AD&D Dismemberment Benefits Won in Federal Court for Quadriplegic Client After Intoxication Exclusion Denial

Texas Federal Court Overturns Lincoln Financial’s Intoxication Exclusion Denial of ERISA AD&D Benefits Following Paralyzing Diving Accident

The facts:

Our client suffered spinal injuries, rendering him quadriplegic, when he dove from a bay boat onto a shallow sandbar after fishing with friends near Corpus Christi. His injuries qualified as “dismemberment” under Lincoln’s ERISA-governed AD&D policy. He had a post-accident blood lab drawn at the hospital, stating that he had a high blood-alcohol level of .22 mg/dL when the accident took place. 

The exclusion:

Lincoln Financial denied his dismemberment coverage under a Policy exclusion that said it would not pay benefits for:

“any loss that is contributed to or caused by: … the presence of alcohol in the Covered Person’s blood… 

That exclusion clearly requires causation between the presence of alcohol (intoxication) and the accident. But as insurers commonly do, Lincoln jumped to the conclusion that intoxication necessarily caused the accident. 

The ERISA administrative appeal process

On administrative appeal, we presented testimony from our client and every known witness who was with him that day, addressing the amount of alcohol consumed, our client’s behavior throughout the day, and the circumstances of the accident itself. Every witness agreed that relatively little beer was consumed over the course of a long day of fishing and that our client’s behavior did not seem at all intoxicated. 

We then hired a top-notch toxicologist who determined that the hospital blood lab results could not be accurate and that the facts could not support a conclusion that the accident was caused by intoxication. We presented all of that evidence to Lincoln to consider on appeal, but Lincoln again denied the claim, with its experts disagreeing with ours. Intoxication causes poor judgment, diving onto a sandbar is poor judgment, ergo, intoxication caused the accident, they essentially said.

The lawsuit:

Our client refused to accept anything less than full policy benefits and opted to take it to trial. The federal judge deciding the case ruled in our client’s favor, awarding full policy benefits. Lincoln appealed to the U.S. Fifth Circuit Court of Appeals, and the case was later settled for a confidential amount.

Quotes from the Court:

Rejecting Lincoln’s handling of the claim, the Court found that Lincoln’s review was not “fair, impartial, and thorough”, and Lincoln’s experts took “a one-sided view of the record,” while “elevating second-hand double hearsay in unsworn medical records over first-hand eyewitness affidavits”, “[c]onducting a result-oriented review,” and “wholesale disregard of eyewitness affidavits.” The court found that the surrounding evidence showed the true cause of the injury was “an unanticipated geographical underwater drop-off that was not visible prior to his dive,” and that “the mechanism of his injury was not caused by any impairment.”

The court also criticized Lincoln’s broader claims process, observing that Lincoln’s experts did not adequately account for contradictory evidence, that “reciting review of all of the evidence is not equivalent to properly considering it,” and further noted that the timeline of Lincoln’s denials showed “the adversarial nature of the process, in which [the insured’s] evidence is repeatedly excluded from consideration.”

Finally, the court held that this case involved substantial direct evidence and that “[t]o disregard this direct evidence out-of-hand in favor of contrary inferences constitutes an abuse of discretion.”

Case Citation:

Timothy Sewell v. The Lincoln National Life Insurance Company, Civil Action No. 2:23-cv-00317, United States District Court, Southern District of Texas, Corpus Christi Division. 2025 WL 1276005.

We applaud our client and his family’s inspiring spirit after a life-changing injury, and willingness to fight for what is right.

Don’t ever give up if you’re the victim of an unfair accidental death and dismemberment insurance claim denial.

Results may vary. Every case is different, and no outcome can be guaranteed.