Sheffey v. American General Life and Accident Insurance Company
Filing
36
MEMORANDUM OPINION AND ORDER; 1)Def's 25 Motion for Summary Judgment is GRANTED. Signed by Judge David L. Bunning on 10/24/11. (LST)cc: COR
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF KENTUCKY
NORTHERN DIVISION
AT COVINGTON
CIVIL ACTION NO. 10-10-DLB-JGW
RUBY SCHEFFEY, Individually and as Administratrix
of Estate of Leroy Hughes
VS.
PLAINTIFF
MEMORANDUM OPINION AND ORDER
AMERICAN GENERAL LIFE AND ACCIDENT
INSURANCE COMPANY
DEFENDANT
**********
Plaintiff Ruby Scheffey, Individually and as Administratrix of the Estate of Leroy
Hughes, has filed breach of contract and bad faith claims arising from Defendant American
General Life and Accident Insurance Company’s refusal to pay accidental death benefits
upon the death of the insured, Mr. Leroy Hughes.
This matter is presently before the Court on Defendant’s Motion for Summary
Judgment (Doc. # 25). The motion has been fully briefed (Docs. # 25-1, 34, 35), and is
now ripe for review.
I. FACTUAL AND PROCEDURAL BACKGROUND
On December 3, 2008, at approximately 11:08 a.m., police from Covington Police
Department were dispatched to Jefferson Avenue in Covington, Kentucky, after receiving
a report that a subject was armed with a gun. The subject was Mr. Leroy Hughes, who is
now deceased. The parties offer conflicting versions of what subsequently occurred.
1
The Covington Police Department offers the following narrative. When officers
arrived at the corner of 19th Street and Jefferson Street, they identified Mr. Hughes as the
suspect and commanded that he get on the ground. Mr. Hughes failed to comply with the
officers’ repeated commands. Mr. Hughes then said that he was leaving and stepped off
the curb towards one of the responding officers “in a threatening manner.” In response to
the perceived threat, another officer deployed his Taser multiple times against Mr. Hughes.
After gaining compliance, officers placed Mr. Hughes into custody and searched his
person. Their search revealed that Mr. Hughes was carrying a concealed 9mm handgun.
Unfortunately, Mr. Hughes passed away shortly thereafter.
Plaintiff offers an entirely different version of Mr. Hughes’s arrest. According to
Plaintiff, police drove past Mr. Hughes three different times before they were able to
identify him as a potential suspect. Mr. Hughes was directed to toss his weapon and
ammunition to the side, to which he readily complied. However, police thereafter deployed
a Taser against Mr. Hughes four separate times. Plaintiff states that witnesses indicated
that Mr. Hughes was compliant at all times during his interaction with the police, suggesting
that the actions of the police were unwarranted.
At the request of the Kenton County Coroner, Dr. Charles Stephens examined Mr.
Hughes’s body at the Medical Examiner’s Office of Northern Kentucky, St. Luke Hospital
East, Ft. Thomas, Kentucky. Dr. Stephens concluded that:
Death, in my judgment, is due to a cardiac event, due to myocardial
hypertrophy and coronary atherosclerosis. The pattern of circumstances
with contributing morbid obesity and hypertrophic heart disease, and the use
of electrical stun devices suggests that this death could be assigned to the
excited delerium syndrome.
(Doc. # 25-3).
2
Plaintiff’s expert, Dr. Robert G. Schneider, offered a slightly different cause of death.
In Dr. Schneider’s opinion, Mr. Hughes’s “death was caused by repeated simultaneous and
cumulative electric shocks delivered by Taser devices . . . , which caused a lethal
arrhythmia.” (Doc. # 25-7). Dr. Schneider’s opinion does not suggest that morbid obesity
or hypertrophic heart disease contributed to Mr. Hughes’s death. (See id.).
At the time of his death, Mr. Hughes owned two insurance policies issued by
Defendant. Under one policy, Mr. Hughes had a $5,000 whole life benefit with a $5,000
accidental death benefit rider. The accidental death benefit rider would not be paid if
“death results directly or indirectly, wholly or partially, from . . . the intentional act of
another.” (Doc. # 25-5) (internal references omitted). Under the second policy, Mr.
Hughes held a $30,000 accidental death benefit. The policy excludes payment if::
accidental injury or any loss caused or result[ed] in whole or in part by
...
(d) the Insured Person’s engaging in an illegal activity or occupation; or
...
(l) any loss directly or indirectly resulting from or contributed to by a cause
other than an Accidental Injury as defined in this Policy.
(Doc. # 25-6). Mr. Hughes’s estate requested that Defendant pay both accidental death
benefits, but Defendant refused. In response, counsel for Mr. Hughes’s estate sent a letter
to Defendant demanding payment, but again Defendant refused. Plaintiff, as administratrix
of Mr. Hughes’s estate, then filed suit in Kenton Circuit Court, which was removed to this
Court by Defendant.
