Revenge Motivated Fire Still An Intentional Act

Homeowners	Intentional Act
Innocent Insured

Rick and Callie Deeter owned a house in Pierceton, Indiana, which they insured under a homeowners policy issued by Indiana Farmers Mutual Insurance Company (Indiana Farmers). The policy contained an exclusion for “Intentional Acts.” Specifically, the policy stated:

“‘We’ do not pay for loss which results from an act committed by or at the direction of an ‘insured’ with the intent to cause a loss.”

Further under the policy, the word, insured, was defined as “you,” and the words “you” and “your” meant “the person or persons named as the insured on the ‘Declarations.’” The policy went on to clarify that if “you” was an individual, then “you” would also include a spouse if the spouse was a resident of the household.

On March 3, 2011, Callie was at home babysitting her niece’s daughter and Rick was at work. When the niece arrived to pick up her daughter, she told Callie that Rick was having an affair with another woman. Callie lost her temper, began breaking things, and called Rick at work to tell him that she was “tearing up the house.” She started a fire in the living room. Rick called the police, and by the time they arrived, Callie was standing in the driveway. She admitted she had started the fire and was charged with arson.

When Rick filed a claim under the homeowners policy, Indiana Farmers refused to pay, citing the Intentional Acts exclusion. Rick filed an action against Indiana Farmers. The court granted Indiana Farmer’s motion for summary judgment. Rick appealed.

On appeal, Rick argued that in setting the house on fire, Callie intended to damage the house, but she was not motivated to recover the proceeds from the policy. According to Rick, the exclusion for intentional loss was ambiguous and could be interpreted to mean that Indiana Farmers would not cover a loss that resulted from an action taken with intent to recover from the policy.

The Court of Appeals of Indiana disagreed. It found that the exclusion for intentional loss was clear and unambiguous. Because Callie intentionally set fire to her house and was criminally prosecuted for doing so, the exclusion applied.

Rick also argued that he was an “innocent co-insured spouse” and as such should not be barred from recovering under the policy. The court acknowledged that it is possible for a policy to contain an explicit exclusion to cover loss that results from an intentional act by a co-insured. However, the Indiana Farmers policy contained no such exclusion. It was clear that Callie and Rick were both listed as “insured” so Indiana Farmers was within the scope of its contractual rights to deny the claim.

The decision of the lower court was affirmed.

Deeter vs. Indiana Farmers Mutual Insurance Company-No. 43A04-1305-PL-229-Court of Appeals of Indiana-December 4, 2013-2013WL 6252421 (Ind. App.)