                                                                                                                           Opinions of the United
1998 Decisions                                                                                                             States Court of Appeals
                                                                                                                              for the Third Circuit


5-19-1998

Murray v. United of Omaha Life
Precedential or Non-Precedential:

Docket 96-5685,96-5748,96-5747,96-5749




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Recommended Citation
"Murray v. United of Omaha Life" (1998). 1998 Decisions. Paper 114.
http://digitalcommons.law.villanova.edu/thirdcircuit_1998/114


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Filed May 19, 1998

UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT

NOS. 96-5685, 96-5747, 96-5748, 96-5749

JOSEPHINE MURRAY,
Appellant in No. 96-5685

v.

UNITED OF OMAHA LIFE INSURANCE COMPANY;
MUTUAL OF OMAHA INSURANCE COMPANY;
AMERICAN HOME ASSURANCE COMPANY;
HARTFORD ACCIDENT AND INDEMNITY COMPANY;
JOHN HANCOCK MUTUAL LIFE INSURANCE COMPANY;
LEGIONNAIRE INSURANCE TRUST PROGRAM;
INSURANCE COMPANY OF NORTH AMERICA

JOSEPHINE MURRAY

v.

UNITED OF OMAHA LIFE INSURANCE COMPANY;
MUTUAL OF OMAHA INSURANCE COMPANY;
AMERICAN HOME ASSURANCE COMPANY;
HARTFORD ACCIDENT AND INDEMNITY COMPANY;
JOHN HANCOCK MUTUAL LIFE INSURANCE COMPANY;
LEGIONNAIRE INSURANCE TRUST PROGRAM;
INSURANCE COMPANY OF NORTH AMERICA

Hartford Accident and Indemnity Company,
Appellant in No. 96-5747

American Home Assurance Company,
Appellant in No. 96-5748

Mutual of Omaha Insurance Company and
United of Omaha Life Insurance Company,
Appellants in No. 96-5749
On Appeal From the United States District Court
For the District of New Jersey
(D.C. Civ. No. 94-cv-03150)

Argued: January 21, 1998

Before: BECKER, STAPLETON, Circuit Judges and
FEIKENS, District Judge.*

(Filed May 19, 1998)

       RALPH E. POLCARI, ESQUIRE
        (ARGUED)
       THOMAS J. DiCHIARA, ESQUIRE
       Drazin & Warshaw
       25 Reckless Place
       P.O. Box 8909
       Red Bank, NJ 07701-8909

       Counsel for Josephine Murray

       MICHAEL J. ZARETSKY, ESQUIRE
       (ARGUED)
       Chorpenning, Good, Carlet &
       Garrison
       1135 Clifton Avenue
       Clifton, NJ 07015

       Counsel for Hartford Accident &
       Indemnity Company

       B. JOHN PENDLETON, JR.,
       ESQUIRE (ARGUED)
       McCarter & English
       100 Mulberry Street
       Four Gateway Center
       Newark, NJ 07101-0652

       Counsel for United of Omaha Life
       Insurance Company and Mutual of
       Omaha Insurance Company
_________________________________________________________________

*Honorable John Feikens, United States District Judge for the Eastern
District of Michigan, sitting by designation.

                                 2
       CHRIS E. PIASECKI, ESQUIRE
       Psak, Graziano, Piasecki & Whitelaw
       127 Union Avenue
       Middlesex, NJ 08846-1039

       Counsel for American Home
       Assurance Company

       JOSEPH J. GARVEY, ESQUIRE
       Kelaher, Garbey, Ballou, & VanDyke
       204 Courthouse Lane
       Toms River, NJ 08753

       Counsel for John Hancock Mutual
       Life Insurance Company

OPINION OF THE COURT

BECKER, Chief Circuit Judge.

This appeal arises from a suit on five accidental death
benefit (ADB) policies (with the five defendant insurance
companies), each of which provides benefits for a death
that is accidental and independent of all other causes. The
plaintiff, Josephine Murray, is the widow of Arthur Murray
who, having been admitted to a hospital for treatment of a
serious ailment, died after his condition worsened following
an accidental fall which resulted in a fractured hip. A jury
found that Mr. Murray's death was within the scope and
conditions of the policies, and returned a verdict in favor of
the plaintiff. The district court, however, determined that,
because Mr. Murray suffered from a number of diseases
and medical conditions prior to the accident, his death was
not independent of all other causes, and entered judgment
as a matter of law in favor of the defendants.

At bottom, this appeal forces us to decide whether, under
New Jersey law, a jury could reasonably find that Mr.
Murray's death was accidental and independent of all other
causes. Unfortunately, New Jersey law is opaque on what is
the critical question here: whether a plaintiff can prevail if
she can prove (1) that the insured's pre-existing condition
or disease, though active and symptomatic, was under

                               3
medical control, and that the insured was expected to live
a productive life for the foreseeable future (measured in
terms of years); and (2) that the accident was the direct,
efficient, and predominant cause of his death. Lacking a
procedure that would enable us to certify this question to
the New Jersey Supreme Court, we are forced to predict
how that court would decide the issue. We predict that the
court would answer in the affirmative, and hence we
conclude that the district court incorrectly interpreted New
Jersey law. Because the evidence was sufficient to sustain
a verdict under New Jersey law as we interpret it, the order
of the district court rendering judgment as a matter of law
in favor of the defendants must be vacated. Although the
district court's charge to the jury was erroneous under the
law as we now predict it, the findings necessarily implied by
the jury's verdict under the incorrect instructions make
clear that the jury would have reached the same conclusion
under correct instructions, and thus we direct the district
court to reinstate the original verdict in plaintiff 's favor.

I. Facts and Procedural History

On February 18, 1992, Mr. Murray, age 71, was admitted
to the hospital due to swelling and pain in his foot. While
hospitalized, he developed gangrene, and on March 2 his
foot was amputated. For several weeks following the
surgery, his temperature was high and he remained
hospitalized. This fever broke on April 6, and he was
scheduled to be discharged on April 11. On April 10,
however, his temperature began to rise again, and when it
continued to rise on the morning of April 11, the discharge
plans were canceled. At approximately 11:45 p.m. on the
evening of the 11th, Mr. Murray fell while walking from the
bathroom to his hospital bed, resulting in a fractured hip.

