ERISA-Fifth Circuit Upholds The Insurer’s/Plan Administrator’s Denial Of Life Insurance Benefits Due Intoxication Exclusion

Green v. Life Insurance Company of North America, No. 13-60049 (5th Cir. 2014), the Fifth Circuit Court of Appeals (the “Court”) faced the following situation. Lindsey Green and Brenda Green (collectively “Plaintiffs”) were appealing the district court’s grant of summary judgment in favor of the defendant, Life Insurance of North America (“LINA”), upholding LINA’s denial of life insurance benefits to Plaintiffs, the beneficiaries of the two policies at issue.

In this case, Joshua Green (“Green”), husband of Lindsey Green and son of Brenda Green, died while operating a boat on July 16, 2010. Around 8:20 p.m, he called his wife to say he was on his way home. When he did not arrive, she called the police. The Coast Guard found Green in his boat the next morning. He had died because of a head injury sustained when his boat struck the support legs of a landing light at Keesler Air Force Base. The police report and radio log on the incident noted that Green had a blood alcohol content of .243, there were empty beer bottles and cans in the boat, he had not been using his running lights and when he had spoken to his wife he sounded intoxicated.

Plaintiffs sought to recover life insurance benefits on two Accidental Death and Dismemberment (“AD&D”) policies Green held with LINA through his employer, Northrop Grumman Corporation. LINA is the issuer, insurer, claims administrator, and plan administrator of the two policies. However, the policies excluded recoveries for death occurring when operating a vehicle while intoxicated. LINA therefore denied Plaintiffs’ claim on the basis of this exclusion and related matters. In analyzing the case, the Court said, first, it was assuming that a de novo review applies to LINA’s decision to deny the benefits. The Court said, next, that-even using a de novo review- LINA properly applied the exclusion for intoxication in the policies. As such, the Court affirmed the district court’s summary judgment in LINA’s favor.

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