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Suicide Exclusion and Intoxication – New Colorado Supreme Court Decision Concerning Denied Life Insurance Claim

Shawn E. McDermott

On June 4, 2018, the Colorado Supreme Court issued its opinion in Renfandt v. New York Life Insurance Company, 2018 CO 49, holding, “under Colorado law, a life insurance policy exclusion for ‘suicide, sane or insane’ excludes coverage only if the insured, whether sane or insane at the time, committed an act of self-destruction with the intent to kill himself.” 2018 CO 49, ¶ 53.

McDermott Law is proud of its role in helping the Colorado Supreme Court reach this decision, which helps insureds hold insurance companies to their promises for financial protection.

The facts of this case were particularly tragic: “[w]hile appearing to be in a ‘zombie-like’ state from a combination of prescription medication, alcohol, and marijuana, Mark Renfandt shot himself in the head and died.” Id. at ¶ 1. “When Mark’s wife tried to collect life insurance benefits under a temporary coverage agreement issued by New York Life Insurance Company, the insurer denied the claim, citing a provision in the agreement that excluded coverage for ‘suicide … while sane or insane.’” Id. Mark’s wife then sued New York Life, claiming that by denying her claim for benefits it breached the contract and that it did so knowingly and in bad faith.

New York Life, ignoring the intent needed to commit suicide, asked the United States District Court Judge to rule as a matter of law that Mark’s death was excluded from the life insurance coverage because “the insured went into their bedroom, pulled a loaded gun out of a drawer, and shot himself in the head.” According to New York Life, it was irrelevant that Mark was impaired (his BAC at this time of his death was .325%) when he shot himself, because the life insurance policy excluded coverage for suicides whether “sane or insane.” However, the attorneys for Mark’s wife opposed New York Life’s request, arguing that its reliance on the suicide exclusion was misplaced because Mark’s extreme intoxication rendered him incapable of forming the intent necessary to commit suicide.

Ultimately, the United States District Court Judge determined that the legal issue was one that the Colorado Supreme Court should answer, and asked it to answer the following question: “Under Colorado law, does a life insurance policy’s exclusion for ‘suicide, sane or insane’ exclude coverage (1) for all acts of self-destruction without regard to the insured’s intent or understanding of the nature and consequences of his/her actions or (2) for only acts of self-destruction committed when the insured intends to take his/her own life or understands the nature and consequences of his/her actions.”

After the Colorado Supreme Court agreed to answer that question, the attorneys for Mark’s wife asked the Colorado Trial Lawyers Association for help with an amicus brief, and McDermott Law Attorney Tim Garvey drafted that brief. In the amicus brief, McDermott Law (on behalf of CTLA and Mark’s wife) argued, “the general rule in Colorado is that suicide is no defense for nonpayment of life insurance benefits. However—to protect insurance companies against fraud by insureds—Colorado permits life insurance companies to exclude coverage for suicides within the policy’s first year. But, when an insured’s self-killing is unintentional, the concerns of fraud dissipate, as do the public policy reasons supporting this limited exception.”

Echoing McDermott Law’s arguments, the Colorado Supreme Court (ruling in favor of Mark’s wife) stated that suicide exclusions “protect insurers from a ‘risk’ that lies wholly in the control of the insured. To apply the exclusion to an individual who lacks suicidal intent is inconsistent with the purpose of such provisions.” Renfandt, 2018 CO 49 at ¶ 51 (citation omitted). Thus, the Colorado Supreme Court concluded, “in Colorado, a policy exclusion for ‘suicide … while sane or insane’ still requires an insurer to show that the insured’s death was a ‘suicide.’” Id. at ¶ 52. And, that’s exactly the result McDermott Law advocated for in its amicus brief.

If you need help with a life insurance dispute—or any other insurance dispute—do what other attorneys do when they need help: contact the attorneys at McDermott Law.

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