Hint, Hint

The Court of Appeals has new opinions up, and one in particular caught my attention because it's right in my area. It's interesting to watch the interplay between the appellate courts, particularly when the principles of stare decisis (following precedent) dictate a result that seems unfair at best. This case is about as obvious a hint as you can get to the Supremes that the law is due for a change. I've just quoted bits of it wholesale because it really requires no translation from legalese.


AMCO INS. CO. v. ROBERTS

FACTS
"Roberts was at her home with her three children on the evening of December 13, 2001. While she was upstairs preparing to give her one-year-old daughter a bath, she heard noises downstairs. When she looked down the stairs she saw two people were coming up the stairs, decedent, Dustin Wehde, and another person, who was never identified. Roberts rushed her young daughter into the room where her eleven-year-old and three-year-old sons were watching a video. Roberts was grabbed from behind and pulled into the hallway by the intruders. Wehde and the other person then assaulted Roberts. She remembers being choked around her neck.

The next thing Roberts remembers is waking up on the floor of the guest bedroom. She heard yelling down the hallway and ran towards it. Roberts was grabbed again and assaulted by the two intruders. She was able to struggle away from them and run into her bedroom. She went to the area between her dresser and bed, where a gun safe was located. While Wehde was standing over her and grabbing at her she was able to get the gun safe open and grab a nine-millimeter gun from the safe. It was dark in the room and Roberts’s prescription glasses had been lost in the struggle, so Roberts just aimed the gun in the direction that she was being grabbed from and, after switching the safety off, she discharged the gun. Wehde was struck and went down. Apparently the other intruder fled after Roberts got a hold of the gun.

After shooting Wehde, Roberts took nine-millimeter gun and a revolver, also from the gun safe, and went to the bedroom to check on her children. The children were fine. Roberts then saw a figure moving near her bedroom. Roberts told the figure not to move. The figure continued to move so Roberts fired a shot from the revolver as a warning to the person to stay still. When the figure continued to move she fired the revolver multiple times at the figure. She then closed the bedroom door and went downstairs where her oldest son called 911.

Wehde died as a result being shot by Roberts. As of this date, Roberts has not been criminally charged in the shooting death. The estate of Wehde claims that after shooting Wehde multiple times with the nine-millimeter handgun, Roberts 'made the conscious and knowing decision to return to the bedroom and kill Dustin Wehde with a second weapon.'"

ISSUE
"Prior to the incident on December 13, 2001, Roberts had purchased a total of three insurance policies from AMCO and Allied. Roberts had purchased (1) a farm master insurance policy from AMCO, (2) a homeowner’s insurance policy from Allied, and (3) a farm excess liability insurance policy from AMCO, which is an umbrella policy that applies only when the underlying policies provide coverage.

In their motion for summary judgment on their petition for declaratory judgment, AMCO and Allied argued that summary judgment must be granted in their favor because the incident, whereby Roberts shot decedent, did not constitute an “occurrence” under the insurance policies and, in the alternative, coverage was excluded under the expected or intended injury exclusions found in the insurance policies."

POLICY LANGUAGE
"The farm master policy states, “Farm liability coverage in the Farm Master Policy does not apply to bodily injury, property damage or personal injury . . . which is expected or intended by any insured.” The homeowner’s policy states that coverage does not apply to:

1. Expected or Intended Injury

“Bodily injury” or “property damage” which is expected or intended by an insured even if the resulting bodily injury or property damage:

a.Is of a different kind, quality or degree than initially expected or intended; or

b.Is sustained by a different person, entity, real or personal property, than initially expected or intended.

. . .

The intent to cause the injury may be either actual or inferred from the conduct of the insured. Allied Mutual Ins. Co. v. Costello, 557 N.W.2d 284, 286 (Iowa 1997). Our supreme court has clearly and repeatedly indicated that an action by the insured in self-defense does “not change the fact it was an intentional act.” McAndrews, 349 N.W.2d at 120.

The question of self-defense is a standard of [the insured’s liability] to [the injured party]. It presents an issue of motive or justification for an intentionally caused harm, but it does nothing to avoid the inference of intent to harm that necessarily follows from the deliberate blow to [the injured party]. . . .

Id. (quoting Home Ins. Co. v. Neilsen, 332 N.E.2d 240, 244 (Ind. Ct. App. 1975); accord Costello, 557 N.W.2d at 286 (reaffirming McAndrews); American Family Mut. Ins. Co. v. De Groot, 543 N.W.2d 870, 871 (Iowa 1996) (summarizing McAndrews in stating, “We concluded the insured’s striking of the victim was an act excluded from coverage because it was intentional, even if done in self-defense.”); Altena v. United Fire and Cas. Co., 422 N.W.2d 485, 488 (Iowa 1988) (reaffirming McAndrews). . . .

