Opinion
No. CV-N-94-197-ECR
June 8, 1995. As Amended June 20, 1995.
Joseph S. Bradley of Bradley Drendel, Ltd., Reno, NV, for plaintiff.
Gordon R. Muir of Hawkins, Folsom, Muir Kelly, Reno, NV, David C. Zuckerbrot, Law Department of Metropolitan Life Ins., New York City, for defendant.
ORDER
On the morning of March 25, 1993, Ronald James was involved in a high-speed automobile chase along a desert highway in western Nevada, in the course of which he fired several rounds from a handgun at the car he was pursuing. The chase ended when James's car rear-ended other vehicle and both went out of control. When the Nevada Highway Patrol arrived, James was dead of a gunshot wound to the chest. The wound was self-inflicted, but whether it was inflicted intentionally or accidentally is unclear.
James was a federal employee when he died and carried a Federal Employees' Group Life Insurance ("FEGLI") policy. Doc. #9 Exh. A. The master FEGLI policy is issued to the Office of Personnel Management (OPM) by the Metropolitan Life Insurance Company (MetLife), pursuant to the Federal Employees' Group Life Insurance Act ("FEGLIA"), 5 U.S.C. § 8701-16, and the regulations promulgated thereunder by OPM. See 5 C.F.R. Parts 870-74. The policy, whose terms preempt inconsistent state and local group life insurance laws, see 5 U.S.C. § 8709(d)(1), provided basic life insurance, and double indemnity if James died "solely through violent, external and accidental means. . . ." Doc. #9 Exh. A at § 5(b). There is, however, no definition of "accidental means" in the policy itself, or in the statute or the regulations, which provide only that benefits for accidental death shall be included in the policy. See 5 U.S.C. § 8709; 5 C.F.R. § 870.101.
MetLife paid James's widow and beneficiary, Paula, the basic policy amount (about $78,000), but refuses to pay additional "accidental death" benefits, on the ground that James's death was, if not a suicide, then at least the reasonably foreseeable result of his voluntary actions, and therefore not caused solely by "accidental means." Paula James has sued for the accidental death benefits. MetLife has moved for summary judgment. The motion will be denied.
I. Jurisdiction
The case is here under diversity jurisdiction; there is no federal question presented. That is so even though the case turns on the definition of a term contained in an insurance policy issued pursuant to federal law and subject to federal regulation. See Virgin Islands Housing Auth. v. Coastal Gen. Const., 27 F.3d 911, 916 (3d Cir. 1994); 1610 Corp. v. Kemp, 753 F. Supp. 1026, 1030 (D.Mass. 1991) (that a contract "involves a preprinted form prescribed by [a government agency] does not signify that a controversy over its terms arises under federal law").
II. State Law Controls
This case, as noted above, turns on the meaning given to the term "accidental means" in the FEGLI policy, and this, in turn, depends (or at least the parties believe it depends — we are not sure it makes a difference) on whether state law or federal common law provides the rule of decision.
James argues that Nevada law applies. Nevada does not recognize the "technical distinction" between the terms "accidental death" and "death by accidental means." Rather,
where an insured dies as the result of an intentional or expected act or event, but did not intend or expect death to result, the death is "accidental" within the contemplation of that term. . . .Catania v. State Farm Life Ins. Co., 95 Nev. 532, 598 P.2d 631, 633 (1979).
MetLife, on the other hand, argues that a federal common law rule ought to govern here, because Congress's intent in establishing the FEGLI program was to provide, with the "utmost economy," "low-cost group life insurance to federal employees," Doc. #9 at 6, and this "necessitates a uniform federal law rather than a panoply of potentially conflicting laws of the different states." Id. "Absent displacement of state law," MetLife warns us, it
would be required to determine, in each instance, the import of each state's accidental means death benefits law, thereby placing undue administrative burdens and costs on this federal program. Furthermore, if state law were to govern, federal employees would be denied the protection of a uniform law, resulting in unequal benefit levels for employees who live in different states.Id. at 7. And the federal common law rule MetLife believes applicable is one that, unlike Nevada precedent, recognizes the distinction between "accidental death" and "death by accidental means." For a comprehensive survey of the voluminous law and literature concerning this distinction in insurance policies, see the majority and (especially) the dissenting opinions in Weil v. Federal Kemper Life Assurance Co., 7 Cal.4th 125, 866 P.2d 774 (1994). For present purposes, it suffices to observe that the distinction matters to MetLife for this reason: under Nevada law, double indemnity must be paid so long as James neither intended nor expected to die as a result of his actions. But the FEGLI policy speaks of death by "accidental means," and under a federal common law rule recognizing that term as one of art, MetLife could argue that it need not pay double indemnity because, whether or not James intended or expected to die as a result of his actions, those actions were the "means" of his death and, as they were voluntary and intentional, they could not have been "accidental."
