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.