Alternate Intentional Loss Exclusion Defeats Coverage for Wrongful Death From a Single, Criminal Blow

A verbal altercation that turned into a physical confrontation between two men on May 23, 2010, in Portland, Maine led to the recent Supreme Court ruling to affirm a trial court’s decision to uphold an insurer’s summary judgment.

After William Googins commented about Eric Benson’s female companion, Googins struck Benson in the face, causing him to fall backwards, hit his head on the pavement and die. Although Googins testified multiple times in deposition that he intended to strike Benson in the face, he testified, also, that he did not intend or expect to hurt Benson by punching him. Googins pleaded guilty to aggravated assault and served about two years of a ten year prison sentence.

Benson’s estate sued Googins, who settled for a $400,000 stipulated judgment against himself based on his contractual admission that his “negligence” caused Benson’s death. Googins assigned to Benson’s estate all of Googins’s rights under a homeowner’s policy issued by Metropolitan Property And Casualty Company to Googins’s grandmother, with whom he claimed to live, which made him an additional insured under the policy. Based on the judgment, which the estate agreed not to execute against Googins personally, the estate filed what is known as “reach-and- apply” lawsuit against Metropolitan under Maine Insurance Code Section 2904, which permits a judgment creditor to have proceeds of his judgment debtor’s insurance policy paid to the creditor to satisfy the judgment.

In the ensuing litigation with the estate, Metropolitan was granted summary judgment of non-coverage based upon the policy’s intentional loss exclusion. That ruling was challenged on appeal to the Supreme Judicial Court of Maine and affirmed in Metropolitan v. Estate of Eric E. Benson, 2015 Me LEXIS 168, decided December 1, 2015.

Metropolitan’s intentional loss exclusion read as follows:

1. Intentional Loss. We do not cover bodily injury or property damage which is recently expected or intended by you or which is the result of the your intentional and criminal acts or omissions. This exclusion is applicable even if:

A. you lack the mental capacity to govern your conduct;
B. such bodily injury or property damage is of a different kind or degree than reasonably expected or intended by you; or
C. such bodily injury or property damage is sustained by different person than expected or intended by you.

In the course of its opinion, the Supreme Court identified the three elements of required proof to establish coverage for Benson’s death under the homeowner’s policy. First, to qualify as an insured under the policy, Googins must have been a resident of his grandmother’s household. Second, the injury must have arisen from an “occurrence”, defined by the policy as an “accident.” Third, Benson’s injury and death cannot be result of an “intentional loss.” Metropolitan was within its right to deny coverage if any one or more of these three elements was not satisfied. Metropolitan, in its arguments on appeal, assumed the first two coverage predicates were satisfied, so the Supreme Court did not address them.

Instead, the Court concentrated on the policy’s intentional loss exclusion, observing that, by use of disjunctive language in its first sentence, that exclusion actually creates two separate exclusions. The first excludes coverage for bodily injury or property damage reasonably expected or intended by the insured – here assumed to be the status of Googins as a resident of his grandmother’s household. The second exclusion, according to the Court, is for bodily injury or property damage resulting from an insured’s intentional and criminal acts or omissions. The opinion on appeal focused on the second part of the intentional loss exclusion, not the first. Although the Supreme Court had previously addressed exclusions similar to the first, it had not considered before the language found in the second exclusion. Whereas the earlier decisions establish that an “expected or intended” policy exclusion applies only when the insured has acted with the intention or expectation that another will be harmed by the insured’s intentional act, the Court held that those decisions did not apply to the second clause of the intentional loss exclusion, i.e, that the insured’s expectation or intention to create harm is not necessary to invoke the second exclusion.

As precedent for that proposition, the Maine Court looked to a sister state decision from Massachusetts, coincidentally litigated by the same insurer, Metropolitan. That decision, Metropolitan Property Casualty Insurance Co. v. Morrison (2011) 460 Mass. 352, 951 N.E. 2d 662, held that the second exclusion is unambiguous and applies where the insured intended to commit only the conduct that caused injury and where the conduct was criminal. Instead of requiring proof of the insured’s intent to cause the ultimate harm, the Massachusetts court held that the exclusion was distinct from other exclusions because it is predicated on conduct that is both intentional and criminal. This was persuasive to the Maine Supreme Court, which concluded that the second clause of the intentional loss exclusion is unambiguous and requires an intentional and criminal act, but not the intent to cause the injury inflicted. That Court held that the explanatory language of the policy intentional acts exclusion’s three subparts, A, B and C, were unnecessary to consider, since the second exclusion is itself unambiguous.

The Court noted its ruling was limited to the precise language of the second of the two intentional loss exclusions, triggered by intentional and criminal acts or omissions. The new ruling, the Court said, does not affect the Court’s previous decisions construing the first of the two intentional loss exclusions, which is without the limiting principle of criminality. That first exclusion, the Court repeated, applies only when the insured has acted with the intention or expectation that another will be harmed by the insured’s intentional act. The court observed that if in such cases, involving the first exclusion only, the Court had held that coverage for an act is excluded as “intentional” if it is merely volitional, then “all losses that resulted from an insured’s conscious action would not be covered. Such an interpretation would have been sweeping and effectively negated coverage in nearly all cases,” the Court said.

Referring to the evidentiary context of the case before it, the Court found that the summary judgment record established that the act of Goggins was both intentional and criminal. Intentional conduct was established by Goggins’s testimony multiple times in deposition that he intended to strike Benson in the face. Because the Court did not rely upon the first of the two intentional acts exclusions of the Metropolitan policy, Googins’s testimony that he did not intend or expect to hurt Benson by punching him was held by the Court to be irrelevant to the second exclusion, because that exclusion is predicated on whether the insured intended to commit the act causing the harm, not on whether the insured intended the ultimate harm that occurred.

There was no genuine issue of material fact, either, whether Googins’s conduct was criminal. He pleaded guilty to charges of aggravated assault and served over two years in prison as a result of punching and ultimately killing Benson. Although the guilty plea to assault, standing alone, did not conclusively prove intent as a matter of law, because assault can be committed recklessly, this was beside the point regarding the second exclusion, according to the Court, because Googins’s testimony in deposition demonstrated an unequivocal intent to strike Benson in the face.

Since there were no genuine issues of material fact regarding applicability of the second intentional loss exclusion, the Court upheld the trial court’s grant of summary judgment of no coverage in favor of Metropolitan.