The issue in Johnson v. American United Life Insurance Co., decided last week by the Fourth Circuit. was whether the Plaintiff’s husband’s death from a car wreck while driving intoxicated was an "accident" under his life insurance policy from Defendant American United which provided "Accidental Death and Dismemberment" coverage .

The policy didn’t contain a definition for an "accident," making it necessary for the Court to interpret the term. It noted in passing that     "[t]here are probably not many words which have caused courts as much trouble as ‘accident’ and ‘accidental.’" Op. at n.1.

In the end, Judge Traxler ruled that the dead husband was covered by the policy, though he said that:

Reaching this result gives us no great pleasure. Drunk driving is reckless, irresponsible conduct that produces tragic consequences for the thousands it touches annually. But our task in this case is not to promote personal responsibility or enforce good driving habits. We must focus on the terms of the policies issued under the Plan and determine whether Richard died as a result of an accident without ‘allowing our moral judgments about drunk driving to influence our

Op. 3-4.

The Court’s analysis began with two competing definitions of the term "accident."  The Plaintiff argued that the "most natural and common understanding of the term . . . is an unintentional, unplanned incident that occurs as a result of a careless error."  Op. at 12.  She said that unless an intoxicated driver intended to crash his car and die, that his death would be an accident under the policy.

Another definition of "accident" would "exclude any incident where the consequences of intentional conduct are expected or reasonably forseeable."  Op. at 13.

Finding the term ambiguous, the Court applied "the rule of contra proferentum and construed the term[] strictly in favor of the insured." Op. at 15.   It found no evidence that the driver intended to have an accident and deemed the insured’s death to be an accident.

The District Court had ruled that a death caused by intoxication was not an "accident."  It relied on Section 58-3-30(b) of the North Carolina General Statutes, which says that

"Accident", "accidental injury", and "accidental means" shall be defined to imply "result" language and shall not include words that establish an accidental means test.  "

You might not be familiar with some of those terms.  I wasn’t.  The "accidental means" definition provides that there is no coverage when the loss "occurs by reason of an insured’s intentional act" or "is the natural and probable consequence of a voluntary actor course of conduct."  Op. at 21 (quoting Collins v. Life Ins. Co. of Va., 393 S.E.2d 342, 343 (N.C. Ct. App. 1990)).

The "accidental result" standard is more liberal. 

a policy that pays benefits based on an ‘accidental result’ standard does not categorically exclude from the definition of ‘accident’ losses resulting from intentional acts; rather, "accidental" under this standard means a loss occurred ‘fortuitously without intent or design’ and was ‘unexpected, unusual and unforeseen.’

Op. at 21 (quoting Henderson v. Hartford Accident & Indem. Co., 150 S.E.2d 17, 20 (N.C. 1966)).

Judge Traxler looked to a 1992 North Carolina Supreme Court decision — North Carolina Farm Bureau Mutual Ins. Co. v. Stox, 412 S.E.2d 318 (N.C. 1992) — which held:


that where the term ‘accident’ is not specifically defined in an insurance policy, that term does include injury resulting from an intentional act, if the injury is not intentional or substantially certain to be the result of the intentional act.

Op. at 22.

Judge Traxler distilled the question to whether a reasonable insured "would have understood that driving while intoxicated . . . was substantially certain to result in death or severe injury." Op. at 22. There was some statistical evidence in the record of the extent to which alcohol impairs a driver’s ability to operate a vehicle, but not enough for the Court to conclude that driving with a blood alcohol content of .289 (like Johnson had been) was substantially certain to result in death or severe injury.

The "substantially certain" standard is a pretty high one:

The indications must be strong enough to alert a reasonably prudent man not only to the possibility of the results occurring but the indications must also be sufficient to forewarn him that the results are highly likely to occur.

Op. at 23.

So, the Plaintiff was ruled to be entitled to her deceased husband’s $125,000 AD&D benefit.

One thing is for sure. AUL will be revising the terms of its AD&D coverage to exclude accidents led to by intoxication.

Another thing that’s for sure is that you are pretty drunk if you have a blood alcohol content level of .289. The NC standard for being intoxicated while driving is only .08. Don’t drink and drive.