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Sarac v. Minnesota Life Insurance Co.

December 14, 2007

MEGHAN SARAC, PLAINTIFF,
v.
MINNESOTA LIFE INSURANCE COMPANY, DEFENDANT.



The opinion of the court was delivered by: Honorable David H. Coar

MEMORANDUM OPINION AND ORDER

Meghan Sarac (the "Plaintiff") filed an action against Minnesota Life Insurance Company (the "Defendant') seeking to recover life insurance benefits as the sole beneficiary under a life insurance and accidental death policy in addition to penalties under 215 Ill. Comp. Stat. §5/154.6 for the alleged bad faith handling of her claim. There has been no jury demand in this case. Before the Court now are motions for summary judgment filed by both parties. For the reasons stated below, Plaintiff's motion for summary judgment is GRANTED in part and DENIED in part and Defendant's motion for summary judgment is GRANTED in part and DENIED in part.

I. UNDISPUTED STATEMENT OF FACTS*fn1

The Plaintiff's husband, Steven Sarac ("Sarac"), was a forensic scientist employed by the Illinois State Police at the time of his demise. Through his employment, Sarac held a State of Illinois Group Insurance Plan (the "Policy"), which entitled his designated beneficiary to benefits upon his accidental death or dismemberment caused by an accidental injury. The Policy stated in relevant part:

What does accidental death or dismemberment by accidental injury mean?

Accidental death or dismemberment by accidental injury as used in this supplement meant that your death or dismemberment results, directly and independently of disease or bodily infirmity, from an accidental injury which is unexpected and unforeseen.

When will the accidental death and dismemberment benefit be payable?

We will pay the accidental death and dismemberment benefit upon receipt at our home office of written proof satisfactory to us that you died or suffered dismemberment as a result of an accidental injury. (Emphasis added.)

On March 3, 2006, Sarac was driving an automobile northbound on Interstate 94 just south of Dempster Street in Skokie, Illinois. In attempting to pass a truck, Sarac lost control of his vehicle, and collided with the rear of the trailer of the truck. The momentum of his vehicle, combined with the truck driver's application of brakes caused Sarac's vehicle to become wedged underneath the rear of the semi-trailer. A medical examiner found that as a result of the collision, Sarac suffered severe craniocervical injuries from which he died. The medical examiner described the manner of Sarac's death as an accident. Toxicology analyses were performed that revealed Sarac had a vitreous humor alcohol level of 203 mg/dl and a blood alcohol level of 510 mg/dl, which correspond to .203 BAC and .51 BAC, respectively.*fn2 The legal limit in the state of Illinois is .08 BAC. 625 Ill. Comp. Stat. 5/11-501(a)(1) (West 1998).

Under the terms of the Policy, Sarac's designated beneficiary was entitled to $372,000 in accidental death benefits. Plaintiff is the sole beneficiary under Sarac's Policy. Plaintiff made a claim to Defendant for the benefits under the terms of the Policy. The Defendant denied the Plaintiff accidental death benefits in a letter dated December 27, 2006, in which Defendant explained that Sarac's death was not an "accidental injury." Defendant cited two reasons for not characterizing Sarac's death as an "accidental injury": the first because Sarac was found to have a vitreous BAC of .203, more than twice the legal limit to operate a vehicle in Illinois, and the second because he was a forensic scientist, he was assumed to know the risks and dangers of drunk driving. Therefore, in the Defendant's opinion, Sarac's death did not result from unforeseen circumstances. Defendant admits that Sarac's death was not a suicide.

Plaintiff filed suit against Defendant alleging that it breached the Policy and owes her benefits in an amount of $372,000. Plaintiff also alleges that Defendant violated Illinois law by failing to provide the benefits under the Policy for the reasons stated in the letter and engaged in bad faith handling of her claim. The basis for Plaintiff's bad faith claim is that, according to her, the law in Illinois is sufficiently clear that Sarac's death was unintended and unforeseen and therefore, Defendant had no good faith basis upon which to deny her claim.

II. STANDARD FOR MOTION FOR SUMMARY JUDGMENT

Summary judgment will be granted only when "the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." Fed. R. Civ. Pro. 56(c). A genuine issue of material fact exists only if there is sufficient evidence for a reasonable finder of fact to return a verdict for the nonmoving party. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). A fact is material if it can affect the outcome of the case under the applicable substantive law. Id. When reviewing a motion for summary judgment, the court must view the ...


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