In Graham v Western Kentucky Navigation, Inc.,[i] the Sixth Circuit used extrinsic evidence to deny a claim for medical benefits.

WKN sponsored a partially self-funded group benefit plan and NAA provide third-party administrative services. NAA submits questionable claims to WKN, which has final discretion to grant or deny the claims. The Plan gave the administrator primary responsibility for decisions regarding eligibility rules, type of benefits, administrative policies, management of Plan assets, and interpretation of Plan provisions. This triggered an arbitrary and capricious review. [ii]

The Plan also limited benefits for medical expenses for certain injuries.[iii]

WKN hired Graham as a towboat deckhand. While off duty, Graham received injuries in a one-car accident. Graham was a passenger in the vehicle and went to the hospital for treatment. The hospital's toxicology report revealed a blood alcohol level of 0.171. The parties stipulated that Graham's blood alcohol level exceeded 0.17 at the time of the accident. WKN denied Graham's claim for medical expenses because he was legally intoxicated at the time of the accident.

In support of WKN's decision to deny benefits, Dewey, president and owner of WKN, said he denied benefits because the plan did not pay benefits if the claimant incurred the medical expenses because he was legally intoxicated.

            Mr. Dewey also stated the Plan excluded from coverage injuries sustained while intoxicated. Mr. Dewey said that based on his experience, many of WKN's employees are likely to drink alcohol and get injured while they are drinking off the job. Thus, it was essential that the Plan have the right to exclude benefits for injuries sustained during off-duty drinking. Mr. Dewey added that Graham was legally intoxicated as the Plan defined it because he exceeded the legal threshold for driving under the influence under Illinois law.[iv]

WKN interpreted the exclusion to apply to expenses incurred (3) while legally intoxicated.[v]

Graham complained that the "while legally intoxicated" clause modified "driving" or "result of" (causation) and was not a separate exclusion.[vi] Graham argued this was ambiguous and the court must construe it against WKN.[vii] Under an arbitrary and capricious standard, the Sixth Circuit must uphold WKN's interpretation of the Plan provision so long as it is reasonable.[viii]

Graham also argued that Illinois had not established a "legal intoxication" standard relating to a passenger in a car. Thus it was arbitrary and capricious for WKN to apply the standard governing the crime of driving under the influence. However, the Sixth Circuit concluded the statutory standard governing driving under the influence provided a suitably objective measure for WKN to conclude that Graham was legally intoxicated at the time of the accident.[ix] Thus, the Sixth Circuit ruled against Graham.

It appears that Mr. Dewey submitted an affidavit in support of summary judgment; under the Wilkins v. Baptist Health Care System, Inc.,[x] a district court may only consider evidence in the administrative record. The limited exception is if the plaintiff offers evidence to show an alleged lack of due process or alleged bias.[xi]

Another district court in the Sixth Circuit has refused to consider affidavits that a plaintiff offered as evidence.[xii]

In Graham the Court should not have considered the affidavit that WKN offered. The affidavit did not explain how the plan interpreted the exclusion in the past.[xiii] Nor did the plaintiff offer the affidavit; therefore the Sixth Circuit should not have considered it. Without the affidavit it is possible the decision would have been different.