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Don Levit 11/17/2008 01:47 PM
Brian: Thanks for providing this case. It seems that the administrator needed to prove only that its denial was reasonable. Under that criteria, there seems to be little argument. However, practiaclly speaking, we humans, when assessing risk, tend to feel our odds are better than average. This type of "it cannot happen to me" thinking never seemed to enter the discussion. In my opinion, without at least honoring this very human way of thinking, the argument loses a lot of subjectivity and objectivity. Don Levit
Brian S. King 11/17/2008 01:47 PM
Don, your separation of the objective and subjective perspectives is important. The facts of the case do not suggest Earl Eckelberry had a subjective belief that he would get home in anything but one piece. The problem is that his subjective perspective is not the only one a court must consider. It must also determine whether a reasonable person, from an objective perspective, would think that driving home drunk is highly likely to result in death or serious injury. That calls into play the kind of overview of statistics that the trial court considered and the appeals court did not and that I think make the answer to the question very easy. You also allude to the standard of review being whether the insurer acted reasonably. It is certainly true that if you ask whether an insurer's denial was "reasonable" you may come up with a different conclusion than if you ask whether the insurer's denial was "right." It is more difficult to reverse an insurer's denial under the former framework, an arbitrary and capricious standard of review, than it is to reverse an insurer's denial under the latter framework, a de novo standard of review. We can all agree that what constitutes an "accident" is one of the really fascinating questions in the law!
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