Johnson v. American United Life Ins. Co. | Accidental Death -- Intoxication

In Johnson v. American United Life Ins. Co. (4th Circuit, May 24, 2013), the Fourth Circuit addressed coverage under a life insurance policy where the insured died in a car crash while intoxicated. The lower court held that this was not an "accident" and that his death was not covered. The Fourth Circuit reversed, finding that this was an "accident."

In this case, the insured had an accidental life insurance policy through his employer. The policy was governed by ERISA, but this did not materially affect the decision in this case (in part because the Plan Administrator did not have discretion in interpreting the policy). The insured was highly intoxicated at the time of the crash. The Court looked at several authorities from other jurisdictions on this issue.

The policies defined "accidental death" as "death due to an accident, directly and independently of all other causes." His blood alcohol content ("BAC") was 0.289 percent, which is more than three times higher than the legal limit (08 percent). The court wrote: "We conclude that a reasonable plan participant in circumstances similar to those before us would easily have understood that this accident was covered. In this case, there is no evidence of intent. The Traffic Collision Report Form submitted by the responding law enforcement officer stated simply that Richard "was traveling too fast for conditions . . . traveled off the roadway, struck a highway sign, and overturned several times.""

The court also addressed whether N.C. General Statute 58-3-30 would alter the result. That statute dictates that any group life or accident policy "shall" define "accident" so as "to imply 'result' language and shall not include words that establish an accidental means test." "Under the stricter "accidental means" terminology, no coverage is provided where the loss "occurs by reason of an insured's intentional act" or "is the natural and probable consequence of a voluntary act or course of conduct."" The court held that even if this statute applied, the result would not be different.

John Kirby has handled numerous insurance disputes in North Carolina, includig disputes under life insurance policies.


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