Faced with the clear and repeated pronouncements of our supreme court, we must conclude Roberts’s shooting of Wehde was an intentional act for purposes of the insurance policies at issue, even if it was in self-defense. We affirm on this issue."

JUSTICE VOGEL'S SPECIAL CONCURRENCE
"Because of the presence and force of the intruders, Roberts acted instinctively to protect herself, her children and her property from imminent harm and loss. The irony is that if Roberts had done nothing, she may also have been denied coverage. Under Section One “Exclusions,” the Allied Insurance homeowner’s policy reads:

We do not insure for loss caused directly or indirectly by any of the following. Such loss is excluded regardless of any other cause or event contributing concurrently or in any sequence to the loss. These exclusions apply whether or not the loss event results in widespread damage or affects a substantial area.

5. Neglect: Neglect means neglect of an “insured” to use all reasonable means to save and preserve property at and after the time of a loss.

Roberts not only acted to save her family, she was also following the dictates of the policy, “to use all reasonable means to save and preserve property”. The policy is internally inconsistent if an intentional act to save property is excluded because the act, while causing the death of an intruder, likely saved the lives as well as the property of the insured family from loss."

JUSTICE MAHAN'S SPECIAL CONCURRENCE
"I concur specially. I agree with the majority that we must affirm this case based upon the current state of the law in Iowa as set out in McAndrews v. Farm Bureau Mut. Ins. Co., 349 N.W.2d 117, 120 (Iowa 1984). However, I find compelling the argument by a growing number of courts that acting in self-defense is not acting with the intent to cause injury to another but, instead, acting with an intent to prevent injury to oneself.

In the instant case, this mother was attempting to protect herself and her children. However, the current status of the insurance law would appear to force her to make a decision between possible death or serious injury to herself and her family or coverage under the policy."

OBLIGATORY BLOG COMMENTARY
The expected or intended exclusions serve an important function in insurance law, because the finances of insurance are based on risk assessment. If it works right, a bunch of actuaries with calculaters flock together and figure out the statistical likelihood of rearenders, fires, death, and the like, to determine how much money needs to be charged for premium in order to pay everybody's claims as they come up and not go bankrupt leaving no coverage for the rest of the insureds. Free enterprise is supposed to take care of the tendency toward greed - if you charge too much over the amount necessary to cover claims, you'll price yourself out of the market. At least, that's the basic theory. But if you allow coverage for things people do on purpose - torching your house because you can't make the payments; going on a killing spree; tossing the Heart of the Ocean into the water 'cause it just feels right - then not only is it unfair to reward you for your less than admirable behavior, it skews the stats and leaves the company at risk for bankruptcy so it can't pay the claims of people who wouldn't think of doing those kinds of things (or at least wouldn't do them and expect to get paid for it).

Contracts law is very big on bright line rules, and for good reason. Much of the litigation in that area stems from situations in which one party to the contract is claiming a misunderstanding of some sort about the terms of the contract. Attorneys are not cheap, so it's usually cheaper for people and companies to have a clear understanding of everything up front than it is to slap something half-assed together and litigate later. If the law is fluid, then it promotes unneccessary litigation because it's always worth it to take your chances in court. Finally, many people are willing accept a loss if they knew what they were getting into when they signed. Not everyone, but still. Therefore, I can understand the rationale behind the fairly clear-cut rule of keeping to the plain meaning of the terms. Further, if you take the plain meaning of the exclusion and open it up to litigation, you invite all kinds of new suits to discover the boundaries of the new rule. If taken to extremes, that could get interesting. For example, in Missouri there's a case in which an insured was sued after they injected a friend with an overdose of illegal pharmeceuticals. The Court found potential coverage under an identical exclusion, reasoning:

It remains for the insurer to show that this particular insured expected or intended the result which occurred. The record does not compel a finding that he did. It is just as likely that Pacchetti, in his perverted way, might have thought that Derek would derive some transitory pleasure or benefit from what apparently would be his initial experience with cocaine.

American Family Mut. Ins. Co. v. Pacchetti, 808 S.W.2d 369 (MO 1991). Um . . . . yeah. (I'd link, but I can't find it on any free sites).

A side note: please notice that this case didn't decide the issue of whether Roberts committed a tort. I would fully expect an Iowa jury to acquit her if this proceeds to trial, if the facts are as represented here.

That said . . .

I agree with the Court of Appeals. Given the facts and circumstances at hand, I'd be comfortable with a little extra litigation to establish a narrow exception to the expected and intended exclusion in order to allow for coverage in clearly established cases of self-defense. As the special concurrences point out, it's a logical conclusion.

(NOTE: Because this is in my arena, I should remind everybody that my employers don't endorse, promote or in any way ascribe to what I write in this blog. Hell, they probably don't even know what a blog is.)

(NOTE NOTE: If anybody at my company is reading this: just kidding about that last part. No, really.)