We note, however, that an insurance policy which provides double indemnity only if the insured suffers "death by accidental means" would, if taken seriously, allow such payment only if the "means" causing the death were "accidental" in the truest sense of that word — say, if the insured were hit by a bus or struck by lightning. But even in those cases, the cause of death, if the chain of causation is traced back far enough, is not "accidental": presumably the insured voluntarily walked across the street where he was hit or outside in a lightning storm. Practically all results stem, ultimately, from "intentional," rather than "accidental," causes. The question is what constitutes proximate cause.
MetLife does not wade into what Justice Cardozo aptly termed this "Serbonian Bog." See generally Weil, supra. Instead, it suggests a simple rule: "when the death of an insured is a reasonably foreseeable outcome of the actions in which the insured voluntarily engaged," it argues, "accidental means death benefits are not payable." Doc. #15 at 13. But it is difficult to see how this "reasonable foreseeability" rule differs in any significant respect from the test under Nevada law, which provides that such benefits are not payable if the insured "expected" death to result.
If the asserted difference is that between subjective (or "actual") and objective ("reasonable") expectations, we would observe that the two perspectives merge in practice. A dead person's subjective intent must almost always be determined by inference from objective indicia. The expectations of the hypothetical "reasonable" person are the expectations of such a person "in the position" of the decedent; in a given case, then, the faceless reasonable person must be refined until he resembles a reasonable person with the decedent's life experiences — until, for practical purposes, he becomes the decedent.
It is often said that, in a diversity case, a federal court must apply the law of the forum state. Erie Railroad v. Tompkins, 304 U.S. 64, 58 S.Ct. 817, 82 L.Ed. 1188 (1938); State Farm Fire Cas. Co. v. Smith, 743 F. Supp. 1379, 1380 (D.Nev. 1989). That statement is true but incomplete. For example, in a case in which jurisdiction is based on the existence of a federal question, a federal court would apply the law of the forum state to pendent claims based on state law, despite the absence of diversity. More generally,
See, e.g., Maternally Yours v. Your Maternity Shop, 234 F.2d 538, 540 n. 1 (2d Cir. 1956) ("[I]t is the source of the right sued upon, and not the ground on which federal jurisdiction over the case is founded, which determines the governing law. Thus, the Erie doctrine applies, whatever the ground for federal jurisdiction, to any issue or claim which has its source in state law. Likewise, the Erie doctrine is inapplicable to claims or issues created and governed by federal law, even if the jurisdiction of the federal court rests on diversity of citizenship") (citations omitted).
[w]hether state law or federal law controls on matters not covered by the Constitution or an Act of Congress is a very complicated question, one that does not yield to any simple answer in terms of the parties to the suit, the basis of subject-matter jurisdiction, or the source of the right that is to be enforced.
19 Charles A. Wright, Arthur R. Miller Edward H. Cooper, Federal Practice and Procedure § 4514, at 221-23 (1982). Whether a federal common law rule is properly implied will depend upon whether the issue requires a nationally uniform body of law, whether application of state law would frustrate specific objectives of the federal program, and whether application of a federal rule would disrupt commercial relationships predicated on state law. United States v. Kimbell Foods, 440 U.S. 715, 728-29, 99 S.Ct. 1448, 1458-59 (1979); see also O'Melveny Myers v. FDIC, ___ U.S. ___, 114 S.Ct. 2048, 129 L.Ed.2d 67 (1994).
