Court Opinion

ID: 1003825
Source: CourtListenerOpinion
Date Created: 2013-07-04 18:32:16.385953+00
Date Added: 2024-06-11T15:38:04.843430
License: Public Domain

UNPUBLISHED

UNITED STATES COURT OF APPEALS
                FOR THE FOURTH CIRCUIT

JOHN A. BALTHIS,                          
                   Plaintiff-Appellant,
                   v.                             No. 00-2022
AIG LIFE INSURANCE COMPANY,
               Defendant-Appellee.
                                          
            Appeal from the United States District Court
         for the Western District of Virginia, at Abingdon.
                  James P. Jones, District Judge.
                          (CA-99-135-1)

                        Argued: January 23, 2001

                        Decided: March 16, 2001

     Before WILLIAMS and MICHAEL, Circuit Judges, and
     Claude M. HILTON, Chief United States District Judge
    for the Eastern District of Virginia, sitting by designation.

Affirmed by unpublished opinion. Chief Judge Hilton wrote the opin-
ion, in which Judge Williams and Judge Michael joined.

                              COUNSEL

ARGUED: James Victor Bates, JAMES V. BATES LAW OFFICE,
Bristol, Virginia, for Appellant. William Bradford Stallard, PENN,
STUART & ESKRIDGE, Abingdon, Virginia, for Appellee.
2                 BALTHIS v. AIG LIFE INSURANCE CO.
Unpublished opinions are not binding precedent in this circuit. See
Local Rule 36(c).

                              OPINION

HILTON, Chief District Judge:

   In this case, the district court granted summary judgment to an
ERISA plan after it was sued by the beneficiary of a life insurance
policy because the plan excluded coverage due to the decedent’s
intoxication at the time of death. Finding the exclusion was proper,
we affirm the district court.

   Gordon Balthis died on December 27, 1997, at his home in Beau-
fort, North Carolina. His autopsy report stated that the cause of death
was "acute ethanol intoxication with aspiration of gastric contents."
His blood alcohol concentration at the time of death was 0.16%. The
evidence below indicated that the decedent had been drinking with
friends, had dinner, and fell asleep on a couch. At some point, he
vomited due to over-intoxication and choked to death.

   The decedent had a $150,000 life insurance policy which named
his brother, John A. Balthis (appellant in this action), as beneficiary.
The policy was issued by AIG Life Insurance Co. through Landstar
System, the decedent’s employer, pursuant to the Employee Retire-
ment Income Security Act, 29 U.S.C. § 1001 et seq. The decedent’s
brother filed a timely claim for benefits with AIG. His claim was
denied both initially and on internal appeal with AIG. He thereafter
brought suit in the United States District Court for the Western Dis-
trict of Virginia.

   AIG moved for summary judgment on the basis that the decedent
was intoxicated at the time of his death. The beneficiary objected,
arguing that his claim should be paid because the decedent’s intoxica-
tion at death was not related to an illegal activity such as driving
while intoxicated. The district court agreed with AIG, found that
exclusion was proper because the decedent was intoxicated, and
granted summary judgment to AIG. The beneficiary appealed the dis-
trict court’s decision to this Court.
                  BALTHIS v. AIG LIFE INSURANCE CO.                   3
   We review the district court’s grant of summary judgment de novo.
See Canada Life Assurance Co. v. Estate of Lebowitz, 185 F.3d 231,
235 (4th Cir. 1999). The parties discussed below and on appeal the
question of whether deference is owed to AIG in its determination of
exclusion. AIG argues that the ERISA plan in question gives discre-
tion to the plan administrator to determine which claims are and are
not covered. AIG argues that such discretion is entitled to deference.
See Firestone Tire & Rubber Co. v. Bruch, 489 U.S. 101, 115 (1989)
(holding that when an ERISA plan gives its administrator discretion-
ary authority to pay or deny a claim, that administrator’s decision is
entitled to deference). The beneficiary responds that the terms of the
ERISA plan do not clearly confer discretion on the plan administrator
and therefore AIG is entitled to no deference. Because we conclude,
even without according deference, that AIG was correct in excluding
coverage because of intoxication, we decline to rule on this question.

