court took the case and said, well, I think Exclusion 7, in a clear, unambiguous way, precludes the claim, means that the claim has to be denied.

[00:03:23] Speaker 01:
Our position is one of two things.

[00:03:25] Speaker 01:
Number one, we disagree entirely and say that Exclusion 7 actually shows, in its clear, unambiguous language, that it doesn't apply and that, in fact, the claim should have been paid.

[00:03:38] Speaker 01:
But alternatively,

[00:03:39] Speaker 01:
That there is some ambiguity and this is the last antecedent argument that we made throughout the briefs There's some ambiguity whether it's on the face of the language of exclusion 7 itself

[00:03:50] Speaker 01:
or ambiguity created by some of the other language in the exclusions, namely how you read exclusion 11 and how you read exclusion together, or exclusion 7 together, that creates ambiguity in a way that causes us to say the standard of review becomes important, because if it's a de novo standard of review, this court and the district court should interpret ambiguities in favor of the insurer.

[00:04:13] Speaker 04:
Why isn't it an abuse of discretion review?

[00:04:16] Speaker 04:
Why is it not an abuse of discretion or arbitrary and capricious?

[00:04:21] Speaker 01:
The reason for that, Your Honor, is the state of Utah long before the... We have Delaware law applying here.

[00:04:29] Speaker 04:
We apply federal choice of law rules.

[00:04:33] Speaker 04:
And federal choice of law rules allow us to say that the choice of law provision under ERISA controls.

[00:04:43] Speaker 01:
Right.

[00:04:43] Speaker 04:
And here the choice of law is Delaware.

[00:04:46] Speaker 01:
That's right.

[00:04:46] Speaker 04:
And the only other thing that's required is that there be a connection to the

[00:04:51] Speaker 04:
between the plan and the law that's chosen, the state's law that's chosen.

[00:04:56] Speaker 04:
And here there's definitely a connection because the employer, which was, I'm trying to remember the name of the employer, Cope, something, Codel, is a Delaware exploration.

[00:05:06] Speaker 04:
So I'm struggling to see why we would have any basis to apply Utah law here.

[00:05:13] Speaker 01:
Here's the problem.

[00:05:14] Speaker 04:
Which I understand you want to apply because Utah doesn't allow

[00:05:19] Speaker 01:
This type of... The bans on discretionary authority clauses.

[00:05:22] Speaker 01:
That's right, Sharon.

[00:05:23] Speaker 01:
Here's the problem for the defendants in this case, for Lyna.

[00:05:27] Speaker 04:
I don't want to... What the problem is for the defendants, I want you to tell me why we wouldn't apply.

[00:05:32] Speaker 01:
Because the state of Utah has put in its insurance code specific prohibitions on insurers choosing law that does... That precludes or

[00:05:44] Speaker 01:
guts the ability of the legislature of the state of Utah to protect Utah residents from overreaching choice of law provisions.

[00:05:52] Speaker 04:
Now, the Supreme Court... That law only applies if Utah law applies.

[00:05:59] Speaker 01:
That's right.

[00:06:00] Speaker 01:
Well, that's a bit of a chicken and egg argument that you've identified, Judge Morris.

[00:06:04] Speaker 01:
Because the Supreme Court in the ARISA, in the context of Kentucky Association of Health Plans versus Miller, many years ago, 20 years ago, said, we're going to allow states to pass laws that regulate insured products if they affect the risk bearing, the risk allocation between the parties.

[00:06:29] Speaker 01:
and if they are aimed directly at the insurance code, at the insurance industry.

[00:06:33] Speaker 01:
We certainly have a provision in the Utah code way back from like the 1990s or long, long before even the discretionary authority ban that says you can't say to Utah residents, we're going to choose the law of a state other than Utah to regulate the insurance obligation.

[00:06:52] Speaker 04:
Well, the statute you're talking about, Section 2, it's 318-21-314, it says an insurance policy

[00:06:59] Speaker 04:
subject to this chapter can't contain such provision.

