Eckelberry v. ReliaStar Life Insurance Co. (4th Cir. November 17, 2006) is a good case to read to ponder when an insured expects or can foresee injury. How much more expected is a drunk driving crash than, for example, driving with a cell phone to your ear, or holding a 60-ounce soda cup between your legs, or speeding and dodging in and out of your lane?
In the case, the U.S. Fourth Circuit reversed the district court and upheld an ERISA plan administrator’s determination that the drunk driving death of Earl Eckeleberry was not "accidental" and therefore not "unexpected" within the meaning of his company-provided death benefits. Courts normally review a plan administrator’s decision under a deferential standard and will uphold it if is "reasonable," even if the court’s decision might have been different. However, where the plan administrator has a financial stake in the decision, a stricter standard of review is used: deference is lessened to the degree necessary to neutralize any "untoward influence" on the decision.
Under that lower standard, the district court examined the language of the ReliaStar policy: an accident is “an unexpected and sudden event which the insured does not foresee,” and found the plan administrator’s decision was unreasonable. The district court focused on the language "does not foresee," and said that implies an entirely subjective state of mind: if it were objective, the court said, it would have been said "should not have foreseen." However, as the court noted, a second step in the analysis is necessary: is the subjective state of mind objectively reasonable to someone else in the insured’s shoes? Doing some rough math, the court calculated the chances of dieing while driving drunk may be roughly 1 in 9,128, or much less than the chance of being struck by lightning at least once during your life. Therefore, the district court said, it was not reasonably foreseeable. (The cite for the lower court case is 402 F.Supp.2d 704 (S.D. W.Va. 2005)). The district court made some sound points and wrote a good analysis.
The Fourth Circuit more or less glossed over the district court’s points, and it is apparent it wanted to follow the result of a number of other cases that, in effect, make a policy decision that drunk driving is not tolerated, and so an alcohol-related crash is held to be foreseeable or even "highly likely." As a non-drinker who has seen a close family member nearly killed by a drunk driver, and seen a number of people I grew up with kill themselves and others with drunk driving, I have no sympathy whatsoever for driving while under the influence. But I have to ask if killing yourself in a crash is "highly likely" when you take the wheel while inebriated. I also wonder if this case had not been about review of an ERISA plan administrator’s decision, but rather a normal declaratory action in federal court between insurer and the insured’s widow, if the result might not have been different. This is getting into territory that is the life’s blood of Steve Rosenberg, and maybe I can convince him to chime in with some observations.
UPDATE: Steve Rosenberg decided to make this issue his subject of the day, and wrote a fine post that you can check out here. Steve is the real expert on anything to do with ERISA, so what he says carries great weight.