Wednesday, January 3, 2018
A recent case out of the Sixth Circuit, Heimer v. Companion Life Insurance Co., No. 16-2274, "is about whether a contract should mean what it says." The insurance policy at issue disclaimed coverage for injuries that resulted from the "illegal use of alcohol." Heimer legally consumed a great deal of alcohol (he was legal drinking age), but then illegally operated a motorbike while his blood alcohol level was nearly twice the legal limit. He collided with another motorbike and suffered extensive injuries.
The insurance company claimed that the policy didn't cover the accident because it resulted from the illegal use of alcohol. The court disagreed based on the plain language of the contract. The policy said "use," not "under the influence." Therefore, Heimer's injuries weren't covered only if his use of the alcohol was illegal, which it was not. Heimer's criminal offense was illegally using a motor vehicle, not illegally using alcohol.
The court acknowledged that obviously the insurance company didn't want to have to pay for the injuries caused by the drunken motorbike driving, but the court noted that the contract's language needed to be modified to reach that result.
A concurrence in part / dissent in part agreed with the outcome and accused the insurance company, the contract's drafter, of "sloppy drafting," but did allow that the phrase might be ambiguous.