Court Opinion

ID: 9491881
Source: CourtListenerOpinion
Date Created: 2023-08-05 14:26:23.778558+00
Date Added: 2024-06-11T17:54:59.607657
License: Public Domain

RIPPLE, Circuit Judge,
dissenting.
My colleagues can rely on certain well-settled maxims of insurance contract interpretation to support their interpretation of the contract. Exclusion clauses are construed strictly against the insurer, and the insurance company does bear the risk of establishing that a particular loss falls within the clause. Nevertheless, these maxims must be employed in a realistic manner so that, in the end, the insurance contract is construed to mean what a reasonable person standing in the shoes of the insured would have understood the policy to mean. See Garriguenc v. Love, 67 Wis.2d 130, 226 N.W.2d 414, 417 (1975). Here, in holding that the loss fell within the terms of the alcohol exclusion clause, the district court correctly read that clause as a whole and in a manner that renders it consistent with the other terms of the policy.
The district court correctly concluded that the reading urged by the plaintiffs makes sense only when the terms “loss” and “occurs while” are read in isolation — without any effort to deal with their relationship to the remainder of the alcohol exclusion clause and to the rest of the policy. All agree that the loss for which recovery is demanded is Mr. Burgess’ death. That death occurred some 9 days after the injury. All also agree that this injury is the covered event. In order to establish a right to recovery, it is therefore necessary for the beneficiaries to establish a causal nexus between the injury and the covered loss. Indeed, the beneficiaries do not contest that Mr. Burgess’ death was a result of the automobile accident.
The district court therefore gave the entire policy a practical, commonsense reading when it determined that, in determining the applicability of the exclusion, the focus must be on the circumstances surrounding the injury. Only in this manner can the intent of the parties — to exclude from coverage a loss caused by the ingestion of too much alcohol— be respected. See Garriguenc, 226 N.W.2d at 417 (“When an insurance company writes an exclusion in a liability policy it intends to limit or exclude a risk.”). For this reason, I would affirm the judgment of the district court.