Because of a Gun, It’s Covered?

The Pennsylvania Supreme Court recently held that there was coverage for a man shot while attempting to intervene in a murder-suicide.

In 2013, Harold Eugene McCutcheon, Jr. broke into his ex-wife’s home with the intent to kill her and then himself. Before he executed the suicide part of his plan, Richard Carly, the ex-wife’s boyfriend, arrived at her home. A struggle ensued while McCutcheon was still holding his gun, and Carly was shot in the face. McCutcheon then shot himself.

Carly sued McCutcheon’s estate, which sought defense and indemnity coverage under both McCutcheon’s homeowner’s and personal liability policy, issued by the same carrier. Both policies covered only an “occurrence” or accident-based injury. The insurance carrier filed a declaratory judgment action asking that the Court conclude there was no coverage under the policy as Carly’s injuries were expected or intended by McCutcheon.

The trial court granted the insurance carrier summary judgment on the basis that Carly’s shooting resulted from “human agency” and that the prospect of injury from a gun firing during a physical struggle over the gun was no less plainly and reasonably anticipated. The Superior Court reversed, closely examining the allegations of the complaint and determining the allegations portrayed a situation of unintentional infliction of injury.

On appeal, the carrier argued that a premediated murder-suicide is not the sort of event that has the requisite degree of fortuity necessary to constitute an “occurrence.” Multiple insurance groups submitted amici curiae briefs also asserting the event lacked the accidental nature of an event for which the coverage was intended. Carly asserted that the Superior Court got it right, and that his injuries, per the complaint in the underlying matter, were plausibly unintentional and therefore accidental. He also asserted that the case law upon which Erie relied were inapposite as they did not involve the accidental discharge of a gun.

The Supreme Court agreed, 4-3, that within the four corners of Carly’s complaint against the Estate, the allegations were that the shooting was accidental. The opinion specifically noted that Carly was not seeking damages for a fistfight or shoving match, but for being shot by the insured. The Court also rejected the carrier’s argument that to find coverage for criminal conduct like McCutcheon’s would incentivize insureds to engage in criminal activity.

In the dissent, the court did not find that the four corners of the complaint made out an accidental shooting. It relied upon several other well-cited opinions noting that the definition of an “accident” is “unexpected.” In that view, they determined that an event was not an occurrence if the result was expected by the insured, even if the specific injury was unintended. McCutcheon intentionally engaged in the physical struggle with Carly while he held and discharged a firearm.

Per the minority, precedent dictated that an insurer is not obligated to defend against such intentional tortious conduct. The complaint could not be reasonably read in a way that suggests McCutcheon did not expect the injury to occur. The minority felt that the majority’s opinion was incorrect to view purely the discharge of the weapon without reference to the context. Further, per the dissent, the majority did not distinguish its analysis as to whether there was an occurrence from whether the occurrence was excluded by the terms of the policies. Both policies, besides being occurrence-based, excluded expected or intended injury even if the degree, kind or quality of the injury or damage was different that what was expected or intended. The minority described the pleadings as “artful” and opined that they could not form the basis of imposing a duty to defend.

The case, Erie Ins. Exchange v. McCutcheon, et al., demonstrates that the Court continues to expand protection for policyholders and disfavor insurers. Carriers should be wary of disclaimers on coverage for close issues in the context of fortuitous injury in apparent intentional torts.