Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-4_14-cv-00313/USCOURTS-cand-4_14-cv-00313-4/pdf.json

Nature of Suit Code: 110
Nature of Suit: Insurance
Cause of Action: 28:1332 Diversity-Petition for Removal

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United States District Court 

Northern District of Californi

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UNITED STATES DISTRICT COURT 

NORTHERN DISTRICT OF CALIFORNIA 

ANGELICA JONES, 

Plaintiff, 

v. 

FEDERAL INSURANCE COMPANY, 

Defendant. 

Case No. 14-cv-00313-HSG 

ORDER DENYING MOTION FOR 

SUMMARY JUDGMENT 

Re: Dkt. No. 42 

Pending before the Court is Defendant Federal Insurance Co.’s motion for summary 

judgment. For the reasons articulated below, the motion is DENIED. 

I. BACKGROUND 

The following facts are undisputed. Defendant issued insurance policy number 99-0700-

71 (“Policy”) to Plaintiff Angelica Jones as part of a “Voluntary Accident Insurance Program” for 

Pacific Service Employees Association, of which Plaintiff was a member through her employment 

with Pacific Gas & Electric Co. Plaintiff’s deceased husband was also insured under the terms of 

the Policy. 

In relevant part, the Policy provides coverage for “an Accident [that] results in a covered 

Loss not otherwise excluded.” Dkt. No. 42-2 at 16. “Accident” is defined as 

a sudden, unforeseen, and unexpected event which: 1) happens by 

chance; 2) arises from a source external to an Insured Person; 3) is 

independent of illness, disease or other bodily malfunction or 

medical or surgical treatment thereof; 4) occurs while the Insured 

Person is insured under this policy which is in force; and 5) is the 

direct cause of loss. 

Id. at 30. The Policy defines “Loss” as “Accidental . . . Loss of Life.” Id. at 37. 

On June 24, 2012, Plaintiff’s husband, Rodney Jones, died of a heroin overdose. The 

overdose occurred as a result of Mr. Jones’s self-injection of heroin while he was alone in his 

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bathroom. There was no other cause of his death. 

Plaintiff submitted her claim for death benefits under the Policy on July 2, 2012. On 

September 4, 2012, Defendant advised Plaintiff that the Policy contained a “Narcotics Exclusion” 

and an “Intoxication Exclusion,” and informed Plaintiff that it was still considering the merits of 

her claim. Dkt. No. 47. Defendant admits now that the Policy contains no such exclusions. 

On November 15, 2012, Defendant informed Plaintiff by letter that her claim had been 

denied. Defendant stated that Plaintiff’s claim was not covered by the Policy because “Mr. 

Jones’s death cannot be considered as Accidental since the self-administered overdose of heroin, 

was not a sudden, unforeseen and unexpected event which happened by chance and did not arise 

from a source external to Mr. Jones.” Id.

Defendant filed the pending motion for summary judgment on May 14, 2015. Dkt. No. 42 

(“Mot.”). Defendant seeks judgment that 1) it did not breach the insurance contract by denying 

benefits because Mr. Jones’s death was not caused by “accidental means”; and 2) even if Mr. 

Jones’s death is covered by the Policy, Defendant did not breach the covenant of good faith and 

fair dealing because its denial of benefits was not unreasonable. The parties agree that California 

law applies to the issues to be decided here. 

II. DISCUSSION 

A. Legal Standard 

Summary judgment is proper where the pleadings, discovery and affidavits show that there 

is “no genuine dispute as to any material fact and [that] the movant is entitled to judgment as a 

matter of law.” Fed. R. Civ. P. 56(a). Material facts are those which may affect the outcome of the 

case. See Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). A dispute as to a material 

fact is genuine if there is sufficient evidence for a reasonable jury to return a verdict for the 

nonmoving party. See id. Only disputes over material facts will preclude summary judgment; 

“factual disputes that are irrelevant or unnecessary will not be counted.” Id.

