A Case of Murder: No Coverage for Negligence Claims against Co-Insureds

The West Virginia Supreme Court, adopting the majority view, has ruled that intentional acts exclusions in homeowners’ insurance policies precluded coverage for negligence claims against two insureds whose daughters had committed murder.

The Case

The parents of a teenage girl murdered by two of her friends sued the killers and their mothers. The plaintiffs asserted that the mothers had been negligent in their supervision of their daughters in numerous respects, such as by failing to monitor their activities, behavior, and whereabouts. The plaintiffs’ complaint did not allege that the mothers had been involved in the murder or had any reason to know of it.

The insurance companies that had issued homeowners’ insurance policies in favor of the mothers asked a federal district court in West Virginia to determine whether the policies provided coverage for the claims asserted against the mothers in the underlying litigation.

The insurers then moved for summary judgment, arguing that no coverage existed under their policies because there had been no “occurrence” within the meaning of the policies and, even if there had been an occurrence, exclusions for intentional and criminal acts unambiguously excluded coverage.

The district court ruled that the girl’s death was an “occurrence” from the perspective of the mothers but that it was unclear how West Virginia would prioritize the exclusions and severability clauses in the insurance policies to determine whether coverage was available to the mothers in the state court action. Therefore, the district court asked the West Virginia Supreme Court to determine:

(1) Whether, under West Virginia public policy and the rules of contract construction, the exclusions in the policies precluded the mothers, who admittedly had not murdered the plaintiffs’ daughter, from obtaining coverage based on the actions of their own daughters, who also were insureds under the policies; and

(2) Whether the severability clauses in the policies required the insurers to apply the exclusions separately against each insured, based upon that insured’s own actions. 

The West Virginia Supreme Court’s Decision

The court answered the first question in the affirmative and the second question in the negative.  In its decision, the court first found that the exclusions for an intentional or expected act committed by “any insured” or “anyone . . . protect[ed]” were not ambiguous. It pointed out that the “majority of jurisdictions” that had considered the issue had applied intentional acts exclusions similar to the exclusions in the policies insuring the mothers in this case “to preclude coverage to an insured based on the intentional or criminal acts of a co-insured.” As the court pointed out, these courts held that the phrase “any insured” unambiguously expressed “a contractual intent to create joint obligations and to prohibit recovery by an innocent co-insured.”

Here, the court continued, because the underlying plaintiffs’ bodily injury claims arose from the “intentional and criminal conduct” of the mothers’ daughters, the exclusions precluded coverage for all of the underlying plaintiffs’ claims. The court said that West Virginia public policy and rules of construction required courts to apply intentional and criminal act exclusions to torts based on intentional acts even when the claims were “couched in terms of negligence.”

The court next examined the policies’ severability clauses, which stated that the insurance applied separately to each insured.

It explained that numerous courts had reviewed the interplay between severability clauses that applied the insurance policy to all insureds and exclusions based on intentional or expected acts. The majority of these courts had ruled that, where the language of a policy excluded coverage for the intentional acts of “any” insured and an insured committed an intentional or expected act, coverage was excluded for all insureds.

The court adopted the majority position and held that the severability clauses’ command to apply the insurance separately to each insured did “not alter the intentional/criminal act exclusions’ plain meaning or create ambiguity” in the application of the exclusions. The court reasoned that the purpose of severability clauses was “to spread protection, to the limits of coverage, among all of the insureds” and “not to negate unambiguous exclusions.”

Accordingly, the court concluded, because the damages claimed against the mothers all arose from the intentional and criminal conduct of their co-insureds – their daughters – coverage was “excluded under these policies.”

The case is American Nat’l Prop. and Cas. Co. v. Clendenen, No. 16-0290 (W. Va. Nov. 17, 2016).