We hold that state law, and not federal common law, applies to this case. State law applies simply because contracts are normally interpreted according to state law, and there is no good reason to depart from the practice in this case. For one thing, the United States is not a party to the contract, which would compel the application of federal law, see Grosinsky v. United States, 947 F.2d 417, 419 (9th Cir. 1991): when it buys insurance from MetLife on behalf of federal employees, the federal government acts as a procuring agent and not as an insurer. See Brinson v. Brinson, 334 F.2d 155, 158 (4th Cir. 1964) ( citing Railsback v. United States, 181 F. Supp. 765 (D.Neb. 1960)). The FEGLI policy, in short, was a contract between James himself and MetLife, and in a dispute between private parties over a contractual term, the fact that the contract was entered into pursuant to authority conferred by a federal statute does not require that federal common law supply the rule of decision. On the contrary, just as that fact is insufficient to create a federal question, so too there is no reason to think that state law should not govern, as it normally does in a diversity case where a contractual term is at issue. See Lindy v. Lynn, 501 F.2d 1367, 1369 (3d Cir. 1974) ("the fact that a contract is subject to federal regulation does not, in itself, demonstrate that Congress meant that all aspects of its performance or nonperformance are to be governed by federal law rather than by state law applicable to similar contracts in businesses not under federal regulation"); see also American Invs-Co Countryside v. Riverdale Bank, 596 F.2d 211, 217 (7th Cir. 1979) (citing cases). And, as noted above, the FEGLI policy's terms preempt conflicting state laws governing insurance, but preemption is irrelevant here, for the problem is not that there is a conflict between a term in the policy and state law, but, rather, that a term in the policy has been left undefined. The question, to reiterate, is whether it should be construed with reference to state law or to federal common law.
MetLife's argument that federal common law should be applied for the sake of uniformity is unpersuasive. As the Supreme Court recently noted, uniformity is the "most generic (and lightly invoked) of alleged federal interests." O'Melveny, ___ U.S. at ___, 114 S.Ct. at 2055. The uniform federal common law rule MetLife seeks to establish might well facilitate its litigation of this type of suit, "eliminating state-by-state research and reducing uncertainty — but if the avoidance of those ordinary consequences qualified as an identifiable federal interest, we would be awash in `federal common-law' rules." Id. ( citing United States v. Yazell, 382 U.S. 341, 86 S.Ct. 500, 504 n. 13 (1966)).
More specifically, while the FEGLI policy is a "government plan" and not subject to ERISA, what the Ninth Circuit said in Kunin v. Benefit Trust Life Insurance Company, 898 F.2d 1421 (9th Cir. 1990), an ERISA case, when confronted with an argument that a state-law construction of the term "mental illness" in an insurance contract should be supplanted by a uniform federal rule, seems equally applicable here:
[N]othing about the construction of insurance contracts . . . calls for national uniformity. Issuers of insurance contracts have always been forced to comply with the separate and sometimes divergent constructions placed upon the language of their policies in each state. . . . The settled expectations of all parties would be needlessly complicated if we were to introduce a uniform federal rule of construction for policies purchased by ERISA plans, while continuing to apply a state-law rule, possibly different, to all other insurance contracts. Among other things, such a regulatory scheme might leave insurers subject to conflicting constructions of identical language in identical policies. In short, statewide uniformity for all insurance contracts is more important than nationwide uniformity for only some of them.898 F.2d 1421, 1427.
Finally, MetLife points out that otherwise similarly situated federal employees may receive differing benefits solely because they live in different states. No doubt they will. For example, in a given case "accidental death" benefits might be payable in Nevada, under Catania, while they would not be payable in California, because MetLife takes pains to refer in the policy to death by "accidental means," and California, under Weil, recognizes that term as one of art in insurance contracts, different in meaning from "accidental death." But the threat that a uniform contract may be interpreted differently in different states is insufficient to justify imposition of a federal common law rule of construction which would guarantee uniformity. That much is clear in light of O'Melveny and Kunin.
It is also suggested, by analogy, by numerous decisions under § 8705 of FEGLIA itself. That section of the statute sets out an "order of precedence," Metropolitan Life Ins. Co. v. Christ, 979 F.2d 575, 576-77 (7th Cir. 1992), determining "precisely to whom insurance benefits are to be paid when a participating employee dies." Id. A review of the annotated cases reveals that the statutory terms and the terms of the FEGLI policy do preempt inconsistent state laws, but that a term in the statute left undefined — say, "child" or "widow" — may be given content by referring to state law. Whether there is a federal common law rule preserving or abrogating the distinction between "accidental death" and death by "accidental means" makes no difference; state law controls and federal common law, whatever its substantive content, does not apply.
