Legal Update for Insurance Services
Supreme Court Pulls Trigger on Expanding Scope of Occurrence Coverage
The Pennsylvania Supreme Court has rendered an important coverage decision construing the common “occurrence” and “expected or intended” language in homeowners and personal liability policies. The new decision continues the court’s recent trend of expanding insurance coverage.
In Erie Insurance Exchange v. Moore, 20 WAP 2018 (Pa., 2018), the insured, Harold McCutcheon, Jr., broke into the home of his ex-wife, Terry McCutcheon, with the intent to kill her and then himself. He shot and killed his ex-wife, but, before he could kill himself, his ex-wife’s boyfriend, Richard Carly, arrived at the residence. McCutcheon pulled Carly into the house, the two men fought, and McCutcheon shot Carly in the face. Carly survived and McCutcheon killed himself.
Carly sued McCutcheon’s estate. McCutcheon was insured under homeowners and personal liability policies. Both policies provided coverage for an “occurrence,” which they defined in relevant part as an “accident.” Both policies also excluded “bodily injury, property damage or personal injury expected or intended by anyone we protect.” Based on the exclusion, Erie denied coverage. The trial court agreed and granted summary judgment to Erie. The Pennsylvania Superior Court reversed and found a duty to defend.
In a 4-3 decision, the Supreme Court affirmed the Superior Court. The Majority Opinion (authored by Justice Dougherty and joined by Justices Baer, Donohue and Wecht) held that “the ‘four corners of the complaint’ — when taken as true and liberally construed — make out an accidental shooting.” In particular, the Majority found that, while McCutcheon may have intended to kill his ex-wife and himself, Carly’s arrival in the middle of the murder-suicide led to a “surprise encounter” that could fall within the definition of a covered “occurrence” to which the “expected or intended” exclusion would not apply.
In its analysis, the Majority found that, while McCutcheon “intended to pull [Carly] into the house and fight with him while wielding a firearm,” the shooting itself might not have been intentional. On this basis, the Majority distinguished long-standing precedent and held that the mere pleading of an intentional act as negligence is insufficient to trigger a duty to defend. Because the allegations in Carly’s complaint “do not make crystal clear that McCutcheon shot Carly on purpose,” Erie has a duty to defend.
Finally, the Majority emphasized that the policies did not contain exclusions for incidents involving firearms or the commission of a crime, which might have led the Majority to decide otherwise.
The dissenting opinion, authored by Justice Mundy and joined by Chief Justice Saylor and Justice Todd, concluded that the incident, even as pled, could not satisfy the common definition of an accident. Relying on settled cases, including the Supreme Court’s own decision in Donegal Mut. Ins. Co. v. Baumhammers, 938 A.2d 286, 292 (Pa. 2007), the dissent emphasized that an accident involves a “degree of fortuity” that was clearly absent when McCutcheon shot Carly after he initiated a fight with him in the middle of a murder-suicide.
The takeaway of this decision is that Pennsylvania courts continue to expand insurance coverage beyond previous limitations. There are fewer and fewer situations in which artful pleading and judicial deference to mere allegations will not result in at least a duty to defend.
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