Mr. Murray's temperature continued to rise on April 12
and he became gravely ill. Although he was a "high risk" for
surgery due to pre-existing diabetic, heart, and liver
conditions (described infra), Mr. Murray's attending
physician determined that he "[would] be totally
incapacitated and probably [would] not heal without
surgical intervention" on the broken hip. Mr. Murray's
condition apparently stabilized over the subsequent week,

                                  4
and the hip surgery was performed on April 22. Following
that surgery, his condition steadily worsened. He suffered
acute respiratory distress, progressive sepsis, acute renal
failure, and a cardiac arrest. In addition, he also
experienced a left pleural effusion. This condition was
caused primarily by heart failure and low protein, and only
appeared after the hip fracture. Finally, Mr. Murray
required an emergency hemodialysis because of
hyperkalemia. He died on May 10, 1992. The death
certificate listed the causes of death as renal failure, sepsis,
and renal transplant.

A. Mr. Murray's Prior Medical Condition

Prior to his fall, Mr. Murray had been diagnosed with a
significant number of medical problems; those from which
he suffered at the time of his death are catalogued in the
margin.1 He had coronary artery disease, a condition
relatively common among older Americans, and suffered
intermittently from atrial fibrillation. While Mr. Murray's
heart was not fibrillating at the time he came into the
hospital, he subsequently developed partial atrial
fibrillation after the accident. He also had hypertension,
which was elevated on the morning of April 11, prior to the
accident. Still, Dr. Scotti, plaintiff 's expert, opined that
there was no reason to believe that Mr. Murray was in any
imminent danger of an acute heart attack. Moreover, the
infarctions noted on his discharge summary, see n.1,
supra, occurred after the accident, and, according to
evidence adduced at trial, were caused by the fall.

In addition, Mr. Murray suffered from renal disease,
which had necessitated two earlier kidney transplants (the
_________________________________________________________________

1. The discharge summary prepared by the hospital after Mr. Murray's
death lists fifteen conditions under the heading "Final Diagnoses." That
list includes: uremia; cellulitis of the left foot with gangrene;
intertrochanteric and subtrochanteric fracture, right hip; peripheral
vascular disease, severe; diabetes mellitus; end-stage renal disease,
secondary to autosomal dominant polycystic kidney disease; status post
kidney transplant; acute renal failure, secondary to sepsis;
atherosclerotic heart disease; fever of undetermined origin; left pleural
effusion; hepatocellular necrosis, idiopathic; fat emboli syndrome;
pneumonia; acute, non-Q wave myocardial infarction.

                               5
first in the 1970s and the second in the 1980s) and
required continuous medication to suppress his immune
system and to prevent his body from rejecting the
transplanted organ. As a result, he had "some immune
deficiency." Dr. Scotti testified, however, that Mr. Murray's
kidney function was "fine" prior to the accident, and that he
did not appear to be in any danger of imminent kidney
failure at that time.

Sometime after his second kidney transplant, Mr. Murray
developed Diabetes Mellitus. According to Dr. Nasberg, an
endocrinologist, this condition was also under control prior
to the accident. Additionally, he suffered from peripheral
vascular disease (i.e. the obstruction or narrowing of the
blood vessels to the legs and feet), which led to the trans-
metatarsal amputation of his foot. Dr. Scotti nonetheless
testified that "there was no evidence that his foot was a
problem" after the amputation. Although Mr. Murray still
suffered from peripheral vascular disease after the
amputation -- which could have lead to complications if he
was to suffer another similar injury -- he did not have any
active gangrene or any specific symptoms prior to his fall.

As noted supra, Mr. Murray also suffered from a fever of
unknown origin while in the hospital for treatment of his
foot. Although the defendant offered testimony at trial that
this fever was indicative of pneumonia, and that it was that
pneumonia that lead to Mr. Murray's death, Dr. Scotti
testified to the contrary. In his opinion, Mr. Murray's clear
chest and lack of cough prior to the accident would make
the possibility of pneumonia highly unlikely. Furthermore,
he had suffered from hepatitis for the fifteen-year period
prior to 1992, and Dr. Scotti hypothesized that the most
likely cause of the pre-accident fever was chronic active
liver disease.

B. Dr. Scotti's Theory

It was not disputed by Dr. Scotti at trial that had Mr.
Murray been a perfectly healthy seventy-one year old man
at the time of the accident, he would probably not have
died as a result thereof. Yet, it was Dr. Scotti's testimony
that the accident caused Mr. Murray's death. In sum, Dr.
Scotti opined that the hip fracture triggered a"cascade of

                               6
events" that directly lead to Mr. Murray's death-- and that
had it not been for the fracture, Mr. Murray would not have
died on April 11.

Briefly put, the "cascade" theory works as follows.
According to Dr. Scotti, all of Mr. Murray's pre-existing
conditions (heart problems, kidney disease, etc.) were under
control at the time he went into the hospital for treatment
of his foot. The fall and subsequent hip fracture either
aggravated the pre-existing conditions out of their
controlled state, or caused new conditions (such as the
Non-Q-wave infarction) to arise, which ultimately lead to
death. For example, Dr. Scotti testified that the Fat Emboli
Syndrome noted on Mr. Murray's discharge summary was
specifically caused by the fractured hip.2 It was this
condition which most likely caused his temperature to rise
significantly after the accident. Moreover, it was Dr. Scotti's
opinion that the fall ultimately spurred on Mr. Murray's
liver disease (i.e. hepatitis B).

As for Mr. Murray's renal failure, it too appears that the
jury could have reasonably inferred from the testimony that
this problem also was triggered by the accident. Dr. Scotti
testified that "the end stage renal failure was certainly a
result of the cascade effect" caused by the fall. Indeed, Dr.
Genovese-Stone, defendants' expert at trial, conceded that
Mr. Murray was not in kidney failure the day before he fell,
that there was nothing in the medical records to indicate
that his kidney was about to fail, and that, with his
medication, Mr. Murray's kidney condition was under
control prior to the fall.

C. Mr. Murray's Insurance and the Litigation Thereon

At the time of Mr. Murray's death, he owned accidental
death benefit policies worth various amounts from the five
defendant insurance companies.3 Plaintiff Josephine
_________________________________________________________________

2. Dr. Scotti described Fat Emboli Syndrome as a condition in which the
fatty materials from the patient's bone marrow escape into the
bloodstream. These materials can then form small clots in the patient's
lung and block the lung vessels. App. at 72A.

