Court: Intentional Acts Preclude Homeowners’ Coverage

An insurer had no duty under a homeowners’ policy to indemnify a man who pre-emptively struck another man, an Oregon federal judge ruled. The case is Allstate Ins. Co. v. Daniken, 2006 WL 516814 (D.Or. March 1, 2006). In the case, Daniken, the insured, admitted that he struck first against another man, Horton, but said he did so in self-defense. Daniken pleaded no contest to criminal charges of fourth-degree assault, and was later sued by Horton. The insurer, Allstate, brought a declaratory action to dispute defense and indemnity.
Judge Ann Aiken said that because Daniken pleaded no contest, his conviction did not definitively establish that his actions were criminal, only that he consented to the conviction. Therefore, Judge Aiken found that, because the complaint alleged negligent as well as intentional conduct, Allstate had a duty to defend. In Oregon, the duty to defend is determined solely with reference to the allegations of the complaint and the language of the policy, and extrinsic facts are not considered. However, the duty to indemnify depends on the facts. Judge Aiken found that Daniken’s intentional acts of striking Horton precluded coverage under the exclusion for intentional acts.
A basic premise of Oregon law is that an intentional acts exclusion precludes coverage for “acts done with the subjective intent to cause harm.” Abrams v. General Star Indemnity Co., 335 Or. 392, 395 (2003). In Abrams, the Oregon Supreme Court decided a question certified by the U.S. Ninth Circuit Court of Appeals (meaning the court was uncertain of Oregon law and asked the state supreme court to answer the question). The state court found that a duty to defend can exist even when the complaint alleges uncovered intentional conduct, when the claim could be proven through unintentional conduct. On the other hand, Oregon precedent is that, when the subjective intent to cause harm is an element of a tort, such as malicious prosecution, the claim cannot be proven through unintentional conduct and, if only intentional conduct is alleged, it is excluded by an intentional acts exclusion and there is no duty to defend. Abrams is not a duty to indemnify case, however, and Oregon appellate courts have not decided an indemnity case involving self-defense, including whether it qualifies as an “occurrence” in a policy and whether it is excluded by an intentional acts exclusion.

Other states have reached varying conclusions. In Farmers and Mechanics Mutual Ins. Co. of West Virginia v. Cook, 557 S.E.2d 801 (W.Va. 2001), the court considered a case involving a wife who, in defense of her husband, shot and killed a third-party aggressor. She was sued for wrongful death by the aggressor’s widow. The court concluded as a matter of law that when someone acts in self-defense or the defense of another, an intentional acts exclusion a homeowners’ does not preclude coverage.
However, in Auto-Owners Insurance Co. v. Harrington, 212 Mich.App. 682 (1995), the Michigan Court of Appeals decided that self-defense may fall within an intentional acts exclusion.
In Harrington, the insured shot and killed a trespasser, who was a guest of the insured’s neighbor. Earlier on the day of the killing, the trespasser was apparently drunk, had shot an automatic weapon into the lake and threatened the insured’s family. Later in the evening, the decedent was seen walking around the insured’s home, and the insured killed him with a shotgun, assuming he still had a gun and was out to hurt someone (he didn’t have a gun). The decedent’s father filed a wrongful death suit.
The insurer filed a declaratory action seeking a judgment of non-coverage because the death was expected or intended by the insured. The trial court found for the insured, holding that the insurer had a duty to defend and indemnify, but the Court of Appeals reversed. The appeals court said the acts were intentional, and thus excluded, because it was clear the insured intended to shoot the trespasser. In dissent, another judge said that the purpose of the intentional acts exclusion is to prevent moral hazard, and that self-defense does not present the type of moral hazard addressed by the exclusion.

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