PA Sup. Ct., “Accident” / “Expected & Intended”:

Claim by 3rd Party Shot During Murder-Suicide Triggers Duty to Defend

The Supreme Court of Pennsylvania, applying Pennsylvania law, affirmed the opinion of the Superior Court of Pennsylvania and held that Erie Insurance had a duty to defend the estate of its insured in a personal injury lawsuit.  According to the Supreme Court of Pennsylvania, the shooting of a third person during a fight, during a planned murder-suicide, constituted an occurrence because the complaint sufficiently alleged that the shooting of the third party was accidental.

Erie Insurance Exchange (“Erie”) insured Harold McCutcheon, Jr. under two policies: Erie Insurance Home Protector Policy and the Erie Insurance Personal Catastrophe Liability Policy.  On Sept 26, 2013, McCutcheon broke into the home of Terry McCutcheon, his ex-wife, with the plan of killing her and then himself with a gun he brought into the home.  After McCutcheon killed his ex-wife, but before he could kill himself, Richard Carly unexpectedly arrived at the home of McCutcheon’s ex-wife.  McCutcheon grabbed Carly, pulled him into the home, and began fighting with Carly while holding the gun.  During the struggle, McCutcheon’s gun fired and struck Carly in the face.  McCutcheon then shot and killed himself.  Carly filed a personal injury lawsuit against McCutcheon’s estate, and the estate sought coverage of the lawsuit under the Erie policies.

The Home Protector Policy provides coverage for “bodily injury or property damage caused by an occurrence,” and the Personal Catastrophe Policy covers personal injury claims caused by an occurrence.  In each policy, “occurrence” is defined as an accident and both policies explicitly exclude insurance coverage if the injury or claim is “expected or intended” by the insured.

Erie determined that it had no duty to defend under either policy because Carly’s injuries were “expected or intended” by McCutcheon and thus excluded.  Erie then filed a declaratory judgment action.  The trial court found in favor of Erie on its motion for summary judgment.  The Superior Court reversed the trial court and held that Erie had a duty to defend.

In an opinion written by Justice Dougherty, the Pennsylvania Supreme Court explained that an insurer has a duty to defend where a complaint alleges an injury that actually or potentially falls within the scope of a policy provision.  The determination of whether an insurer has a duty to defend does not depend on the truthfulness of the allegations in a complaint; for this inquiry, “the allegations are to be taken as true and liberally construed in favor of the insured.”  Further, if any ambiguity or doubt exists about coverage, “the insurer has a duty to defend until the claim is narrowed to one patently outside policy coverage.”

After reviewing the allegations in the complaint, the Pennsylvania Supreme Court determined that the complaint sets forth an injury that potentially falls within the “occurrence” definitions of the policy provisions as an accidental shooting.  The Pennsylvania Supreme Court distinguished cases cited by Erie because, unlike the intentional conduct in those cases, the underlying complaint does not clearly distinguish if McCutcheon purposefully or intentionally shot Carly or if Carly’s injury was “expected.”  Further, the Pennsylvania Supreme Court stated that if Erie wanted to exclude claims that occurred during the commission of a crime, or as a result of a firearm, it could have expressly stated that in its policies.  Instead, Erie’s policy provisions only excluded claims that are “expected or intended.”  If ambiguity exists over whether a policy excludes an injury from coverage, resolution of the issue weighs in favor of coverage since the injury could potentially fall within the policy provision.  The Pennsylvania Supreme Court held that Carly’s injury potentially falls within policy provisions, and therefore, Erie had a duty to defend in the underlying action.

Justice Mundy wrote the dissent and stated that, contrary to the Majority’s opinion, the allegations of the complaint, even when taken as true and liberally construed, do not describe an “accident” that would fall within either “occurrence” definition.  Justice Mundy wrote that the allegations in the complaint do not describe a fortuitous or unexpected occurrence that would trigger Erie’s coverage obligations.  Erie Ins. Exch. v. Moore, No. 20 WAP 2018 (Pa. Apr. 22, 2020).