3. Those policies (and their values) are the following: United of Omaha
Life Insurance Company ($3,995.00); Mutual of Omaha Insurance

                               7
Murray was the named beneficiary under each of these
policies, and after Mr. Murray died, she filed claims for
benefits pursuant to them. Each of the insurance
companies independently reviewed Mrs. Murray's claim,
determined that Mr. Murray's death was not accidental,
and refused to pay benefits.

On May 10, 1994, Mrs. Murray filed a complaint in
Superior Court, Monmouth County, New Jersey, against the
insurance companies, who removed the case to the District
Court for the District of New Jersey. On September 13,
1996, a jury returned a verdict in Mrs. Murray's favor. After
the jury was excused, the district court granted the
insurance companies' renewed motion for judgment as a
matter of law, and dismissed the complaint with prejudice.
Mrs. Murray appeals.4 The insurance companies cross-
appeal, contending that the district court erred in charging
the jury.

II. The District Court's Opinion

The parties have stipulated that Mrs. Murray is entitled
to recover benefits under the present ADB policies only if
her husband's death "was the result of bodily injury directly
from an accident and independent of all other causes."
_________________________________________________________________

Company ($80,200.00); American Home Assurance Company
($25,000.00); Hartford Life Insurance Company ($75,000.00); John
Hancock Mutual Life Insurance Company ($26,250.00). Mr. Murray also
owned accidental death policies from Legionnaire Insurance Trust
Program and the Insurance Company of North America. Although these
latter two companies were named in the complaint, they settled with
Mrs. Murray and are not parties to this appeal.

4. Removal of this action from state court to the district court was
appropriate under 28 U.S.C. S 1441(a), as the district court had original
jurisdiction pursuant to 28 U.S.C. S 1332. We have jurisdiction over this
appeal under 28 U.S.C. S 1291. Our review is plenary, and we will
sustain the district court's entry of judgment as a matter of law if
"there
is no legally sufficient evidentiary basis for a reasonable jury" to
return
a verdict in favor of Mrs. Murray. Rhone Poulenc Rorer Pharmaceuticals
Inc. v. Newman Glass Works, 112 F.3d 695, 696 (3d Cir. 1997). The
evidence must be viewed in a light most favorable to the non-moving
party. See Mosley v. Wilson, 102 F.3d 85, 89 (3d Cir. 1996).

                               8
They also agree that this language must be interpreted
according to the law of New Jersey. Sitting in diversity, we
must predict how the highest court of New Jersey would
rule. See Robertson v. Allied Signal, Inc., 914 F.2d 360, 378
(3d Cir. 1990). We begin by reviewing the district court's
interpretation and application of New Jersey's law in this
matter.

In its opinion granting judgment as a matter of law to the
defendants, the district court read New Jersey law to
require a case by case evaluation which takes into account
both the mechanism by which death occurs and the
"nature and severity of the underlying conditions or
diseases." (See Amended Transcript of Trial, Sept. 13, 1996
at 12-13 [hereinafter "Transcript"].) The "telling rule" derived
from the New Jersey cases, according to the district court,
is that:

       where the medical proofs establish affirmatively that
       the active disease, with which the insured was afflicted
       and for which he was being treated, not only was
       competent to contribute to his death, but in the
       opinion of his own physician, did in fact operate in
       conjunction with an accidental injury to produce the
       demise, the Court has no alternative but to take the
       case from the jury.

From this, the district court found New Jersey to prescribe
a two-pronged test. First, in order to recover, the insured
must show that his pre-existing conditions were "inactive
and under control, and were not sufficient to cause death."
In the district court's view, if any pre-existing condition was
"active, known, symptomatic, or progressive, and of such a
nature and severity in and of itself so as to be capable of
contributing to death," this first element would not be met.
Second, the district court held that the insured must show
that the accidental injury was the "direct, efficient and
predominant cause of death, in that it set in progress the
chain of events leading directly to death by exciting or
triggering the pre-existing conditions into activity, and
thereby hastened death so as to cause it to occur at an
earlier period than it would have occurred but for the
accident."

                               9
The district court then reviewed the evidence. Most
notably, the district court referenced Dr. Scotti's testimony
that all of Mr. Murray's conditions were controlled at the
time of the fall; that these conditions were not likely to
cause death at the time death occurred; and that, in Dr.
Scotti's opinion, the fall was the proximate cause of Mr.
Murray's decline, which led to his death. Indeed, according
to Dr. Scotti, Mr. Murray would have lived for several more
years but for the accident.5 Based on these facts, the
district court concluded that judgment as a matter of law
was not warranted on prong two of the New Jersey test (i.e.
causation).

Nonetheless, the district court found that Dr. Scotti's
testimony did not provide sufficient evidentiary support for
plaintiff to meet her burden on the first prong of the test.
This was because several of the diseases and conditions
from which Mr. Murray was suffering, including
arteriosclerotic heart disease, peripheral vascular disease,
diabetes, hepatitis B, and renal failure, were "active" and
because they, singularly or in combination, together with
the accidental injury, in some manner were contributing
causes of Mr. Murray's death. Moreover, the district court
relied upon Dr. Scotti's testimony that if Mr. Murray had
been a "perfectly healthy 71 year old," then it was much
less likely that he would have died from the hip fracture,
that his death was made "much more likely" by his
combination of existing medical problems at the time of the
accident, and that in Dr. Scotti's opinion there was "no way
that the fall was the sole cause of death." While Dr. Scotti
testified that all of Mr. Murray's pre-existing conditions
were under control at the time of the accident, the district
court found that

       the particulars, the specifics of Dr. Scotti's testimony
_________________________________________________________________

5. For example, Dr. Scotti testified that

       "...about five percent of people with hepatitis will go on to have
       chronic active liver disease but they will live for years and
years. He
       was not in hepatic failure and was not -- did not have cirrhosis,
so
       that again before the fracture, his liver disease did not pose an
       immediate threat of death or death within a year or two or three or
       four."

                               10
       make it clear that he acknowledged that several of Mr.
       Murray's conditions were, in fact, not under control at
       the time of the accident, and that these conditions
       were among the conditions which contributed to his
       ultimate demise.

On this basis, the court found for defendants.

The New Jersey Supreme Court has never addressed the
ultimate question before us, and there are conflicting
strains in New Jersey law. Nonetheless, we predict that
under these circumstances, the New Jersey Supreme
Court's approach to resolving this dispute would differ from
the approach utilized by the district court.

