Insurer Has No Duty to Defend Student Against Association’s Suit Alleging that Student Trespassed on Its Property and Damaged It

June 30, 2013 | Insurance Coverage

A federal district court in Pennsylvania has granted judgment in favor of a homeowner’s insurer, finding that allegations that its insured trespassed on an association’s property, set fire to leaves, and damaged the property were excluded from coverage by the policy’s criminal acts exclusion.  

The Case 

A 22 year old student living with his parents allegedly set fire to leaves on the grounds of Chester Heights Camp Meeting Association, a non-profit corporation, damaging the association’s property.  After the student was charged with a number of crimes, he was admitted into a first offender program and all of the charges, except one trespassing charge, were withdrawn. 

The association sued the student.  His parents asked their insurer, Trustgard Insurance Company, to defend and indemnify him. The insurer sought a declaration that it did not have a duty to defend or indemnify the student.  The parties moved for summary judgment. 

The Court’s Decision 

The court granted judgment in favor of the insurer because the association’s complaint alleged a “direct causal link” between the student’s alleged criminal acts and the property damage.  This causal link supported a finding that the property damage “arose from” the student’s alleged criminal acts within the meaning of the policy’s criminal acts exclusion. 

The fact that all of the charges (except a charge for criminal trespass) were withdrawn when the student agreed to participate in a first offender program did not change the court’s duty-to-defend analysis because the “relevant conduct” was that which was alleged in the association’s complaint.  In any event, the court concluded that the policy exclusion applied regardless of whether the insured actually had been charged with, or had been convicted of, a crime. 

The case is Trustgard Ins. Co. v. Johnson, No. 12-2273 (E.D. Pa. June 12, 2013).

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