Travel Accident Benefit Case Sent Back To Lower Court

June 27, 2003 ( - A federal appeals court has remanded a case back to the lower court to decide whether a travel accident insurance plan participant was in fact traveling on business at the time of her death.

>The US 2nd Circuit Court of Appeals sent Lifson v. INA Life Insurance Co. of New York back to the US District Court for the Northern District of New York, finding that significant questions of fact still remained surrounding the coverage of the accident insurance plan.   Those questions included whether a “reasonable finder of fact” could conclude that Lifson was “on business … or in the course of … business” at the time of her death, the appeals court said in its opinion, according to Washington-based legal publisher BNA.

Accident Coverage

>On February 29, 2000, Irene Lifson was struck by a car when exiting the parking garage at her MONY Life Insurance Co. place of employment.   She died the following day.

>When Lifson, a software engineer, left MONY, she was on call to respond to problems for two sets of computer systems. MONY employees on call could respond from home by connecting via modem to the company’s computer system.

>Further, Lifson participated in MONY’s Travel Accident Insurance Plan, an ERISA-governed plan administered by INA Life Insurance, which was later succeeded by CIGNA Life of New York. Following her death, Lifson’s husband, Alexander Lifson, filed a claim for benefits under coverage for death on “on business … or in the course of … business.”

>CIGNA denied the widower Lifson’s claim on grounds that his wife’s travel was part of her commute, and therefore excluded under the plan. Additionally, CIGNA said her travel was not “authorized,” a requirement for recovery under the plan.

A judge in the US District Court for the Northern District of New York found that Lifson was not on business when she was killed and that therefore, her widower was not entitled to benefits.   However, the appeals court found that since the claim arose under ERISA, federal common law, not state law, should be applied. Additionally, since familiar rules of contract interpretation apply in reading an ERISA plan, the terms must be construed in accordance with the reasonable expectations of the insured, the court said.

>Further, addressing CIGNA’s argument that there was no business purpose for Lifson’s drive home, the appellate court found the term “on business … or in the course of … business,” was unclear, and so should be construed against CIGNA.

>In fact, a reasonable person could conclude that Lifson’s ride home was on business “simply because it benefited the economic interests of her employer,” the court said. Additionally, there was overwhelming and uncontradicted evidence that Lifson was expected to be paged repeatedly that evening and therefore, a reasonable person could easily conclude that “at the time of her accident, [Lifson] was en route to the place where she and her employer expected her to, and where she in fact would have done, work for MONY,” the court said.

The case is Lifson v. INA Life Insurance Co. of New York, 2d Cir., No. 02-9147, 6/25/03.