Home Page The Publication The Editor Contact Information Insurance Key issues Book Subscribe

Vol. 6, Iss. 6
July 12, 2017

Dog Bite Coverage Case Teaches An Old Insurer A New Trick

At the heart of many coverage cases is whether policy language has more than one meaning. It is far more unusual to see a coverage case turn on whether a question on an insurer’s application has more than one meaning, i.e., is it ambiguous? But that’s what the question was in Schultz v. Tilley, No. 15-P-1706 (Mass. Ct. App. May 18, 2017). And it arose in an interesting context.

Christopher Tilley obtained a homeowner’s policy for his residence in Peabody, Massachusetts. With the assistance of a customer service representative at an insurance agency, Tilley completed an application for a policy with Vermont Mutual, which has been around since 1828. Tilley responded “Yes” to the question, “Are there any animals or exotic pets kept on premises?” The application then stated “Note breed and bite history.” The employee of the agency noted, “American bull dog — no biting incidents.”

Edith Schultz was walking her two Yorkshire Terriers near Tilley’s home. Tilley’s dog, Bocephus, ran out and attacked and injured Schultz’s dogs. Schultz suffered a broken arm, a laceration to her face, and scrapes to her knees, elbows, and ankles. Tilley sought coverage from Vermont Mutual.

Vermont Mutual investigated and learned that Bocephus, on prior occasions, had bitten two other dogs prior to Tilley’s completion of the application. Bocephus bit a dog named Buddy who was walking near Tilley’s house. Bocephus also bit Bruno who was walking near Tilley’s house.

In a suit filed by Schultz, Vermont Mutual sought to void the policy on the basis that Tilley made a misrepresentation in his response to the “bite history” question on the application. The trial judge, after chewing on the issue, agreed, concluding that “biting history” is “unambiguous, with the general understanding of the word [biting] read to mean biting anything or anybody.”

On appeal, Schultz argued that there was no material misrepresentation because the “bite history” question on the application was ambiguous.

While most ambiguity determinations center around policy language, the court noted that it could also extend to policy applications: “[W]here a question on an application lends itself to more than one reasonable interpretation, an honest answer to one of those reasonable interpretations cannot be labeled a misrepresentation.”

So was there more than one reasonable interpretation of the “bite history” question and was Tilley’s answer to one of them honest? Yes and Yes the court concluded.

Tilley testified that he understood the question, as the agency employee asked it, to mean whether the animal has a history of biting humans. His negative response to that question was honest. The agency employee testified that her custom and practice was to inquire whether the animal was “aggressive” or had “had a biting incident” in responding to the question. An underwriting manager at Vermont Mutual testified that she interpreted the term to mean “bodily injury or property damage to someone else’s pet.” The judge “adopted a broad meaning advanced by none of the witnesses at the trial, namely that it should be read to mean a history of biting “anything or anybody.”

So four people weighed-in on the meaning of “bite history” and there were four different answers. With all these meanings being offered, the appeals court had no problem concluding that “bite history” was ambiguous: “Although we agree with the judge that a fair meaning of the language could be read to mean, literally, anything the animal has ever bitten, that view hardly seems reasonable in the context of insurance given the strong propensity of dogs to chew toys and other inanimate objects of little or no value. We understand the judge to have meant any living thing. However, we conclude that the language remains subject to multiple reasonable interpretations, as the trial testimony demonstrates. . . . [I]n our view, all of those interpretations are reasonable, in that they each would afford the insurer an assessment, at some level, of the risk associated with a given animal. . . . Because the language is ambiguous, we must afford the Tilleys, as the insureds, the benefit of the reasonable interpretation that is most favorable to them; namely, the one that limits the biting history to humans only. Because Christopher answered that question honestly, as it is undisputed that Bocephus had only bitten other dogs, Christopher’s response cannot be labeled a misrepresentation by Vermont Mutual.”

I think Schultz and Tilley caught a break here. Your dog biting another person’s dog is a big deal. The court noted that Buddy’s owner filed a police report and spoke with Peabody’s animal control officer. Buddy’s owner incurred a $200 vet bill, which Tilley voluntarily paid. It seems to me that a dog’s “bit history,” in the context of an insurance application, means dogs and people.

Website by Balderrama Design Copyright Randy Maniloff All Rights Reserved