|
Homeowner |
Intentional Act |
|
Criminal Act |
Severability
Clause |
Patrick and Suzanne McArdle
and their son, M.S.M., were neighbors of Jaclyn Larson. In 2004, when M.S.M.
was 14 years old, M.S.M. entered Larson's home and assaulted her with a knife,
causing injuries. The knife he used had been given to him by his parents.
M.S.M. eventually pleaded guilty to the offense and was convicted of attempted
first-degree murder. In December 2005, Larson sued the McArdles for negligence.
The McArdles sought coverage under their SECURA Supreme Insurance Company homeowners policy. SECURA agreed to defend Mr. and Mrs.
McArdle but not M.S.M, subject to a reservation of rights. SECURA then filed a
declaratory judgment action asking the court to find that it was not obligated
to defend the McArdles.
The SECURA policy contained
both an intentional act exclusion and a criminal act
exclusion. The language of the criminal-act exclusion provided: "Medical
[p]ayments to [o]thers do
not apply to bodily injury or property damage ... [w]hich:
... (3) Results from the criminal acts of any insured." Another section of
the policy contained a severability clause that
stated that "[t]his insurance applies separately to each insured."
The lower court determined
that the criminal-act exclusion applied and that it operated to bar coverage
for any and all claims made by Larson. Larson appealed.
On appeal, Larson argued
that the criminal act exclusion should not apply because M.S.M. had a mental
illness. According to Larson, because of his mental illness, it was
questionable whether M.S.M. had the ability to form an intention to harm her.
She reasoned that if his behavior was not "intentional," it should
not fall under the criminal act exclusion. The Court of Appeals of Minnesota
rejected Larson's argument and held that in order to trigger a criminal act
exclusion, as opposed to an intentional act exclusion, the insurer had only to
establish that a criminal act had been performed, not that there was an intent
to injure.
Larson also argued that the
criminal act exclusion should not apply because it contained the words
"results from" as opposed to "arising out of." According to
Larson, the phrase "results from" should be construed to mean that
the negligence, and not M.S.M.'s criminal conduct,
should be the focus of the analysis. SECURA argued that the phrase
"results from" is the same as "arising out of" and that the
focus should be M.S.M.'s criminal act. Again, the
Court of Appeals found in favor of SECURA. It found that the criminal act
exclusion applied because Larson's injuries "resulted from" M.S.M.'s attack.
Finally, Larson argued that
exclusion of coverage for all of the McArdles was inconsistent with the
policy's severability provision. Specifically, she argued that the McArdles
had a reasonable expectation of separate coverage, that the two provisions,
read together, were ambiguous, and that they therefore must be interpreted
narrowly to provide separate coverage for M.S.M.'s
parents. Again, the court disagreed. It did not find that an ambiguity was
created when the two clauses were read together. Therefore, there was no reason
to evaluate the McArdles' "reasonable expectation of separate
coverage."
In conclusion, the Court of
Appeals of
SECURA
Supreme Insurance Company vs. M.S.M.-No. A07-1736-Court of Appeals of Minnesota-September 2,
2008-755 North Western Reporter 2d 320.