Seyfarth Synopsis: The Fifth Circuit adds to the growing body of case law requiring more detailed reviews of claims for life insurance or accidental death and dismemberment benefits following accidents resulting from drunk driving.

In White v. LINA, No. 17-30356, __F.3d__, 2018 WL 2978641 (5th Cir. June 13, 2018), a case involving denial of life insurance benefits provided pursuant to an ERISA governed plan, the Fifth Circuit concluded that LINA abused its discretion in determining that the intoxication exclusion applied.

The facts of the case are straight forward. The insured was driving a car and collided with a truck. Following the crash, two blood samples were drawn from the insured, as well as a urine sample. These samples were tested, and while none tested positive for alcohol, all tested positive for illegal drugs. None of the test results, however, provided the level of drugs in the insured’s system. All of the samples subsequently were destroyed pursuant to the labs’ respective policies, and no further testing was conducted. The police did cite the insured for driving under the influence.

A few days after the crash, the insured died from a stroke. The medical examiner determined that the immediate cause of death was a “massive stroke,” and the underlying causes of death were “multiple trauma (from the car accident),” as well as illegal drug abuse.

The plan at issue, like many ERISA plans, contained exclusions precluding coverage if death is caused, at least in part, by intoxication or by voluntary ingestion of narcotics or drugs without a prescription. Upon receipt of Plaintiff’s claim for benefits, LINA hired a toxicologist to review the claim file to determine the level of impairment. Though the toxicologist concluded that it was impossible to estimate the level of the insured’s impairment, given that no qualitative analysis of the samples taken was complete, he concluded that in the absence of any other cause for the collision, the drugs in the insured’s blood system could explain his level of impairment that resulted in the crash. LINA thus denied the claim.

The district court found in favor of LINA, but the Fifth Circuit reversed, concluding that LINA had failed to provide Plaintiff’s claim a full and fair review because it did not disclose the toxicologist’s report until it filed the administrative record with the court after the lawsuit had been filed. On the merits, the Fifth Circuit acknowledged that the evidence was “close,” given that there was no other possible explanation for the insured’s driving on the night of the accident. Yet, because there was no way to determine the level of intoxication, if any, at the time of the accident, LINA’s structural conflict of interest acted as the tie-breaker.

In reaching this conclusion, the Fifth Circuit joined the other circuits in reading these exclusions to require an insurer to conclude that the insured was intoxicated at the time of the accident, which in turn requires some form of scientific proof. It is not sufficient, for example, for a toxicology report to reveal drugs in an insured’s system. It also may not be it sufficient, depending on the jurisdiction, that a toxicology report reveal alcohol intoxication at some point after the accident.

In sum, not having scientific proof to gird an otherwise logical conclusion could be fatal in defending the decision to apply the exclusion in court.