In Arnold v. Hartford Life Insurance Co.( 542 F. Supp. 2d 471 (W.D. Va. 2008), Hartford denied a beneficiary’s claim for accidental death benefits, concluding that the insured’s death was not due to an “injury” as defined in the policy. The insured died at the scene of a motorcycle crash. The immediate cause of death was a closed-head injury with cervical spine fracture. At the time of the crash, the insured was legally intoxicated. Hartford denied the claim because the insured death was reasonably foreseeable and the assumption of a known risk by the insured did not constitute an “accident” under the terms of the policy. The Plaintiff argued the policy included alcohol/intoxication exclusion with regard to seat belt coverage, but not with regard to AD&D coverage, and contended the specific exclusion for intoxicants under the seat belt coverage would not be necessary if the term “accident” was understood not to include a situation where the insured was legally intoxicated.

The court disagreed, noting that for the alcohol/intoxication exclusion under the seat belt coverage to apply, a person would simply have to be under the influence of alcohol, not necessarily intoxicated. The court held that the insured’s death was reasonably foreseeable because his alcohol consumption placed him well above the legal limit at the time of the crash that ultimately led to his death. In the absence of any other reasonable explanation for the crash, the court found that it was reasonable for Hartford to determine the insured’s death was not an “accident” as that term was used in the policy.

The insurer denied the claim for accidental death benefits in Grose v. Sun Life Assurance Co. of Canada (568F. Supp. 2d 652 (W.D. Va. 2008) because the insured was intoxicated when he crashed his motorcycle, and his injuries were reasonably foreseeable. The beneficiaries argued there was no evidence of intoxication at the time of the crash and that the death was a result of an accident. The court first concluded the insured was intoxicated; the insured’s blood-alcohol content was twice the legal limit when his body was found- which was five hours after his death and twelve hours after his crash. The court next rejected the beneficiaries’ novel argument that, even if the insured was intoxicated, his death was still accidental because there was no evidence his intoxication was voluntary. The court noted that the beneficiaries failed to provide any evidence “in support of these fantastical, though not impossible, scenarios,” and “it would be unreasonable to conclude anything other than voluntary intoxication.”

The court found a plan administrator’s interpretation of the alcohol exclusion in an ERISA accidental death insurance plan “legally correct” and granted the defendant’s motion for summary judgment in Pando v. Prudential Insurance Co. of America. 524 F. Supp. 2d 848, 853-56 (W.D. Tex. 2007).

The exclusion provided that a loss is not covered if it results while operating a motor vehicle, the person’s illegal use of: (1) alcohol.” The plan defined neither “use” nor “illegal use”. Plaintiff contended that the decedent’s actual consumption of alcohol was legal in that he was of legal age and there was no evidence that he consumed alcohol while driving. Prudential argued that by driving while intoxicated under state law, the decedent illegally “used” alcohol.

The court found the exclusionary provision ambiguous, analyzed legal authority within and outside the Fifth Circuit, and stated that the law is clear that an administrator’s reasonable interpretation of an ambiguous provision is entitled to deference. The court held that Prudential’s interpretation was reasonable and consistent with a fair reading of the plan. The court further held that Prudential’s factual determination that the decedent’s use of alcohol was illegal at the time of his death and that intoxication significantly contributed to his death was supported by sufficient evidence, namely autopsy and police reports attesting to the decedent’s blood-alcohol concentration and driving behavior, respectively.

In Sarac v. Minnesota Life Insurance Co. 529 F. Supp. 2d 924 (N.D. Ill. 2007) the plaintiff’s husband was a forensic scientist employed by the Illinois State Police who died in a automobile accident after losing control of his vehicle and driving into the rear of a truck. The decedent’s blood-alcohol level at the time of the accident was 0.203, more than twice the 0.08 level for legal intoxication. The insurer contended that the policy only covered losses resulting from unforeseen circumstances and, as a forensic scientist, the decedent knew the risks and dangers of drunk driving. The court surveyed Illinois law and concluded that accidental death and dismemberment policies in Illinois covered such losses unless (1) an insured subjectively expected death or serious bodily injury to occur as a result of his conduct and (2) a reasonable person would expect death or serious bodily harm to be the natural and probable consequence of driving drunk. Since the defendant could not show that the insured expected to die or to be seriously injured as a result of his decision to drive while intoxicated, the court decided his death was an “accident” under Illinois law and entered judgment in favor of plaintiff.

The insured in Smith v. Liberty Life Insurance Co. 535 F.3d 308 (5th Cir. 2008) was a lifelong drug addict with seven arrests for driving under the influence and was killed when the truck he was driving struck two trees. Toxicology reports established that he had potentially lethal doses of drugs in his system along with ethanol. The policy excluded from coverage any death resulting directly or indirectly from injury occurring while under the influence of alcohol or drugs. The Fifth Circuit concurred with the lower court’s determination that, under Louisiana law, the policy exclusion could be interpreted less favorably to insureds than a similar Louisiana statute mandating that an “insurer shall not be liable for any loss sustained or contracted in consequence of the insured’s being intoxicated or under the influence of narcotics unless administered on the advice of a physician.”

Interpreting Louisiana law, the court found Liberty proved the insured was “under the influence” of drugs sufficient to “lose normal control” of his faculties and proof of a complete loss of control was not necessary. The court held Liberty was only required to prove intoxication was a contributing cause, which it did when it presented uncontroverted testimony that the insured’s level of intoxication impaired his faculties and contributed to his death.

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This entry was posted by Adam V. Russo on Wednesday, May 13th, 2009 at 3:05 pm and is filed under 4th, 5th, Exclusion. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.