[00:07:05] Speaker 04:
The problem is we're not subject to this chapter because we're applying federal choice of law principles.

[00:07:12] Speaker 04:
And under those principles, Delaware law applies.

[00:07:16] Speaker 04:
So we're not subject to this chapter.

[00:07:19] Speaker 01:
We are subject to this chapter because you're talking about a Utah resident here.

[00:07:24] Speaker 01:
And you're talking about an insurance product aimed at a Utah resident.

[00:07:28] Speaker 01:
And to adopt the argument that Lina is asking for here, Your Honor, is to say, we're going to allow insurance departments and legislatures of the various states with regard to insurance products to lose their ability to protect their residents by a Lina, an insurance company, Lina in this case, saying,

[00:07:52] Speaker 01:
we're going to, as a matter of boilerplate, put in our policies, pick and choose of the 50 states the law that applies its most favorable to us, to the detriment of the policies of the protection of the people of the state that live in the state where the policies are being produced and provided.

[00:08:11] Speaker 04:
Well, let's assume for a minute that an abuse of discretion policy applies.

[00:08:17] Speaker 04:
I think that changes your argument, doesn't it?

[00:08:20] Speaker 01:
A little.

[00:08:20] Speaker 04:
All we've got to have then is we've got to have a reasonable basis.

[00:08:27] Speaker 04:
That's right.

[00:08:29] Speaker 04:
And in this case, why would it not have been reasonable?

[00:08:33] Speaker 04:
to apply exclusion seven.

[00:08:36] Speaker 01:
Here's why, Your Honor, because exclusion seven, by its very language, including the last precedent, the last decedent rule, simply does not apply here in a situation where we've got the circumstance where you have a death as a result of medical or surgical treatment in the form of prescription medications that is applied to this kind of

[00:09:00] Speaker 01:
illness that Mr. Jensen was suffering from.

[00:09:04] Speaker 01:
Anxiety, chronic pain, those two things did not cause his death.

[00:09:08] Speaker 01:
There's no question based on what Linus said in the pre-litigation appeal process that they accepted that this was a covered loss.

[00:09:16] Speaker 04:
Okay, so let me just clarify first.

[00:09:18] Speaker 04:
I think there's a couple steps you've taken here that I want to make sure I understand.

[00:09:22] Speaker 04:
So in deciding that this was not reasonable, you think we should look at

[00:09:28] Speaker 04:
the clause seven and we should read it.

[00:09:31] Speaker 04:
as you're reading it, as though the clause or medical or surgical treatment thereof only applies to bacterial or viral infections.

[00:09:40] Speaker 03:
Correct.

[00:09:41] Speaker 04:
And we would do that because of the rule of construction, the antecedent.

[00:09:48] Speaker 01:
Yeah, the last antecedent.

[00:09:50] Speaker 04:
And again, that doesn't make sense to me for a number of reasons, but assuming we disagree with you.

[00:10:00] Speaker 04:
What's your argument?

[00:10:02] Speaker 01:
Well, then the argument is take a look at the interrelationship between exclusion 11 and exclusion 7.

[00:10:09] Speaker 01:
Exclusion 11 clearly, Your Honor, states that when you have a voluntary ingestion of a narcotic drug, poison, gas, or fumes as prescribed by a doctor that causes a death, that is outside the scope of the exclusion for

[00:10:28] Speaker 01:
the particular circumstance where a loss is caused by a drug.

[00:10:37] Speaker 01:
Exclusion 11 is more specific, number one.

[00:10:39] Speaker 01:
And number two, the language of exclusion 11 itself says, if you have the individual taking drugs by prescription, it falls outside the exclusion framework of the policy.

[00:10:53] Speaker 01:
There's no question that we've got a covered loss here.

[00:10:56] Speaker 01:
Lina has never said there's anything other than a covered loss.

[00:10:59] Speaker 01:
The only question is, do these exclusions, do any exclusions apply?

[00:11:03] Speaker 01:
Again, the Tenth Circuit is very clear in saying it's lying to the bears the burden of proving that exclusion applies.

