Everyone knows what an “accident” is – until a court decision hinges on the meaning of the word, at which point it becomes as enigmatic as a Rorschach test. Indeed, the question of whether drunken-driving deaths are “accidental” for purposes of accidental death insurance has long troubled the courts.
On May 24, the 4th U.S. Circuit Court of Appeals wrestled with it again before ruling that one North Carolina woman should receive accidental death benefits for her husband’s fatal one-car drunken driving crash.
North Carolina resident Richard Johnson died in 2007 when he lost control of his car and veered off a road in Myrtle Beach. A toxicology report showed that he had a blood alcohol content of .289, more than three-and-a-half times the legal limit. His wife, Angela, submitted claims on two accidental death and dismemberment claims the couple had with American United Life Insurance Co. The company denied the claims, saying that Richard’s death was not accidental because his death was the expected result of his drunken driving. Angela pursued the claim in federal court, and a magistrate judge in North Carolina’s Middle District upheld the denial.
On appeal, the 4th Circuit unanimously reversed, saying that the insurance contract was ambiguous because it failed to define “accident,” a word of more than one meaning. Angela Johnson argued that an accident is an unintentional incident resulting from a careless error, and thus the average layperson would assume the policy covers drunken driving accidents. The carrier argued that an accident is an unforeseen event with no apparent cause, whereas drunken driving deaths have a clear cause.
The court reasoned that because “accident” was capable of multiple meanings, contract law required that it be interpreted in favor of the policyholder.
The appeals court also noted two parts of the contract, in addition to its failure to define “accident,” that cut against the insurer’s claim. First, the policy listed a number of dangerous activities for which injuries would not be covered, and drunk driving was not among them. More crucially, one of the policies paid out an extra benefit if the holder died in a car crash while wearing a seat belt. That benefit was explicitly negated by drunk driving—a clause the court said would be superfluous if the entire contract prohibited coverage for drunken driving.
The court emphasized that its decision was based on the specific language of the contract and the specific facts of the case at issue, suggesting that if AUL wanted to preclude benefits for drunk drivers, it should have drafted a clearer contract and that its failure to do so would be held against it.
“AUL could have defined ‘accident’ or even imposed a limitation on benefits for any loss resulting from the insured’s driving with a blood alcohol content above the legal limit of the state in which the vehicle is driven. Instead, the policy language simply leaves ‘accident’ undefined and susceptible to more than one interpretation,” Chief Judge William Traxler wrote for the court.
Gavin Reardon of Greensboro, N.C., represented Johnson.
Reardon said that while drunken driving can be an emotional issue, it was a simple contract law case, and the decision applied fundamental tenets of contract law. Indeed, Traxler wrote that while “this result gives us no great pleasure,” the court’s task was to determine the intent of the parties rather than to enforce personal responsibility.
“I don’t think the whole thing hinged on the seat belt exclusion, but the insurer never came up with a good answer for why you would have the seat belt exclusion if it wasn’t an exclusion in the overarching contract,” Reardon said. “A big part of their argument boiled down to his death being reasonably foreseeable, but many of their exclusions were about reasonably foreseeable things. There would be no need for those exclusions if there was an overarching foreseeability requirement.”
Matthew Creech and Elizabeth Bondurant of Greensboro and Atlanta, respectively, represented the insurer.
– By David Donovan
North Carolina Lawyers Weekly