The Supreme Court of Pennsylvania held that an insurer has a duty to defend its insured’s estate in a personal injury lawsuit brought by a man who was shot by the policyholder.
This comes after Richard A. Carly came to the front door of Terry McCutcheon, whom he had been dating, and found himself unexpectedly being pulled inside her home by her ex-husband Harold Eugene McCutcheon Jr. Carly had walked in on Harold carrying out a murder-suicide plan that involved killing Terry before turning the gun on himself. An altercation between the two men ensued, and Carly was shot in the face.
After Carly filed a personal injury lawsuit against Harold’s estate, the estate sought coverage under both a homeowners and a personal catastrophe policy from its insurer, Erie Insurance Exchange.
Although Erie argued the shooting incident could not be considered an accident, and therefore, it did not owe coverage to the estate under the policy, The Supreme Court of Pennsylvania on April 22 held that Carly’s allegations in the suit were sufficient to trigger Erie’s duty to defend. This affirmed a previous order of the Superior Court.
A Murder-Suicide Plan
On September 26, 2013, Harold successfully carried out his murder-suicide plan after outlining his intentions in a note he left to his adult children.
However, after Harold had killed Terry but before he killed himself, Carly arrived at the house. After ringing the doorbell and receiving no answer, he was pulled into the home by Harold. A fight broke out between the two men while Harold continued to hold the gun he had used to kill Terry. During the struggle, Carly alleged shots were “carelessly, negligently and recklessly fired” by Harold, one of which struck Carly in the face and caused severe injuries.
Carly filed suit against Harold’s estate, and the estate sought coverage of the lawsuit under its Erie Insurance Home Protector Policy and its Erie Insurance Personal Catastrophe Liability Policy.
Harold’s homeowners policy outlined that it will pay all sums up to the amount shown on the declarations in the event that an insured becomes legally obligated to pay damages because of bodily injury or property damage caused by an occurrence during the policy period.
Similarly, his personal catastrophe policy said it will provide coverage for amounts an insured becomes legally obligated to pay due to personal injury resulting from an occurrence. The policy defined a covered occurrence as “an accident, including continuous or repeated exposure to conditions, which results in personal injury or property damage which is neither expected nor intended,” according to Pennsylvania Supreme Court Justice Kevin Dougherty’s opinion.
Both policies expressly excluded coverage for bodily injury, property damage or personal injury expected or intended by an insured.
Based on the policy provisions, Erie argued it did not owe coverage to the estate because Carly’s injuries were expected or intended by Harold. As a result, Erie filed a declaratory judgment action.
The trial court initially agreed with Erie and granted summary judgment in its favor, finding that Erie had no duty to defend the estate against Carly’s complaint. On appeal, however, the Superior Court reversed that decision. Erie filed a petition for allowance of appeal, and the Pennsylvania Supreme Court granted discretionary review.
‘Accident’ Versus ‘Intentional Act’
In its argument, Erie contended it does not have a duty to defend Harold’s estate because the allegations in Carly’s complaint “describe a shooting during the commission of multiple felonies,” according to Dougherty’s opinion.
Erie argued the term “occurrence” in the context of a liability insurance policy is defined as an accident, and the injuries resulting from this fight are not the result of an accident but a “willful and malicious assault,” the opinion document stated.
Although Harold never expressed his intention to harm Carly, Erie argued this does not rule out the possibility that he acted intentionally. According to Erie, Harold’s decision to fight with Carly while brandishing a firearm was an intentional act, and Carly’s injuries could be expected under the circumstances.
On the other hand, Carly argued the allegations in his complaint should be taken as true, and if doubt or ambiguity exists, it should be resolved in favor of coverage, Dougherty’s opinion stated.
According to Carly, the allegations in his complaint indicate Harold accidentally shot him. Carly emphasized that he does not allege Harold pointed the gun at him or threatened him and is not seeking relief for any intentional acts.
By denying coverage, Carly alleged Erie is presuming the accidental discharge of the gun was criminal and suggesting its policy excludes all risks associated with gunfire. Carly argued that although Erie could have written its policy to expressly exclude these risks, it did not.
Supreme Court Decision
Contrary to Erie’s view, the Pennsylvania Supreme Court found that Harold’s encounter with Carly was not part of his other intentional conduct for the purposes of insurance coverage. It stated that although Harold’s fight with Carly was intentional, Carly only sought damages for the shooting injury, not a fistfight or shoving match.
“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 Carly,” Dougherty wrote in his opinion. “But the policy does not say this.”
With this in mind, the court held that Erie has a duty to defend Harold’s estate against Carly’s lawsuit, affirming the previous order of the Superior Court.
Looking at the Facts
In light of the ruling, Pennsylvania Supreme Court Justice Sallie Updyke Mundy filed a dissenting opinion, arguing that Carly’s injuries do not constitute an insurable occurrence.
Mundy argued that for an event to be considered an insurable occurrence, it must be unintended and occur unexpectedly. She stated that the discharge of Harold’s gun under the circumstances that caused injury to Carly cannot be interpreted as an unexpected event that would trigger Erie’s duty to defend.
“We are tasked with looking at the facts, not speculating about scenarios that are inconsistent with common sense or experience,” she wrote. “The facts are clear: while in the process of effecting a murder-suicide, McCutcheon physically pulled Carly into the home, engaged in a physical struggle with Carly, while he, the aggressor, held and discharged a firearm.”
Mundy wrote that she believes the discharge of the firearm under the circumstances alleged in the Carly complaint do not carry the degree of unexpectedness necessary to constitute an accidental occurrence, and therefore disagreed with the notion that Erie is obligated to provide coverage.
“In my view, artful pleadings cannot form the basis of imposing a duty to defend,” she wrote.
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