[00:11:09] Speaker 01:
You've got to read, you can't just read number seven alone, you have to read number eleven with number seven.

[00:11:15] Speaker 02:
I mean reading eleven like you do though, I mean if somebody ingested poison, you know some kind of noxious gas or fumes and death resulted, I mean we wouldn't we, under your analysis wouldn't we

[00:11:31] Speaker 02:
then try to determine if a physician had told them to do that?

[00:11:35] Speaker 02:
Well, I mean, it's not... I mean, this thing's full of drafting problems, and like our Payless case, I mean, we've not hesitated to get around that.

[00:11:45] Speaker 01:
And when we have drafting problems, the 10th Circuit's very clear when you're talking about exclusions.

[00:11:50] Speaker 01:
The burden of loss, the risk of loss associated with ambiguity falls on Lina.

[00:11:56] Speaker 01:
It does not fall on Ms.

[00:11:57] Speaker 01:
Jensen.

[00:11:58] Speaker 01:
And that's important because I think what we have here is a failure on the part of Lina to act reasonably in evaluating how they inform their insureds about what the scope of the coverage is.

[00:12:13] Speaker 04:
What you just said, though, again, I think you're assuming that de novo review applies.

[00:12:19] Speaker 04:
Because if it's just arbitrary and capricious, we're not going to say that an ambiguity is resolved in favor of the insured.

[00:12:31] Speaker 04:
Your argument keeps hopping over it, but I want to make it clear.

[00:12:34] Speaker 01:
No, there's a relationship between the two.

[00:12:36] Speaker 04:
You've got to have two different arguments here.

[00:12:37] Speaker 01:
There's a relationship between the two.

[00:12:39] Speaker 01:
But I do acknowledge, Judge Maritz,

[00:12:41] Speaker 01:
We feel strongly that the plain, unambiguous language of the policy, when you read 7, and especially when you read 7.011, results in a ruling in favor of coverage and requires a reversal, if I may reserve my time.

[00:13:00] Speaker 04:
Any other questions?

[00:13:00] Speaker 04:
OK.

[00:13:00] Speaker 04:
Thank you.

[00:13:13] Speaker 00:
Thank you and may it please the court.

[00:13:14] Speaker 00:
Christina Holmstrom on behalf of Defendant Life Insurance Company of North America or Lina as it's much easier to say.

[00:13:21] Speaker 00:
I would like to start with where Judge Moritz picked up your questioning and that is with the choice of law provision that we have in the policy.

[00:13:29] Speaker 00:
The case that governs this is Ellis versus Liberty Life.

[00:13:32] Speaker 00:
It is recent.

[00:13:33] Speaker 00:
It is published.

[00:13:34] Speaker 00:
The 10th Circuit denied en banc review, leaving it to stand as is and it is clear.

[00:13:40] Speaker 00:
federal choice of law rules apply to the choice of law analysis in an ERISA policy.

[00:13:45] Speaker 00:
This was also recently described in some length in a case out of the District of California.

[00:13:53] Speaker 00:
a case called Ehrlich, which we cited in our briefs.

[00:13:56] Speaker 00:
And it wouldn't make any sense from an ERISA, from a federal preemption standpoint, to start the choice of law inquiry by looking at state law.

[00:14:05] Speaker 00:
Neither Miller nor any of the other preemption cases that deal with saved state insurance regulation statutes talk about which

[00:14:16] Speaker 00:
which state's law is saved.

[00:14:17] Speaker 00:
And that's the issue we have here.

[00:14:18] Speaker 00:
It's not that no state law is saved.

[00:14:20] Speaker 00:
We're looking at the policy, the plan, to determine which state's law is saved.

[00:14:24] Speaker 00:
And here, under Ellis, it's Delaware.

[00:14:26] Speaker 00:
That leaves the standard of review as an abuse of discretion.

[00:14:30] Speaker 00:
I am unaware of any case, I could have missed one, but I'm unaware of any case in which a court has looked at Lina's policy language and said that it unambiguously

[00:14:42] Speaker 00:
only excludes medical or surgical treatment for bacterial viral infection.

