When a motorcyclist died in a crash while driving 124 miles per hour, Aetna Life Insurance Company denied the claim, asserting that the driver was intoxicated and that made the crash an “intentionally self-inflicted injury,” something excluded from payment under his employer’s Accidental Death & Dismemberment (AD&D) plan. The question was: could driving the motorcycle whle intoxicated be a self-inflicted injury? A federal court decided that Aetna was permitted to deny the life insurance claim based on what the driver should have expected when driving while drunk, even without direct evidence the being drunk caused the crash that resulted in death or that the driver intended to die in the crash.
The Group AD&D Insurance Claim under ERISA
Beth Wilson’s son died driving his motorcycle in excess of 124 miles per hour in a 55 miles per hour zone at dusk. A car made a U-Turn ahead of the motorcycle, and her son hit the vehicle making the U-Turn in a horrific crash. Eyewitnesses explained they did not believe he had time to hit the brakes and thought his motorcycle struck the car at speed. Toxicology showed that his blood alcohol level was well above the legal limit when he died. His Death Certificate stated the cause of death as “Multiple Blunt Force Injuries” from a “Motorcycle Accident.” He had sustained skull fractures, multiple fractures, and a laceration of his heart.
Her son was covered under two employee benefit plan sponsored by his employer, a Life Insurance plan and an Accidental Death plan. Aetna paid the basic Life Insurance benefit, because there were no exclusions stated in that policy. However, the AD&D plan had an exclusions which Aetna applied to deny payment of the Accidental Death benefit.
Aetna’s investigation into the AD&D claim included getting the police report, autopsy, and toxicology report which showed that a blood alcohol level of 0.246 (well over the legal limit). The investigation also revealed several witness statements which describes the crash and the motorcycle’s speed and lack of braking. Aetna denied the claim and refused to pay the Accidental Death benefits, relying upon the plan’s intentionally self-inflicted injury exclusion. Its decision letter stated:
“Due to his voluntary actions, Mr. Wilson exposed himself to unnecessary risks. These risks were reasonably foreseeable, and such that he should have known or appreciated the consequences of his intentional acts, including the likelihood or strong possibility of death. It is not an unforeseen consequence that death would occur under these circumstances.
Based on the information we have been provided with and in accordance with the requirements of the Policy, it has been determined that Mr. Wilson’s death was caused or contributed to by an intentionally self-inflicted injury which is a losses [sic] excluded by the Policy.”
Wilson was required to file a pre-suit appeal with Aetna, and her lawyer argued that the driver ahead of the motorcycle made an illegal U-turn on the highway ahead of the motorcycle. Aetna did not consider this fact significant enough to change its decision, and upheld its denial.
Employer AD&D plan covered by ERISA
Wilson filed suit after he claim for AD&D benefits was denied. Originally, the lawsuit was filed in state court, but was later removed to federal court, because of the law that applies to employer group benefit plans.
ERISA – the Employee Retirement Income Security Act – is the law that regulates benefit plans to employees by employers. This was important, because a court reviewing an ERISA insurance plan must give deference to the insurance administrator’s decision. The court may not replace its decision for the insurance company’s. Instead, in most ERISA cases, a court may only reverse the insurance company’s decision when that decision is not based on reasonable evidence. Using a standard called “arbitrary and capricious” review, a denial of benefits may be overturned only if the decision is without reason, unsupported by substantial evidence or erroneous as a matter of law. Substantial evidence means facts that a reasonable mind might accept as adequate enough to support the conclusion reached by the insurance company.
This is important in ERISA cases, because the court does not have to be convinced that an insurer such as Aetna was wrong. Instead, they must investigate and decide whether reasonable evidence supported the insurance company’s decision, even if the court disagrees with it.
Court held that intoxication almost always found by courts not be an “accident”
The AD&D plan used terms which included the word “accident” as part of the requirements to pay a claim. The District Judge listed numerous cases explaining that courts reviewing the AD&D denials under the arbitrary and capricious standard “have almost always found that the plan acted reasonably in determining that injuries resulting from driving while intoxicated do not arise from an ‘accident’”
Court used what is called “subjective/objective” analysis
Accidental & self-inflicted deaths evaluated using expectation of person who died
The federal District Judge relied upon an appellate court decision from the Second Circuit Court of Appeals to analyze the facts of the case. In Critchlow v. First UNUM Life Ins. Co. of Am., 378 F.3d 246 (2d Cir. 2004), the Second Circuit held that a method called the subjective/objective analysis was to be used to determine if the death was accidental or the result of a self-inflicted injury. This involves analyzing what should have been expected by someone in the same shoes as the person who died.
The court first asks whether the insured subjectively lacked an expectation of death or injury. If so, the court asks whether the suppositions that underlay the insured’s expectation were reasonable, from the perspective of the insured, allowing the insured a great deal of latitude and taking into account the insured’s personal characteristics and experiences. If the subjective expectation of the insured cannot be ascertained, the court asks whether a reasonable person, with background and characteristics similar to the insured, would have viewed the resulting injury or death as substantially certain to result from the insured’s conduct.
Critchlow, 378 F.3d at 257-58.
The actual facts of the death are not evaluated using the subjective/objective method
It is important to understand that this method of analysis does not take into account whether something like intoxication actually caused the death. Arguably, if the beneficiary could show that it did not cause the death, the exclusion could be avoided and the benefits paid. However, the subjective/objective method seems to lower the bar for the insurer to deny benefits using its alcohol or intoxication exclusion.
In this case, the Judge was not moved by Ms. Wilson’s arguments about the illegal U-turn ahead of the motorcycle. The Judge plainly stated, “considering the extreme level of intoxication while driving a motorcycle at dusk in excess of 124 miles per hour, a reasonable person with background and characteristics similar to the Decedent would have viewed the resulting injury or death as substantially certain to result from the Decedent’s conduct.”
Making claims for Accidental Death benefits requires a very specific factual showing why AD&D benefits should be paid. Convincing the life insurance company that an accident was truly an accident and not subject to some exclusion takes a significant amount of specific facts, particular in group employer AD&D plan claims subject to ERISA.