INSURANCE EXCLUSION FOR INTENTIONAL ACTS: NATIONWIDE MUTUAL FIRE INS. CO. V. PELGEN (COA 6/22/2007)

NATIONWIDE MUTUAL FIRE INS. CO. V. PELGEN
INSURANCE:  Exclusion for intentional acts and "inferred intent" rule
2006-CA-000749
PUBLISHED: REVERSING
PANEL: VANMETER, PRESIDING; PAISLEY CONCURS; STUMBO DISSENTS W/SEP. OPINION
COUNTY: CAMPBELL
DATE RENDERED: 6/22/2007

COA reverses holding in declaratory action which held that Nationwide could not rely exclusions to deny coverage in a shooting death.

Charles R. Swope fatally shot his estranged wife and himself. The record shows years of mental illness on his part. His administratrix sought coverage under the couple’s homeowners policy; Nationwide denied personal liability and medical coverage under the intentional act exclusion and the criminal act exclusion. Nationwide then filed this dec action.

After a hearing, the TC held that Nationwide could not rely on either exclusion b/c it was undisputed that Mr. Swope lacked the capacity to understand the physical nature of the consequences of his actions.

Nationwide argues on appeal that the TC abused its discretion in rejecting the "inferred intent" rule. CA agreed, noting that the rule is  supported by sound public policy principles, in part because it removes from the trial court the burden of determining an actor’s thought process when engaging in conduct resulting in harm.

by John Hamlet

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