Eckelberry v. Reliastar Life Ins. Co.

• Decision Date: 01 December 2005
• Docket Number: No. 6:04 CV 01185.,6:04 CV 01185.
• Citation: 402 F.Supp.2d 704
• Court: U.S. District Court — Southern District of West Virginia
• Parties: Michele ECKELBERRY, in her capacity as beneficiary, Plaintiff, v. RELIASTAR LIFE INSURANCE COMPANY, Defendant.

402 F.Supp.2d 704

Michele ECKELBERRY, in her capacity as beneficiary, Plaintiff, v. RELIASTAR LIFE INSURANCE COMPANY, Defendant.

No. 6:04 CV 01185.

United States District Court, S.D. West Virginia.

December 1, 2005.

Todd S. Wiseman, Parkersburg, WV, for Plaintiff.

Charles M. Surber, Jr., Erin Elizabeth Magee, Jackson Kelly, Charleston, WV, for Defendant.

MEMORANDUM OPINION AND ORDER

GOODWIN, District Judge.

Pending before the court are cross motions for summary judgment. The court GRANTS the plaintiff's motion for summary judgment [Docket 16] and DENIES the defendant's motion for summary judgment [Docket 13].

I. Background

Around 3:49 a.m. on March 19, 2004, Earl Eckelberry died in an automobile accident when he struck a tractor trailer parked on the side of the road. (R. at 8.) The presence of alcohol was confirmed by a toxicology report, which measured Mr. Eckelberry's blood-alcohol level to be 0.15%, an amount 0.05% higher than the legal limit. (Id. at 9-12.) At the time of Mr. Eckelberry's death, he was employed by Ames True Temper, Inc. in Parkersburg, West Virginia. (Id. at 8.) Mr. Eckelberry had accidental death and dismemberment (AD & D) insurance of $86,000 through his employer's employee benefit plan. (Pl.'s Mot. for Summ. J. 1.) The defendant, ReliaStar Life Insurance Company, is the exclusive administrator of the AD & D plan. (Mem. Supp. Pl.'s Mot. for Summ. J. 3.) The plaintiff, Michele Eckelberry, the beneficiary under her husband's policy, filed a claim for death benefits with ReliaStar on March 31, 2004. (R. at 2-3.)

On May 18, 2004, ReliaStar sent a letter to the plaintiff denying the claim because her husband's death was not an "accident" as defined by the policy. (Id. at 18-20.) The plaintiff appealed the decision, which ReliaStar's ERISA Appeals Committee affirmed in a July 20, 2004 letter. (Id. at 25-28.) Following this final claim determination, the plaintiff brought suit in the Circuit Court of Wood County, West Virginia. ReliaStar removed the action pursuant to 28 U.S.C. § 1441(b) based on this court's federal question jurisdiction. The parties have stipulated that ERISA governs the case. (Stipulations ¶ 1.) This opinion follows the court's determination that the sole legal issue is whether the defendant properly denied the plaintiff's application for death benefits. (Scheduling Order, Jan. 19, 2005.)

II. Standard of Review

According to the plan, the defendant has discretionary authority to determine whether a claimant is entitled to benefits. Specifically, ReliaStar "has final discretionary authority to determine all questions of eligibility and status and to interpret and construe the terms of this policy(ies) of insurance." (Stipulations ¶ 2.) Because of this language, the court ordinarily would review ReliaStar's decision to deny the plaintiff's application for abuse of discretion. (Stipulations ¶ 3); Baker v. Provident Life & Accident Ins. Co., 171 F.3d 939, 941 (4th Cir.1999) (citing Firestone Tire & Rubber Co. v. Bruch, 489 U.S. 101, 115, 109 S.Ct. 948, 103 L.Ed.2d 80 (1989)). Under that standard, the court will not "disturb any reasonable interpretation by the administrator." Doe v. Group Hospitalization & Med. Servs., 3 F.3d 80, 85 (4th Cir.1993). As long as the administrator uses a deliberate, principled reasoning process and the decision is supported by substantial evidence, the decision will not be disturbed. Martin v. Am. Bancorporation Ret. Plan, 407 F.3d 643, 655 (4th Cir.2005); Elliott v. Sara Lee Corp., 190 F.3d 601, 605 (4th Cir.1999). When the plan administrator, however, also has a financial stake in the outcome of the benefits decision, "this deference will be lessened to the degree necessary to neutralize any untoward influence resulting from the conflict." Doe, 3 F.3d at 87. Because ReliaStar both insures and administers the payment of benefits under the AD & D plan, its decision to deny benefits will be reviewed using the less deferential standard.