[00:14:49] Speaker 00:
In other words, I'm aware that there are other cases that have looked at whether this language is ambiguous, found that it has been, and construed it against the drafter.

[00:14:57] Speaker 00:
I'm unaware of any court that's found that it unambiguously confers coverage where somebody dies from medical treatment due to a sickness.

[00:15:06] Speaker 00:
And that's an important distinction when you're talking about abuse of discretion review.

[00:15:10] Speaker 04:
Beyond that, however... Can you explain that a little more precisely?

[00:15:13] Speaker 04:
Yes.

[00:15:13] Speaker 04:
Because I'm struggling a little bit with both of your arguments as they pertain to the two different possible standards of review, which are very much different here.

[00:15:22] Speaker 00:
Yes.

[00:15:23] Speaker 04:
As I understand it, the insurer

[00:15:26] Speaker 04:
if we apply abuse of discretion, the insurer simply has to have a reasonable basis for what we do.

[00:15:34] Speaker 04:
And what is your argument that this was reasonable?

[00:15:38] Speaker 00:
At the very best, what we have is an ambiguous policy.

[00:15:43] Speaker 00:
And I don't think that's true.

[00:15:45] Speaker 00:
There has only been one other circuit-level decision to analyze this policy language, and that was the Vieira case out of the Third Circuit.

[00:15:53] Speaker 00:
And the Third Circuit found that this

[00:15:56] Speaker 00:
this policy language, despite the lack of commas, unambiguously excluded coverage for medical or surgical treatment of sickness, disease, bodily or mental infirmity, as well as bacterial or viral infection.

[00:16:11] Speaker 00:
So.

[00:16:11] Speaker 04:
Well, if we're applying, and clarify for me, if we are applying abuse of discretion with you, and we decide that exclusion seven is ambiguous, then do we

[00:16:25] Speaker 04:
Do we apply the contra-preferendum rule?

[00:16:30] Speaker 00:
No, Your Honor.

[00:16:30] Speaker 00:
Contra-preferendum does not apply in discretionary cases, because if something is ambiguous, it's reasonably susceptible to more than one interpretation.

[00:16:38] Speaker 00:
And under abusive discretion review, we get to have the reasonable interpretation, which we have here.

[00:16:44] Speaker 00:
Again, though, I would reiterate that I don't think this is an ambiguous policy term.

[00:16:49] Speaker 00:
So even under de novo review, as in the Vieira case, which was also a de novo case,

[00:16:55] Speaker 00:
There's no ambiguity in the policy.

[00:16:58] Speaker 04:
And if the court will indulge me for just a little bit, I want to take... The argument, though, you need to address, I don't think it's addressed in the Vieira case, is that somehow Exclusions 11, when read with Exclusion 7, makes it ambiguous.

[00:17:14] Speaker 00:
Yes, Your Honor, I'm happy to explain.

[00:17:17] Speaker 00:
I disagree.

[00:17:17] Speaker 04:
There's a way... It does seem that originally, well, originally you wanted to rely on both exclusions,

[00:17:24] Speaker 04:
And then when you receive some facts indicating exclusion 11 may not apply, then you simply relied on seven.

[00:17:32] Speaker 00:
Yes, that's correct, Your Honor.

[00:17:33] Speaker 00:
And that's part of the reasonable dialogue process that Orissa sets up in requiring this administrative back and forth.

[00:17:39] Speaker 00:
When Lyna first obtained the medical records, there was some suggestion that there were a lot more pills missing than should have been from the remaining pill bottles.

[00:17:48] Speaker 00:
So based on the initial information, Lyna had a reasonable basis

[00:17:52] Speaker 00:
to assert that voluntary ingestion exclusion 11.

[00:17:56] Speaker 00:
In good faith, considered the additional evidence that Ms.

[00:17:59] Speaker 00:
Jensen provided, went and got a third party expert's opinion.

[00:18:02] Speaker 00:
Third party experts said, yeah, we can't prove he was not taking them as prescribed.

