Court upholds denial of widow's death benefit claim, on basis of exclusion, but also upholds penalty based on insurer's late disclosure of policy
Nicole Cultrona sued Nationwide Life Insurance Company after her husband apparently died of acute alcohol poisoning. Nationwide had written a group death benefit policy and would owe the widow and her young daughter approximately $200,000.00 if the husband's death qualifed as accidental. She had filed a claim, however, Nationwide denied it, citing an exclusion from benefits for any death that was caused by driving wihile intoxicated. Cultrone then enlisted an attorney who documented the fact that her husband died at home and demanded a copy of the pertinent policy language and proofs relied upon by Nationwide.
The insurer responded admitting its error and citing an amendment to the policy that excluded benefits for any death where intoxication was involved, and excising the language relating to motor vehicle operation. It did not provide the policy to Cultrone or her attorneys, however, even though internally one employee had suggested that the full policy language be delivered to the claimant.The Federial District Court ultimately enforced the policy amendment, denying Cultrone any death benefits. The judge did award her $9,000.00 in daily penalties for the insurer's failure to turn over to the claimant the material she requested supporting the denial. Both parties appealed and the Federal appellate court upheld the result. It deemed the $55 dollar per day penalty appropriate under the circumstances, but also enforced the broad intoxication-related exclusion.