In Locklear v. Sun Life Assurance Company of Canada, the United States District Court for the Middle District of Pennsylvania held that an insurer could not use alleged vehicle code violations to trigger the “criminal act” exclusion of an accidental death policy.
The insurer denied benefits to the widow of a man who was killed in a car accident when the motorcycle he was riding collided with a truck while he was attempting to pass a construction vehicle in a no-passing zone. Plaintiff brought suit under ERISA after the insurer denied her claim and she exhausted all her administrative appeals.
The policy at issue excluded coverage for any death that occurred as a result from an insured individual committing or attempting to commit an assault, felony or other criminal act. Since Mr. Locklear was illegally passing a vehicle in a no-passing zone at the time of the accident, the insurer determined that Mr. Locklear’s death occurred during the commission of a crime and denied benefits. Plaintiff argued that vehicle code violations were not crimes.
Examining well-established Pennsylvania law, the court determined that an offense must carry the possibility of imprisonment or death in order to constitute a crime. Using that statutory definition for a “crime” in Pennsylvania, the court found that the alleged vehicle code violations could not possibly constitute a crime since no violation would result in imprisonment and entered judgment in Plaintiff’s favor.
Additionally, the court addressed a secondary argument that the insurer introduced during the litigation, but had not raised during the administrative level of the claim. The insurer argued that Mr. Locklear’s actions constituted reckless endangerment and were thereby excluded by the criminal acts language of the policy. The court did not find the insurer’s argument compelling. First, the court found that the insurer had ample opportunity to raise the “reckless endangerment” argument at the administrative level and yet failed to do so, which constituted a post hoc rationale to support its denial. The court held that it was not appropriate to allow the insurer to rely on such post hoc rationales during the litigation when the factual record was completely developed at the administrative level.
Second, the court determined that even if the court considered the argument that recklessly endangering another person qualified for exclusion under the policy, Mr. Locklear’s actions in passing a vehicle in a no-passing zone did not rise to the level of recklessness required to commit reckless endangerment.