[00:18:09] Speaker 00:
So Lina withdrew its reliance on exclusion 11.

[00:18:13] Speaker 00:
But exclusion 7 and 11 can absolutely be read in harmony, and here's how.

[00:18:19] Speaker 00:
If an insured is prescribed a medication to treat the insured for an accidental injury and takes that medication as prescribed by the doctor and that medication causes a loss, that is covered under the exception to exclusion 11 because there's no involvement of a sickness or bodily infirmity.

[00:18:44] Speaker 00:
But any time.

[00:18:45] Speaker 04:
But it doesn't say that.

[00:18:48] Speaker 04:
Why would you take a prescription when you don't have a bodily infirmity or a sickness?

[00:18:52] Speaker 00:
For an injury.

[00:18:53] Speaker 00:
So if I got into a car accident.

[00:18:55] Speaker 04:
That's not a bodily infirmity?

[00:18:57] Speaker 00:
No.

[00:18:57] Speaker 00:
No, I don't think that would be.

[00:18:58] Speaker 00:
I mean, it's hypothetical at this point.

[00:19:00] Speaker 00:
I don't think it would be a fair interpretation of this policy language to say that if I got into a car accident and broke my arm and I got prescribed pain medication just for that break and I had some adverse reaction and died

[00:19:13] Speaker 00:
without any sickness, I think that would have to be a covered death, as long as I was taking those medications as prescribed by the doctor, as contemplated in exclusion 11.

[00:19:23] Speaker 03:
And I want to highlight... But you would not say that 11 applies if a drug or a narcotic is being taken for a disease.

[00:19:37] Speaker 03:
You say it's only an accident.

[00:19:40] Speaker 00:
Correct, to an accidental injury.

[00:19:42] Speaker 03:
Why doesn't it say, in paragraph 11, accident?

[00:19:47] Speaker 00:
It doesn't need to.

[00:19:48] Speaker 00:
It's two separate things.

[00:19:49] Speaker 00:
The exclusions seem related, especially under this type of fact pattern, but they cover discrete situations.

[00:19:56] Speaker 00:
So the medical exclusion number seven, the medical treatment exclusion, covers any time an insured suffers a loss in connection with being treated for a sickness or an illness or some type of mental infirmity.

[00:20:07] Speaker 00:
Mike, I get that.

[00:20:09] Speaker 00:
The voluntary ingestion, you know, there's innumerable ways.

[00:20:13] Speaker 00:
Somebody might be taking a drug or medication that might have no relation to a sickness.

[00:20:19] Speaker 00:
Somebody could just be taking an oxycodone to get high, in which case there would be no application of Exclusion 7.

[00:20:27] Speaker 00:
We need Exclusion 11.

[00:20:28] Speaker 03:
I understand that as an explanation.

[00:20:30] Speaker 03:
Yeah.

[00:20:31] Speaker 03:
But what I don't understand is that explanation, without paragraph 11,

[00:20:38] Speaker 03:
saying, for things other than sickness, disease, bodily or mental infirmity, bacterial or viral infection, for things other than that, voluntary ingestion of a narcotic, according to the doctor's prescription, is not excluded.

[00:20:59] Speaker 03:
11 does not say that it is

[00:21:07] Speaker 03:
subservient to seven.

[00:21:10] Speaker 03:
And that's what you're saying.

[00:21:11] Speaker 00:
I'm not saying it's subservient.

[00:21:12] Speaker 00:
I'm saying it's harmonious.

[00:21:13] Speaker 00:
You have to read them together.

[00:21:14] Speaker 03:
Okay.

[00:21:22] Speaker 03:
Okay.

[00:21:22] Speaker 03:
That may work if the standard is abuse of discretion, but it doesn't work so much if it's to know.

[00:21:31] Speaker 03:
Do you agree with that?

[00:21:32] Speaker 00:
I don't.

[00:21:32] Speaker 00:
And here's why.

[00:21:34] Speaker 00:
So this is more fleshed out in the Grove case, which we cited.

