Wolf v. Life Ins. Co. of N. Am.

46 F.4th 979

Scott C. WOLF, Plaintiff-Appellee,

v.LIFE INSURANCE COMPANY OF NORTH AMERICA, Defendant-Appellant.

No. 21-35485

United States Court of Appeals, Ninth Circuit.

Argued and Submitted June 8, 2022 Seattle, Washington

Filed August 25, 2022

Charles C. Huber (argued), D. Michael Reilly, and Ryan P. McBride, Lane Powell PC, Seattle, Washington, for Defendant-Appellant.

Glenn R. Kantor (argued), Sally Mermelstein, Sarah J. Demers, and Stacy Monahan Tucker, Kantor & Kantor LLP, Northridge, California, for Plaintiff-Appellee.

Before: Ronald Lee Gilman,^* Sandra S. Ikuta, and Eric D. Miller, Circuit Judges.

Opinion by Judge Gilman;

Concurrence by Judge Ikuta

GILMAN, Circuit Judge:

Scott Wolf, Jr. (Scott) died in a one-car collision. He was intoxicated and had been driving at a high speed in the wrong direction down a one-way road when he hit a speed bump and lost control of the car, which ultimately flipped over and landed upside down in a body of water adjoining the road. Scott Wolf, Sr. (Wolf), Scott's father, brought suit against Life Insurance Company of North America (LINA), alleging that LINA wrongfully denied his insurance claim based on Scott's accidental death. The district court granted Wolf's motion for summary judgment.

On appeal, LINA argues that, under the language of the insurance policy, an event is not an "accident" if it is "reasonably foreseeable." But LINA did not present that argument to the district court, nor to Wolf when it denied his claim, so it has forfeited that argument here. The appropriate test for whether the death in this case was an "accident" is therefore the one that the district court applied, which asks whether the resulting death was "substantially certain" to occur from the insured's conduct. Although the insured's conduct here was extremely reckless, the district court correctly concluded that his death was not "substantially certain" to occur. Accordingly, we AFFIRM the judgment of the district court.

I. BACKGROUND

A. The AD&D policy

Wolf maintains an accidental death and dismemberment (AD&D) insurance policy from LINA through his employer. The policy pays benefits for, among other things, a "Covered Accident," which is defined as "[a] sudden, unforeseeable, external event that results, directly and independently of all other causes." Scott, Wolf's 26-year-old son, was insured under this policy for $50,000 as his parents' dependent.

The policy includes a list of exclusions to coverage, such as for injuries resulting from skydiving, hang-gliding, parachuting, or acrobatic flying. Notably, however, the policy does not have any exclusion for incidents occurring while the insured was under the influence of alcohol, speeding, or engaged in reckless conduct.

B. Scott's fatal drive

The incident in question occurred around 4:00 a.m. on August 19, 2018 in Clearwater, Florida. Witnesses reported that Scott was driving in the wrong direction on a one-way service road next to the Courtney Campbell Causeway, which is surrounded on both sides by water. The police later determined that Scott was traveling at approximately 65 miles per hour, despite the service road having a speed limit of 10 miles per hour. He hit a speed bump, which caused him to lose control of the car, overcorrect, and veer off the road. His car then struck several tree stumps, went airborne over the rocky coastline, and landed upside-down in the adjacent bay.

A deputy from the Clearwater Police Department quickly arrived on scene and pulled Scott from the submerged, overturned car with the assistance of a nearby onlooker. Scott was transported to a local hospital, where he was pronounced dead. After performing an autopsy, the county medical examiner determined that Scott had suffered blunt-impact injures to the head and neck and had died as a result of drowning. The examiner listed the "manner of death" as "Accident (Drove automobile off roadway into bay while intoxicated)." In addition, the medical examiner's toxicology report revealed that Scott had a blood alcohol content (BAC) of .20 grams per deciliter (0.20%).

C. LINA's denial of coverage

Wolf filed a timely claim for accidental-death benefits with LINA in June 2019. Roughly one month later, LINA issued a denial letter, concluding "that Scott's death was a foreseeable outcome of his voluntary actions, and thus, the loss was not a result of a Covered Accident as the term is defined" under the policy (emphases in original). In explaining its decision, LINA wrote:

Foreseeability can be analyzed by examining whether the Insured's intentional conduct was objectively reasonable, or reasonable based on the judgment of a similar individual. Because we cannot determine Scott's subjective expectation prior to the incident, we must consider whether a reasonable person with a similar background would have viewed serious injury or death as highly likely to occur. He was a 26 year old with a valid Driver's License and a Bachelor's Degree, employed as a Technical Manager for a company contracted by the U.S. Department of Energy. The impairments associated with a BAC of 0.20% also support that he was operating his vehicle under highly unsafe conditions. For these reasons, it is reasonable to assume that a person of similar education and age-based experience would have understood that serious injury or even death would be highly likely to occur while operating a vehicle ... with a BAC of 0.20% and speeding at 6.5 times over the legal speed limit, the wrong way down a road.

