Watson v. Unum Life Insurance Co. of America

Mar 22, 2005
03-1253
Versions:

dent investigation into the subject matter of [their] purchase,” id.—rely at their peril, because their reliance on statements like those at issue here are not justifiable. See also Horner v. Ahern, 207 Va. 860, 153 S.E.2d 216, 219 (1967) (someone who has the ability to protect himself with “ordinary care and prudence” is left by the law “where he has been placed by his own imprudent confidence”).

The majority’s unwillingness to recognize this legal tradition in Virginia law would have unfortunate implications if it were ever adopted by Virginia courts. It is no accident that Virginia law has developed as it has. Insubstantial suits for securities fraud simply drain energy from an economy that, in essence, is meant to remain entrepreneurial. No one doubts that overselling products like a cure for AIDS would be unfair not only to investors. It would represent a cruel hoax played against a particularly vulnerable segment of our society. On the other hand, holding that statements like the two specifically addressed above are actionable is to pile multiple legal difficulties on top of the already difficult medical challenges involved in vaccine production. Such rulings make it more difficult for vaccines of any sort—flu, smallpox, AIDS—to reach market because many vaccine manufacturers now face additional legal disincentives to develop them. Over the past thirty years, the number of vaccine manufacturers in America has declined from twenty-five to a grand total of five manufacturers today. Denise Grady, Before Shortage of Flu Vaccine, Many Warnings, N.Y. Times, Oct. 17, 2004, at A1. It is not novel to attribute the disappearance of manufacturers in part to legal claims. See, e.g., id. (“Some companies dropped out because of lawsuits,” while others found it too burdensome “to meet regulatory standards.”) There may well be multiple causes for the dwindling numbers of vaccine manufacturers in our country, but it seems fair to observe that ungrounded suits in fraud will not assist in reversing the decline.

If the law actually required this consequence, so be it. But at least the Virginia law of fraud does not. I agree that six of the twelve statements are more than puffing, although Glaser must still be able to demonstrate on remand a reasonable reliance upon them. Even if those six could survive a Rule 12(b)(6) motion, the other two never could and were properly dismissed by the district court. It is this failure to strike an appropriate balance between warranted liability and the unwarranted encouragement of frivolous securities fraud actions that leads me to dissent in part from the majority opinion.

Carson M. Henderson, the Garrett Law Firm, PC, Greenville, South Carolina; C. Rauch Wise, Law Office of C. Rauch Wise, Greenwood, South Carolina, for Appellant.

Theodore D. Willard, Jr., Montgomery, Patterson, Potts & Willard, L.L.P., Columbia, South Carolina, for Appellee.

Before NIEMEYER, TRAXLER, and SHEDD, Circuit Judges.

Affirmed by unpublished per curiam opinion.

Unpublished opinions are not binding precedent in this circuit. See Local Rule 36(c).

PER CURIAM:

Nancy Watson appeals from the district court’s order entering judgment in favor of Unum Life Insurance Co. (“Unum”) in her action seeking to recover the proceeds of an accidental death and dismemberment plan pursuant to 29 U.S.C. § 1132(a)(1)(B) (2000). We affirm.

On June 9, 2000, Jamie Watson died as the result of injuries sustained in a single-car collision in Ware Shoals, South Carolina. At the time of his death, Jamie was an employee of Lowe’s Companies, which established an employee accidental death and dismemberment plan with Unum. Nancy Watson—Jamie’s grandmother—was designated as sole beneficiary.

The traffic report stated that the driver of Jamie’s vehicle was “driving at a high rate of speed lost control of the vehicle and ran off right side of the roadway striking a ditch which caused the vehicle to overturn and strike two trees.” The toxicology report disclosed that, at the time of the accident, Jamie was driving with a blood alcohol level of .175%.

Unum denied Watson’s claim for benefits on the grounds that Jamie “did not sustain an ‘Injury’ that resulted in a covered loss as defined in the Policy,” i.e., Jamie “did not sustain an accidental bodily injury that resulted directly and independently of all other causes.” J.A. 151. Unum concluded, instead, that Jamie’s “action of driving while under the influence of alcohol at a blood alcohol level of .175% was deemed to have caused, contributed to or resulted in his motor vehicle accident.” Watson then filed this action in district court alleging that she was denied benefits under the policy in contravention of ERISA.

After a bench trial, the district court entered judgment in favor of Unum, finding that Unum did not abuse its discretion in deciding that Jamie’s death was not the result of an “injury” as defined in the policy. We have reviewed the record on appeal, including the district court’s opinion and the parties’ briefs, and have found no reversible error. Accordingly, we affirm.

We dispense with oral argument because the facts and legal contentions are adequately presented in the materials before the court and argument would not aid the decisional process.

AFFIRMED