[00:21:37] Speaker 00:
But I think the court was concerned that exclusion 11 doesn't specifically say if you're taking medication for an accident.

[00:21:44] Speaker 00:
And it wouldn't have to, because to even get to the exclusions, you have to have a covered loss, which already requires an accidental injury.

[00:21:51] Speaker 00:
It's already in there in the coverage analysis.

[00:21:54] Speaker 00:
By the time you get to exclusion 11, you're already dealing with an accidental injury.

[00:21:59] Speaker 00:
You're then looking to see if there's anything else that might carve out coverage.

[00:22:03] Speaker 00:
And here, there is covered in exclusion 11.

[00:22:07] Speaker 00:
There will be no payment if the death was caused by voluntary ingestion of a drug unless, and here we have an exception, unless that drug is being taken as prescribed by a doctor.

[00:22:18] Speaker 00:
Now, that's an exception to an exclusion.

[00:22:21] Speaker 00:
An exception to exclusion 11 cannot create coverage that is otherwise excluded under number 7.

[00:22:27] Speaker 00:
And if the court will indulge me for just a moment, I have a hypothetical.

[00:22:31] Speaker 00:
Under Ms.

[00:22:32] Speaker 00:
Jensen's reading of exclusion 7, which is the medical treatment exclusion,

[00:22:37] Speaker 00:
We will all agree that medical loss due to medical treatment for a virus is excluded.

[00:22:43] Speaker 00:
There's nothing ambiguous about that.

[00:22:45] Speaker 00:
Even under the last antecedent rule, that's excluded.

[00:22:48] Speaker 00:
So if I get COVID and I'm being treated with medication for COVID and I take that medication exactly as prescribed by my doctor and I still die from it under exclusion seven, that's excluded.

[00:23:01] Speaker 00:
Under Ms.

[00:23:02] Speaker 00:
Jensen's reading of exclusion 11, it's covered.

[00:23:05] Speaker 00:
That's an irreconcilable difference between the exclusions.

[00:23:10] Speaker 00:
The only way these exclusions can be read together, and they have to be, because the court doesn't write out any part of a policy, and it doesn't disregard any part of policy, and it doesn't nullify a part of a policy.

[00:23:23] Speaker 00:
The only way to read these two together is that your death will be covered if it's from medication, if that medication is taken for an accidental injury and taken exactly as prescribed by a doctor.

[00:23:35] Speaker 00:
That's how you read those harmoniously.

[00:23:37] Speaker 00:
And that's what the Grove case really goes into.

[00:23:38] Speaker 00:
I know it's a district court case.

[00:23:40] Speaker 00:
It's not binding on this court.

[00:23:41] Speaker 00:
But the logic is persuasive.

[00:23:44] Speaker 00:
And I think that just taking a step back and going back to the Vieira case with the Third Circuit, the reason why exclusion seven is not ambiguous is because you have to look at in the context of the entire exclusion and the policy itself.

[00:23:59] Speaker 00:
So the policy is very clear up front.

[00:24:01] Speaker 00:
It is a limited policy.

[00:24:02] Speaker 00:
This is not a life insurance policy.

[00:24:04] Speaker 00:
Ms.

[00:24:04] Speaker 00:
Jensen received her life insurance benefits from Lina.

[00:24:07] Speaker 00:
This is a much more limited in scope type of coverage.

[00:24:11] Speaker 00:
And when you look at exclusion seven, you have this list of things that are excluded, sickness, illness, bodily, mentally, mental infirmity, and then bacterial viral infection.

[00:24:22] Speaker 00:
The only way that exclusion makes sense is if you apply the medical treatment, therefore,

[00:24:28] Speaker 00:
to the entire preceding list.

[00:24:30] Speaker 00:
Otherwise, you end up with absurd results.

[00:24:33] Speaker 00:
Again, going back to my COVID example, if I die from treatment related to COVID, that would unequivocally be excluded.

[00:24:40] Speaker 00:
But if I die from treatment of diabetes under Ms.

[00:24:44] Speaker 00:
Jensen's reading of the policy, that would have to be covered.

