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Court Interprets Insurance Term: 'Illegal Use of Alcohol'

By William Vogeler, Esq. on January 03, 2018 | Last updated on March 21, 2019

A day after the New Year's drinking ended, a federal appeals court ended a life insurance company's attempt to deny coverage to a drunk driver.

The U.S. Sixth Circuit Court of Appeal did not condone the driver's behavior -- he partied, crashed and suffered severe injuries. But the appeals court also did not let the insurer escape the terms of its own policy.

"This matter is about whether a contract should mean what it says," wrote Judge R. Guy Cole, Jr. in Heimer v. Companion Life Insurance Company.

Nearly $200,000 in Medical Bills

Beau Darrell Heimer is lucky to be alive after crashing his motorbike in a Michigan field. He suffered extensive injuries and incurred more than $197,333 in medical bills.

Heimer filed an insurance claim with Companion Life, but the company denied the claim because he had twice the legal limit of alcohol in his system at the time of the accident. He filed a complaint in federal court, and a trial judge held that the plan covered his injuries.

On appeal, the company reiterated its arguments that the policy excluded coverage for injuries from the "illegal use of alcohol." The Sixth Circuit said that's not what happened in Heimer's case.

"What was illegal about Heimer's behavior was his use of a motor vehicle, not of alcohol," the judges said.

"Context Matters"

The appeals panel was not impressed with the insurer's arguments or research, calling its citations a "hodgepodge of cases."

The Sixth Circuit also scoffed at the company's claim that the "illegal use of alcohol" language would exclude coverage for injuries from misdemeanor bar fights and for "simply sustaining a fall while at home."

"Whatever the merits of that, it does not argue that 'illegal use of alcohol' is a specialized term for driving under the influence," the appellate court said.

Citing Justice Ruth Bader Ginsburg in Yates v. United States, the appeals court said that "in law, as in life," context matters.

As for Heimer, it wasn't the first time he crashed. But that's another story.

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