The Court of Appeals for the Sixth Circuit, in an unpublished decision, employed the distinction between "death by accidental means" and "accidental death" as a matter of federal common law. Belcher v. Metropolitan Life Ins. Co., 1991 WL 164325, No. 91-3056, 1991 U.S.App. LEXIS 20046 (6th Cir. Aug. 23, 1991). As an unpublished decision, Belcher is of limited force in its own circuit and is not binding in this district. Moreover, the Belcher court did not explain why it was necessary to apply federal common law, rather than state law, to give meaning to the term "accidental means" in the FEGLI policy. In any event, the court noted that even if state law did provide the rule of decision, Ohio or District of Columbia law would apply under Ohio's choice-of-law rules, and that both of those jurisdictions have preserved the distinction between "accidental death" and "death by accidental means." Application of federal common law was thus not necessary to the decision.
The United States Supreme Court did recognize the distinction, as a matter of federal common law, in two diversity cases: Landress v. Phoenix Mutual Life Ins. Co., 291 U.S. 491, 54 S.Ct. 461, 78 L.Ed. 934 (1934), and Mutual Accident Assoc. v. Barry, 131 U.S. 100, 9 S.Ct. 755, 33 L.Ed. 60 (1889). Those cases were decided before Erie, and Landress has since been described as being "entitled to no judicial weight whatever," Weil, 7 Cal.4th at 166 n. 15, 866 P.2d 774 (Mosk, J., dissenting) ( citing 1B John Alan Appleman and Jean Appleman, Insurance Law and Practice with Forms § 377, at 37 n. 1 (1981)), because the issue today would be decided under state law. That may be an unfair assessment: the Supreme Court in a fairly recent case cited Landress for the proposition that "American jurisprudence has long recognized the distinction between an accident that is the cause of an injury and an injury that is itself an accident." Air France v. Saks, 470 U.S. 392, 399, 105 S.Ct. 1338, 1342, 84 L.Ed.2d 289 (1985). Moreover, the flaw in Landress and Barry was not that they established the "wrong" rule of federal common law, but, in light of Erie, that they established any rule of federal common law at all. Nevertheless, even assuming that Landress and Barry do establish a rule of federal common law in this area, they are of no help to MetLife; as noted above, state law controls the question at issue in this case, and we therefore have no occasion to apply federal common law, whatever result such application might produce.
III. The Evidence and Analogous Cases
The meaning of the term "accidental means" in James's FEGLI policy is governed by Nevada law. Under the Nevada Supreme Court's decision in Catania, the "technical distinction" between "death by accidental means" and "accidental death" is not recognized in insurance contracts. Instead, a beneficiary may recover accidental death benefits even if the policyholder died as a result of his own intentional and voluntary actions, so long as he did not intend or expect to die as a result of those actions.
On the evidence presented, we cannot conclude that James intended or expected to die as a result of his voluntary actions. (Indeed, even if we applied MetLife's proposed test, we could not say that death was the "reasonably foreseeable," let alone probable, outcome of those actions; under its own standard, then, MetLife would not be entitled to summary judgment.) That much is made clear by the cases.
In Sivley v. American Nat. Ins. Co., 454 S.W.2d 799 (Tex.Ct.App. 1970), the insured was killed in a head-on collision while driving in the wrong direction on a highway, which was his normal practice in that area in order to take a short-cut home. This was not sufficient to prevent the death from being considered "accidental." As the same court explained in a later case,
[t]he mere fact that a person's death may have occurred because of his negligence, even gross negligence, does not prevent that death from being an accident within the meaning of an accident insurance policy. It is only when the consequences of the act are so natural and probable as to be expected by any reasonable person that it can be said that the victim, in effect, intended the result and it was therefore not accidental. . . . More is required than a simple showing that the insured could have reasonably foreseen that injury or death might result.Freeman v. Crown Life Ins. Co., 580 S.W.2d 897, 900 (Tex.Ct.App. 1979) (emphasis added). In Hearn v. Southern Life Health Ins. Co., 454 So.2d 932 (Ala. 1984), the insured, driving a pickup truck, became involved in a highspeed chase with a police officer, which took place over eight miles at speeds of between 70 and 80 miles per hour. Just after the officer broke off the pursuit, the truck crashed and the insured died of smoke inhalation while attempting to escape the fire that engulfed his vehicle. The appellate court reversed the trial court's ruling that the cause of death was not "accidental."
MetLife has seen this sort of case before. For instance, in Johnson v. Metropolitan Life Ins. Co., 26 Conn. Sup. 398, 225 A.2d 498, 499 (1966), the insured was killed while in a speeding car, fleeing from police. The court noted that even if it assumed the insured had been driving, it would not hold that the death had not been caused by "accidental means"; the court found unconvincing MetLife's contention, similar to the contention here, that the collision was not "accidental" because the insured was travelling at a high speed.
