Four Corners Rule Requires Defense for Person who Shot Plaintiff in the Face

Estate of Murderer Gets Defense for Injuries to Visitor who Arrived During Murder Suicide Attempt

When Mr. Carley interrupted McCuctcheon’s murder of his ex-wife he was assaulted and shot in the face by McCutcheon. Carley alleged the shooting was negligent rather than intentional. The estate of McCutcheon sought defense based on the allegations of the complaint and the insurer claimed it was not a fortuitous act and was excluded as an intentional act.

In Erie Insurance Exchange v. Tracy L. Moore And Harold E. McCutcheon, Iii, Individually And As Administrators Of The Estate OF Harold Eugene McCutcheon, Jr., And Richard A. Carly, J-31-2019, No. 20 WAP 2018, Supreme Court Of Pennsylvania Western District (April 22, 2020) the Supreme Court was asked whether the alleged conduct of an insured, Harold Eugene McCutcheon, Jr. (McCutcheon), obligates McCutcheon’s insurer, Erie Insurance Exchange (Erie) to defend the estate against Carly’s complaint.

FACTS

On the evening of September 26, 2013, McCutcheon broke into the home of his ex-wife, Terry McCutcheon, in order to shoot and kill her, and then kill himself.  McCutcheon succeeded in executing this plan, first shooting and killing Terry and, eventually, shooting and killing himself. However, after McCutcheon killed Terry but before he killed himself, Carly arrived on the scene. Carly, who had been dating Terry, approached the front door of her home, rang the doorbell and received no answer. Carly became concerned, placed his hand on the doorknob “in order to enter and the door was suddenly pulled inward by [McCutcheon] who grabbed [Carly] by his shirt and pulled him into the home.” McCutcheon was “screaming, swearing, incoherent, and acting ‘crazy.'” Then, “a fight ensued between the two and at the time, [McCutcheon] continued to have the gun in his hand” which he apparently had used to kill Terry. During this “struggle” between the two men, McCutcheon, according to the complaint: “negligently, carelessly, and recklessly caused the weapon to be fired which struck [Carly] in the face,” causing severe injuries.

Carly filed suit against McCutcheon’s estate, and the estate — administered by McCutcheon’s adult children — sought coverage of the lawsuit under two insurance policies issued by Erie to McCutcheon: the Erie Insurance Home Protector Policy (homeowner’s policy) and the Erie Insurance Personal Catastrophe Liability Policy (personal catastrophe policy).

THE POLICIES

The policy provided: “We will pay all sums up to the amount shown on the Declarations which anyone we protect becomes legally obligated to pay as damages because of bodily injury or property damage caused by an occurrence during the policy period. We will pay for only bodily injury or property damage covered by this policy.” The homeowner’s policy defines an “occurrence” as “an accident, including continuous or repeated exposure to the same general harmful conditions.” Similarly, McCutcheon’s personal catastrophe policy provides coverage for amounts an insured becomes legally obligated to pay due to personal injury resulting from an “occurrence,” and defines 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.”

Both policies expressly exclude from coverage “bodily injury, property damage or personal injury expected or intended by anyone we protect.” The homeowner’s policy further provides expected or intended injury is excluded even if “the degree, kind or quality of the injury or damage is different than what was expected or intended,” or “a different person, entity, real or personal property sustained the injury or damage than was expected or intended.” Based on these provisions, Erie concluded it owed no coverage to the estate because Carly’s injuries were not caused by an accidental “occurrence,” but rather were “expected or intended” by McCutcheon.

DECISION BY TRIAL COURT

The trial court agreed with Erie and granted summary judgment in its favor, holding Erie had no duty to defend the estate against Carly’s complaint. The trial court noted that the prospect of injury from a gun firing during a physical struggle over that gun was no less plainly and reasonably anticipated. The court explained the shooting “cannot fall within the definition of an accident,” and “the deliberate conduct of [McCutcheon] did not constitute an ‘occurrence’ that would trigger coverage[.]”

On appeal, the Superior Court reversed in a published opinion. Erie Ins. Exch. v. Moore, 175 A.3d 999 (Pa. Super. 2017).  The panel recognized the complaint’s “legal terminology” of negligence and carelessness “cannot control the outcome,” but nevertheless determined the allegations “fairly portray a situation in which injury may have been inflicted unintentionally.”

