District Court Finds ERISA Aviation Exclusion Bars AD&D Benefits for Pilots Killed in Crash

In Aloff v. The Prudential Insurance Company of America, No. 3:25-cv-05834-DGE, 2026 WL 2389181 (W.D. Wash. Aug. 17, 2026), United States District Judge David G. Estudillo granted the defendants’ motions to dismiss with prejudice, holding that an aviation exclusion in an ERISA-governed group life insurance plan barred accidental death and dismemberment benefits for the beneficiaries of two pilots killed in a plane crash.

What ERISA plan and benefits were at issue?

Prudential issued Group Policy G-61476-CA covering qualifying employees of Clay Lacy Aviation, Inc., including pilots. Clay Lacy paid for basic term life coverage and basic AD&D coverage for eligible employees. The plan paid basic term life coverage upon written proof of death. AD&D coverage, by contrast, paid benefits for accidental loss of life only if certain conditions were met. The plan excluded coverage for any loss resulting from travel or flight in any vehicle used for aerial navigation, and that exclusion applied where the person was performing as a pilot or crew member of any aircraft.

Plaintiffs’ partners, pilots employed by Clay Lacy, died in an airplane crash on February 7, 2024. Plaintiffs, as beneficiaries, submitted AD&D claims, which Prudential denied. Plaintiffs appealed, and Prudential upheld the denials, citing the aviation exclusion. There were no allegations that Plaintiffs had been denied basic term life coverage.

Why did the court hold that the aviation exclusion barred AD&D benefits?

To state a claim under 29 U.S.C. § 1132(a)(1)(B), a plaintiff must allege the existence of an ERISA plan and the plan provisions entitling the plaintiff to benefits. The court found that Plaintiffs did not dispute that the aviation exclusion’s terms made no benefits payable for losses arising out of flight in a vehicle used for aerial navigation when the participant was performing as a pilot. Plaintiffs instead argued that the exclusion should not be interpreted to bar AD&D benefits because doing so would make the coverage illusory, unconscionable, and objectionable on equitable, contractual, and public policy grounds.

The court rejected these arguments. To the extent Plaintiffs relied on state law, the court held those arguments preempted by ERISA, following Noecker v. Southern California Lumber Industries Welfare Fund, in which the court held that state-law unconscionability grounds are preempted and that a federal common law doctrine of unconscionability is foreclosed because ERISA mandates no minimum substantive content for welfare benefit plans. The court distinguished Platt v. Sodexo, S.A., on which Plaintiffs relied, noting that the unconscionability defense there arose from federal statutes and federal common law rather than state law, whereas Plaintiffs cited only state law for their unconscionability argument. As to the illusory argument, the court found that Plaintiffs stated only a general principle of federal common law contract interpretation without explaining how the aviation exclusion was illusory. The court also determined that the exclusion’s terms were unambiguous, rendering the parties’ intent irrelevant. Because AD&D benefits were not payable under the plan terms and Plaintiffs’ contract defenses were inapplicable, the court dismissed Count One.

How did the court treat the breach of fiduciary duty claim?

Plaintiffs alleged that Clay Lacy represented it offered “fully paid” benefits including “life insurance,” that Prudential continued to collect premiums despite knowing the policy departed from the practice of other insurers of aviation companies, and that the defendants breached a duty of due care. The court assumed without deciding that the defendants were fiduciaries performing a fiduciary function, but found that Plaintiffs failed to allege facts showing a breach. Because Plaintiffs’ fiduciary duty theory rested on the failure to pay AD&D benefits, and Plaintiffs failed to state a claim that they were entitled to those benefits, the fiduciary duty claim was dismissed as well.

What did the court decide on leave to amend and attorney fees?

Plaintiffs did not request leave to amend, and the court dismissed the claims with prejudice, noting that Plaintiffs could file a motion to reconsider with a proposed redlined amended complaint identifying modifications that would cure the deficiencies. The court declined Clay Lacy’s request for attorney fees under ERISA § 502(g), noting that Clay Lacy devoted only one paragraph to the request and provided no analysis of the Hummell factors, and observing the Ninth Circuit’s frequently expressed disfavor of awarding attorney fees against individual ERISA plaintiffs.