Life Insurance – ERISA – Alcohol

Here is a life insurance case which is governed by the Employee Retirement Income Security Act (ERISA).  The opinion is from the Southern District of Texas, Houston Division.  It is styled, Heidi Ballard v. Lincoln Life Assurance Company of Boston.

The deceased had an accidental death life insurance policy which was governed by ERISA.  The death resulted when the deceased, riding as a passenger in a golf cart, was thrown out of the car after the driver of the cart suddenly and unexpectedly accelerated the cart.  This was witnessed by others.

Lincoln Life denied the claim based on an exclusion in the policy excluding an accidental death that is the result of consuming alcohol.

Ballard filed suit alleging various State law claims under Texas Insurance Code, Sections 541.060(a)(2)(A) and 541.060(a)(7) and breach of contract.  Lincoln Life filed a Rule 12(b)(6) motion to dismiss the State law claims.

A motion to dismiss under Rule 12(b)(6) is viewed with disfavor and is rarely granted.

When there are well-pleaded factual allegations, a court should presume they are true, even if doubtful, and then determine whether they plausibly give rise to an entitlement to relief.  Rule 8 generally requires only a plausible short and plain statement of the plaintiff’s claim, not an exposition of his legal argument.”  Additionally, regardless of how well-pleaded the factual allegations may be, they must demonstrate that the plaintiff is entitled to relief under a valid legal theory.

Lincoln Life points out that Ballard’s state law claims for violation of the Texas Insurance Code and breach of contract are preempted by ERISA.  ERISA regulates “any plan. . . established or maintained by an employer . . . for the purpose of providing for its participants or their beneficiaries, through the purchase of insurance or otherwise, . . . benefits in the event of . . . death . . . .”  This according to 29 U.S.C., Section 1002(1).  It is evident from the allegations in Ballard’s First Amended Complaint that the Policy was issued as part of an ERISA plan.

ERISA preempts state laws “insofar as they may now or hereafter relate to any employee benefit plan.”  This is according to 29 U.S.C., Section 1144(a).  Accordingly, “any state-law cause of action that duplicates, supplements, or supplants the ERISA civil enforcement remedy conflicts with the clear congressional intent to make the ERISA remedy exclusive and is therefore pre-empted.”

There is a saving clause contained in ERISA, however, that saving clause does not apply to this situation.

The plan under which the Policy and Ballard’s claims originate is an ERISA Plan.  Ballard’s claims for violation of Sections 541.060(a)(2)(A) and 541.060(a)(7) of the Texas Insurance Code and breach of contract are not exempt from ERISA’s savings clause and are preempted. Therefore, the Court granted Lincoln Life’s motion.

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