The moving party bears the initial burden of identifying those portions of the pleadings, 

discovery and affidavits which demonstrate the absence of a genuine issue of material 

fact. See Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). Where the moving party will have 

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the burden of proof on an issue at trial, it must affirmatively demonstrate that no reasonable trier 

of fact could find other than for the moving party. See id. On an issue for which the opposing 

party will have the burden of proof at trial, however, the moving party need only point out “that 

there is an absence of evidence to support the nonmoving party's case.” Id. at 325. 

Once the moving party meets its initial burden, the nonmoving party must go beyond the 

pleadings and, by its own affidavits or discovery, set forth specific facts showing that there is a 

genuine issue for trial. See Fed. R. Civ. P. 56. It is not the task of the district court to scour the 

record in search of a genuine issue of triable fact. Keenan v. Allan, 91 F.3d 1275, 1279 (9th Cir. 

1996). The nonmoving party has the burden of identifying with reasonable particularity the 

evidence that precludes summary judgment. See id. If the nonmoving party fails to make this 

showing, “[t]he moving party is entitled to a judgment as a matter of law.” Celotex Corp., 477 

U.S. at 323. 

B. The Policy Is An “Accidental Death” Policy 

The parties’ dispute turns on whether the Policy is properly classified as an “accidental 

means” or an “accidental death” insurance policy. Under California law, the distinction is often 

dispositive, as “policies requiring only that there be proof of accidental death have been construed 

broadly, such that the injury or death is likely to be covered unless the insured virtually intended 

his injury or death.” Weil v. Fed. Kemper Life Assurance Co., 7 Cal. 4th 125, 140 (1994) (internal 

quotation marks omitted). An “accidental means” policy requires not only “that death or injury is 

unexpected or unforeseen,” but also that there is “some element of unexpectedness in the 

preceding act or occurrence which leads to the injury or death.” Olson v. Am. Bankers Ins. Co., 30 

Cal. App. 4th 816, 822 (1994). In other words, “[a] person may do certain acts, the result of which 

acts may produce unforeseen consequences and may produce what is commonly called accidental 

death, but the means are exactly what the [person] intended to use, and did use, and was prepared 

to use. The means were not accidental, but the result might be accidental.” Weil, 7 Cal. 4th at 135 

(emphasis in original) (internal quotation marks omitted). 

Insurance companies specifically began limiting the coverage of some insurance policies to 

“accidental means” once it became clear that California courts would construe “accidental death” 

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policies broadly. See Weil, 7 Cal. 4th at 134 n.5. As a result, “[b]y employing the phrase 

‘accidental means,’ insurers can be relatively certain that their policies will be interpreted by the 

courts to have the limiting effect desired. No such assurance is available when other terms are 

used. . . . [T]he whole rationale for insurers choosing to employ the phrase in the first place was to 

define more precisely the risk that was insured.” Olson, 30 Cal. App. 4th at 823. 

Defendant argues that “[w]hile the . . . Policy does not use the word ‘means’ like some 

other policies, based on its plain and unambiguous wording, when read as a whole, it clearly and 

unambiguously requires that for benefits to be payable, an Accident must have caused an 

Accidental Bodily Injury or death.” Mot. at 11. As such, Defendant argues that the Policy must 

be construed as an “accidental means” policy. But California courts have clearly rejected this 

argument. See Olson, 30 Cal. App. 4th at 824-25 (“Because [the insurer] failed to use the term 

‘means,’ the policy is ambiguous. Since uncertainties in an insurance contract are resolved against 

the insurer and in favor of imposing liability, we hold that the subject policy is of the ‘accidental 

death’ variety.”); see also Paulissen v. U.S. Life Ins. Co., 205 F. Supp. 2d 1120, 1128 (C.D. Cal. 