III. The New Jersey Jurisprudence on the Interpretation
       of Accidental Death Benefit Clauses

The question before us is whether the district court
correctly predicted how the New Jersey Supreme Court
would rule on the present facts. The district court deduced
its two-pronged test from three cases dealing with the
construction of ADB clauses in New Jersey: Runyon v.
Commonwealth Casualty Co., 160 A. 402 (N.J. 1932)
("Runyon II"); Kievit v. Loyal Protective Life Ins. Co., 170
A.2d 22 (N.J. 1961); and Tomaiuoli v. United States Fidelity
and Guaranty Co., 182 A.2d 582 (N.J. Super. Ct. App. Div.
1962). We will look to these cases and others to determine
how the New Jersey courts have treated the construction of
ADB limited coverage clauses in the past. Since, as we
discuss infra, the holdings of these cases are largely
dependent upon their particular facts, we will also make
reference to modern intrajurisdictional trends and scholarly
opinions on how these clauses should be construed.

A. The Strict Construction Model -- Runyon I & II

The first major New Jersey opinions treating issues
similar to those before us were the related cases of Runyon
v. Monarch Accident Ins. Co., 158 A. 530 (N.J. 1932)
("Runyon I") and Runyon II, supra. Both cases dealt with the
same accident, in which the insured slipped on an icy
pavement, broke his hip, and died about five weeks later.
The evidence showed that the insured had suffered for

                               11
eleven years prior to the accident from a condition then
known as "paralysis agitans" (known more commonly now
as Parkinson's Disease), and the death certificate listed the
cause of death as "fractured left hip from slipping on ice;
contributory paralysis agitans (secondary) duration 11
years." Runyon I, 158 A. at 532. The insured's physician
testified at trial that his use of the word "contributory"
meant that if the insured had been in normal health, he
would have "stood a much better chance" to recover from
the shock of the hip fracture. See id.

The ADB policy in Runyon I provided that the defendant
was liable only if death resulted "exclusively from bodily
injuries caused solely by external, violent and accidental
means." Id. at 531. The court held that"under such a
policy, if the insured, at the time of the accidental injury,
was also suffering from a disease, and the disease
aggravated the effects of the accident, and actively
contributed to the death occasioned thereby, there can be
no recovery upon the policy." Id. On this basis, the court
upheld the verdict for the defendant.

Runyon II involved the same facts, though construed
under a different insurance policy. The relevant policy
language in that case provided for benefits so long as death
or bodily injury was caused:

       directly and independently of all other causes by
       external, violent, and accidental means, which bodily
       injuries, or their effects, shall not be caused wholly or
       in part, directly or indirectly, by any bodily or mental
       disease, defect or infirmity.

Runyon II, 160 A. at 403. The trial court denied the
defendant's motion for a nonsuit, and the jury returned a
verdict for the plaintiff. The New Jersey high court reversed.6
Since it was uncontroverted that the insured's pre-existing
condition had, to some extent, caused the death of the
insured, the court held that the case fell squarely within
the exempting condition of the policy -- i.e. that the death
was not caused directly and independently of all causes
other than the accident. See id.
_________________________________________________________________

6. The court was then known as the Court of Errors and Appeals.

                               12
B. The Modern Model -- Mahon and Kievit

About thirty years after Runyon II, the New Jersey
Superior Court Appellate Division broke from Runyon's
apparently strict dictates in Mahon v. American Casualty
Co. of Reading, 167 A.2d 191 (N.J. Super. Ct. App. Div.
1961). The facts of Mahon can be simply stated. The
deceased, a nine year old boy who appeared to be in good
health, was playing in his schoolyard during recess when
he accidentally bumped his head against the head of a
schoolmate. Soon thereafter, the boy developed symptoms
prompting a medical examination. That examination and
subsequent diagnostic operations revealed that the boy had
a condition known as the Arnold-Chiari malformation.
According to expert testimony at trial, the malformation
was caused by a tumor deep within the boy's brain; while
the tumor and the malformation existed prior to the head
injury, they were in a "quiescent" state and it took the
trauma of the head injury to cause the boy's acute
symptoms. See id. at 194-95. Moreover, the expert testified
that but for the tumor, the acute symptoms would not have
occurred; yet, but for the head trauma, the tumor would
not have caused the malformation to become acute"for a
further interval of time." See id. at 195.

The court recognized that cases like Runyon II reflected a
"pronounced tendency" in the law "to hold for the insurer
as a matter of law, if there is uncontroverted evidence of
causal contribution by disease or abnormality to the loss."
Id. at 198. At the same time, the court noted a "not
inconsiderable number of decisions" which held that such
evidence could still support a verdict for the insured if the
jury was to find that the accident operated as the proximate
or predominant cause of the loss. See id. The court also
distinguished between two types of limitation clauses found
in ADB policies. The first (found in Mahon and in the
stipulation here), known as a "limited coverage clause," is
typically of the form: "loss resulting directly and
independently of all other causes from injury caused by
accident." Id. at 196. The second (found in Runyon II) is
known as an "exclusionary clause," and is of the form:
"which bodily injuries, or their effects, shall not be caused
wholly or in part, directly or indirectly, by any bodily or

                               13
mental disease, defect, or infirmity." Id. Examining cases
from several jurisdictions, the court concluded that the
exclusionary clause constitutes a significantly more
restrictive contract than the limited coverage clause. See id.
at 199.

In light of these considerations, Mahon held that the
"mere conjunction of disease or abnormality and accident,
each `but for' causes of the resulting disability, and neither
alone efficient to produce it" does not necessarily bar
recovery as a matter of law in a limited coverage case. See
id. at 200. The court opined:

       In what seems to us a preponderance of American
       jurisdictions, the test is whether the accidental injury
       as contrasted with the contributing disease or bodily
       condition, is the proximate cause of the disability or
       loss. . . . Pervading such cases is the philosophy that
       if the accident is a more substantial contributing cause
       of the resultant disability or death than the disease,
       the latter merely being a condition thereof, recovery is
       allowed.

