Many employers offer accidental death and dismemberment insurance, a form of life insurance for employees. If the loss of life or limb is the result of an accident, then a lump sum will be paid. However, one court found that if someone, in the chain of events resulting in loss of life or limb, was drinking alcohol, then there will be no coverage. See, Unum v. Mohedano, 2017 WL 713791 (S.D. Tx. 2017).

Candido and his brother Bill Mohedano had been out to a karaoke lounge drinking. Afterwards they drove to Candido's house. His wife Sandra came out of the house with a shotgun. While the facts were disputed, it was clear that she shot and killed Candido in the driveway. She claimed her husband had been abusive in the past, and he was very angry when he came home. She had the shotgun to defend herself, and it accidentally went off. On the other hand, brother Bill said Sandra was the one who was angry, and in a rage, shot her husband. Candido's blood-alcohol content was .217, well over the legal limit of .08 for driving. A jury found Sandra not guilty of murder.

Sandra, and several Mohedano relatives then filed an ADD claim for the death of Candido. Sandra and the family thought there was a chance to win, because Texas bars discretionary clauses in its policies. This meant they only had to prove by a preponderance that the death was an accident. Unum thought differently. Maine was the insurer's location, from which the policy was sent to Texas. Unum argued Maine law applied. The Court chose to apply Maine law, which did not bar discretionary clauses. So, Unum's refusal to pay the claim would not be changed by the Court, unless it was arbitrary and capricious.

Unum contended that Candido was angry and intoxicated and his aggressive behavior led to his own death. It claimed policy exclusions of intoxication and crimes of assault and terrorist threats by Candido. The Court agreed, finding “His intoxication appears to have caused, contributed to or resulted in a change in his behavior during which he became violent with his wife. This violence caused her to use a firearm against him to defend herself.”

Most people would find it distasteful for Sandra to benefit from the death of her husband under these facts. However, many might not expect to have no coverage if they have a loss of limb, but because they had been drinking the claim is denied. The slight connection to alcohol “causing or contributing to” the loss will bar the claim—if the arbitrary and capricious standard applies. At least according to this Court. Mere intoxication could bar most claims.

It is also troubling that a policy delivered to an employer in the State of Texas, with insurance benefits provided to employees in the State of Texas, would be governed by the law of Maine. The ability of Texas to protect its citizens from policies it considers unfair is eviscerated here.

Stay tuned… there may be more to come on this. Learn more about life insurance law, and get in touch with a claims attorney here at the Martin Law Group if you need representation.