HOUSTON FEDERAL DISTRICT COURT GRANTS SUMMARY JUDGMENT TO WIDOW SEEKING DEATH BENEFITS
Last Wednesday, a Houston federal judge granted summary judgment in favor of a bereaved widow seeking benefits from her employer’s Accidental Death & Dismemberment plan for her husband’s death in a drunk-driving accident. James v. Life Ins. Co. of N. Am., No. CIV.A. H-12-2095, 2015 WL 4126580 (S.D. Tex. July 8, 2015). While the court’s opinion is heavily influenced by ERISA-specific administrative law issues, the facts of this case and the court’s conclusion are of broader general interest.
The carrier denied the widow’s claim for $300,000 in death benefits on the ground that her husband had been illegally driving with a blood alcohol content of 0.19% (over twice the legal limit) and, therefore, his death was not an “accident,” which the policy defined as a “sudden, unforeseeable external event….” The policy did not further define the term “unforeseeable” and the court concluded it incorporates an inherent element of reasonableness. Therefore, the definition of an “accident” does not exclude every event that can possibly be foreseen, however remote, but only excludes those which can be reasonably foreseen. Referring to other court opinions citing National Highway Traffic Safety Administration data which show that just 0.17% of impaired trips actually result in death, the court noted: “It cannot reasonably be said that a less than one percent chance of death makes death reasonably foreseeable.”
The carrier argued its claim decision was not based solely on the fact of the illegal blood alcohol content but that it applied several case-specific factors, including the severity of the impairment and the weather and road conditions, to make this claim decision. However, its letters to the widow told a different story: the carrier advised her that in order to win her administrative appeal of the original claim decision she would need to present proof that her husband was not legally intoxicated.
Although the court’s opinion did not mention it, the magistrate judge’s memorandum reviewed several other cases involving policies issued by this carrier which contained express intoxication exclusions. The clear subtext is that the carrier could have written such an exclusion into this policy but did not do so and, if it wished to avoid paying benefits for intoxication-related losses, it should have done so.