Id. at 201. The court held that this result was not
foreclosed by Runyon I. Although Runyon I mentioned a
"general rule" that recovery should be barred if a pre-
existing disease aggravated the accident and "actively
contributed" to the death occasioned by the accident,
Mahon's review of the case law suggested that Runyon I's
statement could not reflect the "general rule" unless "active
contribution" was understood to mean "predominant
cause." Mahon, 167 A.2d at 205. The court also
distinguished Runyon II on the basis that the policy in that
case involved an exclusionary clause, whereas the policy in
Mahon only involved a limited coverage clause. We do not
rely on this distinction, however, because, as we note
below, the modern trend (at least in New Jersey) is to treat
both clauses the same. See infra at n. 7.

The New Jersey Supreme Court evinced an intent to
follow the modern liberal trend outlined in Mahon in Kievit
v. Loyal Protective Life Ins. Co., 170 A.2d 22 (N.J. 1961), the
court's most recent treatment of the issue at hand. The
insured in Kievit was a forty-seven year old carpenter, who

                               14
appeared to be in perfectly good health, without any
diagnosed diseases or conditions, and with no symptoms.
The accident occurred when the insured was struck over
the left eye by a two-by-four, after which he developed
"tremors" and became totally disabled. Kievit, 170 A.2d at
24. Testimony at trial indicated that the insured actually
had (although asymptomatic) Parkinson's Disease prior to
the accident, which the accident had aggravated. See id. at
25.

The trial   court entered judgment for the defendant
insurance   company and the Supreme Court reversed. This
case, the   court held, was distinguishable from both Runyon
opinions.   In those cases:

       a patent, active disease was found to have contributed
       with the accident to the resulting death of the insured.
       We are here concerned with a latent, inactive condition
       or disease which was not accompanied by any
       symptoms and which was precipitated or activated by
       the accident into a resulting disability.

Id. at 27. Although the policy held by the insured in Kievit
contained an exclusionary clause, the court did notfind
that Mahon was distinguishable on this basis.7 Rather, the
Kievit court held that the key was the reasonable
expectations of the insured. See id. at 30 ("[T]he court's goal
in construing an accident insurance policy is to effectuate
the reasonable expectations of the average member of the
public who buys it.").

In what we consider the most critical passage of the
opinion, the court held:

       When the Company issued its accident policy to Mr.
       Kievit it knew that, although he was then about 48 and
       in good health, he could and presumably would keep
       the policy in force until he was 65 and that in the
       course of time he would undoubtedly be subjected to
       bodily conditions and diseases incident to the aging
_________________________________________________________________

7. "In the instant matter we attach little significance to the presence of
the exclusionary clause in view of the primary provision limiting coverage
to loss from accidental bodily injuries, directly and independently of all
other causes." Kievit, 170 A.2d at 30.

                                 15
       process. If the terms of the policy were read literally,
       the policy would be of little value to him since disability
       or death resulting from accidental injury would in all
       probability be in some sense contributed to by the
       infirmities of age. . . . Such literal reading was never
       contemplated and it may fairly and justly be concluded
       that it also was never contemplated that indemnity
       would be unavailable where a condition or disease
       which was wholly dormant was activated and became
       disabling as the result of an accidental injury.

Id. at 30 (emphasis added). The court then further clarified
its position by quoting the following passage from United
States Fidelity & Guarantee Co. v. Hood, 87 So. 115, 120
(Miss. Sup. Ct. 1921):

       It is not sufficient to defeat the policy that the accident
       may have made some latent disease active, which
       disease contributed in some degree to the death. If the
       disease was active and of such character and virulence
       as to endanger life apart from the accident, but might
       not have done so had the accident not happened, then
       that may be said to be a proximate contributing cause.

Kievit, 170 A.2d at 30. Based on this rationale, the court
held that the accident was the proximate cause of the
insured's disability, and that his pre-existing disease,
"activated by the accident into an incapacitating condition,"
was not a disqualifying contributing cause. Id. at 31.

Thus, Kievit and Mahon can be read most plausibly to
hold that the construction of limited coverage clauses in
ADB policies depends upon some form of proximate
causation analysis in order to fairly represent the
reasonable expectations of the insured. At the very least, if
the pre-existing condition is found to have been"active" (as
opposed to the "latent" condition at issue in Kievit), these
cases would appear to require a factual determination
whether the condition was "of such character and virulence
as to endanger life apart from the accident" in some
relevant medical sense, or whether the accident precipitated
the condition into a resulting disability. See Kievit, 170
A.2d at 27, 30.

                               16
This approach suggests what scholars have deemed the
modern tendency of courts dealing with limited coverage
clauses like these:

       It has thus been the tendency to hold that where the
       disease was not a direct, proximate, or concurring
       cause of the loss recovery would be allowed, regardless
       of the existence of such condition. . . . Other courts
       have taken a still broader view, consistent with that
       which the authors urge herein as being the better
       approach, that recovery may still be had where the
       diseased condition appeared actually to contribute to
       cause the death, where the accident was the prime or
       moving cause. This has come to be the more modern
       rule, irrespective of the stringencies of policy language,
       where injury is a proximate cause of death or
       disability, even though the result for which claim is
       made would, perhaps, not have occurred except for the
       preexisting condition.

John Alan Appleman & Jean Appleman, Insurance Law and
Practice S 393 at 81, 85-90 (1981); see also Robert E.
Keeton & Alan I. Widiss, Insurance Law S 5.4(b)(2) at 502
(1988) (stating that in ADB cases, "courts tend to interpret
the coverage provisions and limitations so as to favor the
interests of the beneficiaries when the evidence indicates
the death or injury was essentially fortuitous."). For the
reasons discussed infra, we believe that the New Jersey
Supreme Court would follow this modern approach in the
present case.

C. The Appellate Division Returns to Runyon-- Tomaiuoli

Shortly after Kievit was handed down, the Appellate
Division revisited the Runyon approach in Tomaiuoli v.
United States Fidelity & Guaranty Co., 182 A.2d 582 (N.J.
Super. Ct. App. Div. 1962). In that case, the insured, a
seventy-two year old man who had a history of
arteriosclerotic heart disease and diabetes, was involved in
a minor traffic accident, from which he suffered no bodily
injuries. Shortly thereafter, while still at the accident scene,
the insured collapsed on the sidewalk from a heart attack,
and died before an ambulance could arrive. The plaintiff,
relying upon expert medical testimony, claimed that the car

                               17
accident led to a "chain of events" that caused the insured's
death. See id. at 586. The court ultimately found that the
accident was "the precipitating cause of exciting the
decedent to a degree greater than he was able to withstand
physically by reason of the underlying systemic maladies
with which he was afflicted, with the consequence that he
collapsed." Id. at 587. The insurance policy, as in Runyon
II, provided for the payment of benefits for accidental
injuries resulting in death only if the loss resulted "directly
and independently of all other causes." Tomaiuoli, 182 A.2d
at 588.

