(I know I’m dating myself here with a TLC joke, but I couldn’t resist.)
Anyway, last week, the Indiana Court of Appeals affirmed summary judgment in favor of the insurer in Deeter v. Indiana Farmers Mutual Insurance Company (the opinion is below). So how does Left Eye Lopes burning down Andre Rison’s house fit into this? Read on.
Rick and Callie Deeter owned a home in Pierceton, Indiana, which was covered by a Farmers’ homeowners policy. Not surprisingly, the policy had an “intentional acts” exclusion that said “‘We’ do not pay for loss which results from an act committed by or at the direction of an ‘insured’ and with the intent to cause a loss.” “Insured,” in turn, was defined as “you,” and “you” means “the person or persons named as the insured on the ‘Declarations’. If ‘you’ are an individual, this includes ‘your’ spouse if a resident of ‘your’ household.” Rick and Callie were listed on the declarations page, so they were both insureds.
One day in March 2011, while Rick was at work, Callie’s niece came to tell her that Rick was having an affair. That set Callie off; she started breaking things, called Rick to tell him she was “tearing up the house,” and then she set a fire in the living room. When the police arrived, Callie admitted to setting the fire. She later pleaded guilty to criminal mischief.
Farmers refused to pay for the damage on the house because–duh–arson. Rick sued, and the trial court granted summary judgment to Farmers because of the intentional act exclusion.
On appeal, Rick argued the intentional acts exclusion was ambiguous because “a reasonable person might interpret that clause to mean that Farmers will not cover loss that results from an intentional act that is intended to cause a loss that will result in property damage or the intent to cause a loss to recover from the insurance policy” and asserted that “while Callie intended to damage their home, she was not motivated to do so because she wanted to recover the proceeds from the insurance policy.” That argument was quickly rejected because the exclusion was clear and unambiguous.
Rick’s other argument was that because he is an “innocent co-insured spouse,” he should not be barred from recovery. In support, he cited a couple of early-1980s Indiana cases that held that “in the absence of any language in the policy that could ‘support an exclusion,’ we would fulfill an ‘innocent co-insured’s’ reasonable expectation to be indemnified for loss,” and that “where an insurance company had not provided an explicit exclusion for intentional loss by a co-insured, it was possible for the innocent spouse to recover.”
That argument fared no better because the Court of Appeals held that “when an insurance company has included an explicit exclusion in its policy to cover loss that results from an intentional act by a co-insured, we will respect the parties’ right to contract and enforce that exclusion.” Since both Rick and Callie were listed as insureds and the policy expressly didn’t cover losses intentionally caused by an insured, Rick was out of luck. So, to the extent those older cases left open the door, the Court of Appeals slammed it shut–presumably in the same way that Callie slammed some doors before exiting the burning house.
(And, yes, I know that the Talking Heads’ “Burning Down the House” would have probably fit much better with this whole post, but I’m already committed to the bit…)