Insured Loses Fight for Coverage for a Fight

In the case of State Farm Fire and Cas. Co. v. Simone, No. 2:20-CV-00908-RJC (W.D.P. Jan. 28,2021 Colville, J.) County Court addressed a Motion for Judgment on the Pleadings filed by the liability insurance company seeking a declaratory judgment that the carrier did not have a duty to defend or indemnify the defendant with respect to allegations set forth in an underlying complaint arising out of an altercation during which the insured punched the injured party after they bumped into one another on a walkway at a crowded concert. 

After comparing the allegations in the Plaintiff’s complaint against the terms of the policy in question, the court ruled that the allegations in the complaint described a willful physical assault and an intentional tort for which there was no coverage under the policy. 

As such, the carrier’s motion for judgment on the pleadings was granted.

Anyone wishing to review this decision may click this LINK.

Artful Pleading Allowed To Trigger Liability Coverage

In Erie Insurance Exchange v. Moore, No. 20 WAP 2018 (Pa. April 22, 2020)(Op. by Dougherty, J.)(Dissenting Op. by Mundy, J.), the Court allowed artful pleading of negligence by a Plaintiff in a shooting case to trigger a carrier’s duty to defend the matter.

In this case, the liability carrier sought a declaration that it did not have to defend or indemnify the estate of Harold McCutcheon Jr., who was the alleged shooter in an underlying tragic string of events involving a murder-suicide and injuries to a third person.

With regards to the previous decisions by the lower courts in this matter, a three-judge Superior Court panel had reversed a Washington County trial judge’s decision and had unanimously ruled that, because the injured third person alleged in the Complaint filed in the underlying matter that the shooting was "accidental," the events fit the definition of “occurrence” in the homeowner’s policy that the alleged shooter had with the liability carrier. 

The language in the policy at issue defined an 'occurrence' as “an accident including continuous or repeated exposure to the same general harmful conditions.”

According to the Opinion, the injured Plaintiff alleged in his Complaint that the alleged shooter had left a note outlining his intention to kill his ex-wife and then commit suicide. 

The Plaintiff further alleged that, after the alleged shooter allegedly shot his ex-wife at her house, there was a knock at the front door. The Plaintiff was that person who was knocking on the door.

The Opinion also notes that the Plaintiff had been dating the ex-wife in the time leading up to the incident.

The ex-husband, who was the alleged shooter, pulled the Plaintiff into the house where a fight ensued during which the Plaintiff was shot in the face by the ex-husband. The alleged shooter then shot himself.

In his lawsuit against the shooter, the Plaintiff alleged that the alleged shooter had "negligently, carelessly, and recklessly caused the weapon to be fired." 

Justice Kevin Dougherty, writing for the majority, compared the allegations in the Plaintiff’s Complaint against the policy language and rejected Erie’s contention that McCutcheon’s conduct was deliberate and therefore not covered by the policy. As such, the Court’s ruling resulted in a finding that the carrier had a duty to defend the claims against the alleged shooter and, therefore, possibly a duty to indemnify the Plaintiff for his injuries from this shooting event.

Justice Dougherty wrote, “Contrary to Erie’s view, this surprise encounter with [the Plaintiff] was not part of the insured’s other intentional conduct for purposes of insurance coverage, and in fact, [the Plaintiff] does not seek damages for a fistfight or shoving match,” 

Justice Dougherty also wrote that “[The Plaintiff’s] lawsuit seeks damages for being shot by the insured. Had the policy’s exclusion expressly stated coverage would not apply to incidents involving firearms, or during the commission of a crime, then perhaps there would be no duty to defend the underlying claims by [the Plaintiff]. But the policy does not say this. Instead, it excludes from coverage bodily injury ‘expected or intended’ by the insured, and to the extent this language is ambiguous in the presently alleged factual context, it must be construed in favor of coverage.”

Dougherty was joined by Justices Max Baer, Christine Donohue and David Wecht.

The three Justices on the Supreme Court that could not agree with the Majority’s decision included Chief Justice Thomas Saylor, Justice Debra Todd, and Justice Sallie Updyke Mundy.