[00:24:48] Speaker 00:
And there's not a reason within the purpose of AD&D coverage to distinguish between different types of illness in their treatment thereof.

[00:24:56] Speaker 00:
I'll give you an even more nuanced example.

[00:24:59] Speaker 00:
Say I have pneumonia.

[00:25:00] Speaker 00:
Pneumonia can often is caused by viral or bacterial infection.

[00:25:05] Speaker 00:
It can also be caused by fungal infection.

[00:25:07] Speaker 00:
So are we saying that if I die from treatment of pneumonia, coverage is going to depend on what type of pneumonia that is?

[00:25:15] Speaker 00:
That is what the Payless Court referred to as a crazy quilt analysis of what it is and isn't covered.

[00:25:23] Speaker 00:
And that's why you have to take a step back.

[00:25:25] Speaker 00:
look at what the policy was intended to cover.

[00:25:28] Speaker 00:
I do want to briefly hit the Payless decision.

[00:25:31] Speaker 02:
Let me ask you a question first.

[00:25:33] Speaker 02:
Because you agree, don't you, that one of the things we have to do is try to give effect to all of the language in the policy?

[00:25:39] Speaker 02:
Yes.

[00:25:41] Speaker 02:
And I look at paragraph, your exclusion number 11.

[00:25:44] Speaker 02:
And it seems to me that under your argument today, the unless clause, the unless prescribed or taken under the direction of a physician,

[00:25:53] Speaker 02:
and taken in accordance with the prescribed dosage is just surplusage.

[00:25:57] Speaker 02:
It doesn't matter because you're not going to voluntarily ingest a narcotic or a drug unless you're one, abusing it, or two, you have a prescription for a medical infirmity of some sort.

[00:26:14] Speaker 00:
No, Your Honor.

[00:26:14] Speaker 00:
That was my example with the accidental injury.

[00:26:17] Speaker 00:
The way that a death is covered due to taking a prescribed medication

[00:26:23] Speaker 00:
is if that medication is prescribed for an injury as opposed to any kind of sickness.

[00:26:28] Speaker 00:
And that's how you harmonize these two exclusions.

[00:26:30] Speaker 02:
And in your position would be, well, that accidental injury wouldn't be a bodily infirmity.

[00:26:35] Speaker 00:
Correct.

[00:26:37] Speaker 00:
I think under the way this policy works and these two provisions, I think I would have a hard time standing up here and arguing to the court that taking pain medication for a broken arm somehow is treatment for a bodily infirmity.

[00:26:49] Speaker 00:
I think that would make these irreconcilable.

[00:26:51] Speaker 02:
Does it matter to you that what we have here is not a situation where someone just took a drug for an infirmity or for whatever, but we have an unexpected drug interaction that caused death?

[00:27:03] Speaker 00:
That's exactly what Exclusion 7 is intended to provide.

[00:27:07] Speaker 00:
There are innumerable ways that medical treatment can go awry.

[00:27:10] Speaker 00:
Drug interactions, surgical mishaps.

[00:27:15] Speaker 00:
Exclusion 7 broadly is meant to exclude all of those things from coverage.

[00:27:18] Speaker 00:
if the origin of that treatment is a sickness or a bodily or mental infirmity.

[00:27:24] Speaker 00:
And that's consistent with how AD&D coverage functions.

[00:27:27] Speaker 00:
Again, different than life.

[00:27:28] Speaker 00:
Life is very broad.

[00:27:30] Speaker 00:
But when you look at the policy as a whole, and Payless says that you must, it is intended to exclude any death that starts, that has its origin,

[00:27:39] Speaker 00:
with a sickness or a bodily or mental infirmity.

[00:27:42] Speaker 00:
And that's exactly what we have here.

[00:27:44] Speaker 00:
It was a tragic loss.

[00:27:45] Speaker 00:
I don't deny that.

[00:27:46] Speaker 00:
It's just simply not covered under AD&D coverage.

[00:27:49] Speaker 04:
Did you ever suggest that it wasn't an accidental loss at all?

