Despite Assault Exclusion, Razor Attack Covered by Policy Because of Mental Illness

There was no argument that Colin Doherty, a resident at the Brown County Care Center, slashed Austin Krewina’s face with a razor blade.

But a criminal court found Doherty not guilty of assault and battery because he was insane at the time of the attack. That means United Specialty Insurance Co. cannot deny coverage because of an exclusion for damages caused by assaults and alleged assaults, the panel of the Ohio Court of Appeals ruled.

The First Appellate District panel reversed a ruling by the Hamilton County Court of Common Pleas that dismissed a lawsuit filed by Krewina. He wants to collect on a settlement agreement with BCCC that pledges $952,924.36, plus interest.

The court found that even the exclusion for “alleged assaults” does not apply.

“When an allegation is disproven—as it was here—an insurer cannot escape coverage simply because someone made an allegation at one point in the process,” the opinion says. “Doherty’s criminal allegations are not perpetual. Rather, the final judgment of an Ohio court extinguished the allegations.”

The panel also found that USIC cannot rely on an endorsement in the commercial general liability policy that limited coverage for physical abuse claims to $25,000, ruling that physical abuse requires a person to act knowingly.

One of three judges on the panel wrote a concurring opinion that suggests the Ohio Supreme Court revisit the 1995 decision that required it to reverse the trial court’s ruling: Nationwide Ins. Co. v. Estate of Kollstedt. In that case, the high court ruled that a homeowner’s insurer was required to defend a policyholder who fatally shot a fellow resident at a mental health center despite an intentional acts exclusion.

“It does not make sense to me to have the exclusion dependent upon the mental state of the perpetrator as opposed to the conduct trying to be excluded under the policy,” wrote Judge Beth A. Myers. She concluded, however, that the Kollstedt decision requires a finding that coverage is owed.

Doherty and Krewina were both residents of BCCC, which houses adults transitioning from jails and restrictive health facilities, at the time of the 2014 attack. Krewina suffered multiple lacerations to his face.

Prosecutors charged Doherty with assault, but the Brown County criminal court found he was not guilty by reason of insanity. The court found that Doherty suffered paranoia and auditory hallucinations that compelled him to attack and ordered him into involuntary commitment.

Krewina sued the Brown County Care Center in 2016. After USIC refused to coverage, BCCC sued its insurer. While those lawsuits were pending, BCCC and Krewina agreed to a settlement that assigned the care facility’s claims to Krewina. He appealed after the Hamilton County court dismissed BCCC’s lawsuit.

During oral arguments, attorney Richard Garner argued that Ohio courts had ruled previously that insurers may “contract around” the Kollstedt ruling. He said USIC used a “categorical exclusion” for alleged assaults as well as actual assaults to limit its risk and keep coverage affordable. The facility paid only $1,000 for its USIC policy, he said.

“What happens if an entity like BCCC is forced to buy insurance for something like this, the cost of their (liability) insurance becomes astronomical,” said Garner, who is a partner with the Collins Roche Utley & Garner in Dublin, Ohio. “What this does, is it keeps coverage affordable for bars, nursing homes, sports arenas and other places where violence is likely to happen.”

Krewina’s attorney, Brian Butler with Mezibov Butler in Cincinnati, argued that BCCC is not seeking coverage for its vicarious liability for an assault; it had asked USIC to provide coverage for its negligent supervision of its residents. Butler said facility staff knew that Doherty was suffering delusions and had been committed to a previous mental health facility because he had attempted to murder his mother.

“USIC does not dispute that Mr. Doherty was unable to control his own actions,” Butler said.

That lack of control led the appellate panel to find that the Kollstedt decision applied to the case. The fact that USIC excluded alleged assaults in edition to actual assaults is not important, the opinion says.

“Because Doherty ‘suffered from a derangement of his intellect which deprived him of his capacity to govern his conduct in accordance with reason,’ Doherty did not act intentionally, knowingly, or recklessly,” the court said, citing the Kollstedt opinion. “Therefore, Krewina’s bodily injury did not arise out of an actual assault or battery.”

The appellate panel reversed the decision of the Hamilton County court and remanded the case with instructions to enter judgment against USIC.

About the photo: Attorney Brian Butler speaks during oral arguments held before the 1st District of the Ohio Court of Appeals in October.