DEFENSE STILL OWED FOR DELIBERATE INCIDENT

Homeowners	Business Exclusion
Intentional Act

The Lint Family was covered by a homeowners policy issued by State Farm during an incident involving their son and a friend (last name Wright) while at a party. During the party, the two argued. Shortly after, Lint followed Wright outside and threw him into a pool’s shallow end. Wright struck the pool’s concrete step and was hospitalized for four days due to a fractured clavicle. Wright sued over his injuries.

State Farm began investigating the loss under a reservation of rights. Afterwards, the insurer, twice, told the Lints that it would neither defend nor indemnify the loss. From its viewpoint, the incident involved an intentional act and was excluded. The company’s position was unchanged even after the Lints sent a transcript of their son’s deposition stating that he was involved in horseplay and didn’t intend to harm Wright.

The Lints filed a declaratory motion, asking that State Farm be required to respond to the loss which, in the Lints’ opinion, involved their son’s nondeliberate (negligent-to-less than willful) actions toward Wright. Wright and the Lints agreed to a $60,000 judgment, based on Wright’s amended complaint that asserted only negligence, and the Lints assigned their policy rights to the plaintiff. After a trial court found State Farm obligated to defend against the suit, the insurer appealed.

The appellate court reviewed the core issue of whether there was an obligation to defend Lint. The court acknowledged that the defense obligation was broader than the coverage obligation. However, it also acknowledged that an insurer could properly deny a defense obligation if it established that coverage did not exist. Therefore, it proceeded by comparing what was alleged in the suit to the policy wording. The court found that the policy obligated the insurer to respond to accidents since the policy referred to “occurrences” and that the definition of that term included accidents. The court stated that, while there is no final definition of accident within insurance law, it’s plainly understood to refer to acts that are unexpected or unintended including their consequences.

State Farm argued that regardless whether Lint intended to hurt Wright, the original act of throwing Wright was deliberate, so the incident was excluded. Further, the insurer referenced additional policy language that excluded acts done maliciously. Since, in its opinion, the act was excluded, it was within its rights to deny any defense obligation. The insurer supported its argument with citations of court cases it felt were relevant.

In the court’s view, State Farm cited cases that did not support its argument. The court cited a number of cases involving deliberate acts accompanied by either unforeseen or unintended consequences that still qualified as accidental occurrences. It also cited several cases where accidental consequences had no bearing. In the latter area, the cases involved consequences that were related to inherently dangerous acts, such as deliberate firearm use, where an intent to harm is implicit in such acts.

The court disagreed with the insurer’s contention that deliberate acts nullified consideration of consequences and it offered an analogy to demonstrate its position. It wrote that in baseball, batters always have the intent to hit pitched balls, often striving for home runs. However, due to the angle of contact with the ball, the force used or other factors, different consequences arise, such as breaking windows in nearby buildings. While it is plain that a batter intends to hit a ball, it is not reasonable to assume that the goal was to damage property. The court reasoned that, taken to its extreme, State Farm’s position would never allow for response to losses with any element of deliberate action.

Based upon the disposition record that Lint’s action did not intend harm and since the accidental landing created Wright’s injury, the court ruled that the lower court decision that State Farm owed an obligation to defend the Lints was correct.

State Farm Fire and Casualty Co. et al., Petitioners, v. The Superior Court of Los Angeles County, Respondent: Joshua Wright, Real Party In Interest. CALCTAPP 2nd District, B202768, Filed 6/26/08. Petition Denied. http://login.findlaw.com/scripts/case_login?dest=http://caselaw.lp.findlaw.com/data2/californiastatecases/ b202768.pdf (downloaded 07/06/08)