Insurance Not Triggered Because Pennsylvania Shooter was Drunk, Court Rules

December 22, 2009

The U.S. Third Circuit Court of Appeals has ruled that a man’s drunkenness did not render his attempted shootings of a woman accidental and therefore did not trigger coverage under either his homeowners policy or his personal umbrella liability policy under Pennsylvania law.

The court sided with State Farm Fire & Casualty in denying coverage to Dr. Thomas Mehlman for his March 2005 attempted shootings of Maria Iacono. Iacono survived as the multiple shots fired at her by Mehlman all missed but Mehlman killed himself after the attempts. Iacono then sued Mehlman’s estate, which sought to have his insurance policies pay.

The appeals court concluded that despite Mehlman’s intoxication, Iacono’s alleged injuries were not caused by an accident so there was not an “occurrence” under the homeowners policy or a “loss” under the umbrella policy. State Farm did not owe a duty to defend or indemnify Mehlman under either policy.

“Mehlman’s alleged actions demonstrate that he had an unmistakable intent to cause harm to Iacono. Damages resulting from a violent assault with a deadly weapon are exactly the type of injury against which insurance companies are not and should not be expected to insure,” the appeals court stated.

“Pennsylvania courts will not lightly allow an insured to avoid the financial repercussions of an act of violence by drinking himself into insurance coverage,” the court also wrote.

The case ended up on appeal because a district court had decided that while State Farm did not have a duty to defend or indemnify Mehlman’s estate under his homeowners policy, the insurer did have a duty to defend but not necessarily indemnify him under the personal umbrella policy. Both parties appealed.

Case History

On the afternoon of March 5, 2005, Mehlman left a restaurant in Edgemont, Pennsylvania, visibly intoxicated and cognitively impaired. He walked one and one-half miles to the residence of his girlfriend. Mehlman let himself in, and upon encountering the owner of the residence, Iacono, told her that he wanted to see his girlfriend but Iacono told him his girlfriend was in Colorado.

Mehlman became agitated and aggressive, threatening Iacono, and demanded to see his girlfriend. After Mehlman refused Iacono’s requests to leave, Iacono left the house and walked toward her car. Mehlman approached Iacono’s vehicle in a rage, raised his gun, aimed the weapon at Iacono’s head, and pulled the trigger, but the gun did not discharge.

Iacono attempted to flee, but her car stalled and then crashed it into a tree as she tried to drive away. Mehlman then jumped up on the front of Iacono’s car, aimed his gun at Iacono’s head through the front windshield, and pulled the trigger. The gun, however, again misfired.

Mehlman then approached the passenger side of Iacono’s car, attempted to break the window, and for a third time tried to shoot Iacono but the gun again misfired. When Iacono finally escaped and drove away, Mehlman fired at least one shot in the direction of her vehicle but he missed.

Mehlman returned to the residence. Later a SWAT team entered the residence and found Mehlman dead. A police report indicated that he died from a self-inflicted gunshot wound to his head. Mehlman’s blood-alcohol level at the time the police found his body was 0.21 percent.

Policy Language

Mehlman’s homeowners policy provided $500,000 in liability coverage “[i]f a claim is made or a suit is brought against an insured for damages because of bodily injury . . . caused by an occurrence.” But the policy stated that “bodily injury does not include . . . emotional distress, mental anguish, humiliation, mental distress, mental injury, or any similar injury unless it arises out of actual physical injury to some person.”

The homeowners policy further limited coverage with an exclusion that stated that it does not provide coverage for bodily injury that is either expected or intended by the insured or is the result of “willful and malicious acts of the insured.”

Mehlman’s umbrella policy provided $1,000,000 in liability coverage if an insured is legally obligated to pay damages for a loss.” In a provision that parallels the homeowners policy, it excluded from its coverage personal injury “which is either expected or intended” by the insured, or which was a result of the insured’s “willful and malicious act, no matter at whom the act was directed.”

Iacono sued the Mehlman estate for intentional infliction of emotional distress; negligent infliction of emotional distress; assault with a firearm; and negligence. Mehlman’s estate demanded a defense and indemnification from State Farm under both policies.

State Farm sought a declaration that it did not owe a duty to defend or indemnify under either policy, while the lawyers for Mehlman’s estate and Iacono sought a declaration that State Farm owed those duties under both policies.

A district court concluded that State Farm did not have a duty to defend or indemnify under the homeowners policy because Iacono’s alleged injuries did not constitute “bodily injury” as defined in that policy, but that State Farm did have a duty to defend under the umbrella policy “at least until such time as the factual record can show that Mehlman’s purported state of intoxication did not negate any intent on his part.”

The appeals court noted that the plain language of both policies limited coverage to damage caused by an accident and examined Mehlman’s intent in deciding whether there was an accident so that there was a “loss” or “occurrence” for which there was coverage.

Whether something is an accident can depend on the degree of foreseeability and the state of mind of the actor in intending or not intending the result, according to the court. The Mehlman case centered on the question of whether Mehlman’s intoxication might have rendered conduct accidental even though it otherwise would be regarded as intentional.

While there may be situations in which an insured’s intoxication, particularly when combined with other factors, may call the insured’s intent into question, the court said Mehlman’s situation was not one of them. His actions demonstrated an “unmistakable intent to cause harm to Iacono,” the court found. The court noted that Mehlman intoxication did not keep him from walking one and one-half miles to Iacono’s residence. Also, his repeated attempts to shoot Iacono showed that he knew what he was doing.

“Unlike his gun, which was not functioning as it was intended to do when it misfired, Mehlman certainly was functioning precisely as he intended,” the court said.

By providing coverage only for damages caused by accidents, State Farm expressed its desire to exclude coverage for damages caused by a drunken insured’s violent assault, the court added.

In closing remarks, the court also addressed what is said is tension that arises in intoxication insurance coverage situations:

“On the one hand it is unfortunate that the denial of coverage is likely to deprive an innocent victim from obtaining compensation for her injuries but on the other hand the Pennsylvania cases make plain that it is against the policy of that state to provide insurance coverage for insureds intentionally committing wrongful acts intended to cause injury.

“Moreover, insurance companies are not eleemosynary institutions and thus courts cannot require them to provide coverage beyond the scope of the coverage in their contracts unless duly adopted legal requirements compel the companies to provide such coverage. There is no such legal requirement implicated here.”

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