ANALYSIS

Erie argued the trial court correctly granted summary judgment in its favor and the Superior Court erred in reversing that decision. Erie contended it does not have a duty to defend McCutcheon’s estate against Carly’s lawsuit because the factual allegations in the Carly complaint do not constitute an insurable “occurrence.” Erie asserts instead the facts “describe a shooting during the commission of multiple felonies.

Here, according to Erie, McCutcheon’s decision to fight with Carly “while brandishing — and discharging — a firearm was an intentional act,” and there is no duty to defend because Carly’s injuries “were of the same general type which were expected or intended under the circumstances.”

An insurer’s duty to defend is always broader than its duty to indemnify, and the duty to defend is triggered “if the factual allegations of the complaint on its face encompass an injury that is actually or potentially within the scope of the policy.” Babcock & Wilcox Co. v. American Nuclear Insurers, 131 A.3d 445, 456 (Pa. 2015) The truth of the complaint’s allegations was not at issue in Pennsylvania when determining whether there is a duty to defend; the allegations of the complaint are required to be taken as true and liberally construed in favor of the insured. Whether a claim is potentially covered is answered by comparing the four corners of the insurance contract to the four corners of the complaint.

The Supreme Court concluded that “four corners of the complaint” — when taken as true and liberally construed — make out an accidental shooting and that the allegations are not mere “artful” pleading designed to present intentional acts as accidental for purposes of insurance coverage. Instead, taken as true, they present a factual scenario that potentially comes within the definition of a covered “occurrence,” and to which the Erie exclusion for bodily injury “expected or intended” by the insured does not apply.

Carly’s complaint establishes the insured intended to kill his wife, and then later, intended to pull the victim into the house and fight with him while wielding a firearm. Contrary to Erie’s view, this surprise encounter with Carly was not part of the insured’s other intentional conduct for purposes of insurance coverage, and in fact, Carly does not seek damages for a fistfight or shoving match. Carly’s lawsuit seeks damages for being shot by the insured.

The Supreme Court’s analysis included the advice to insurers that they rewrite the policy exclusions to expressly state coverage would not apply to incidents involving firearms, or during the commission of a crime, then on “perhaps there would be no duty to defend the underlying claims by Carly.” But the policy did not say so. Instead, it excludes from coverage bodily injury “expected or intended” by the insured, and to the extent this language is ambiguous in the presently alleged factual context, it must be construed in favor of coverage.

The Supreme Court rejected Eries arguments and its amici that finding a duty to defend  ignores the basic principle that “fortuity” is essential to a valid transfer of risk between an insured and insurer, and providing coverage for criminal conduct like McCutcheon’s will incentivize insureds to engage in criminal activity. The argument, the Supreme Court concluded, is beside the point because the complaint’s allegations do not preclude the possibility McCutcheon accidentally shot Carly, despite the fact he intentionally shot Terry McCutcheon, or intentionally pulled Carly into the house before the shooting. It also concluded that denying a duty to defend under such circumstances would not serve as a crime deterrent, and would unnecessarily withhold compensation to tort victims.

Applying the four corners rule the Supreme Court concluded Erie has a duty to defend McCutcheon’s estate against Carly’s lawsuit, and affirmed the order of the Superior Court.

ZALMA OPINION

The decision fits Pennsylvania’s use of the four corners rule. It also allows an attorney to plead a complaint where an intentional battery and shooting could conceivably be “accidental” because the complaint used the magic language of negligence fits its jurisprudence. That jurisprudence is, in my opinion, wrong and the trial court was reasonable in concluding there is no way that grabbing a person, pulling him into a crime scene, beating him and shooting him in the face, could not to any reasonable person be considered an “accident” or a negligent shooting. Those writing insurance in Pennsylvania should consider following the advice of the Supreme Court and revise their policies to avoid this type of problem.


© 2020 – Barry Zalma

This article, and all of the blog posts on this site, digest and summarize cases published by courts of the various states and the United States.  The court decisions have been modified from the actual language of the court decisions, were condensed for ease of reading, and convey the opinions of the author regarding each case.

Barry Zalma, Esq., CFE, now limits his practice to service as an insurance consultant  specializing in insurance coverage, insurance claims handling, insurance bad faith and insurance fraud almost equally for insurers and policyholders. He also serves as an arbitrator or mediator for insurance related disputes. He practiced law in California for more than 44 years as an insurance coverage and claims handling lawyer and more than 52 years in the insurance business. He is available at http://www.zalma.com and zalma@zalma.com.

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About Barry Zalma

An insurance coverage and claims handling author, consultant and expert witness with more than 48 years of practical and court room experience.
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