Opinion
Civil Action No. 00-0373-M
September 29, 2000
FINAL JUDGMENT
Pursuant to separate order entered this date granting Plaintiff's motion for summary judgment, it is hereby ORDERED, ADJUDGED and DECREED that JUDGMENT be and hereby is entered in favor of Plaintiff The Canada Life Assurance Company and against Defendant William Robert Piercy on all counts. The parties are to bear their own costs.
DONE.
MEMORANDUM OPINION AND ORDER
This matter comes before the Court on Plaintiff's Motion for Summary Judgment (Docs. 17-19) and Defendant's Motion for Summary Judgment (Docs. 20-22). Jurisdiction has been invoked in this Court under the Declaratory Judgment Act, 28 U.S.C. § 2001, and provisions of the Employee Retirement Income Security Act (hereinafter ERISA), 29 U.S.C. § 1132(e)(1). The parties consented in writing to have all matters and proceedings in this action conducted by the undersigned Magistrate Judge pursuant to 28 U.S.C. § 636(c) ( see Doc. 14). It is Ordered that Plaintiff's Motion for Summary Judgment be GRANTED (Docs. 17-19) and that Defendant's Motion for Summary Judgment be DENIED (Docs. 20-22).
The undisputed facts, briefly, are as follows. William P. Piercy, a participant in a group insurance plan (hereinafter Plan) issued by Plaintiff Canada Life Assurance Company (hereinafter Canada Life), was killed while operating a motor vehicle on May 25, 1999 (Doc. 18, pp. 1-2; Doc. 21, pp. 1-2). Piercy's accident was caused by the driver of a car who crossed over into his lane at a high rate of speed, striking Piercy's car head on; the driver of the other vehicle was under the influence of alcohol and crack cocaine at the time of the accident (Doc. 21, Exhibit B). Canada Life paid term life insurance benefits of ten thousand ($10,000) dollars to the Deceased's estate, represented in this action by Defendant William Robert Piercy (Doc. 18, pp. 1-2; Doc. 21, pp. 1-2). Plaintiff refused, however, to pay a fifty thousand ($50,000) dollar Accidental Death and Dismemberment Benefit (hereinafter ADD Benefit) under the Plan, citing the report of the medical examiner which reflected that the Deceased had a blood alcohol concentration at the time of the accident which exceeded Plan limits (Doc. 18, pp. 1-3; Doc. 21, pp. 2-3)
Defendant disagrees with the accuracy of the medical examiner's findings without presenting anything else for the Court to consider (Doc. 21, p. 2).
Canada Life brought this action, seeking a declaration of its rights and responsibilities under the Plan (Doc. 1). Plaintiff subsequently filed a Motion for Summary Judgment, arguing that it was justified in denying the fifty thousand dollar benefit (Docs. 17-19). Defendant has also filed a Motion for Summary Judgment, arguing that the benefit should be paid (Docs. 20-22); Piercy also seeks an additional fifty thousand ($50,000) dollar Seat Belt Benefit under the Plan, pointing out that the Deceased was wearing his seat belt at the time of the collision (Doc. 7, ¶ 9; Doc. 21, pp. 2-3).
It appears that the Seat Belt Benefit is paid only if the Accidental Death and Dismemberment Benefit is paid ( see Doc. 1, Exhibit A, pp. 52-53).
The crux of this action is for the Court to determine whether Canada Life's refusal to pay the fifty thousand (or one hundred thousand) dollar benefit was proper. This issue is the subject-matter of both motions for summary judgment presented for the Court's review.
The Rules of Civil Procedure, in discussing summary judgment, state that
an adverse party [to a motion for summary judgment] may not rest upon the mere allegations or denials of the adverse party's pleading, but the adverse party's response, by affidavits or as otherwise provided in this rule, must set forth specific facts showing that there is a genuine issue for trial. If the adverse party does not so respond, summary judgment, if appropriate, shall be entered against the adverse party.
Fed.R.Civ.P. 56(e); see also Celotex Corporation v. Catrett, 477 U.S. 317, 325-27 (1986). The Court further bears in mind, with regard to the motion for summary judgment, that "there is no issue for trial unless there is sufficient evidence favoring the non-moving party for a jury to return a verdict for that party. If the evidence is merely colorable or is not significantly probative, summary judgment may be granted." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 249-50 (1986) (citations omitted). Summary judgment may be granted against a party who fails to establish the existence of an element essential to that party's case and on which that party will bear the burden of proof at trial. Id.
