Failing to Supplement ERISA Record on Aircraft Use Stymies AD&D Claim

• ERISA in Practice: ERISA claims reviewed “de novo” rarely allow the submission of evidence beyond the “administrative record”

  • Because the court “simply proceeds to evaluate whether the plan administrator correctly or incorrectly denied benefits,” evidence beyond the record is usually irrelevant.

  • But sometimes “circumstances clearly establish that additional evidence is necessary to conduct an adequate de novo review of the benefit decision.” In that case additional materials can be considered.

  • A failure to submit “necessary” additional evidence can lead to a plaintiff failing to meet their burdens of proof. Here’s one tough example.

• The Facts: Kenneth Mueller worked for a supermarket chain that used private planes to move executives around California to visit stores.

  • The chain encouraged executives to get pilot licenses to fly themselves and Mueller had one.

  • Mueller was learning how to fly a new aircraft with the supermarket’s Chief Pilot when it crashed, killing both men.

  • When Mueller’s widow sought group Accidental Death & Dismemberment (AD&D) benefits, insurer Lincoln National denied on the basis that Mueller was a “student pilot” and excluded from coverage.

• The Policy:

  • Mueller’s policy excluded any loss “contributed to or caused by . . . boarding, leaving or being in or on any kind of aircraft.”

  • But it excepted circumstances where “the Covered Person is [1] a fare paying passenger on a commercial aircraft or [2] traveling as a passenger in any aircraft that is owned or leased by or on behalf of the Sponsor."

• The Holding:

  • The Court first examined the term “passenger,” found it ambiguous, and held Mueller could qualify as a “passenger” for purposes of the exclusion.

  • The parties agreed the aircraft was not “owned” by the supermarket. And there was no evidence in the record as to whether it was “leased.”

    • The court rejected arguments that “leased” should be interpreted to mean “used.”

    • It held that “[i]t was incumbent upon plaintiff to provide evidentiary support for her contention that the aircraft was "owned or leased by or on behalf of" the supermarket.

    • “Because of the dearth of information in the record, the court has no way of discerning the relevant facts. Plaintiff had the option of seeking to supplement the administrative record once this action was initiated but never availed herself of that option. Had she done so, the court likely would have granted that request because additional information concerning the ownership or lease of the aircraft ‘is necessary to conduct an adequate de novo review of the benefit decision.’”

  • Because the plaintiff failed to establish the aircraft was leased she could not prove up the exclusion and judgment was entered for Lincoln National.