Drunk People Get Coverage Too

One of the great things about the Volokh Conspiracy’s move to Reason is their feature of Short Circuit, a weekly roundup of notable federal court decisions. Today’s topic of interest is affectionately titled “People Do Dumb Shit When Drunk.”

A twenty two year old man and his friends got loaded and decided to play a game of “chicken” in a Michigan field. The end result saw our booze-soaked subject in the hospital with six figures in medical bills.

This is normally where health insurance would kick in and at least defray some of the cost. With nearly two grand in bills, you’d think Beau Heimer at least met his deductible. Unfortunately, his insurer, Companion Life, told Heimer to pound sand because his injuries were the result of “illegal use of alcohol,” a situation not covered in his plan.

Heimer exhausted all administrative remedies before suing Companion Life in Federal Court. This would not go well for Companion Life.

Courts don’t give parties drafting contracts much leeway in lawsuits. The general rule is to look at the plain meaning of the words in question to see if they give any guidance. If further clarification is needed, courts construe contract language against the drafter.

As you can imagine, the Sixth Circuit roasted Companion Life. “Illegal use of alcohol” did not mean what Companion Life wanted it to mean.

In everyday English, an “illegal use of alcohol” thus means an illegal act of consuming alcohol—such as drinking while under 21, on public streets, or in an unlicensed restaurant…Read this way, Heimer’s conduct was not an “illegal use of alcohol”: Heimer was over the legal age to drink, and Companion Life has not pointed to any law that prohibited Heimer from consuming alcohol.
Heimer did something illegal, but it wasn’t drinking. The court couldn’t find a definition of “illegal use of alcohol” that fit “let’s get drunk and play chicken.” Absent language specifically excluding coverage for injuries sustained while under the influence, Companion Life had to pay Heimer’s bills.

The worst one can say about our reading is that it does not give effect to the insurance company’s understandable desire not to pay for injuries sustained during a drunken ride on a motorbike. But if the insurance company wanted to exclude this type of injury, it should have used specific language to that effect, as many other insurance companies have done. (emphasis mine)

In other words, if you want to exclude bad behavior while drunk from your insurance plan, say so in plain, specific language.

Companion Life’s last stand failed when the Sixth Circuit construed the language of Heimer’s plan against the insurer. No ambiguities in the plan’s language meant it was time to pony up for Heimer’s bills.

The dissenting judge even admitted Companion Life’s drafting was sloppy and needed work. While there was some ability to read the plan in favor of Companion Life, the language in Heimer’s plan didn’t allow for Companion to exclude coverage.

Companion Life surely did not intend its policy to cover injuries arising from drunken participation in a reckless game of chicken. Reading “illegal use of alcohol” so narrowly leaves one seeing double. But ultimately, in this case, the insurer must bear the consequences of its sloppy drafting.

Bad writing and deference to Heimer’s policy meant Companion Life ran on the wrong side of the law. Perhaps in the future they’ll figure out a way to exclude people doing dumb shit when drunk. For now, the Sixth Circuit gives us solid notice that “context matters,” especially when trying to skirt paying for medical bills.

Morgan and the Bad Review Recall Snafu

Here’s a story, and it’s true. For the purposes of this story, let’s name our protagonist “Morgan.”

Morgan had a car she purchased from a dealership in Cleveland. She took the vehicle to her dealership for a repair job, and was asked to leave a review for her visit. Morgan wasn’t satisfied with certain aspects of the repair experience, so she left what she felt was an honest review. After all, it took them a week to get her vehicle fixed. That’s not typically something a person enjoys, being without a car for a week.

Later Morgan received a recall notice from the manufacturer of her vehicle. She took the vehicle to the dealership, expecting them to perform the recall repair without issue. Her expectations didn’t live up to reality. The manager of the dealership telephoned Morgan and asked her to take her business elsewhere. According to the dealership’s manager, the negative review from Morgan’s former visit cost one of his mechanics approximately $1,200 as the surveys factor into employee compensation.

Morgan got the recall finished at another dealership able to work on her car. The manager of the dealership from which she purchased the vehicle refused to do so because of a bad review. Whether this practice is legal is questionable at best. Federal law allows Morgan to have issues with her vehicle fixed when based on a recall notice at no cost to her.  This is because we value consumer safety with regards to the products sold in the United States. As long as she gets the repair fixed by an agent authorized to perform the recall, Morgan received that to which she was entitled by law.

Whether Morgan’s dealership had to perform the recall is another matter entirely. While the dealership is bound by law to fix issues stemming from a recall notice with the car’s manufacturer, one could easily argue they did not have to perform the recall repair on Morgan’s specific car. This is arguably a contract of specific performance, and courts have previously held enforcing parties to perform on contracts of specific performance is sketchy at best, if not completely unenforceable. Given the nature of the manager’s call to Morgan, it’s arguable her best recourse would be taking her vehicle to another authorized agent!

As an example, let’s say Morgan pushed hard enough and convinced the dealership to perform the recall repair. Morgan is not an automotive expert. The mechanics in the dealership’s service department would know about her negative review, and how that review cost one of their own a substantial chunk of change. Morgan is essentially putting her life at this point into the hands of people who really don’t like her very much. The repair might be performed, but there’s nothing stopping a mechanic or other ill-willed party from “slipping” and causing damage to another component of the vehicle, resulting in another, more costly repair for Morgan.

That said, the idea of refusing service to customers based on negative reviews, solicited by the dealership is a bad business move. It looks petty, and gives the dealership a bad reputation as one that punishes honest criticism rather than extending a hand in good faith to make a bad customer experience better. It’s enough to question whether anyone should purchase a vehicle at the dealership in question, or attempt to get a repair job on a previously purchased vehicle at that dealership. If the mechanic’s pay is based on the customer’s review, and negative reviews adversely impact the mechanic, then unless the dealership is transparent about this policy more customers will have Morgan’s experience.

Businesses routinely ask customers for reviews of their work and products. When a customer isn’t satisfied, asking for a review will probably result in a less than positive review. If the business can’t take criticism, or punishes the customer for their honest feedback, then that business is one not worth patronizing.