In this action, Piercy has the burden of demonstrating that he is entitled to the ADD benefit. Horton v. Reliance Standard Life Ins. Co., 141 F.3d 1038, 1040 (11th Cir. 1998). "But, if the insurer claims that a specific policy exclusion applies to deny the insured benefits, the insurer generally must prove the exclusion prevents coverage." Horton, 141 F.3d at 1040 (citing Farley v. Benefit Trust Life Ins. Co., 979 F.2d 653, 658 (8th Cir. 1992)).
The Plan provides for a fifty thousand ($50,000) dollar ADD benefit if a participant is killed in an automobile accident ( see Doc. 1, Exhibit A, pp. 10-11, 52-55). The Homicide Investigators' Case Summary shows that Defendant was killed in an automobile accident (Doc. 21, Exhibit B). The Court finds that Piercy has met his initial burden of proving that he is entitled to the ADD benefit.
It is, therefore, incumbent on Plaintiff to prove that language in the Plan excludes coverage. In the list of exclusions, the Plan states the following:
In addition, no payment will be made under this provision if the loss, or injury leading to the loss, occurs while:
1. In the course of operating a motor vehicle;
(a) Under the influence of any intoxicant or
(b) If the Insured's blood alcohol concentration is in excess of 100 milligrams of alcohol per 100 milliliters of blood.
(Doc. 1, Exhibit A, p. 56). The report from the Alabama Department of Forensic Sciences stated that the Deceased's "blood was positive for ethyl alcohol, 0.107%" and that the "vitreous was positive for ethyl alcohol, 0.101%;" there was no indication of any drug use (Doc. 1, Exhibit B). Plaintiff found that the Plan precluded coverage because the Deceased was under the influence of an intoxicant and his blood alcohol concentration exceeded Plan limits.
Plaintiff argues that it has satisfied its burden of proving that the Plan excludes coverage. Defendant, on the other hand, argues that the exemption provision is, at best, ambiguous and in need of this Court's interpretation.
The standard of review used in analyzing the. respective arguments depends on Canada Life's responsibilities in the administration of the Plan. Brown v. Blue Cross Blue Shield of Alabama, 898 F.2d 1556 (11th Cir. 1990). However, "[i]t is fundamental that the fiduciary's interpretation first must be `wrong' from the perspective of de novo review before a reviewing court is concerned with the self-interest of the fiduciary." Brown, 898 F.2d at 1566 n. 12 (citing Denton v. First Nat'l Bank of Waco, 765 F.2d 1295, 1305 (5th Cir. 1985)). So, the Court's first order of business is to determine if Plaintiff's reading of the ADD Benefit exclusion was "wrong."
Because the Court ultimately concludes that Canada Life's decision was not wrong, it will be unnecessary for the Court to determine which standard of review is required to review the decision.
Both parties agree that, pursuant to Dahl-Eimers v. Mutual of Omaha Life Insurance Co., 986 F.2d 1379, 1381 (11th Cir. 1993), it is the Court's responsibility, as a matter of law, to interpret insurance contract language (Doc. 18, p. 11; Doc. 21, p. 6). In determining the meaning of the specific language, the Court must "assess the natural or plain meaning of the policy language." Dahl-Eimers, 986 F.2d at 1382 (citing Landress Auto Wrecking Co., Inc. v. United States Fidelity Guaranty Co., 696 F.2d 1290, 1292 (11th Cir. 1983)).
Canada Life makes a strong argument that a plain reading of the exemption provision supports its denial of the ADD benefit. Defendant argues, however, that the provision fails to link the prohibited activity (drinking and driving) with the risk associated with it. Piercy argues that the exemption should be understood to imply causation; otherwise, the provision is ambiguous in that it imposes a restriction where one was not intended or contemplated. The Court finds Defendant's argument compelling.
