A young Michigan man wrecked his motorbike one April evening after consuming a few too many drinks. (It’s unclear just what he had to drink, nor is it particularly important, but we’ll assume it was a Founder’s All Day IPA in keeping with the complaint’s filing in Grand Rapids). As a consequence, he incurred nearly $200,000 in medical bills.
When the young man submitted those medical bills to his insurer, however, he was denied coverage due to a policy exclusion for injuries “occurr[ing] as a result of a Covered Person’s illegal use of alcohol.” Perhaps the young man lost heart when he first read this exclusion. But his lawyers did not. They asked the $64,000 question: while driving under the influence is undoubtedly illegal, is it the illegal use of alcohol within the meaning of the insurance policy?
Both the Western District of Michigan and the 6th Circuit on appeal answered the question in the negative. They distinguished between the the illegal use of alcohol, such as by a person under the age of 21 or subject to Court-ordered temperance, and illegal post-consumption conduct, such as operation of a vehicle. Because the young man was of legal drinking age and not under any other prohibitions, both Courts held that his alcohol use was legal and did not provide a basis for denial of coverage.
In the end, this is a simple case of contract interpretation that is distinguished from the thousands of other such cases only by its interesting factual predicate. Yet, it serves as an important reminder to transactional attorneys (and litigators, like me) that sometimes what is intended matters less than what is written.
*This post’s title is an homage to the wit and wisdom of the late, great George Carlin.
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