The appellate division found this case to be factually and
legally indistinguishable from Runyon II, and affirmed the
trial court's judgment notwithstanding a verdict in favor of
the defendant. The court found that in both cases:

       the insured persons were, and had been, suffering from
       active diseases, progressive in nature, capable of
       producing fatality, and presenting symptoms which
       brought home to the victims and their respective
       doctors knowledge of their existence. Moreover, in both
       cases the treating physicians confessed inability to
       separate the effects of the bodily injury from the effects
       of the pre-existing active disease, and felt obliged to
       conclude that the total of such effects in combination
       produced the death.

182 A.2d at 588. In this light, the court held that:

       Where, as here, his medical proofs establish
       affirmatively that the active disease with which he was
       afflicted, and for which he was being treated, not only
       was competent to contribute to his death, but in the
       opinion of his own physician, did in fact operate in
       conjunction with an accidental injury to produce his
       demise, the court has no alternative but to take the
       case from the jury.

Id. at 590.

Thus, in the view of the Tomaiuoli court, Runyon I and
Runyon II do not permit recovery when the pre-existing
condition is an "[a]ctive, patent progressive disease which
in its very nature is competent to contribute to death." Id.

                               18
While the court recognized that Kievit and Mahon "stand
strongly for liberality of construction," it found that those
cases only compelled a departure from the Runyon
approach when the pre-existing condition was "[l]atent or
[d]ormant, [a] symptom-free condition, possibly aggravated
or exacerbated by bodily injury." Id.

D. Application to the Present Case

Not surprisingly, defendants contend that our disposition
of this case should be controlled by Runyon II and
Tomaiuoli. They submit that the New Jersey Supreme Court
would follow Tomaiuoli's reading of the Runyon cases,
Kievit, and Mahon and hold that, if a known and active pre-
existing condition, capable in itself of producing fatality,
actively contributes to the insured's death, recovery under
the applicable ADB policies would not be permitted.
Accordingly, they would have us affirm the district court's
determination that the fact finder must determine as a
threshold matter whether the pre-existing disease falls into
one of two categories: either the disease is (1) an active,
patent, progressive disease that by its very nature is
competent to contribute to death; or it is (2) latent or
dormant and symptom free. Under this test, if the condition
falls within category (1), there can be no liability. According
to the defendants, the facts of the present case, unlike
Kievit, could not fall within category (2). To the contrary,
they contend that this case is factually indistinguishable
from Runyon II and Tomaiuoli, placing it squarely within
category (1).

Although Tomaiuoli clearly suggests that we should
construe Runyon broadly and find no recovery any time the
pre-existing condition is active and symptomatic, see 182
A.2d at 588-89, we predict that the New Jersey Supreme
Court would reject this view in light of Kievit's emphasis on
the reasonable expectations of the insureds. Tomaiuoli, to
be sure, recognizes the reasonable expectations doctrine,
and the "liberality of construction" for which Kievit and
Mahon stand. See Tomaiuoli, 182 A.2d at 590. We believe,
however, that Tomaiuoli unduly limits the reach of both of
these principles. Accordingly, we predict that the New
Jersey Supreme Court, if faced with the present facts,
would not adopt Tomaiuoli. See generally Nationwide

                               19
Mutual Fire Ins. Co. v. Pipher, ___ F.3d ___, 1998 WL
113933 (3d Cir. 1998) (predicting that Pennsylvania
Supreme Court would not extend holding of its earlier
decision as suggested by intervening decisions of other
courts).

We observe first that Kievit clearly rejected the
proposition that there can be no liability if any known pre
existing condition at all contributed to the insured's death.
If that was the case, then an insured could only recover if
he or she was in perfect health at the time of the accident.
As another court, interpreting Kievit and other similar
cases, has eloquently stated:

       If the phrase is given literal effect, only the healthiest
       of individuals would be given the protection of their
       policies. Those suffering from even the slightest pre-
       existing medical condition would be precluded from
       benefits--the purchased coverage would be illusory.
       The court will not construe the contract to defeat,
       rather than promote, the purpose of accident
       insurance. The court therefore concludes that literal
       application of the phrase "direct result, independent of
       all other causes" defeats the reasonable expectations of
       insureds.

Henry v. Home Ins. Co., 907 F. Supp. 1392, 1397 (C.D. Cal.
1995). Such a result could not be consistent with the
reasonable expectations of the insured. See Kievit, 170 A.2d
at 26, 30; see also Sparks v. St. Paul Ins. Co., 495 A.2d
406, 414 (N.J. 1985) ("The interpretation of insurance
contracts to accord with the reasonable expectations of the
insured, regardless of the existence of any ambiguity in the
policy, constitutes judicial recognition of the unique nature
of contracts of insurance.").

We recognize that this observation may be in tension with
a literal reading of the Runyon decisions. However, those
cases were based upon a strict construction approach to
limited coverage and exclusionary clauses which we do not
believe is tenable after Kievit specifically applied the
reasonable expectations doctrine to this area of New Jersey
insurance law. See, e.g., Werner Industries, Inc. v. First
State Ins. Co., 548 A.2d 188, 191 (N.J. 1988) ("At times,

                               20
even an unambiguous contract has been interpreted
contrary to its plain meaning so as to fulfill the reasonable
expectations of the insured."); Kievit, 170 A.2d at 30
(rejecting literal interpretation of limited coverage clause).8
Accordingly, we predict that the Supreme Court of New
Jersey would not apply a literal reading of the Runyon
opinions to this case.

The question remains, however, whether that court would
agree with Tomaiuoli that recovery can only be had if the
pre-existing condition was latent, dormant, and symptom-
free. We predict not. Consider, for example, a situation in
which an individual has been diagnosed with a slow-moving
cancer that is likely to cause his death in ten or fifteen
years and which is thus, by definition, not inactive. Let us
further assume: (1) the disease carries with it certain
symptoms, all of which are presently controlled by
medication and treatment; and (2) the individual has been
living a normal and productive life and is expected to do so
until the cancer finally progresses to its terminal stage (i.e.
in ten to fifteen years). Assume also that the individual
suffers an entirely fortuitous accident and, due to serious
injuries suffered in that accident, his previously controlled
condition is aggravated, resulting in death. We doubt that,
in light of the reasonable expectations doctrine, New Jersey
would hold that his beneficiaries should be deprived of
accidental death benefits just because his pre-existing
disease, which acted in combination with the accidental
injury to cause his untimely death, was not "inactive and
symptom free."