III. Analysis

A. The Reasonableness of the Interpretation

The AD & D plan provides that "ReliaStar Life pays this benefit if you lose your life ... due to an accident." (R. at 50.) The plan defines an accident as "an unexpected and sudden event which the insured does not foresee." (Id. at 65.) ReliaStar denied the plaintiff's claim on the grounds that her husband's death was not an "accident" under the policy. In the letter denying the plaintiff's claim, ReliaStar explained that Mr. Eckelberry's death was "not unexpected" and therefore was not an accident. (R. at 18-20.) When ReliaStar's ERISA Appeals Board denied the plaintiff's appeal, the Board noted that Mr. Eckelberry "put himself in a position in which he should have known serious injury or death could occur." (Id. at 25-28.)

The plaintiff does not argue that the defendant lacked substantial evidence to conclude Mr. Eckelberry was under the influence of alcohol. The only issue is whether ReliaStar's interpretation of the plan's definition of accident was reasonable. This court must examine whether the interpretation was the result of a principled reasoning process and whether it was supported by substantial evidence. In determining whether the plan administrator made a reasonable interpretation, the court can examine multiple factors, including but not limited to a review of (1) the language of the plan; (2) whether the interpretation is at odds with ERISA's requirements; (3) the reasoning process used by the administrator and the extent of the evidence used to make the determination; (4) whether the interpretation is consistent with the plan's goals; (5) whether the interpretation is consistent with the rest of the plan's language; and (6) the fiduciary's motives and any potential conflict of interest. Booth v. Wal-Mart Stores, Inc., 201 F.3d 335, 342-43 (4th Cir.2000). Thoroughly examining these factors reveals that ReliaStar's interpretation of the policy's definition of "accident" was not reasonable.

1. The Language of the Plan

What is an accident? Courts and underwriters have attempted to answer this apparently simple question for a century and a half. Adam F. Scales, Man, God, and the Serbonian Bog: The Evolution of Accidental Death Insurance, 86 IOWA L. REV. 173, 175 (2000). One court described the question as "one of the more philosophically complex simple questions" in the law. Fegan v. State Mut. Life Assurance Co., 945 F.Supp. 396, 399 (D.N.H.1996). Whenever an insurer derives a seemingly impenetrable definition, "the endless cup-chain of events has dipped down into the bottomless well of evolution and brought to the surface a new and unthought-of combination of circumstances, smashing the formula into little bits." Scales, supra, at 190 (quoting Edson S. Lott, Accident Insurance, 26 AM. ACAD. POL. & SOC. SCI. ANNUALS 483, 483 (1905)). Attempts to create a perfect definition for an accident have led to a horde of cases, which to review properly would require the writing of a treatise. One scholar who courageously attempted this endeavor explained, "[t]he jumbled mass of precedent which has steadily accumulated on the judicial shores over the past 150 years attests the Scylla or Charybdis¹ nature of the task." Scales, supra, at 191.

In reality, few accident insurers attempt the creation of a definition for accident.² Id. at 192. "The occasional effort typically results in failure." Id. at 192-93. In this case, ReliaStar defines "accident" and consequently attempts to navigate the treacherous strait that has doomed other accident insurers. According to ReliaStar's policy, an accident is "an unexpected and sudden event which the insured does not foresee." (R. at 50.) To qualify as an accident under this definition, something must be 1) unexpected, 2) constitute a sudden event, and 3) not be foreseen by the insured. According to the language of this definition, the third element of foreseeability is entirely subjective. No component of objective foreseeability is present in this definition. ReliaStar easily could have written the definition to include an objective component by defining accident as an unexpected, sudden event that the insured should not have foreseen. The drafters of the policy, however, chose to use the words "does not foresee" instead of "should not have foreseen."

Was the crash that killed Mr. Eckelberry unexpected? According to the letter initially denying benefits, ReliaStar believes the accident was not unexpected. To say, however, that Mr. Eckelberry expected to crash his car defies logic. Even though he was intoxicated, Mr. Eckelberry expected to drive home safely, not to hit a parked tractor trailer. To sustain ReliaStar's contention that Mr. Eckelberry's crash was not unexpected, Mr. Eckelberry would have had to expect the crash. Arguing, however, that he expected the crash and crashed anyway is analogous to arguing Mr. Eckelberry committed suicide. There is no evidence in the record suggesting Mr. Eckelberry expected his life to end when he chose to drive his car.

Was the crash a sudden event? Mr. Eckelberry lost control of his car and hit a parked tractor trailer. It is beyond doubt that this event was sudden.

Was the crash foreseen by the insured? ReliaStar believes the crash was foreseen by the insured because Mr. Eckelberry was driving drunk. If he foresaw the accident, then how did the accident occur? Merriam-Webster defines "foresee" as "knowing beforehand." If Mr. Eckelberry knew beforehand that he was going to crash his car into a parked tractor trailer and die as a result, he would have avoided the collision. There is no doubt that Mr. Eckelberry's impaired condition could have contributed to the cause of the collision. One of the chief goals of accident insurance, however, is to protect insureds from the effects of their own acts. Providence Life Ins. & Inv. Co. v. Martin, 32 Md. 310, 1870 WL 3948, at *2 (1870); Scales, supra, at 243. Even if an accident results because of the insured's own fault,...