2002) (same). Here, the Policy provides coverage for “an Accident [that] results in a covered 

Loss,” and defines “Loss” as “Accidental . . . Loss of Life.” Put together, the Policy provides 

coverage for “an accident that results in accidental loss of life.” At best, this language is 

ambiguous. It certainly does not “clearly and unambiguously” limit the Policy to an “accidental 

means” policy. See Ritchie v. Anchor Cas. Co., 135 Cal. App. 2d 245, 253 (1955) (“There is a 

clear distinction between injury caused by ‘accident’ and one caused by ‘accidental means.’”). As 

a result, the Court follows the reasoning articulated in Olson and Paulissen, resolves the 

uncertainties in the Policy against the insurer, and finds that the Policy is “of the ‘accidental death’ 

variety.” Olson, 30 Cal. App. 4th at 824-25; Paulissen, 205 F. Supp. 2d at 1128. 

C. Plaintiff’s Death Was Accidental And Therefore Is Covered By The Policy 

Defendant appears to concede that the undisputed facts demonstrate that Mr. Jones’s death 

was unintentional. However, Defendant advances two arguments as to why the “accidental death” 

Policy nevertheless does not cover Mr. Jones’s death. 

First, Defendant argues that the heroin toxicity that caused Mr. Jones’s death was not an 

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“external” source, as required by the Policy. Second, Defendant argues that Mr. Jones died of a 

bodily malfunction (his body’s reaction to the heroin overdose). 

The Court does not find these arguments persuasive. It is undisputed that the heroin that 

killed Mr. Jones originated from outside of his body. That Mr. Jones did not die until the heroin 

entered his body does not transform the heroin from an external to an internal source. 

Furthermore, if an individual dies, his body has by definition malfunctioned—in other words, 

being run over by a truck will cause one’s body to malfunction, resulting in death, but such a Loss 

indisputably would be covered by the Policy. The response of the insured’s body to an external 

trauma—such as the injection of excessive amounts of heroin—cannot properly be thought of as a 

“bodily malfunction.” 

Defendant’s motion for summary judgment as to Plaintiff’s first cause of action is 

accordingly denied. 

D. Disputed Issues Of Fact Exist As To Whether Defendant Breached The 

Covenant Of Good Faith And Fair Dealing 

Every insurance contract “imposes on each party an implied duty of good faith and fair 

dealing.” Chateau Chamberay Homeowners Ass’n v. Associated Int’l Ins. Co., 90 Cal. App. 4th 

335, 345 (2001). An insured’s claim of bad faith turns on whether the insurer’s investigation and 

denial of benefits was reasonable. See id. at 346. However, the denial of benefits “due to the 

existence of a genuine dispute . . . as to the existence of coverage” does not warrant liability for 

bad faith conduct. Id. at 347. 

Defendant argues that Plaintiff’s bad faith claim must fail even though Plaintiff’s benefits 

claim is covered by the Policy because Defendant’s denial of the claim was not unreasonable. 

Further, Defendant argues that its actions were reasonable because a “genuine dispute” existed 

regarding the application of California law and whether the Policy constituted an “accidental 

means” insurance policy. 

The Court cannot find as a matter of law that Defendant did not breach the covenant of 

good faith and fair dealing. Plaintiff has presented facts relating to Defendant’s inaccurate 

representation of the coverage of the Policy to Plaintiff—specifically, the existence of narcotics 

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and intoxication exclusions. Furthermore, the Court finds that Defendant could reasonably be 

expected “to know and apply California law distinguishing between accidental death and 

accidental means policies, especially in light of the fact that this distinction sets California apart 

from other jurisdictions.” Paulissen, 205 F. Supp. 2d at 1131. Defendant’s motion for summary 

judgment as to Plaintiff’s second cause of action is accordingly denied. 

III. CONCLUSION 

For the foregoing reasons, Defendant’s motion for summary judgment is DENIED. The 

Court sets a case management conference for August 18, 2015, at 2:00 p.m., in Courtroom 15, 

18th Floor, 450 Golden Gate Avenue, San Francisco, at which the parties should be prepared to 

discuss the remainder of the case schedule. 

IT IS SO ORDERED. 

Dated: July 10, 2015 

______________________________________ 

HAYWOOD S. GILLIAM, JR. 

United States District Judge 

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