Insurer Loses Bet on Posing Only One Reason for Criminal Acts Exclusion At Summary Disposition Stage in Declaratory Judgment Action Challenging Coverage for “Accidental” Shooting

This case demonstrates the importance of having experienced coverage counsel analyze and apply all potential theories of coverage, including exclusions, at the defense stage of proceedings to determine coverage obligations in a declaratory judgment action.

The plaintiff in the underlying lawsuit was shot by the defendant insured during a hunting incident.  The shooting was clearly an accident, as the hunter (stupidly, if not criminally) fired at a flash of white he thought was a deer he flushed out while walking around a field at dusk.

The insurer insured the defendant under a homeowner’s policy.  The insurer filed a declaratory judgment action seeking to avoid coverage.  It raised the “criminal acts” exclusion, while conceding an occurrence.  The exclusionary language excluded coverage for “a criminal act or omission” or for “an act or omission, criminal in nature”.  However, the insurer only plead that the insured had violated MCL 750.235(1), which made it a misdemeanor to maim or injure “another person by discharging a firearm pointed or aimed intentionally but without malice at another person….”  This was the only basis relied on by the insurer to seek a declaration that coverage should be excluded by the policy’s criminal acts exclusion.

The trial court concluded that the elements of this specific intent statute were not satisfied because the defendant in the underlying suit testified he did not know he was shooting at a person.  Therefore, the trial court ruled the insurer owed coverage to the defendant insured for defense and potential indemnity to the plaintiff in the underlying lawsuit.

On appeal, the Court of Appeals (Fitzgerald, Meter, and M.J. Kelly) affirmed.  It points out, more than once, that the insurer failed to plead or assert any other grounds for exclusion under the policy.  The singular reliance on whether or not MCL 750.235(1) had been violated and the trial court’s disposition with respect to that singular issue was all that the Court of Appeals could assess in terms of preserved issues on appeal.

This case demonstrates the importance of having coverage counsel assess all possible avenues concerning coverage obligations, including whether or not and to what extent any of the coverage provisions, i.e., occurrence, claim, etc., and any exclusion (or any other exclusions) might be satisfied, or apply, respectively.

It also demonstrates the importance of exploring whether other potential facts implicate the broader language of the criminal acts exclusion.  Certainly, it appears that “an act or omission, criminal in nature”, which the exclusion included, casts a wider net than the simple “specific intent” statute that the insurer here attempted to prove had been violated.  Criminal negligence, reckless endangerment, recklessness, and a host of other general criminal acts come to mind when considering the exclusion’s precise language.

The opinion is here:  Auto Club v. Kondziolka, et al.

About cjtucker06

Owner of law firm since July 2014; Handles all types of appellate matters and assists other lawyers with complex litigation and insurance coverage issues; Admitted to the Supreme Court of the United States, the Sixth Circuit Court of Appeals and the State Bar of Michigan; Expertise in prosecuting and defending appeals with several significant successes in the Sixth Circuit Court of Appeals, the Michigan Supreme Court and the Michigan Court of Appeals; Author of briefs amicus curiae in the Michigan Supreme Court for the Michigan Defense Trial Counsel and the Insurance Institute of Michigan; Represents Insurance Companies, Major International Business, Governmental Entities, Law Enforcement Officers and County Sheriffs. Board of Directors, Michigan Defense Trial Counsel Amicus Committee Co-Chair, Michigan Defense Trial Counsel Military - Retired Major in the Judge Advocate General (JAG) Corps of the United States Army, Brigade Judge Advocate and Staff JAG officer for the Maneuver Training Center, Camp Grayling, Michigan; Recipient of the Army's Meritorious Service Medal (the highest medal of honor available to Soldiers serving in non-combat roles); 2012 Graduate of the Judge Advocate Officer Advanced Course, at The Judge Advocate Legal Center and School, Charlottesville, Virginia. United States Navy Reserves, Combat Warfare Qualification, January 1989 to July 2003 Former law clerk to Justice Stephen J. Markman, Michigan Supreme Court, Research Attorney, Michigan Court of Appeals. Insurance Coverage Associate Plunkett Cooney; Environmental Law Attorney at Squire Sanders, now Squire Patton Boggs; Master's Degree in Environmental Law; Environmental Law Scholar, ALI/ABA Washington, D.C., Juris Doctorate, Vermont Law School, Environmental Editor, Vermont Law Review; Treasurer and Finalist, Moot Court Advisory Board.
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