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Insurance Law

Three Sheets To The Win: Policyholder Rewarded For Being Drunk

The court in IDS Property Casualty Ins. Co. v. Schonewolf, No. 13-6039, 2015 U.S. Dist. LEXIS 67542 (E.D. Pa. May 26, 2015), [subscribers can access an enhanced version of this opinion: | Lexis Advance], gave away the ending right at the get-go: “Although I am mindful that courts should not lightly allow a wrongdoer to avoid responsibility by ‘drinking himself into insurance coverage,’ at this juncture I cannot rule out the possibility that coverage exists.”

But to really give away the ending, the court’s decision, that someone can drink themselves into coverage, has a twist -- to get such reward they must be really, really plastered. Just somewhat drunk is not going to cut it.

At issue in this federal court case is coverage for Michael Schonewolf (and Dan Lagreca) who was sued for violently beating John Sweeney in a concert parking lot. The complaint alleged that Schonewolf, who was underage, was intoxicated. Schonewolf sought coverage under his parents’ homeowners policy issued by IDS Property Casualty. IDS provided a defense to Schonewolf and filed an action seeking a determination that it had no duty to defend or indemnify him.

At issue was whether the IDS policy’s “occurrence” requirement was satisfied. Further, the IDS policy contained an expected or intended exclusion.

The policy defined “occurrence” as: “[A]n accident which is unexpected or unintended from your standpoint resulting in bodily injury or property damage during the policy period. It also includes repeated or continuous exposure to substantially the same general harmful conditions.”

The court began its task by turning to the definition of “accident” under Pennsylvania law: “an unexpected and undesirable event occurring unintentionally, and that the key term in the definition of the ‘accident’ is ‘unexpected’ which implies a degree of fortuity. . . . An injury therefore is not ‘accidental’ if the injury was the natural and expected result of the insured’s actions.” The court further noted that, in determining whether IDS had a duty to defend Schonewolf, it must view the events from the perspective of Schonewolf.” From all this, the court concluded: “Given the definition of ‘accident’ in Pennsylvania, ‘an insured is not entitled to coverage for damages caused by his intentional assault on another person.’” A further principle of Pennsylvania law, noted by the court, is that an actor is presumed to intend the natural and expected results of his actions.

On one hand, the court observed, the injuries suffered by Sweeney “were certainly the natural and expected result of Schonewolf’s violent acts, or at least to be expected or intended by one who is not intoxicated.” On other hand, based on Pennsylvania law, “imbibed intoxicants must be considered in determining if the actor has the ability to formulate an intent.” The court explained: “An insured who is intoxicated may lack the ability to formulate the requisite intent to appropriately label his conduct as intentional. That rule is not without its limits. Intoxication would have to be so severe that a court could find that the assailant did not intend the natural and probable consequences of his actions.”

Following a detailed analysis of Pennsylvania law on this issue, the IDS court reached this conclusion:

“As a general rule, a court interpreting an insurance contract seeks to ascertain the intent of the parties as manifested by the terms used in the written insurance policy. It is unlikely the parties expected an alcohol-fueled assault would fall within the realm of homeowner’s insurance. Nonetheless, Mehlman [589 F.3d 105 (3d Cir. 2009)], [subscribers can access an enhanced version of this opinion: | Lexis Advance], makes clear that there are circumstances under Pennsylvania law where the intoxication of an insured can negate intent to a point where the insured’s actions qualify as an ‘accident,’ as the term is understood in Pennsylvania homeowner’s insurance contracts. As noted above, the complaint here pleads less than the ‘alcoholic blackouts’ in Stidham [618 A.2d 945 (Pa. Super. Ct. 1993)], [subscribers can access an enhanced version of this opinion: | Lexis Advance], but more than the mere fact of intoxication in Mehlman. Given that I must construe the allegations liberally and resolve doubts in favor of coverage, I conclude that the language stating that Schonewolf, as an underage drinker, had ‘consum[ed] alcoholic beverages ... knowing that it would cause significant impairment and lapse of judgment and control’ is enough to leave open the possibility that the impairment and lapse in judgment and control was so severe as to negate intent.”

The court applied the same analysis to conclude that the expected or intended exclusion also did not exclude a duty to defend.

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

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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