Previously on the Personal Injury blog, we have explored that auto insurance policies commonly include coverage exceptions for damage or injury that arises from intentional acts. Another typical limitation concerns criminal acts, whereby the insurer’s obligation to cover losses is limited or entirely avoided when the policyholder’s claim is related to his or her own illegal activity. Similarly, life insurance policies that contain accidental death benefits usually include a provision that reduces or eliminates the pay-out when the policyholder’s death occurs while he or she is engaging in illegal activity. This very provision was at the center of an unpublished opinion by the U.S. Court of Appeals for the Fifth Circuit following a one-car accident in Lafayette Parish, Louisiana.
In 2002, Bryan Redeaux was killed in a single-car accident. At the time of his death, he was covered by a life insurance policy issued by the Southern National Life Insurance Company, Inc. that named his mother, Connie Redeaux, as the beneficiary. Southern paid Connie Redeaux $10,000 in life insurance benefits but denied her claim for accidental death benefits based on a policy exclusion “for a loss which in any way results from … injury or death occurring as a result of the commission of a crime or the attempt to commit a crime.” The coroner reported that at the time of the accident, Bryan Redeaux’s blood alcohol concentration (“BAC”) registered 0.21 percent, which was twice the legal limit under Louisiana law. Connie Redeaux filed suit in state court seeking to recover the policy’s accidental death benefits. The action was removed to federal court due to the applicability of the Employee Retirement Income Security Act. The parties filed cross-motions for summary judgment, and the district court granted Connie Redeaux’s. Southern appealed.
The court, after reviewing the trial record, determined that it was “undisputed that the insured was operating a motor vehicle at the time of his death and that his BAC was 0.21 percent, more than twice the legal limit under Louisiana law.” It rejected Connie Redeaux’s argument that the policy exclusion did not apply because no criminal charges were filed against her son; it is well established in the Fifth Circuit that “[t]he failure of the state criminal justice system to prosecute an individual … by no means constitutes an affirmative finding that the individual is absolved of any crime.” Thus, the court held that “the insured committed the crime of operating a vehicle while intoxicated under Louisiana law,” and reversed the district court’s judgment.
Although Louisiana generally endorses the view that “exclusionary provisions are to be strictly construed against the insurer with any ambiguity construed in favor of the insured,” policy holders should ensure they understand all limitations and exclusions. While Connie Redeaux’s loss of her son was tragic and her attempt to maximize her recovery under the policy understandable, the application of standard contract principles could produce no other result given the clear langauge of the policy.
If you are involved in a dispute with an insurance company over a claim, call the Berniard Law Firm at 504-521-6000 and speak with an attorney who can help you obtain the recovery you deserve.