II. ANALYSIS
1.
Standard of Review
Summary judgment is appropriate “if the pleadings, the discovery and disclosure
3
materials on file, and any affidavits show that there is no genuine issue as to any material
fact and that the movant is entitled to judgment as a matter of law.” Fed. R. Civ. P. 56. In
deciding a motion for summary judgment, the court must view the evidence and draw all
reasonable inferences in favor of the nonmoving party. Matsushita Elec. Indus. Co. v.
Zenith Radio Corp., 475 U.S. 574, 587 (1986).
“The moving party bears the burden of showing the absence of any genuine issues
of material fact.” Sigler v. Am. Honda Motor Co., 532 F.3d 469, 483 (6th Cir. 2008). Once
the movant has satisfied its burden, the nonmoving party must “do more than simply show
that there is some metaphysical doubt as to the material facts,” Matsushita, 475 U.S. at
586, it must produce evidence showing that a genuine issue remains. Plant v. Morton Int’l,
Inc., 212 F.3d 929, 934 (6th Cir. 2000). If, after reviewing the record as a whole, a rational
fact finder could not find for the nonmoving party, summary judgment should be granted.
Ercegovich v. Goodyear Tire & Rubber Co., 154 F.3d 344, 349 (6th Cir. 1998).
Moreover, the trial court is not required to “search the entire record to establish that
it is bereft of a genuine issue of material fact.” Street v. J.C. Bradford & Co., 886 F.2d
1472, 1479-80 (6th Cir. 1989). Rather, the “nonmoving party has an affirmative duty to
direct the court’s attention to those specific portions of the record upon which it seeks to
rely to create a genuine issue of material fact.” In re Morris, 260 F.3d 654, 665 (6th Cir.
2001).
2.
Reviewing and Interpreting Terms of an Insurance Contract
The Kentucky Supreme Court recently reiterated the general rule that “the
construction and legal effect of an insurance contract is a matter of law for the court.”
State Farm Mut. Auto. Ins. Co. v. Slusher, 325 S.W.3d 318, 322 (Ky. 2010) (citing
4
Morganfield Nat’l Bank v. Damien Elder & Sons, 836 S.W.2d 893, 895 (Ky. 1992)). If the
language of the contract is not ambiguous, the ordinary meaning of the words chosen by
the insurer are to be followed. Id. However, any ambiguities must be liberally construed
so as to resolve all doubts in favor of the insured’s reasonable expectations and construed
as an average person would construe them. Id.; Kininmonth v. Kentucky Farm Bureau
Mut. Ins. Co., No. 2008-CA-002339-MR, 2009 WL 3878115, at *2 (Ky. Nov. 20, 2009).
“Exceptions and exclusions in insurance policies are to be narrowly construed to effectuate
insurance coverage.” Kininmonth, 2009 WL 3878115, at *2. But “[r]easonable conditions,
restrictions, and limitations on insurance coverage are not deemed per se to be contrary
to public policy.” Snow v. West American Ins. Co., 161 S.W.3d 338, 341 (Ky. App. 2004).
3.
Defendant Properly Denied Benefits under the Accidental Death Benefit
Rider to the Whole Life Policy
Mr. Hughes owned a $5000 whole life policy and $5000 accidental death benefit
rider issued by Defendant. The policy excluded coverage if the insured’s death resulted
“directly or indirectly, wholly or partially, from . . . the intentional act of another; . . . .”
Defendant contends that the police intentionally tased Mr. Hughes, which partially caused
Mr. Hughes’s death, meaning that the exclusion applies. Plaintiff, on the other hand,
contends that the police did not intentionally kill Mr. Hughes, and the policy exclusion
applies only when the other person acted with the intent to cause death. The issue
therefore boils down to a simple question: does the word “intentionally” modify the act
requirement, or does “intentionally” modify the consequence?
As the Kentucky Supreme Court holds, contract interpretation and the legal effect
of a written instrument are matters of law that must be decided by the court. State Farm,
5
325 S.W.3d at 322; Morganfield, 856 S.W.2d at 895. This Court must determine whether
the policy exclusion is ambiguous, and if it is not, the Court must give terms their plain
meaning as written by the insurer. See State Farm, 325 S.W.3d at 322. Here, the policy
states that “no death benefit for Accidental Death is payable if death results directly or
indirectly, wholly or partially, from . . . the intentional act of another.” This policy only has
one possible meaning; if the insured’s death is the result, in whole or in part, of the
intentional act of another, accidental death benefits will not be paid.
