Thies v. Life Ins. Co. of North America

804 F.Supp.2d 560

Elizabeth THIES and Matthew Thies, Plaintiffs

v.LIFE INSURANCE COMPANY OF NORTH AMERICA, Defendant.

No. 5:09–CV–98.

United States District Court, W.D. Kentucky,Paducah Division.

Aug. 17, 2011.

Michael D. Grabhorn, Grabhorn Law Office, PLLC, Louisville, KY, William K. Shannon, Paducah, KY, for Plaintiffs.

Mitzi Denise Wyrick, Walter M. Jones, Wyatt, Tarrant & Combs LLP, Louisville, KY, for Defendant.

MEMORANDUM OPINION

THOMAS B. RUSSELL, Chief Judge.

This matter is before the Court upon Plaintiffs' Motion for Judgment on Counts I & II (Docket # 67). Defendant has responded (Docket # 77). Plaintiff has replied (Docket # 79). The Court has reviewed the administrative claim file (Docket # 51). This matter is now ripe for adjudication.

BACKGROUND

On May 28, 2006, Wade Thies was killed while operating a jet ski on Kentucky Lake. Administrative Record at 198–99 [hereinafter “A.R. at –––”]. According to the Kentucky Boating Accident Report, Mr. Thies's vessel “ramped off an under water rock and struck an above water rock causing Mr. Thies to strike the above water rock.” A.R. at 199. “After Mr. Thies struck the above water rock he fell into of [sic] water and drowned.” Id.

At the time of his death, Mr. Thies was employed as a riverboat captain by Ingram Industries, Inc. (“Ingram”), a corporation that subscribed to Life Insurance Company of North America's (“LINA”) Group Policy No. COA 002533 (the “Policy”). A.R. at 323. The Policy provided accidental death and dismemberment benefits. A.R. at 327. Ingram paid for the basic employee benefit, which amounted to two times the employee's salary. A.R. at 295. Mr. Thies opted to increase this coverage in the amount of ten times his salary, providing a total benefit of $768,000.00 and burial benefits in the amount of $5,000. Id.

Following Mr. Thies's death, Plaintiffs filed a claim for benefits on October 5, 2006, which was received by LINA on October 18, 2006. A.R. 295–97. The claims examiner, James Macom, reviewed the Proof of Loss form, Mr. Thies's death certificate, the coroner's report, and the Kentucky Boating Accident Report. A.R. at 273. Mr. Thies's death certificate indicates that Mr. Thies died from drowning as a result of injuries caused by a jet ski accident. A.R. at 320. The death certificate also lists blunt force injuries from a jet ski accident and acute alcohol intoxication as other significant conditions contributing to his death. Id. The coroner's report lists the cause of death as drowning caused by a jet ski accident and lists acute alcohol intoxication as a contributing factor. A.R. at 212. Both documents classify the manner of death as an “accident.” A.R. at 212, 320.

The Kentucky Boating Accident Report, submitted on June 9, 2006, indicates that the boating accident involved “Collision with Fixed Object” and “Falls Overboard.” A.R. at 198–99. It also lists excessive speed, alcohol use, and operator inattention as other contributing factors. A.R. at 198. The report notes that Mr. Thies did not use a personal flotation device and drowned. A.R. at 199. At the bottom of the report, alcohol use is listed as the primary cause of the accident and operator inattention is listed as the secondary cause. Id. A Toxicology Report dated June 2, 2006, and attached to the boating report found a BAC of 0.223. A.R. at 202.

On November 10, 2006, Mr. Macom denied Plaintiffs' claim, finding Mr. Thies's death was not a “Covered Accident” and the exclusion for intentionally self-inflicted injuries applied:

Evidence obtained in the claim file supports that Mr. Thies died of drowning, as a consequence of injuries sustained in a jet ski crash. The crash occurred on 05/28/2006 at 7:00 PM. According to the Kentucky Boating Accident Report, there was no evidence of inclement weather or poor visibility. The report indicated that Mr. Thies was operating his jet ski close to shore, and that he struck an underwater rock, causing him to strike another rock, causing injuries that contributed to his drowning. The report concluded that excessive speed, operator inattention, and alcohol use contributed to the accident. The Toxicology report confirms that Mr. Thies' blood alcohol concentration was .223%.

In Kentucky, it is illegal to boat while intoxicated. A person is considered to be intoxicated with a blood alcohol level of 0.08% or higher. Toxicology testing reveals that Mr. Thies had a blood alcohol concentration of 0.223%. This is over 2.5 times the legal limit.

