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Miles v. Federal Insurance Co.

United States District Court, E.D. Kentucky, Central Division, Lexington

February 10, 2017

HAROLD MILES, Personally and as Administrator for the Estate of TERRY MILES, Plaintiff,



         Defendant Federal Insurance Company moved to dismiss certain claims contained in plaintiff Harold Miles' Complaint (DE 1) for failure to state a claim upon which relief can be granted. (DE 11). For the following reasons, the motion is GRANTED. Before entering a dismissal order, the Court will permit Miles an opportunity to amend the complaint within fourteen (14) days of this order.

         I. BACKGROUND

         On October 22, 2013, Terry Miles died of accidental positional asphyxia, or “accidental suffocation, ” an unintended consequence of what was not the first time Terry engaged in asphyxiation-inducing activities to derive pleasure. (Compl. ¶¶ 14, 25, 29). At the time of Terry's death, his father Harold Miles[1] was a participant in the Voluntary Accident Insurance Program Issued for Toyota Engineering & Manufacturing North America, Inc. (“the Policy”), a part of the Toyota Engineering & Manufacturing Health and Welfare Benefit Plan (“the Plan”). (Compl. ¶¶ 53-55; DE 11-2).[2] Miles was the Primary Insured Person and beneficiary of the Policy, which Federal underwrote, issued, and administered. (Compl. ¶¶ 8, 10-12). Terry was a dependent entitled to coverage under the Plan and Policy. (Compl. ¶ 12).

         The Policy provided:

Subject to all the terms and conditions of this policy and the payment of premium, We will provide the following insurance:
Accidental Death and Dismemberment
We will pay the applicable Benefit Amount, shown in Section IV-B of the Schedule of Benefits, if an Accident results in a covered Loss not otherwise excluded. The Accident must result from an insured Hazard and occur while an Insured Person is insured under this policy, while it is in force. The covered Loss must occur within one (1) year after the Accident.

         (Compl. Ex. 2, at 1-2) (capitalization and emphasis in original). The Policy placed limits on what it would cover, excluding “any Accident, Accidental Bodily Injury, or Loss caused by or resulting from, directly or indirectly, an Insured Person's suicide, attempted suicide or intentionally self-inflicted injury.” (Compl. Ex. 2, at 2).

         After Terry's death, Miles submitted a claim to Federal under the Plan and Policy seeking to recover benefits. (Compl. ¶ 18-19). Federal denied the claim. In the May 19, 2014 letter denying Miles' claim, Federal, through its adjuster, Crawford U.S. Property & Casualty, stated that the policy requirements for coverage for accidental loss of life were not satisfied because Terry's death “was the result of his voluntarily placing a cord around his neck.” (Compl. Ex. 2, at 2). The letter continued:

This was confirmed by the received death certificate which confirmed [Terry's] death was due to suffocation from a cord around his neck and conversation with Coroner John P. Goble. . . . While we recognize that [Terry's] death certificate states that his death was an accident, even if we were to assume (solely for the purposes of this analysis) that this deduction is plausible, we fail to see how such circumstances demonstrate that an Accident [as defined in the Policy] caused an accidental death, since it has been confirmed that the placing of the cord around his neck by [Terry] was voluntary, which is not the direct result of an Accident or Accidental Bodily Injury.

(Compl. Ex. 2, at 2-3).

         Miles appealed the denial on July 11, 2014, (Compl. ¶ 19), and Federal once again denied Miles' benefits two months later, reaffirming its decision that Terry's death was not an accident as defined in the Policy and that the Suicide or Intentional Injury exclusion precluded any coverage for Miles' claim. (Compl. Ex. 5). Miles filed a second “voluntary” appeal, in which he included a written statement from John Goble, the Scott County Coroner, indicating that Terry's death was accidental. (Compl. ¶ 20-21). The stated purpose of the letter was to “clarify and correct the misunderstanding and misinformation contained in the May 19, 2014 [Insurance Denial] letter.” (Compl. ¶ 20). Federal did not respond to Miles' “voluntary” appeal. (Compl. ¶ 21).

         Miles now seeks relief from this Court pursuant to the Employee Retirement Income Security Act, 29 U.S.C. § 1001 et seq. (“ERISA”) for what he claims is a wrongful denial of benefits under the Policy, an ERISA welfare benefit program. Miles' complaint asserts various claims under ERISA; one as a claim for benefits under ERISA § 502(a)(1)(B) styled as “breach of contract, ” (Compl. ¶¶ 46-51) and others under § Section ...

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