(emphasis in original).

Wolf appealed, contending that if LINA "wanted to exclude coverage for accidental deaths arising from negligent or even reckless conduct on behalf of the deceased, they should have stated so in plain English." He further pointed out that the death certificate stated that Scott's death was both an accident and was due to drowning.

In reviewing Wolf's internal appeal, LINA engaged a toxicologist, Dr. Theodore Siek, to opine on what impact Scott's intoxication level might have had on his driving. Dr. Siek observed that the "physical and mental impairments" of someone with a BAC above 0.18% "include: 1) loss of the sense of care and caution, 2) a slower perception and reaction time, 3) loss of coordination, and 4) less ability to multi-task." He further opined that Scott's "immunity to pain, loss of coordination, and inability to perceive his dangerous situation were all impacted by [Scott's] gross ethanol intoxication. Both his driving ability, his attitude about safety, and ability to rescue himself from drowning were all significant factors in his accident and drowning death."

Citing Dr. Siek's statements, LINA upheld its denial of benefits following Wolf's internal appeal. LINA again explained its analytical framework for assessing whether an event was an "accident" under the policy:

The analytical framework to determine if the event was unforeseeable is for [LINA] to determine if the insured subjectively lacked an expectation of death or injury. If so, LINA asks whether the suppositions that underlay the insured's expectation were reasonable, from the perspective of the insured, allowing the insured a great deal of latitude and taking into account the insured's personal characteristics and experiences. If the subjective expectation of the insured cannot be ascertained, LINA asks whether a reasonable person, with background and characteristics similar to the insured, would have viewed the resulting injury or death as a probable consequence highly likely to occur as a result from the insured's conduct. Given the common meanings of the words, we interpret highly likely to occur to entail a level of inevitability that is of a significant or large degree.

(emphasis added.) LINA concluded that a reasonable person with a background and characteristics similar to Scott's "would have viewed the resulting death as a probable consequence substantially likely to occur."

D. The instant lawsuit

Wolf sued LINA for benefits under the Employee Retirement Income Security Act of 1974 (ERISA), 29 U.S.C. §§ 1132(a), (e), (f) and (g). The parties informed the district court that they would file simultaneous cross-motions and responsive briefs. They proposed that the court's judgment be based entirely on the briefs and the administrative record.

LINA moved for judgment under Rule 52 of the Federal Rules of Civil Procedure, and Wolf filed a motion for summary judgment under Rule 56 of the Federal R ules of Civil Procedure. In his motion, Wolf cited statistical information on drunk driving that was not part of the administrative record. After concluding that it would not consider Wolf's statistical information, the district court analyzed the case under the framework adopted by this court in Padfield v. AIG Life Insurance Co. , 290 F.3d 1121 (9th Cir. 2002).

The district court acknowledged that "Scott was engaging in extremely reckless behavior," but concluded that "a reasonable person would not have viewed [Scott's fatal] injury as substantially certain to occur as a result of his actions, rendering his death accidental under the policy." LINA has timely appealed that ruling.

II. ANALYSIS

A. Standard of review

In an appeal under ERISA, we review de novo a district court's grant of summary judgment, employing the same standard that governed the district court's review of the plan administrator's decision. Williams v. Nat'l Union Fire Ins. Co. of Pittsburgh, Pa. , 792 F.3d 1136, 1139 (9th Cir. 2015). De novo review applies to the denial of benefits under an ERISA-governed insurance policy where, as is undisputed here, the policy does not assign the administrator discretionary authority to determine eligibility of benefits or to construe the plan's terms. Padfield , 290 F.3d at 1124–25. In such cases, we "simply proceed[ ] to evaluate whether the plan administrator correctly or incorrectly denied benefits." Abatie v. Alta Health & Life Ins. Co. , 458 F.3d 955, 963 (9th Cir. 2006) (en banc).

B. The Padfield test controls

The key...