In her Dissenting Opinion, Justice Mundy, joined by Chief Justice Saylor and Justice Todd, contended that “the discharge of a weapon during a physical altercation initiated by the insured, while the insured is holding a firearm, is the type of harm specifically excluded under the policy.”

“In my view, artful pleadings cannot form the basis of imposing a duty to defend,” Mundy said. “As the discharge of the firearm under the circumstances alleged in the [Plaintiff’s] complaint does not carry with it the degree of fortuity or unexpectedness necessary to constitute an accidental occurrence, I cannot agree Erie is obligated to afford coverage under the terms of the insurance policies.”

Anyone wishing to review the Majority Opinion in this case may click this LINK.

The Dissenting Opinion can be viewed HERE.

Source: Article - “Deeply Split High Court Says Insurer Must Cover Accidental Shooting During Murder-Suicide” by Zack Needles of the Pennsylvania Law Weekly (April 23, 2020)

Court Rules No Breach and No Bad Faith Where Exclusion Precluded Coverage

In the case of Tarttour v. Safeco Ins. Co., No. 17-1896 (E.D. Pa. Jan. 28, 2020 DuBois, J.), the court granted the carrier’s Motion for Summary Judgment in a breach of contract and bad faith claim after finding that coverage did not apply under the case presented. 

By way of background, Defendant Safeco, provided a homeowner’s insurance policy to its insured. The insured lived in the home covered by the policy with his two (2) children. The insured became ill and went to the hospital where he had to be put on life support. 

When a decision was made by the insured’s wife and one of his children to remove the insured from life support, the insured’s other adult child did not agree with the decision and began to threaten suicide. As part of that process, that adult son set his room on fire in an effort to commit suicide but then changed his mind and survived. 

A fire loss claim was submitted to the carrier for coverage. The carrier denied coverage asserting that the accidental loss provision in the policy did not apply and/or that coverage was excluded under the intentional loss exclusion. 

After reviewing the facts of the case before it and noting that coverage disputes were initially to be decided by the court, the court ruled that the facts presented did not fall under the accidental loss provision of the policy and/or that the facts implicated the intentional loss exclusion. As such, the breach of contract claim was dismissed.

The court also dismissed the companion bad faith claim after finding that the undisputed evidence demonstrated that the carrier has a reasonable basis for denying the Plaintiff’s claim for coverage.

Anyone wishing to review a copy of this decision may click this LINK.

I send thanks to Attorney Lee Applebaum of the Philadelphia law firm of Fineman, Krekstein & Harris, as well as the writer of the excellent Pennsylvania and New Jersey Insurance Bad Faith Case Law blog, for bringing this decision to my attention.

Court Rules That Artful Pleading Cannot Defeat Exclusions Applicable Under Homeowner's Policy

In the case of Carrasquillo v. Kelly and Nationwide Mut. Fire Ins. Co., No. 2720 EDA 2018 (Pa. Super. Nov. 12, 2019 Panella, P.J., Kunselman, J., and Stevens, J.E.) (Op. by Kunselman, J.)(Non-precedential decision), the court addressed issues pertaining to a declaratory judgment action under a homeowner’s policy.

According to the Opinion, the Nationwide insured fatally shot and killed the Plaintiff’s decedent in the insured’s home. The insured later pled guilty to a charge of murder in the third degree. Thereafter, the decedent’s family pursued a wrongful death and survival action.

In response, Nationwide, the carrier who provided homeowner’s coverage on the home where the incident occurred, denied coverage under the intentional acts exclusion and the criminal acts exclusion. A declaratory judgment action was filed to address these issues.

In this declaratory judgment action, the Plaintiff attempted to argue that it had pled negligence allegations in the underlying Complaint such that the exclusions were not applicable. The court disagreed and noted that artful pleading did not serve to avoid the exclusions in this matter.

Anyone wishing to review a copy of this decision may click this LINK.

I send thanks to Attorney Benjamin P. Novak of the Lancaster, PA law firm of Fowler, Hirtzel, McNulty & Spaulding for bringing this case to my attention.

