Preferred Mutual Insurance v. Gamache

Citations: 42 Mass. App. Ct. 194; 675 N.E.2d 438; 1997 Mass. App. LEXIS 29Docket: No. 95-P-685

Court: Massachusetts Appeals Court; February 5, 1997; Massachusetts; State Appellate Court

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Flannery, J. James Gamache and Henry Andrade, Jr. appeal a summary judgment favoring Preferred Mutual Insurance Company, which declared that Preferred had no obligation to defend or indemnify Gamache under a homeowner’s policy concerning injuries sustained by Andrade, a police officer, during Gamache's arrest. A Superior Court judge determined that the policy's exclusion for injuries resulting from intentional acts exempted Preferred from its duties. The case has been vacated and remanded for further proceedings.

The facts indicate that on September 10, 1991, Andrade and another officer responded to a fight, encountering Gamache, who was injured and behaving aggressively. Despite his resistance, the officers subdued him. Andrade injured his knee while attempting to arrest Gamache, who subsequently faced a civil suit from Andrade for negligent conduct. Gamache was covered under his parents' homeowner’s policy with Preferred, but Preferred refused to defend him in the lawsuit. Before trial, Gamache admitted liability for Andrade's knee injury, stipulating that his liability stemmed from negligent or reckless actions, not intentional conduct.

Following Andrade’s successful civil suit, Preferred sought a declaratory judgment affirming it had no duty to defend Gamache. The motion judge concluded that Gamache’s actions during the arrest were intentional, leading to the summary judgment ruling that Preferred was not liable. The appeal centers on the interpretation of "intentional act" within the context of the homeowner's insurance policy, specifically whether it pertains to the intent to injure or merely the intent to act.

The motion judge noted a distinction in the exclusion's wording compared to previous intentional acts exclusions from the Supreme Judicial Court, which focused on the insured's intent to injure. Prior cases, such as Quincy Mut. Fire Ins. Co. v. Abernathy and Hanover Ins. Co. v. Talhouni, emphasized that coverage for bodily injury or property damage was excluded if it was expected or intended by the insured. The judge determined that the critical issue was whether the injury resulted from an intentional act, rather than the insured’s intent to cause harm. Based on this interpretation, the judge concluded that Gamache’s actions—resisting arrest and grabbing Andrade—were intentional conduct excluded from coverage. The policy defines an "occurrence" as an accident, which is broadly construed as an unexpected event without intention. The court previously held that injuries resulting from a volitional act can still be considered an accident if the insured did not intend to cause harm or was not substantially certain harm would occur. However, in this case, the exclusion specifically referred to bodily injury from "intentional acts," leading Preferred to argue that the focus should be on whether Gamache's act was volitional, irrelevant of intent to injure. Conversely, Andrade and Gamache contended that the term "intentional act" is ambiguous and should be interpreted to focus on intent to cause harm, claiming that a broad interpretation negates the policy’s coverage for accidents. They argued for a strict construction of exclusions, asserting that ambiguities should be resolved against the insurer, thus challenging Preferred’s broad interpretation of "intentional acts."

The use of the term "intentional act" as a basis for excluding coverage under a policy that covers "accidents" introduces ambiguity. In German Mut. Ins. Co. v. Yeager, it was determined that such an exclusion only applies when the insured intends to cause harm, not merely when the insured intends the act itself. Simply replacing "intentional act" with "injuries expected or intended by the insured" does not shift focus from the intent to harm. If policy language can be interpreted in two rational ways, the interpretation favorable to the insured prevails, as established in Hazen Paper Co. v. United States Fid. Guar. Co. The intentional act exclusion can be understood in terms of either the intent to act or the intent to cause harm; this interpretation aligns with Abernathy and emphasizes the intent to cause harm.

Furthermore, the broad interpretation proposed by Preferred lacks limitations, potentially excluding any volitional act from coverage, which could undermine the policy's purpose. Liberty Mut. Ins. Co. v. Tabor asserts that provisions negating coverage are void for public policy reasons. The abstract interpretation of "intentional acts" without considering injury likelihood is not practical in insurance contexts. When intent to cause harm is disputed, granting summary judgment is inappropriate. Preferred claims entitlement to summary judgment by asserting that Gamache’s assault constitutes inferring intent to harm as a matter of law, based on precedents. However, such inference applies only in specific situations, none of which are relevant to Gamache's actions. His behavior, such as grabbing Andrade’s waist, is deemed more neutral compared to previous cases where intent was a matter for fact-finding. Thus, the evidence does not support inferring that Gamache intended to injure Officer Andrade as a matter of law.

Andrade and Gamache contend that Preferred Insurance failed to prove Gamache's intent to cause injury, as Preferred did not provide evidence regarding Gamache's mental capacity. They argue that the trial judge incorrectly concluded that Gamache's actions were intentional despite his intoxication. Preferred counters that the case of Hanover Ins. Co. v. Talhouni is factually different from the current matter, asserting that the principles from Talhouni, which emphasized the need for proof of intent and the impact of intoxication on mental capacity, are not applicable here. The court finds that since Gamache was intoxicated during the incident, his ability to form intent is a material issue that remains disputed.

Furthermore, Andrade and Gamache assert that Preferred breached its duty to defend Gamache in the underlying tort action, thereby binding Preferred to the judgment. The court agrees, stating that the insurer's duty to defend is determined by the allegations in the complaint and the insurance policy. The underlying complaints allege that Andrade was injured due to Gamache's negligent, reckless, or wanton conduct, which are not considered intentional acts under the policy’s exclusion. The court clarifies that negligent conduct cannot be equated with intentional conduct, and while wanton or reckless behavior may sometimes be viewed as intentional in criminal law, it does not hold the same weight in civil insurance coverage. Thus, the allegations in the complaints are interpretable as claims potentially covered by the policy, obligating Preferred to provide a defense.

Preferred had a duty to defend Gamache in a legal matter concerning bodily injury claims. The court determined that a genuine issue of material fact existed regarding Gamache's conduct, leading to the vacating of the prior judgment and remanding for further proceedings to assess whether Preferred also has a duty to indemnify Gamache. Observations during the incident included Gamache exhibiting slurred speech, glassy and bloodshot eyes, an alcohol odor, and unsteady movements, with officers describing him as out of control.

In 1993, an amended complaint was filed by Andrade for loss of consortium on behalf of his wife, which Preferred settled. The insurance policy defined "insured" to include Gamache and specified coverage for bodily injuries resulting from occurrences not excluded by the policy. Despite Gamache's guilty pleas to disturbing the peace and assaulting a police officer, Preferred argued it had no duty to defend or indemnify him. The court rejected this notion, emphasizing that a guilty plea does not definitively establish intent in civil actions and only serves as evidence.

The court highlighted the need to interpret the intentional act exclusion in the context of policy coverage, noting that terms like "intent" and "intentional" do not have fixed legal definitions and can vary by legal context. The genuine issue of material fact regarding Gamache's possible intoxication and its potential impact on his mental capacity rendered summary judgment inappropriate. The stipulation between Gamache and Andrade, which merely stated that Gamache's actions caused injury, was deemed non-material for the judgment.