BLOGS: Southeastern ERISA Watch

Monday, July 8, 2013, 2:02 PM

District Court in 11th Circuit Enters the Fray, Weighing in on Definition of “Accident.”

It is all in your perception, according to a District Court sitting in the Northern District of Georgia.  Clark v. LINA, 2013 U.S. Dist. LEXIS 85541 (N.D. Ga. June 18, 2013), adding new perspective to the challenge of defining "accident."

As we reported last month, the Fourth Circuit reversed a District Court decision in defining “accident” for purposes of an Accidental Death & Disability (AD&D) benefit under an ERISA-qualified plan when a driver dies as a result of intentionally becoming intoxicated and intentionally driving, knowing the inherent dangers, but probably not intending to crash and perish.  Johnson v. Am. United Life Ins. Co., 2013 U.S. App. LEXIS 10528 (4th Cir. May 24, 2013).  In Johnson, a participant of an employee benefit plan died after his truck left the road at high speed, hit a sign, and overturned several times. The post-mortem toxicology report showed a blood-alcohol concentration (BAC) of .289, more than three times the legal limit.  

Reviewing the fiduciary’s decision de novo, the District Court considered the tests under Wickman v. Northwestern Nat’l Ins. Co., 908 F. 2d 1077, 1087 (1st Cir. 1990), and Eckleberry v. ReliaStar Life Ins. Co. 469 F. 3d 340 (4th Circ. 2006) (“reasonable foreseeability” test), but settled upon the definition of “accident” under N.C.G.S. § 58-3-30(b). Under this statute, which uses an “accidental result” test, a loss resulting from an intentional, voluntary act is still accidental if the injury (or result) is unanticipated and unexpected, unless the result was substantially certain to occur from the actions taken.  When the District Court applied this test, it found that “a crash by a speeding driver in Mr. Johnson’s [intoxicated] condition [is] as much an anticipated and expected result as a bullet hitting the head of someone who chooses to play Russian Roulette,” (giving a nod to the Wickman Court’s illustration of an unreasonable expectation of survival, even if death were not actually intended.)  Johnson v. AUL, 2012 U.S. Dist. Lexis 32718 (M.D.N.C. 2012)

However, the Fourth Circuit Court of Appeals came to the opposite conclusion:  Evidence of driving while intoxicated, even at a BAC level of .289, by itself, did not establish that the insured’s death was “substantially certain,” under the statute’s definition, or even “highly likely,” under the Wickman test. The Court’s conclusion was partly based upon statistics published by the CDC that an intoxicated driver’s chances of a fatal crash are 1 in 9,128. (The other 9,127 apparently survive.) 

In Clark, the District Court in the Northern District of Georgia reached yet another result, finding in favor of the plan fiduciary.  (While the plan’s empowerment of discretionary authority to the fiduciary triggered the deferential standard of review, the Court’s first step in the analysis was to determine whether the fiduciary’s determination was “de novo wrong.” )  The Court applied the test espoused by the Court in Wickman, supra: When there was no evidence of the deceased’s actual (subjective) intentions and expectations (as is often the case), the Court asks whether a reasonable person in the deceased’s shoes would have viewed the injury as highly likely to occur as a result of the deceased’s intentional conduct. If so, then the loss was not the result of an accident.  While the parties in Clark sparred with statistics and court decisions involving lower and higher intoxication levels, (Mr. Clark’s BAC was .17, twice the legal limit but .12 less than in Johnson, supra), the Court rejected that approach:  “’[T]he focus of … Wickman was not on the statistical probability that death would occur from the decedent’s actions.  Instead, we are concerned chiefly with what a reasonable person would perceive to be the likely outcome of the intentional conduct.’”  Id., quoting Stamp v. MetLife, 531 F. 3d 84, 92 (1st Cir. 2008).  The Clark Court found that, in its case, a reasonable person in the decedent’s shoes would have perceived that death was a highly likely outcome of riding a motorcycle downhill on a curvy road while intoxicated.  

In the continuing theme that the definition of “accident” is elusive, we are now told that it depends on your perspective.  
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