[00:27:54] Speaker 04:
And why not?

[00:27:56] Speaker 04:
Based on what you're saying.

[00:27:58] Speaker 00:
So we don't have a causal link between the sickness he was being treated for and the death.

[00:28:05] Speaker 00:
So in other words, his chronic pain didn't cause his death.

[00:28:08] Speaker 00:
Therefore, it does broadly come within the insurance clause, the insuring clause.

[00:28:14] Speaker 04:
Does it come within the definition of accidental loss?

[00:28:16] Speaker 00:
I think it does.

[00:28:17] Speaker 00:
And that's why you have to apply the exclusion.

[00:28:20] Speaker 00:
Because the coverage starts with the coverage provision, right?

[00:28:23] Speaker 00:
You then have to look at the exclusion to see what is subtracted from coverage.

[00:28:29] Speaker 00:
And my time is up.

[00:28:30] Speaker 00:
So if the panel does not have any more questions, I'll sit down.

[00:28:33] Speaker 00:
Thank you.

[00:28:41] Speaker 01:
I want to start where Lyna ended, and your question Judge Moritz.

[00:28:46] Speaker 01:
There's never been an argument, there was never an argument in the pre-litigation appeal process from Lyna that we did not fall within the covered loss provisions.

[00:28:53] Speaker 01:
This case is relatively simple and focused on the relationship between exclusion 7 and exclusion 11.

[00:29:02] Speaker 01:
I just don't see how Lina's position today can be reconciled with exclusion 11.

[00:29:08] Speaker 04:
There has to be... She offers a basis.

[00:29:10] Speaker 04:
She offers a rationale.

[00:29:11] Speaker 04:
She offers a hypothetical.

[00:29:13] Speaker 04:
Under abuse of discretion review, all they have to do is have a reasonable argument.

[00:29:18] Speaker 04:
Why isn't that reasonable?

[00:29:20] Speaker 01:
It is not reasonable to say,

[00:29:22] Speaker 01:
We can't provide coverage when there is a loss caused by the use of any prescription drugs arising out of treatment of a sickness, disease, or bodily or mentally infirmity.

[00:29:34] Speaker 01:
That's unreasonable.

[00:29:36] Speaker 01:
Those two provisions of 7111 can't be reconciled in that way.

[00:29:40] Speaker 01:
I want to also get back to the Ellis case and one of the things that we talked about at the beginning of the discussion in connection with your concerns, Judge Martz, which is the Ellis case, Tenth Circuit case that talks about the degree to which

[00:29:54] Speaker 01:
choice of law provisions need to be deferred to does not talk about in that case whether it's a self-funded or a fully insured plan.

[00:30:03] Speaker 01:
And there's no question here in this case we've got a fully insured plan.

[00:30:07] Speaker 01:
The language of the Supreme Court in the FMC versus Holliday case

[00:30:11] Speaker 01:
much more importantly, the specific savings clause of ERISA itself, preserve the ability of states to regulate their own insurance products and protect their own citizens.

[00:30:22] Speaker 01:
It's absolutely improper from our perspective to allow Lina in this case, with regard to its fully insured products, to say, you know what, we're going to pick out the best state regulations for insurance that we can find.

[00:30:35] Speaker 01:
That's what's going to govern.

[00:30:36] Speaker 04:
Well, that's the reason why you have to have a connection to the state, and they do here.

[00:30:40] Speaker 04:
Well, even if they have a connection... At their point, the employer is based out of Delaware.

[00:30:45] Speaker 01:
It's not the kind of connection that Utah's connection is to having the need and feeling the need and wanting to protect the Jill Jensen's of the world from overreaching insurance practices.

[00:30:56] Speaker 01:
I don't argue that there's not a connection, Your Honor, so... Okay.

[00:30:59] Speaker 01:
Thank you.

[00:30:59] Speaker 04:
Thank you, Counsel.

[00:31:01] Speaker 04:
We appreciate your arguments.

[00:31:02] Speaker 04:
They've been very helpful, and the case will be submitted and counsel are excused.