When an insured under an accidental death and dismemberment policy governed by ERISA dies, coverage often turns on whether the death resulted from an “accident,” which is covered, or from the insured’s own intentional conduct which a reasonable person would have viewed as substantially certain to lead to death, which is not covered.  In Wolf v.  Life Insurance Co. of North America, 2021 WL 2105316, (W.D. Wash. 2021), the court had to determine whether the death of an insured who drowned after a car wreck was an “accident.”  The case turned on whether driving 70-80 miles per hour the wrong way down a one-way road next to a bay, with a .17 blood alcohol level, would have led a reasonable person in the insured’s shoes to view death as substantially certain.  While calling it a very close call, the court ruled in favor of the insured in finding the death was accidental, for which insurance benefits were due under the policy.  

In the Ninth Circuit Court of Appeals, the standard for determining whether an insured’s intentional conduct leading to death was an “accident” for purposes of an accidental death policy governed by ERISA was decided in Padfield v. AIG Life Insurance Company, 290 F.3d 1121, at 1126–27 (9th Cir. 2002).   In Padfield, the insured had died while engaged in autoerotic asphyxiation.  The Ninth Circuit first had to decide what standard should apply. 

The seminal case on this issue was decided by the First Circuit Court of Appeals, in Wickman v. Northwestern National Insurance Company, 908 F.2d 1077, 1088 (1st Cir. 1990).  In Wickman, the First Circuit adopted a two-part test for deciding the issue.  First, the court looks at whether the insured has a subjective expectation of death from the conduct. The court is to make the subjective intent analysis “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.”   Second, the court is to apply an objective standard if the court cannot determine whether the insured had a subjective expectation of death, or if the court determines that the insured did not have a subjective expectation of death, the court is to apply an objective test to determine whether the insured’s expectations were reasonable.  The objective test adopted in Wickman is “whether a reasonable person, with background and characteristics similar to the insured, would have viewed the injury as highly likely to occur as a result of the insured’s intentional conduct.”

In Padfield, the Ninth Circuit adopted the Wickman two-part test with a modified version of the second part of the test –whether a reasonable person, with a background and characteristics similar to the insured, would have viewed death as “substantially certain” to occur as a result of the insured’s intentional conduct. Padfield, 290 F.3d at 1127.  Under this standard, the Ninth Circuit determined that a reasonable person with the insured’s experience would not have viewed death as substantially certain from autoerotic asphyxiation.  Indeed, the court held that these facts “fell far short” of the substantially certain to result in death standard.   The court found that this insured had engaged in autoerotic asphyxiation without dying in the past and also relied on “the uniform medical and behavioral science evidence indicating that autoerotic activity ordinarily has a nonfatal outcome.”  On the other end of the spectrum, the court noted that courts have found that playing Russian roulette does involve a reasonable expectation of a substantial certainty of death, regardless of the insured’s subjective expectations.  

The Padfield court noted that courts use various formulations to indicate the degree of certainty with which an insured must expect injury for an injury to be nonaccidental, but concluded that “the ‘substantially certain’ test is the most appropriate one, for it best allows the objective inquiry to ‘serve [ ] as a good proxy for actual expectation.’ ” Id. at 1127 (citing Wickman, 908 F.2d at 1088; Todd v. AIG Life Ins. Co., 47 F.3d 1448, 1456 (5th Cir. 1995)).

In Wolf, the court applied the Ninth Circuit’s two-part standard to Wolf’s behavior leading up to his death.  The court found that the evidentiary record was inconclusive regarding Wolf’s subjective expectations, although the court observed that his wearing of a seatbelt and use of emergency flashers possibly indicated a subjective intention that his conduct not be fatal.  The court ruled that Wolf’s conduct, while “extremely reckless behavior,” was nonetheless an accident under the substantial certainty of death standard:   

Speeding along a one-way road the wrong direction in the dark alongside a body of water does not ‘fall far short’ of what a reasonable person might expect to lead to death, [citation], but neither would a reasonable person . . . view death as “substantially certain” in these circumstances.

In contrast, the court in Wolf gave examples of reckless driving scenarios which a reasonable person would consider substantially certain to lead to death:  

driving into oncoming highway traffic or driving alongside a cliff without a guardrail with one’s eyes closed.

In Wolf, the court made its decision under the de novo review standard.  It emphasized that these facts would have presented a much closer call for the court under the “abuse of discretion” standard, in which the insurance company’s decision to interpret policy language and make coverage decisions is accorded deference by the court.  The court cited to cases holding it was not an abuse of discretion for an administrator to deny coverage for claims involving very similar drunk driving scenarios.

Wolf provides a useful roadmap in how the “substantially certain” standard would be applied to other circumstances in which an insured dies while engaged in intentional conduct that was a cause of the death.  For example, dying from jumping off a five-story building would not be an accidental death.  But dying from jumping off that same building while bungy jumping, due to an equipment failure, would be.   

Wolf shows the advantages to the insured beneficiary of having a court review a denial of benefits under an ERISA governed insurance policy under the de novo standard, rather than under an abuse of discretion standard.  

Wolf shows the necessity of an insured seeking coverage under an accidental death and disability policy to hire a knowledgeable ERISA accidental death attorney to carefully analyze the factual circumstances of an insured beneficiary’s death, and to successfully navigate the insurance claim through the ERISA appeals process and, if necessary, litigation.