I See Dead People Causing Coverage Disputes

Look, it’s not pleasant, but when you are involved in liability claims you will be forced to confront scenarios involving death. It’s simply the nature of the beast. Liability insurance claims are, by their nature, all about when things go wrong. And when things go wrong – really wrong – sometimes there are fatal consequences.

In the typical claim scenario, something happened that caused a fatality. The issue then becomes whether the circumstances that caused the death are covered under the terms of the general liability policy. Was the death caused by an “occurrence?” Was it arising out of the use of an “auto?” Is the decedent an employee of the insured? And the list of possible coverage issues goes on and on.

But this isn’t the only way that death and coverage disputes can collide. Instead of circumstances causing death, which then result in a coverage dispute, sometimes it is death itself that causes the circumstances that then result in a coverage dispute. This shouldn’t be the case. After all, no matter how accident prone someone was in life, how much trouble can they cause after they’ve stop moving? Well, a lot it seems. Despite death’s reputation for finality, the dearly departed have a way of continuing to contribute to insurance coverage jurisprudence.

I found myself thinking about this recently as I was reading Bibeka Shresta’s article in Law360 about two recent decisions that fit within this category. Bibeka reported on the Florida Appeals Court’s April 23rd decision in Rodrigo v. State Farm, [enhanced version available to lexis.com subscribers], which addressed the availability of coverage, under a property policy, for damage to Judy Rodrigo’s condominium when her neighbor’s decomposing body went undiscovered. The court rejected Rodrigo’s argument that coverage was owed because her claim for damage to personal property was caused by a covered “explosion.” This argument was based on a doctor’s testimony that the internal contents of the decomposing body “explosively expanded and leaked.” [Presumably, coverage would be owed under a liability policy issued to the deceased neighbor. Unless it can be argued that decomposition upon death is not fortuitous, and, hence, not an accident/occurrence. Gee, that’s an interesting question actually.]

Bibeka also reported on the Third Circuit’s April 14th decision in Certain Underwriters at Lloyd’s v. Creagh, [enhanced version available to lexis.com subscribers], where the federal appeals court held that the “microorganism exclusion” precluded coverage for $180,000 in damage to an apartment caused by the decomposing body of a tenant (who I suppose is unlikely to recover his or her security deposit). The court concluded that this exclusion (as well as the seepage/pollution exclusion) applied because the fluids that leaked from the body contained bacteria.

Bibeka reported on two decisions where death is what caused the circumstances that then resulted in a coverage dispute. Consider these many other cases in this category:

Rock v. Travelers (Cal. 1916), [enhanced version available to lexis.com subscribers], (addressing coverage for pallbearer that died of heart dilation from the strain of carrying a casket)

Bohreer v. Erie Ins. Group (E.D. Va. 2007), [enhanced version available to lexis.com subscribers], (addressing coverage for a crematorium for delivering ashes of an individual that were those of someone’s pet)

Devillier v. First National Funeral Homes (La. Ct. App. 1964), [enhanced version available to lexis.com subscribers], (addressing coverage arising out of a funeral home dropping a casket during a funeral)

Levine v. State Farm (Ohio Ct. App. 2005), [enhanced version available to lexis.com subscribers], (bad faith suit against auto insurer for declining certain funeral expenses as not “reasonable and necessary”) (no word if the insurer also said that the funeral took too long or prior approval was needed for more than one person to grieve)

Reed v. Netherlands Ins. Co. (E.D. Mich. 2012), [enhanced version available to lexis.com subscribers], (addressing coverage for cemetery for misplacing remains)

State Farm v. Condon (Ohio Ct. App. 2005), [enhanced version available to lexis.com subscribers], (addressing coverage for manipulating and photographing dead bodies in a morgue)

Ripp v. Maryland Casualty Co. (La. Ct. App. 1969), [enhanced version available to lexis.com subscribers], (addressing coverage for a back injury sustained by a mortician on account of carrying a corpse down a stairway) (mortician’s last name was Ripp – I’m not making that up)

Employers Insurance of Wausau v. Martinez (Ky. 2001), [enhanced version available to lexis.com subscribers], (addressing coverage for a cemetery for interring bodies in already occupied graves – 80,000 bodies buried in a cemetery designed to hold 15,000)

State Farm v. Neises (Ct. App. Minn. 1999), [enhanced version available to lexis.com subscribers], (addressing coverage for an individual that broke into a crypt and removed a body)

Scottsdale Indem. Co. v. Lexington Ins. Co. (C.D. Cal. 2012), [enhanced version available to lexis.com subscribers], (addressing which of two insurers was liable for a collision that was allegedly caused by the negligence of a security guard hired to handle traffic for a funeral) (a coverage lawyer’s dream – you cause a coverage dispute on the way to your funeral)

Pasha v. Rosemount Memorial Park (N.J. Sup. Ct. App. Div. 2001), [enhanced version available to lexis.com subscribers], (addressing coverage for cemetery for lowering casket into grave containing three feet of water)

Nationwide v. Garzone (E.D. Pa. 2009), [enhanced version available to lexis.com subscribers], (addressing coverage for crematorium for harvesting organs and selling them)

LeJeune v. Allstate (La. 1978), [enhanced version available to lexis.com subscribers], (addressing coverage for employer of hearse driver for death of (another) passenger in a hearse killed in an intersectional collision during a funeral)

Coverage Opinions is a bi-weekly (or more frequently) electronic newsletter reporting or providing commentary on just-issued decisions from courts nationally addressing insurance coverage disputes. Coverage Opinions focuses on decisions that concern numerous issues under commercial general liability and professional liability insurance policies. For more information visit www.coverageopinions.info.

The views expressed herein are solely those of the author and not necessarily those of his firm or its clients. The information contained herein shall not be considered legal advice. You are advised to consult with an attorney concerning how any of the issues addressed herein may apply to your own situation. Coverage Opinions is gluten free but may contain peanut products.

    Randy Maniloff is Counsel at White and Williams, LLP in Philadelphia. He previously served as a firm Partner for seven years and transitioned to a Counsel position to pursue certain writing projects including Coverage Opinions . Nonetheless he still maintains a full-time practice at the firm. Randy concentrates his practice in the representation of insurers in coverage disputes over primary and excess obligations under a host of policies, including commercial general liability and various professional liability policies, such as public official’s, law enforcement, educator’s, media, computer technology, architects and engineers, lawyers, real estate agents, community associations, environmental contractors, Indian tribes and several others. Randy has significant experience in coverage for environmental damage and toxic torts, liquor liability and construction defect, including additional insured and contractual indemnity issues. Randy is co-author of “General Liability Insurance Coverage - Key Issues In Every State” (Oxford University Press, 2nd Edition, 2012). For the past twelve years Randy has published a year-end article that addresses the ten most significant insurance coverage decisions of the year completed.

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