   The sole substantive issue before the district court was whether the
ERISA plan was entitled, as a matter of law, to exclude the decedent’s
beneficiary’s claim for benefits. Whether the beneficiary is entitled to
benefits under the policy turns on the question of whether the circum-
stances of the decedent’s death excluded coverage. The relevant por-
tion of the insurance policy states: "The Policy does not cover any
loss caused in whole or in part by, or resulting in whole or in part
from . . . the Insured Person being legally intoxicated under the appli-
cable law of the jurisdiction where the accident occurred." The parties
focus their arguments on the phrase "legally intoxicated" in the exclu-
sionary clause. The beneficiary argues that this phrase means that the
exclusion applies only if the decedent was committing an illegal act
under the applicable law that involved intoxication. For example, he
argues that the beneficiary of a decedent who dies while driving while
intoxicated cannot recover because he is "legally intoxicated"—
intoxication while performing an act (driving) that together is illegal
under the applicable law (DWI). The beneficiary concludes that the
exclusion cannot apply to this case because the decedent died while
sleeping on a couch. Because "sleeping while intoxicated" is not ille-
gal under North Carolina law, he argues, the policy should cover the
loss in this case and the exclusion should not apply.

   However, the policy is clear: Where any loss is caused in whole or
in part by the insured being legally intoxicated, coverage may be
4                 BALTHIS v. AIG LIFE INSURANCE CO.
denied. The phrase "legally intoxicated" simply means that the parties
intended to look to the law of whatever state the accident occurred in,
rather than set a uniform or precise standard of intoxication. The
exclusion directs whoever is interpreting the policy to look to state
law to determine what constitutes severe enough intoxication to meet
the standard of the exclusionary clause. Because the policy is clear on
its face, there is no need—as the beneficiary would have us do—to
apply the principle of contra proferentem, the construction of an
ambiguous contractual provision against the party that drafted it. See
Glocker v. W.R. Grace & Co., 974 F.2d 540, 544 (4th Cir. 1992).

   To resolve the dispute in this case, the Court need only determine
whether the decedent was intoxicated under the law of North Carolina
at the time of his death. There are several sections of the North Caro-
lina General Statutes which discuss intoxication. Under the legal
requirements of any of those provisions, the decedent was intoxicated
at the time of death. His blood alcohol concentration was 0.16%
which was above the legal limit for driving, operating a motorboat,
and operating an aircraft. See N.C. Gen. Stat. § 20-138.1 (BAC limit
for driving is 0.08%); N.C. Gen. Stat. § 75A-10 (BAC limit for oper-
ating a motorboat is 0.08%); N.C. Gen. Stat. § 63-27 (BAC limit for
operating an aircraft is 0.04%).

   In addition, North Carolina’s public intoxication statute defines
intoxication as, "The condition of a person whose mental or physical
functioning is presently substantially impaired as a result of the use
of alcohol." N.C. Gen. Stat. § 14-443. The North Carolina Mental
Health and Substance Abuse Act of 1985 defines intoxication as,
"[T]he condition of an individual whose mental or physical function-
ing is presently substantially impaired as a result of the use of alcohol
or other substance." Under both of these statutes, impairment is the
standard for intoxication. There is no question that the decedent—in
addition to having a BAC of 0.16%—was impaired because of alco-
hol. The autopsy report concluded that the decedent died after he
choked on his vomit which was caused by alcohol intoxication. In
essence he was so impaired at the time of death due to alcohol that
he died as a result.

   This Court need not determine in this case which of the provisions
of North Carolina law applies because under any or all of them, the
                 BALTHIS v. AIG LIFE INSURANCE CO.                  5
decedent was legally intoxicated. The decedent’s brother’s claim for
benefits was therefore properly denied and the district court was cor-
rect in granting summary judgment to AIG.

                                                         AFFIRMED