UNUM Correct In Denying Benefits to Drunk Driver

April 14, 2005 (PLANSPONSOR.com) - UNUM Life Insurance did not err in denying a drunk driver long-term disability benefits after a car accident, a federal judge has ruled.

>In the ruling, US Judge Paul Barbadoro of the US District Court for the District of New Hampshire said that although drunk driving was not technically a “crime” in New Hampshire – it is only a “violation” – UNUM did not have to use this definition in rendering its decision on benefits.

>Under the UNUM policy, benefits are not to be paid for disabilities caused by, contributed to, or resulting from the “commission of a crime.”

>Francie Harrison, who participated in a long-term disability program under her employer and that was administered by UNUM, was injured in a car accident while she was above the legal blood-alcohol limit. She applied for benefits with UNUM, but the company rejected her, saying she has been injured during a criminal act.

>Harrison sued UNUM, asserting that drunk driving was not a criminal act under New Hampshire law. UNUM claimed that the dictionary definition of the word “crime” is “an act committed or omitted in violation of the law,” which would nullify the long-term disability benefits policy.

>In his ruling for the plaintiff, Barbadoro wrote that even with the differing definitions, UNUM was correct in rejecting Harrison’s claim because it was reasonable for a policy administrator to adopt a different definition of “crime” than that of New Hampshire’s – if that definition was also reasonable.

>Barbadoro also noted that UNUMs approach matched usual and established contract interpretation principles. He also ruled that if New Hampshire’s definition was adopted, then all plan participants with UNUM – even those outside the state – would be bound by the decision.

The text of the opinion can be found  here .