What this hypothetical points out, we believe, is that the
patent/latent categorization scheme suggested in Tomaiuoli
is too simplistic, and yields results inconsistent with the
reasonable expectations of insureds. As Appleman &
Appleman, supra, have noted, while a move away from this
_________________________________________________________________

8. We have on several occasions recognized and applied New Jersey's
adoption of the reasonable expectations doctrine. See, e.g., Oritani
Savings & Loan Ass'n v. Fidelity & Deposit Co. of Md., 989 F.2d 635, 638
(3d Cir. 1993); Vargas v. Hudson County Bd. of Elections, 949 F.2d 665,
671-72 (3d Cir. 1991); Van Orman v. American Ins. Co., 680 F.2d 301,
308-310 (3d Cir. 1982).

                               21
scheme "is not as satisfactory as the ability to decree a
clean line of demarcation, it might be more consistent with
the realities of existence." Appleman & Appleman, supra,
S 391 at 52-3. And, we add, it is more consistent with the
ability of modern medicine to prolong life. While Tomaiuoli
was correct in recognizing that Kievit distinguished its facts
from the Runyon facts along the patent-latent axis, we
believe -- and predict that the Supreme Court of New
Jersey would similarly believe -- that Tomaiuoli erred (an
error which the district court here followed) in raising this
essentially factual distinction to the level of legal
categorization.

It is important to note also that all of the New Jersey
precedents discussed above are heavily fact-bound, relying
upon the precise nature of the insured's pre-existing
condition; the relationship between that condition, the type
of accident, and the resulting disability; and the language
of the applicable insurance policy. In none of these cases
were the New Jersey courts faced with a factual scenario
like the cancer hypothetical or the present case, in which
the defendant suffered from arguably "active" diseases
which the jury could find, based on medical expert
testimony, were reasonably under control by virtue of the
insured's then-existing medical treatments.9 While such a
condition is not "dormant" in any technical sense of the
word, it is functionally like a "dormant" condition in the
important respect that it did not pose an immediate threat
of death until triggered by the injury.10 Of course, such an
_________________________________________________________________

9. Tomaiuoli is the closest case to the present one on the facts. Mr.
Tomaiuoli's heart disease and diabetes were diagnosed a few years prior
to his accident and were monitored during regular checkups. His doctor
noted "no signification [sic] changes" in his conditions during this time,
and it appears that medication was prescribed at some point. See
Tomaiuoli, 182 A.2d at 585-86. The court found additionally that
"arteriosclerosis and its attendant symptoms are the invariable
consequences of the aging process and are progressive in varying degrees
depending upon the arterial fortitude of the individual." Id. at 587. The
court does not make note of any testimony to the effect that Mr.
Tomaiuoli's conditions were under control at the time of accident,
however.

10. Both Kievit and Mahon appear to attach significance to whether or
not the insured was aware of his pre-existing condition prior to the time

                               22
analogy may or may not be appropriate on the facts of a
particular case -- as noted in Kievit, just because an active
or virulent pre-existing condition might not have killed the
insured had the accident not happened does not mean that
the condition is not a proximate contributing cause. See
Kievit, 170 A.2d at 30. But this is a question of fact, not a
question of law.

Bearing in mind New Jersey's broad and liberal
construction of insurance policies in favor of the insured,
see, e.g., Dittmar v. Continental Cas. Co., 150 A.2d 666, 672
(N.J. 1959), its adoption of the doctrine of reasonable
expectations, and the harshness with which the rule
advanced by these insurers would operate under some
factual scenarios, we do not believe that the New Jersey
Supreme Court would adhere to the insurers' mechanical
reading of New Jersey law. To the contrary, we believe that
the court would hold that in cases such as the present one,
in which there is medical evidence to a reasonable degree of
certainty that the insured's relevant pre-existing conditions,
even if active and symptomatic and capable of ultimately
causing death, were under control at the time of the
accident, and that the insured was expected to live a
productive life for the foreseeable future (measured in terms
of years), it is a question of fact for the jury to decide
whether the pre-existing condition or the accident was the
cause of the defendant's death or disability under an ADB
policy.

The remaining question is the standard of causation. The
traditional term is "proximate cause," but there appears to
be some confusion in the case law and scholarly
commentary as to how that term should be defined in this
context. More specifically, there is some difference of
opinion whether it should be defined in the same way as
_________________________________________________________________

of the injury. In light of modern medicine's increasingly developed
ability
to detect diseases in their nascent stages, we fail to see how this
distinction could continue to have much meaning. That is, we discern
little difference between a disease or condition that is unknown to the
patient and asymptomatic, and one that is known but that is being
treated to the extent that it is considered "under control." The relevant
question in both instances is the same -- to what extent is the pre-
existing condition affecting the life (and life expectancy) of the
patient?

                               23
that term is used in standard negligence cases, or whether
it should be defined as the "predominant cause." See, e.g.,
Appleman & Appleman, supra, S 362 at 484-85, 487 ("it is
necessary only that the accident stand out as a
predominant factor in producing the loss") (citing cases);
Carroll v. CUNA Mutual Ins. Society, 894 P.2d 746, 755
(Colo. 1995) (en banc) ("Courts when using the word
`proximate cause,' however, seem to intend no more that to
distinguish between remote and predominant causes.").

The Mahon court appears to conflate the two terms:

       [T]he test is whether the accidental injury, as
       contrasted with the contributing disease or bodily
       condition, is the proximate or predominant cause of
       the disability or loss, sometimes additionally qualified
       as the active, efficient, dominant, originating, or direct
       cause.

Mahon, 167 A.2d at 201. The New Jersey Supreme Court in
Kievit uses the term "proximate cause" without defining it,
although the court does discuss Mahon's definition and
seems to approve of it. See Kievit, 170 A.2d at 487-90
(noting Mahon's definition of proximate cause as the "direct,
efficient, and predominant cause."). In consideration of the
foregoing, we predict that the New Jersey Supreme Court
would define "proximate cause" in this setting as the direct,
efficient, and predominant cause of the insured's death. We
note that this was the test the district court applied in
instructing the jury and ruling on defendants' motion for
judgment as a matter of law.

