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Insurance, as I have said often, only insures against fortuitous events. If the event is either contingent or unknown it can be insured against.
In Smith v. Patton, Slip Copy, 2015 Wisc. App. LEXIS 547 (Wis.App., July 2015), [subscribers can access an enhanced version of this opinion: lexis.com | Lexis Advance], Badger Mutual Insurance Company appealed from a nonfinal order denying its motion for summary judgment. The dispositive issue presented to the appellate court was whether its automobile liability policy provided coverage for an individual who injured someone with a car during a premeditated robbery.
In February 2011, Deandre T. Patton, then age sixteen, arranged via Craigslist to purchase a Samsung tablet from Carmen Smith. In fact, however, Patton intended to-and did-steal the tablet by having Smith meet him and an accomplice at Patton’s car in a store parking lot and then driving away without paying for the item.
Unfortunately for all involved, Smith leaned into the car while Patton’s accomplice examined the tablet and lunged further into it as Patton began to accelerate away. Patton’s accomplice pushed or punched Smith to force him out of the car. The car then “fishtailed” on the icy surface of the parking lot, running over and seriously injuring Smith.
Patton and his accomplice were convicted on criminal charges related to the incident. Smith subsequently sued Patton and his automobile insurer, Badger Mutual, for his injuries. Badger Mutual disputed coverage and moved for summary judgment on the issue. The circuit court denied the motion. Badger Mutual appealed.
Summary judgment is proper when there are no genuine issues of material fact and one party is entitled to judgment as a matter of law. Additionally, the interpretation of an insurance policy is a question of law.
On appeal, Badger Mutual contended that the circuit court erred in denying its motion for summary judgment. Specifically, it argued that its policy provided no coverage because the injury causing event was not an “auto accident.”
Badger Mutual’s policy provides that it “will pay damages for ‘bodily injury’ or ‘property damage’ for which any ‘insured’ becomes legally responsible because of an auto accident.” As “auto accident” is not defined in the policy, Badger Mutual urges us to look to case law for guidance.
One case Badger Mutual cites in support of its argument is Schinner v. Gundrum, 2013 WI 71, 349 Wis.2d 529, 833 N.W.2d 685, [subscribers can access an enhanced version of this opinion: lexis.com | Lexis Advance]. In Schinner, West Bend Mutual Insurance Company’s insured, Michael Gundrum, hosted an underage drinking party. One of Gundrum’s guests, Matthew Cecil, assaulted and seriously injured another guest. Gundrum knew that Cecil had a tendency to become belligerent when he was intoxicated, but he permitted Cecil to drink anyway. The injured guest sued Gundrum and West Bend to recover damages for his injuries. West Bend disputed coverage on the ground that Gundrum’s actions as a party host were intentional, and thus, there was no “occurrence” or “accident” under its homeowner’s policy.
The Wisconsin Supreme Court accepted review of the case and agreed with West Bend. The court determined that there was no “occurrence” or “accident” under the homeowner’s policy because Gundrum intended to host an illegal underage drinking party and intended to provide alcohol to a guest known to become belligerent when intoxicated, creating a direct risk of harm resulting in bodily injury even though injury was not intended. Finding an occurrence and coverage would allow recovery for intentional and illegal actions. The court would be sending the wrong message about underage drinking parties, implying that whatever tragic consequences might occur, insurance companies will be there to foot the bill.
Insurance contracts are construed from the standpoint of what a reasonable person in the position of the insured would believe the contract to mean. Although Schinner involved a homeowner’s policy, the court found its reasoning applicable here. By planning and carrying out a robbery facilitated by the use of a car on icy pavement, Patton created a direct risk of harm even though injury was not intended. Indeed, Patton admitted as much during a deposition.
The public policy considerations in Schinner are also applicable to this case. Finding insurance coverage for Patton’s actions would relieve him of the financial consequences of purposefully using his car to facilitate a robbery. No reasonable insured would expect automobile liability coverage for bodily injury resulting from the purposeful use of a car to rob someone.
The appellate court found, without difficulty, the obvious. Criminal conduct, and any injuries resulting from it, cannot be accidental. A criminal act, like a robbery using an automobile, that results in injury to the victim of the robbery, is sufficient to bar coverage. If not the criminal will profit from his crime a result that no state’s public policy should allow.
By Barry Zalma, Attorney and Consultant
Reprinted with Permission from Zalma on Insurance, (c) 2015, Barry Zalma.
Barry Zalma, Esq., CFE, is a California attorney who limits his practice to consultation regarding insurance coverage, insurance claims handling, insurance bad faith and fraud and acting as a mediator or arbitrator on insurance disputes. Mr. Zalma serves as a consultant and expert almost equally for insurers and policyholders. He founded Zalma Insurance Consultants in 2001 and serves as its only consultant. He recently published the e-books, "Zalma on Rescission in California - 2013"; "Random Thoughts on Insurance" containing posts from this blog; "Zalma on Insurance;" "Murder and Insurance Don't Mix;" “Heads I Win, Tails You Lose — 2011,” “Zalma on Diminution in Value Damages,” “Arson for Profit” and “Zalma on California Claims Regulations,” and others that are available at Zalma Books.
Mr. Zalma can be contacted at or firstname.lastname@example.org, and you can access his free "Zalma on Insurance Fraud" newsletter at Zalma’s Insurance Fraud Letter.
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