A recent decision from the Third Circuit addresses a rather timely issue during this holiday season, that is, does inebriation render an intentional act accidental? State Farm Fire & Casualty Co. v. The Estate of Thomas W. Mehlman, 2009 WL 4827027 (3rd Cir. Dec. 16, 2009), holds that for purposes of a liability insurance policy, a person’s intentional act is not rendered accidental simply because one commits the act while inebriated.
State Farm issued two liability insurance policies to Mehlman, a Homeowner’s Policy and an Umbrella Policy. The insuring agreement of the Homeowner’s Policy provided coverage “if a claim is made or a suit is brought against an insured for damages because of bodily injury . . . cost by an occurrence.” The Policy defined an “occurrence” as “an accident, including exposure conditions, which results in” bodily injury. The Homeowner’s Policy excluded a bodily injury “(1) which is either expected or intended by the insured; or (2) which is the result of willful and malicious acts of the insured.”
The Umbrella Policy provided coverage where the insured is “legally obligated to pay damages for a loss.” The Umbrella Policy excluded coverage for personal injury “which is either expected or intended” by the insured, or which was a result of the insured’s “willful and malicious act, no matter at whom the act was directed.”
As the Court aptly characterizes the underlying claim, “the events giving rise to [the] dispute are tragic and bizarre,” involving the toxic triad of a jilted lover, alcohol, and guns. 2009 WL 4827027, at *1. On March 5, 2005, Mehlman began drinking at a restaurant bar. After quickly quaffing a number of drinks, Mehlman became physically intoxicated and cognitively impaired. He then proceeded to walk to the home of his girlfriend, Phyllis Sauter, carrying a backpack containing a .45 caliber handgun. Upon arriving at the home, he encountered her roommate, Maria Iacono, who explained that Sauter was in Colorado. Mehlman then became agitated and aggressive, eventually trying on three occasions to shoot the roommate. Fortunately, Mehlman’s gun repeatedly misfired. After Iacono fled the house, Mehlman committed suicide.
Iacono brought suit against the Mehlman Estate, asserting claims for intentional infliction of emotional distress, negligent infliction of emotional distress, assault with a firearm, and negligence (“the Underlying Action”). The Mehlman Estate demanded defense and indemnification from State Farm pursuant to the Homeowner’s Policy and the Umbrella Policy. State Farm retained counsel to defend the Mehlman Estate, subject to a reservation of rights.
State Farm then brought a declaratory judgment action against the Mehlman Estate and Iacono to determine whether it owed a duty to defend or indemnify the Mehlman Estate in the Underlying Action. The district court granted State Farm summary judgment in part, concluding that State Farm did not have a duty to defend or indemnify the Mehlman Estate under the Homeowner’s Policy because Iacono’s injuries did not constitute “bodily injury” within the meaning of the policy. The district court, however, held that State Farm did have a duty to defend the Mehlman Estate under the Umbrella Policy “at least until such time as the factual record can show that Dr. Mehlman’s purported state of intoxication did not negate any intent on his part.” 2009 WL 4827027, at *3. Applying Pennsylvania law, The Third Circuit reversed.
The Court observed that both Policies defined “occurrence” and “loss” as accidents. 2009 WL 4827027, at *4. Therefore, the dispositive question was whether Mehlman’s actions constituted an accident. Id.
The Court remarked that the Pennsylvania Supreme Court “has emphasized that the fortuity of the events in question is the key factor to consider in making” the determination of what incident constituted an accident. 2009 WL 4827027, at *5. That inquiry “seems to depend on two criteria: 1. the degree of foreseeability and 2. the state of mind of the actor in intending or not intending the result.” Id. What is more, “in determining whether Iacono’s injuries resulted from an accident,” the Court “must view the operative events from Mehlman’s perspective, for State Farm insured him, not Iacono.” Id. Therefore, “it is of no significance in our analysis that the events in question were unexpected as they surely must have been, when viewed through the eyes of Iacono.” Id. Thus understood, “the dispute in this case centers on the question of whether Mehlman’s intoxication might have rendered conduct accidental even though it otherwise would be regarded as intentional.” Id.
The Court observed that under Pennsylvania law, insurance is not available for losses that the insured intended or is aware are substantially certain to occur. Id. More proximately, “the mere fact that an insured was intoxicated . . . will not prevent a court from finding that he intended the natural and probable consequences of his actions.” 2009 WL 4827027, at *6. The Court reasoned that “it is entirely appropriate to recognize this limitation on the consequences of intoxication and coverage disputes, where alcoholic beverages certainly can contribute to the loosening of a person’s inhibitions without eliminating his ability to intend to engage in harmful conduct.” Id. “Indeed, the effect of the use of alcoholic beverages may contribute to a party formulating an intent to engage in anti-social conduct.” Id.
The Court determined that “Mehlman’s intoxication cannot render his alleged actions on March 5, 2005—walking to his girlfriend’s house equipped with a loaded handgun, and, after encountering Iacono, attempting to shoot and kill her—accidental under Pennsylvania law.” 2009 WL 4827027, at *7. Rather, “an actor is presumed to intend the natural and unexpected results of his actions.” Id. The Court sardonically observed that, “Unlike his gun, which was not functioning as it was intended to do when it misfired, Mehlman certainly was functioning precisely as he intended.” 2009 WL 4827027, at *8.
The Court offered the astringent observation that “the Pennsylvania courts will not lightly allow an insured to avoid the financial repercussions of an act of violence by drinking himself into insurance coverage.” Id. The Court hastened to note, however, that “situations may arise in which an insured’s intoxication, particularly combined with other factors, may call the insured’s intent into question.” Id.
It bears particular emphasis that the Court found it material that “there is no allegation in this case that Mehlman was in the midst of an alcoholic blackout and had lost awareness of his actions at the time he assaulted Iacono.” 2009 WL 4827027, at *8. In the Court’s reading of Iacono’s complaint, “the only allegations to support a conclusion that this case involves an accident or that Mehlman was intoxicated and cognitively impaired at the time of the attack, and that he had a blood alcohol level of 0.21 percent when the police discovered his body.” Id. (emphasis added). Nonetheless, the Court determined that even with such a degree of intoxication, Mehlman did not lack an awareness of his actions. Id.
The Court held that “there is no escape from a conclusion that Mehlman’s alleged actions demonstrate that he had an unmistakable intent to cause harm to Iacono.” 2009 WL 4827027, at *9. “Where, as here, the injured party does not make allegations indicating that an insured’s intoxication prevented him from intending the consequences of his violent behavior, we are satisfied that Pennsylvania law does not permit an insured or his representative, i.e., the Mehlman Estate, to shift responsibility for the damages resulting from his behavior to his insurer.” Id.
In a footnote, the Court recognized that the case implicated competing policy considerations:
Our examination of the cases we have cited reveals that there is a tension in intoxication insurance coverage situations. On the one hand, it is unfortunate that the denial of coverage is likely to deprive an innocent victim from obtaining compensation for injuries but on the other the Pennsylvania case makes plain that it is against the policy of the State to provide insurance coverage for insureds intentionally committing wrongful acts intended to cause injury. Moreover, insurance companies are not eleemosynary institutions and thus courts cannot require them to provide coverage beyond the scope of the coverage in their contracts unless duly adopted legal requirements compel the companies to provide such coverage. There is no such legal requirement implicated here.
Id. n. 11.