This term is
unambiguous, and it is entirely unreasonable to construe the term to mean that the person
must have had the intent to kill the insured.
Defendant properly declined to provide accidental death benefits under the whole
life policy. Although the parties contest most of the facts surrounding Mr. Hughes’s death,
they do not contest the two most significant and material facts. First, the police made a
conscious decision to deploy the Taser against Mr. Hughes, indicating that their actions
were intentional.1
There are no facts to suggest that the Taser was negligently or
mistakenly fired. Second, both parties agree that Mr. Hughes’s death was caused at least
in part by the electric shock from the Taser. Defendant relied on the medical examiner’s
report that stated, “[d]eath, in my judgment, is due to . . . the use of the stun device[],
[which] suggests that the death could be assigned to the excited delirium syndrome.”
Plaintiff’s expert, in partial agreement, stated, “death was caused by repeated
simultaneous and cumulative electric shocks delivered by multiple Taser devices.” As a
1
The parties disagree about the reason why police deployed the Taser. Plaintiff argues that police
were unwarranted in deploying the Taser. Defendant argues that police deployed the Taser in response to
a perceived threat presented by Mr. Hughes. The reason is immaterial; it is only material whether the action
was intentional.
6
result, there is absolutely no dispute between the parties that the police intentionally tased
Mr. Hughes. Nor do they dispute that the police officer’s act, at least in part, was the cause
of Mr. Hughes’s death. Therefore, the “intentional act” exclusion applies and Defendant
properly declined to pay benefits under the whole life policy.
4.
Defendant Properly Denied Benefits Under the Accidental Death Benefit
Policy
Mr. Hughes owned a $30,000 Accidental Death Benefit policy issued by Defendant.
When Mr. Hughes passed away, Defendant declined requests by Mr. Hughes’s estate to
pay benefits under the policy. Defendant maintains that two policy exclusions apply and
that its denial was proper.
The policy states, “[Defendant] will pay NO Accidental Death Benefit or Common
Carrier Benefit for any Accidental Injury or any loss caused or resulting in whole or in part
by . . . (d) the Insured Person’s engaging in an illegal activity or occupation; . . . .” This
term is not ambiguous, and must be given its ordinary meaning. See State Farm, 325
S.W.3d at 322. “Illegal activity” can only mean an act or series of acts that violate a penal
code. Plaintiff quibbles with differentiating “illegal activity” from “illegal act.” However, her
argument is merely an attempt to create an ambiguity where one does not otherwise exist.
Applying the “illegal activity” exclusion to the facts, Defendant properly denied
paying benefits. KRS § 527.020 makes it a crime if a person “carries concealed a firearm
or other deadly weapon on or about his or her person” unless the individual is licensed to
do so or is within a specified category of individuals that may permissibly carry a concealed
weapon without a license. At the time of his death, Mr. Hughes was carrying a Ruger 9mm
without a license. Plaintiff argues that Mr. Hughes was not in violation of KRS § 527.020
7
because he was only carrying the firearm so that he could return it to its rightful owner.
This is not a defense. Kentucky courts recognize two affirmative defenses to this statute,
neither of which are applicable here.2 Therefore, Mr. Hughes was in violation of the statute
at the time of his death and engaged in an “illegal activity.”
The exclusion also requires that the Insured’s death must be “caused or resulting
in whole or in part by” the illegal activity. Police responded to a report that an individual
was carrying a weapon while walking down a public street. After identifying Mr. Hughes
as the suspect, police deployed a Taser against him, which led, at least in part, to Mr.
Hughes’s death. Therefore, Mr. Hughes’s death resulted, at least in part, because of his
illegal action, meaning that Defendant properly declined to pay benefits pursuant to the
“illegal activity” exclusion.
III. CONCLUSION
For all of these reasons, IT IS ORDERED that Defendant’s Motion for Summary
Judgment (Doc. # 25) be, and is hereby, GRANTED.
This 24th day of October, 2011.
G:\DATA\Opinions\Covington\2010\2-10-10 MOO.wpd
2
In Smith v. Commonwealth, 230 S.W.2d 478, 479 (Ky. 1950), the Kentucky Court of Appeals, the
Commonwealth’s highest court at the time, held that the defendant may allege as an affirmative defense that
he or she is within the excepted class. Additionally, in Mosley v. Commonwealth, 374 S.W.2d 492, 493 (Ky.
1964), the Commonwealth’s Court of Appeals upheld its prior ruling that a defendant may prove as an
affirmative defense that the firearm was inoperable such that it could not be fired.
8
Disclaimer: Justia Dockets & Filings provides public litigation records from the federal appellate and district courts. These filings and docket sheets should not be considered findings of fact or liability, nor do they necessarily reflect the view of Justia.
Why Is My Information Online?