S.D. Court Says Insurance Does Not Cover Lawsuit on Wife Stealing

October 30, 2007

South Dakota's public policy prevents insurance from covering damages in lawsuits against those accused of stealing another's spouse, the state Supreme Court ruled Thursday.

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The high court's unanimous decision said an Aberdeen doctor cannot make an insurance company protect him against a lawsuit that alleges he stole another man's wife.

South Dakota public policy does not allow people to shift financial responsibility to insurance companies for their own intentional actions, the Supreme Court said. Alienation of affections is conduct that should not be encouraged by allowing people the financial protection provided by insurance, the court said.

"To permit such 'affair insurance' would defeat the purpose of punishing and deterring individuals for their own tortious acts,'' the high court said.

The insurance policy also does not cover the lawsuit because alienation of affections is an intentional harm, and the policy excludes coverage for intentional wrongs, the Supreme Court said.

David and Peggy Kalt were married in 1976, but their marriage broke up after Peggy was hired as manager of an Aberdeen medical clinic and began having an affair with Dr. Thomas Harbert in 2001, according to court documents.

David Kalt filed for divorce. He also sued Harbert for alienation of affections, seeking $2 million in actual damages and another $2 million in punitive damages because Harbert allegedly sought to steal his wife's affections.

Harbert asked State Farm Fire & Casualty Co. to help defend against the lawsuit and cover any damages under his personal liability insurance policy, but State Farm argued the policy did not cover claims of alienation of affection. Kalt amended his lawsuit to include a claim for invasion of rights of privacy, an attempt to make Harbert's insurance policy cover any damages.

Circuit Judge Jack R. Von Wald ruled that State Farm had no duty to defend Harbert or cover any damages in the lawsuit.

The Supreme Court agreed that the insurance policy does not protect Harbert against the lawsuit.

A claim of alienation of affections is an allegation of an intentional wrong, and the insurance policy excludes coverage of injuries intended by Harbert or injuries that result from willful and malicious acts, the high court said.

The addition of the claim involving invasion of privacy did not make the insurance policy cover the lawsuit because that additional claim amounted to the same thing as the alleged alienation of affections, the justices said.

South Dakota law also establishes a public policy that prohibits giving insurance protection to someone who has intentionally harmed others, the Supreme Court said. The lawsuit alleges Harbert intentionally enticed Peggy Kalt's affections away from her husband, so he cannot be protected by insurance from possible damages that might be awarded, the high court said.