Perhaps most on point is Metropolitan Life Ins. Co. v. Henkel, 234 F.2d 69 (4th Cir. 1956). In that case, too, a beneficiary sought from MetLife double indemnity for the death of the policyholder, on the ground that the death had occurred as a result of "accidental means." The insured was killed when, while fleeing from police officers at speeds in excess of 90 miles per hour, he came to an apparently unfamiliar fork in the road and hesitated, causing his car to run onto a soft shoulder and turn over, as a result of which he suffered fatal injuries. The trial court, sitting without a jury, held that the death was caused by "accidental means" within the meaning of the policy. The Fourth Circuit's reasoning, affirming the judgment, rings true after forty years:
In interpreting the provisions of the policy, we are governed by the law of North Carolina, as the law of the state in which the policy was applied for and delivered; and under the law of North Carolina recovery may be had under a provision such as this only where death results from accidental means and is not merely the accidental result of means knowingly and intentionally employed by the insured. As we think that the death of insured was clearly the result of accidental means within the meaning of the policy, it is not necessary to go into the distinction between accidental means and accidental result, a distinction described by Mr. Justice Cardozo as a "Serbonian Bog," and one which is being repudiated by "an increasing number of jurisdictions." An injury, or death, results from accidental means as distinguished from an accidental result, within the rule of those courts observing the distinction, "if, in the act which precedes the injury, something unforeseen, unexpected, unusual, occurs which produces the injury." Here the driving of the car was the act which preceded the injury within the rule as above stated; and in that act "something unforeseen, unexpected and unusual" occurred which produced the injury, i.e., the turning over of the car as a result of the unexpected coming upon the fork in the road with the consequent running off onto the soft shoulder.
It is true, of course, that insured was exposing himself to danger in driving the car at such a high rate of speed; but "voluntary exposure to danger by the holder of an accident insurance policy will not defeat recovery for an injury caused by accidental means, where such exposure is not an exception in the policy, and the insured has no intention of producing the injury received." Nor does the fact that the speed of the automobile was in violation of law affect the coverage of the policy, in the absence of an exception to that effect. . . .
We do not mean to say that double indemnity is recoverable in every case of voluntary exposure to danger where such an exposure is not an excepted risk in the policy. If it were shown that the insured was killed in the performance of an act so obviously dangerous as normally to result in loss of life, the well-established rule would apply that one is presumed to intend the natural and probable consequences of his act; but under the findings of the District Judge that rule is not applicable in this case.Henkel, 234 F.2d at 70-71 (citations omitted). As in Henkel, so also in this case, and all the more so because the Henkel court assumed, as MetLife wishes us to do here, that "accidental means" is a term of art with a distinct meaning. Even with the benefit of that assumption, MetLife not only was not entitled to summary judgment, but lost on the merits.
IV. Conclusion
In summary, then, we hold as follows. This is a diversity case involving interpretation of the term "accidental means" in an insurance contract. That the contract was entered into pursuant to authority granted by a federal statute, and that certain terms of the contract are dictated by that statute and federal regulations, and that the United States "procures" the contract on behalf of its employees, neither creates a federal question nor calls for a rule of federal common law to give meaning to the term. Instead, state law provides the rule of decision. Under Nevada law, the distinction between the terms "accidental death" and "death by accidental means" is not recognized. Rather, double indemnity is payable, even if the actions causing the insured's death were voluntary and intentional, so long as the insured did not expect or intend to die as a result of those actions.
On the facts presented, we cannot, as a matter of law, conclude that James expected or intended to die. Indeed, even under the rule proposed by MetLife, we could not say that death was the "reasonably foreseeable outcome" of James's voluntary actions. James was driving too fast along a highway, firing a gun at the car in front of him. His actions, we may assume, would have subjected him, had he lived, to serious criminal and civil liability. But that is not the point. The question, to reiterate, is whether those actions were "so obviously dangerous as normally to result in loss of life." They were not. A reasonable person in James's position could, as we have noted, expect to be prosecuted and sued for such behavior, but would neither expect to die in the course of that behavior nor "reasonably foresee" his own death as a result of those actions.
For the reasons stated above, MetLife's motion (Doc. #9) for summary judgment is DENIED.