Adoption of the rule we have described would bring New
Jersey in line with the modern approach taken by courts of
other jurisdictions. See Appleman & Appleman, supra, at
S 393; see also, e.g., Carroll v. CUNA Mutual Ins. Society,
894 P.2d 746, 755 (Colo. 1995) (holding that benefits are
recoverable "as long as one can show that the accident is
the predominant cause of the [death]."); Life Ins. Co. of
North America v. Evans, 637 P.2d 806, 808-09 (Mont. 1981)
("Recovery may be had even though the disease appears to
have actually contributed to the cause of death as long as
the accident sets in motion the chain of events leading to
death, or if it is the prime or moving cause."). We believe
that New Jersey would follow this course.

                               24
Under this standard, the evidence adduced by the
plaintiff would support a verdict in her favor. Although it is
undisputed that some of Mr. Murray's conditions were
active and symptomatic and capable of ultimately causing
his death, Dr. Scotti testified that they were under control,
that Mr. Murray would have lived with them for years, that
the accident caused an exacerbation of the pre-existing
conditions, and that the accident was the predominant
cause of death.11 If so, the death could be found by the jury
to be proximately caused by an "accident and independent
of all other causes" within the stipulated limited coverage
clause of the policy as we have construed it, and the
judgment as a matter of law in favor of the defendants
must be vacated.

IV. The Jury Charge

The defendants contend that, even if the district court
improperly granted judgment as a matter of law, the jury
rendered its verdict pursuant to erroneous instructions,
and a properly instructed jury would have had no choice
but to find in their favor. They therefore assert that they
are entitled to judgment as a matter of law on this
alternative ground.

We agree that the jury charge as given by the district
court did not conform to New Jersey law as we predict it.12
Nonetheless, we will not reverse a judgment where "it is
highly probable that the error did not contribute to the
judgment," McQueeney v. Wilmington Trust Co., 779 F.2d
916, 924 (3d Cir. 1985), i.e., where the challenged error
_________________________________________________________________

11. As we noted in Part II, supra, the district court found that the
"particulars, the specifics of Dr. Scotti's testimony" belie Dr. Scotti's
testimony that all of Mr. Murray's pre-existing conditions were under
control at the time of the accident. While the district court could be
justified in reaching this conclusion on a de novo review of the facts, it
is error in the context of a motion for judgment as a matter of law, since
there is a legally sufficient evidentiary basis for a reasonable jury to
accept Dr. Scotti's conclusion, and since the evidence must be taken in
a light most favorable to the non-moving party. See supra note 4.

12. We of course do not mean to be critical of the district judge, who,
given the opaqueness of New Jersey law in this area, could hardly have
been expected to divine what our prediction would be.

                               25
was harmless. We conclude that the findings necessarily
implicit in the verdict of the jury compel the conclusion
that the jury would have reached the same result had it
been instructed according to the correct legal standard as
we have explained it. Therefore, the error in the instruction
was harmless.13 Cf. Commercial Union Ins. Co. v.
International Flavors and Fragrances, Inc., 822 F.2d 267,
275 (2d Cir. 1987) (if jury's findings would support verdict
under proper instructions "no useful purpose could be
served by submitting the same evidence to another jury");
H.C. Blackwell Co. v. Kenworth Truck Co., 620 F.2d 104,
107 (5th Cir. 1980) (same); 9A Charles Alan Wright &
Arthur R. Miller, Federal Practice and Procedure S 2540
(1995) ("If the trial court erroneously grants a renewed
motion for judgment as a matter of law under Rule 50(b),
the appellate court may reverse and order reinstatement of
the verdict of the jury.").

In relevant part, the jury was instructed as follows:

       You are instructed with respect to this first element
       that if you find that the disease condition of the
       insured at the time of the accident was either active,
       known, symptomatic, or progressive, and of such a
       nature and severity in and of itself so as to be capable
       of contributing to his death, then plaintiff has not met
       plaintiff's burden of proof with respect to this element,
       and you should end your deliberations and return a
       verdict for defendants.

       If, on the other hand, you find that at the time of the
       accident, the disease condition of the insured was
       inactive and under control, and was not sufficient to
       cause death, then plaintiff has met plaintiff's burden
       of proof with respect to the first element, and you
       should proceed to consider the second element; which
       is, second, that the accidental injury was the direct,
       efficient and predominant cause of death, in that it set
       in progress the chain of events leading directly to death
       by exciting or triggering the pre-existing condition into
_________________________________________________________________

13. For the same reason we reject defendants' assertion that if the jury
could reasonably have ruled in plaintiff's favor under proper instructions
then a new trial should be ordered under the present circumstances.

                               26
       activity, and thereby hasten death so as to cause it to
       occur at an earlier period than it would have occurred
       but for the accident.

According to this instruction, for the jury to have returned
a verdict for the plaintiff, it necessarily must have found
that, at the time of the accident, Mr. Murray's pre-existing
conditions were: (1) inactive, (2) under control, and (3) not
sufficient to cause death.

As we explained supra, whether the insured's conditions
were "active" or "sufficient to cause death" is not
dispositive. An insured suffering from conditions that are
active, symptomatic, and ultimately capable of causing
death may still recover under an ADB policy for an
accidental death so long as there is medical evidence to a
reasonable degree of certainty that the insured's conditions
were under control at the time of the accident. Since the
jury found that Mr. Murray's conditions were under such
control, we have no reservations in concluding that the jury
would also have found for the plaintiff under the standard
as we have articulated it.

This is not the end of the analysis, however. As quoted
above, the district court also instructed the jury that it
must find that the accidental injury was the "direct,
efficient, and predominant cause of death." Since we have
predicted that the New Jersey Supreme Court would apply
this same causation test, this prong is also satisfied.
Indeed, the district court found that there was sufficient
evidence to support the jury's conclusion on the causation
prong under the instructions given. Since we have found
congruence between the findings implicit in the jury's
verdict and both the control and causation prongs of our
standard, in addition to vacating the judgment of the
district court, we will remand with instructions to reinstate
the verdict in favor of plaintiff.

The parties shall bear their own costs.

A True Copy:
Teste:

       Clerk of the United States Court of Appeals
       for the Third Circuit

                               27