The hazards of boating, or operating any motorized vehicle, while intoxicated are widely known an [sic] publicized. It is well known that doing so could result in bodily harm or death. The evidence on file supports that Wade Thies made a conscious decision to consume alcohol to a level that exceeded the legal limit in the State of Kentucky (0.08%). This was an intentional act. The evidence supports that this level of intoxication contributed to the jet ski crash that eventually led to his death.

The policy specifically excludes the payment of benefits in cases involving intentionally self-inflicted injuries. Having reviewed the available information, there is evidence to support that Mr. Thies' death was contributed to by his voluntary ingestion of alcohol. This was an intentional act, and that act contributed to his jet ski crash, that lead to the drowning that caused his death.

In addition, we have determined that the crash does not meet the definition of Covered Accident. As stated above, a Covered Accident must be an unforeseen event. The hazards of boating or operating a motorized vehicle while intoxicated are widely known and publicized. Because of this, the jet ski crash that led to Mr. Thies' death was not unforeseeable, and therefore does not qualify as a Covered Accident as defined by the policy.

A.R. at 273–74 (emphasis added). Plaintiffs were provided a copy of the Policy provisions and informed of their right to appeal the decision. A.R. at 272, 274–75.

Plaintiffs filed their appeal on January 5, 2007. A.R. at 191. Plaintiffs' attorney submitted the Kentucky Boating Accident Report, the coroner's report, the Western Kentucky Regional Medical Examiner's Office Final Diagnosis, and supporting caselaw. A.R. at 191–230. Renee Worst, Technical Specialist for LINA, responded on January 17, 2007, advising Plaintiffs that their appeal was received. A.R. at 189. Worst requested any additional information be submitted by February 2, 2007. Id.

Plaintiffs' claim was sent to Michael Grimes for legal review on March 26, 2007. A.R. at 10–11. On April 11, 2007, Ms. Worst wrote to Plaintiffs informing them that their claim had been denied on appeal. A.R. at 183. Ms. Worst wrote:

The information in our file indicates that Wade Thies died May 29, 2006 when he was involved in a jet ski crash in which the jet ski he was operating struck an underwater rock, causing him to strike another rock, causing injuries that contributed to his death. The death certificate states that Mr. Thies' cause of death was drowning. Other significant conditions which contributed to death but not resulting in the underlying cause of death were blunt force injuries from jet ski accident, acute alcohol intoxication.

According to the Kentucky Boating Accident Report, the primary cause of the accident was alcohol use. The secondary cause of the accident was operator inattention. No jet ski or environmental factors were noted to contribute to the collision.

We reviewed the autopsy report form [sic] the Medical Examiner's Office. There was no evidence of any medical condition that would have contributed to the crash. The toxicology report shows that Mr. Theis' [sic] blood screen produced a blood alcohol level of .223%. In the State of Kentucky, it is illegal to operate any vessel, water skis, surfboard or similar devices while under the influence and on the waterways of Kentucky.

According to the information on file, Wade Thies was involved in a single vessel crash on May 28, 2006. According to the Kentucky Boating Accident Report there were no adverse weather conditions or vehicle mechanical malfunctions that would have contributed to the crash.

We have confirmed that Mr. Theis' [sic] blood alcohol level was 0.223%, which is over twice the legal limit for the State of Kentucky (0.08%).

A review of the file indicates that Mr. Thies worked as a River Boat Captain. There is no information to support the fact that Mr. Thies would have been unable to understand the risks involved in drinking and operating a jet ski.

Any reasonable person could have foreseen that Mr. Thies' drinking and operating a jet ski might cause injury or death. Mr. Thies' voluntary actions placed him in a position where he would be at risk to personal injury or death. Since Mr. Thies' death was the foreseeable result of his own voluntary actions, we have concluded that his death was not accidental. This policy, as quoted previously, pays a benefit if the insured dies as a result of an accident. Rather, we have determined that Mr. Thies' death was the result of his own self inflicted injuries, which is specifically excluded from this policy. Since we have concluded that Mr. Thies' death was not an accident, we have determined that no Accidental Death benefits are payable under the terms of policy COA 2533.

A.R. at 184–85. Ms. Worst advised Plaintiffs that they had exhausted their administrative levels of appeal and no further appeals would be honored. A.R. at 185.

Plaintiffs responded by sending a final demand for payment on May 11, 2007. A.R. at 181. Plaintiffs questioned whether LINA reviewed the submitted caselaw, but did not submit any additional caselaw or evidence. Id. Plaintiffs indicated that if they did not receive an agreement from LINA to pay the claim in full by May 21, 2007, they would pursue their claim in court. Id. Accident Claims Manager Brian Billeter responded to Plaintiffs' letter on May 18, 2007, and indicated that the claim had been...