Liability insurance is, by definition, a product that provides financial protection when things don’t turn out as planned. Most of the time when this occurs it’s simply a case of bad luck or because, well, stuff just happens. Essentially, some action was taken and the outcome was one that nobody could have seen coming.
But there are other times when liability claims don’t arise simply because stuff just happens. Instead, the claims are the result of peoples’ actions that were so ill-conceived or Tom foolhardy that a liability claim was as predictable as day following night. When you read liability coverage cases you are bound to come across some of these. They are the cases where all you can do is shake your head in disbelief and ask yourself – Wow, did he REALLY do that? You then walk over to a colleague and say you GOTTA see this. Eventually the incredulous behavior leads to a lawsuit, which leads to an insurance claim, which leads to a coverage dispute, which leads to a reported decision, which leads to the final stage of this insurance circle of life -- an appearance in “Coverage For Dummies.”
I am pleased to present my 8th Annual “Coverage For Dummies” -- a review of the best cases, from the year just-concluded, that demonstrate attempts to secure insurance coverage for the frailty and imperfection of the human brain.
Incidentally, last year I suggested that “Coverage for Dummies” may be over since I suspected that there could never be a “Dummies” case as great as Davler v. Arch Ins. Co. (Cal. Ct. App. Aug. 25, 2014), where the court held that no coverage was owed to a cosmetics manufacturer when a (female) manager, determined to figure out who left a sanitary napkin in the bathroom and blood around the toilet seat, forced female employees to pull down their underwear so that another (female) employee could inspect whether they were wearing a sanitary napkin. The employment related practices exclusion precluded coverage.
But, alas, “Dummies” was saved from extinction by Blank-Greer v. Tannerite Sports, LLC, No. 13-1266 (N.D. Ohio Apr. 21, 2015), which rivals Davler v. Arch. In Blank-Greer, two nimrods, as part of a celebration of the upcoming birth of a child of one of the nimrods, held a party – a “diaper shootout” -- where guests could bring diapers for the new baby and enjoy an afternoon shooting guns. As a grand finale they decided to blow up an old refrigerator. Guests stood behind tables fifty meters away from the refrigerator -- with explosives placed inside. Upon firing at the refrigerator it immediately blew apart and sent shrapnel flying across the yard. A piece of shrapnel hit a guest’s hand, nearly severing it. I know. It takes your breath away. In case you’re wondering, the court held that no coverage was owed because the incident did not arise with respect to the conduct of the insured’s business.
Incidentally, 2015 was a down year for “Dummies.” For whatever reason, it was slim pickins for good “Dummies” cases. That’s just the way it goes sometimes. However, this could be prevented in some way. “Dummies” cases often involve such things as fights, people doing stupid stuff in bars, the use of an automobile for something other than getting from A to B, feuding neighbors and the use of guns. The incidents at issue in these cases generally just don’t happen out of the blue. They often have back stories explaining what led up to them. But so many courts leave these facts out of their opinions. As a result, what could be a great “Dummies” case will never be known, since it reads as a detail-less “assault and battery” or “liquor liability” or “expected or intended” case.
The following additional “Dummies” 2015 cases are in no particular order.
Evanston Insurance Co. v. Haven South Beach, LLC (S.D. Fla. Dec. 28, 2015): Pollution Exclusion precluded coverage to insured food and beverage vender for injuries sustained by a customer who was served an alcoholic beverage infused with liquid nitrogen to create a “smoky effect.”
Minden v. Atain Specialty Ins. Co. (8th Cir. May 26, 2015): Neither auto exclusion nor assault and battery exclusion precluded coverage to insured driver, for striking and killing an individual with his car, possibly motivated by the decedent yelling unflattering remarks at the insured-driver, when he could not figure out how to turn off a car alarm with a key fob.
Auto Club Property Casualty Ins. Co. v. B.T. (W.D. Ky. Jan. 12, 2015): No coverage owed to a dad for this father of the year performance. Dad’s 8 year old son was playing with friends and wanted to get some sparklers out of the car. Dad used his keyless remote to open the door but did not follow his son to the car – nor check up on him for the next few hours. It turns out that his son didn’t retrieve just sparklers from the car (as if that would have been OK) but bottle rockets too. One of the kids lit a bottle rocket that hit another in the eye. Coverage for dad denied based on the criminal act exclusion. Nobody will confuse this guy for Ward Cleaver. [This case was featured in “Dummies” 2014. In 2015 the Sixth Circuit reversed – not the dummy-ness; but the lower court’s decision that the criminal act exclusion barred coverage.]
Parler v. North Sea Insurance Co. (N.Y. Sup. Ct. June 17, 2015): Not enough factual details to be a “Dummies” case. However, the underlying action involved a bar patron being struck in the face with a bar stool. As frequent as that happens in the movies, you just don’t see it very often in real life coverage cases. Take my word. I did some research on that.
Ford v. Standard Fire Ins. Co. (N.D. Ohio Apr. 30, 2015): Expected or intended exclusion barred coverage to insured for striking his brother-in-law with a ceramic pot. [Insured also alleged that his brother-in-law once stole Christmas presents intended for insured’s children.]
Canon v. Palisades Insurance Company (N.J. Super. Ct. App. Div. Mar. 25, 2015): You know an opinion is going to be good when it starts out with this gem: “This case involves a street fight between two groups of combatants, some of whom were employed as telemarketers with two local companies. Not surprisingly, the challenge to fight, the acceptance of that challenge, and negotiations over the combat site were all done telephonically.” Following the rejection of numerous fight locations one was finally agreed upon. However, the fight didn’t take place as scheduled. One group arrived in a car with the occupants carrying baseball bats. The other group, expecting a traditional fist fight, was unarmed, and hurriedly left. However, the court noted that the parties were willing to continue settlement efforts: “The two cars drove to the Skytop Gardens Complex while their occupants made phone calls trying to reschedule the fight.” Sadly, the opinion does not mention what caused these two groups to want to kill each other. Maybe each one tele-marketed the other.
To make a long story short, someone was eventually shot in the head. He filed suit against some of the individuals on the other side. A default judgment was entered in the amount of $65,000. Seeking to satisfy the judgment, the victim then filed an action against the auto insurer for one of the assailant’s parents. The substantive coverage issues were “expected or intended” and “use of an auto.”
State Farm Fire and Casualty Co. v. Powell (N.D. Okla. Sept. 11, 2015): Intentional act exclusion barred coverage to insured for striking a fellow gambler in the face while playing cards in a casino. I mentioned in the introduction that most assaults have a back story explaining what led up to the altercation. Well, not here. Casino surveillance showed that, three minutes after the victim sat down at the table, the insured stood up, walked around the table, and struck him in the face with his fist. I guess when you saw “hit me” at a blackjack table there’s more than just the risk of going over 21.
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