The Court notes that ERISA is silent on the issue of whether there must be "a causal link between an exclusion provision and a loss or injury for a proper denial of recovery." See Jenkins v. Montgomery Industries, Inc., 77 F.3d 740, 744 (4th Cir. 1996). This being the case, this Court draws its guidance on how to proceed from an eleventh circuit case which has, in a lengthy passage, stated as follows:
Courts have the authority "to develop a body of federal common law to govern issues in ERISA actions not covered by the act itself." Kane v. Aetna Life Ins., 893 F.2d 1283, 1285 (11th Cir. 1990). When crafting a body of common law, federal courts may look to state law as a model because of the states' greater experience in interpreting insurance contracts and resolving coverage disputes.
To decide whether a particular rule should become part of ERISA's common law, courts must examine whether the rule, if adopted, would further ERISA's scheme and goals. Nachwater v. Christie, 805 F.2d 956, 960 (11th Cir. 1986) ERISA has two central goals: (1) protection of the interests of employees and their beneficiaries in employee benefit plans, id.; and (2) uniformity in the administration of employee benefit plans, Smith v. Jefferson Pilot Life Ins. Co., 14 F.3d 562, 570-71 (11th Cir. 1994).
* * *
When Congress enacted ERISA, it was not writing on a clean slate. See Goodyear Atomic Corp. v. Miller, 486 U.S. 174, 184-85, 108 S.Ct. 1704, 1711-12, 100 L.Ed.2d 158 (1988). "Congress is understood to legislate against a background of common-law adjudicatory principles. . . . Thus, where a common-law principle is well established . . . the courts may take it as given that Congress has legislated with an expectation that the principle will apply except when a statutory purpose to the contrary is evident." Astoria Fed. Sav. and Loan Ass'n v. Solimino, 501 U.S. 104, 108, 111 S.Ct. 2166, 2169-70, 115 L.Ed.2d 96 (1991).Horton, 141 F.3d at 1041.
An Alabama case, albeit an old one, provides this Court with some guidance. In Continental Casualty Co. v. Meadows, 7 So.2d 29 (Ala. 1942), a man's widow, Meadows, claimed the proceeds from a health and accident insurance policy after her husband had been shot. The facts of that case, briefly, were that Meadows met another married woman for an afternoon tryst, during which he got exceedingly drunk. Meadows showed up at the home of his sexual partner that evening where he was shot and killed by the cuckold. Meadows's widow sought benefits but the insurance company denied them, pointing to a provision in the policy which prohibited payment "if injury is sustained while the insured is under the influence of any intoxicant." Meadows, 7 So.2d at 31. The Alabama Supreme Court upheld the provision and further stated "that under such a policy stipulation the insurance company is under no duty to show a causal connection between the condition of the insured and the catastrophe." Meadows, 7 So.2d at 31.
The Court notes that the Meadows Court, nevertheless, found causation. Meadows, 7 So.2d at 31.
The Court understands Defendant's expected argument that the facts in Meadows are very much different from the ones presented here. While the assertion is true, it is clear that Alabama law upholds insurance contract provisions that exempt coverage on the basis of blood alcohol concentration levels. It is also apparent that Alabama law places no duty, in this action, for Canada Life to prove that the blood alcohol concentration caused the accident.
The Court is mindful of Defendant's assertion that Canada Life's denial of benefits "result[s] in a totally fortuitous, unforseen and arbitrary denial of benefits owed under the policy and a windfall to the insurance company" (Doc. 21, p. 10). The Court cannot fail to note, however, that the Deceased's blood alcohol concentration level indicates that he was in violation of Alabama law at the time of his death. See Ala. Code § 32-5A-191(a)(1). On this set of facts, the Court will not find that an injustice has been done.
"A person shall not drive or be in actual physical control of any vehicle while there is 0.08 percent or more by weight of alcohol in his or her blood." The Deceased's concentration level was 125% of the level at which one can be arrested.
The Court cannot say that the findings made herein should become "the rule of law" in ERISA cases; this is a limited holding. Furthermore, the Court cannot say whether "the rule" has been uniformly applied as there is virtually nothing on point on this issue. See Horton, 141 F.3d at 1041. However, it seems improper to instruct Canada Life to pay the ADD benefit when the Deceased was clearly in violation of Alabama law at the time of the accident.
In light of the Court's conclusions, it is Ordered that Plaintiff's Motion for Summary Judgment be GRANTED (Docs. 17-19) and that Defendant's Motion for Summary Judgment be DENIED (Docs. 20-22). Judgment will be entered by way of separate order.
DONE.