Homeowner's Insurance Carrier's Duty To Defend Addressed in Assault Case

In the case of Homesite Ins. Co. v. Neary, No. 17-2297 (E.D. Pa. Sept. 17, 2018 Bartle, J.), the court addressed a homeowner’s insurance company’s duty to defend in a matter involving a physical assault.  

According to the Opinion, two (2) roommates sharing a rented apartment got into a physical altercation, first at an off-premises party and then again at the rented apartment.  

After the Plaintiff sustained a traumatic brain injury as a result of the attack, a lawsuit was filed against the other roommate, alleging claims of negligence, recklessness, and other claims.  

The carrier had issued a homeowner’s policy to the attacker’s parents.  The homeowner’s insurance company filed this declaratory judgment action seeking a judicial declaration that it had no duty to defend the attacker.   The issue came before the court by way of a Motion for Summary Judgment. 

According to the Opinion, the homeowner’s insurance carrier’s limited coverage to injury or damage caused by an “occurrence,” which was defined as an accident.   The term “accident” was not defined in the policy.

Accordingly, the court construed that word according to its natural, plain, and ordinary sense to mean “an unexpected and undesirable event occurring unintentionally.”  The court noted that the key phrase in the definition of an “accident” is the word “unexpected” which the court found to be imply a degree of fortuity.  

Although the Plaintiff’s Complaint contained allegations of negligence, the court noted that the Plaintiff’s characterization of the claims is not controlling on the coverage question issues.   Rather, the court was required to look at the factual allegations.   In the end, the court found that the Plaintiff’s attempts to characterize the causes of action as claims sounding a negligence was insufficient to trigger the carrier’s duty to defend.   Accordingly, the carrier’s Motion for Summary Judgment was granted.

Anyone wishing to review a copy of this decision may click this LINK.

Source: “Digest of Recent Opinions.”  Pennsylvania Law Weekly (October 2, 2018).

Declaratory Judgment Entered In Favor of Homeowner's Carrier on Intentional Acts Exclusion in Shooting Case

Summary judgment was recently entered in favor of a carrier in a declaratory judgment action of Erie Insurance Exchange v. Moore, et al., No. CR 2014 - 4931 (C.P. Wash. Co. May 31, 2016 Emery, J.).  The court entered summary judgment in favor of the carrier on a coverage question that implicated an intentional acts exclusion under a homeowner’s policy in a case arising out of a tragic shooting.

The party injured in the shooting sued the shooter’s estate seeking damages for his personal injuries.  The Estate representatives sought coverage under the shooter’s ERIE homeowner's policy.  ERIE provided the Estate with a defense to the lawsuit, but also commenced a declaratory judgment action, seeking a declaration that no coverage was owed because shooter’s actions were intentional and, thus, barred from coverage for several reasons, including the policy's "intentional act" exclusion.  The injured party argued in the coverage action that the shooter did not intend to shoot him, but rather accidentally shot him during the struggle.

The parties filed cross-motions for summary judgment.  By Order of May 31, 2016, the Honorable Katherine Emery, president judge of the Washington County Court of Common Pleas, entered an Order granting ERIE's Motion for Summary Judgment and denying Carly's Motion. 

In her Opinion, Judge Emery essentially found that the policy covers only "accidents" and not intentional acts.  The Court quoted a previous Superior Court decision that held "[a]n insured intends an injury if he desired to cause the consequences of his act or if he acted knowing that such consequences were substantially certain to result." 

Judge Emery found that, under all of these circumstances, the shooter's acts that resulted in the injury of Carly were intentional, per this definition.  Specifically, Judge Emery held that "[t]he shooting of Carly plainly resulted from human agency.  Moreover, the prospect of injury from a gun firing during a physical struggle over that gun was no less plainly and reasonably anticipated.  As such, while tragic, the shooting of [the injured party] by [the shooter], cannot fall within the definition of an accident." 

Anyone wishing to review this case may click this LINK

I send thanks to the prevailing defense attorney Craig Murphey of the Erie, Pennsylvania law firm of MacDonald, Illig, Jones & Britton, LP for bringing this case to my attention.