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Killing two dogs is an intentional act



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Norma Hudson and the Hudson Revocable Trust (the Trust) appealed from a summary judgment in favor of Farm Bureau Mutual Insurance Company of Arkansas, Inc. (Farm Bureau). In the summary judgment, the court found that the Farm Bureau had no duty to defend or indemnify the appellants as a result of a lawsuit against the Trust by Dewayne Evans, Mark White and Billy Taylor. IN Norma Hudson And Hudson Revocable Trust v. Farm Bureau Mutual Insurance Company Of Arkansas, Inc.., No. CV-21-396, Court of Appeals of Arkansas, Division II (Oct. 5, 2022), the appellate court resolved the coverage dispute.

FACTS

Benjamin Hudson (Norma̵

7;s adult grandson) shot and killed two coon dogs and allegedly traumatized a third on property owned by the Trust. The dog owners sued Benjamin Hudson (Benjamin) and the Trust, alleging destruction of property, negligence and nuisance, and seeking compensatory and punitive damages. The allegations in the complaint against the foundation were that Benjamin was hired to oversee the foundation’s property, that he acted within the scope of that authority, and that his outrageous conduct was ratified by the foundation.

Norma has two policies with the Farm Bureau. One policy is a homeowner’s policy that insures the property where the shooting occurred, and the other is a property owner’s policy. After the dog owners sued Norma and the Trust filed a claim with the Farm Bureau for coverage under the policies. Farm Bureau subsequently sued seeking a declaratory judgment that it was not obligated to defend or indemnify Benjamin, Norma, or the Trust based on exclusionary language in the policies relating to bodily injury or property damage resulting from intentional acts.

The policies provided that Farm Bureau provided that there is no coverage for “bodily injury or property damage caused intentionally by you or someone covered or at the direction of you or anyone covered by it” and it “[t]expected or unexpected results of such actions are not covered.” (My emphasis.)

Farm Bureau argued that the dog owners’ complaint alleged that Benjamin was acting as an agent for the Trust when he shot the dogs. Farm Bureau argued that because the policies expressly excluded liability coverage for damages arising out of an intentional act, it had no duty to defend or indemnify Norma or the Trust and should be granted summary judgment.

The trial court agreed and entered an order granting Farm Bureau’s motion for summary judgment. More specifically, the district court found:

  • Liability insurance coverage is expressly and unequivocally excluded under both the homeowner’s policy and the property owner’s policy for bodily injury or property damage resulting from an insured’s intentional conduct.
  • That it is alleged in the underlying lawsuit that Benjamin C. Hudson was acting on behalf of the Hudson Revocable Trust at the time of the subject incident, and it is undisputed in this matter that Benjamin C. Hudson acted intentionally when he shot the dogs during the course of the subject incident.
  • That, under Arkansas law, liability insurance coverage is excluded under the Homeowner Policy and Property Owners Policy from covering Dewayne Evans, Mark White and Billy Taylor’s alleged injuries in the underlying lawsuit and related to the dog shooting incident.

ANALYSIS

Once the moving load has established a prima facie right to summary judgment, the opposing party must meet the evidence with evidence and show that there is a material issue of fact. On appeal, the appellate court must determine whether summary judgment was appropriate based on whether the evidence presented by the moving party in support of the motion leaves a material fact unanswered. The Court of Appeal views the evidence in the light most favorable to the party against whom the claim was brought, and resolves all doubts and inferences against the moving party. The review focuses not only on the pleadings but also on the affidavits and other documents submitted by the parties.

Arkansas law regarding the construction of insurance contracts is well settled and requires that the language of an insurance policy be interpreted in its ordinary, usual and popular meaning. If the language of the policy is unambiguous, the appellate court will give effect to the plain language of the policy without recourse to the rules of construction.

Once it is established that coverage exists, it must be determined whether the exclusionary language of the policy eliminates coverage. Exclusive endorsements must comply with the general requirements that the insurance terms must be expressed in clear and unambiguous language. If a provision is unambiguous and only a reasonable interpretation is possible, the court will give effect to the plain language of the policy without recourse to the rules of construction.

Appellants have argued that the undisputed facts show that the insured, Norma, did not shoot the dogs, nor did she direct or encourage Benjamin to shoot the dogs. Appellants state that it is implied in the trial court’s ruling that Benjamin was acting on behalf of the Trust when the undisputed evidence—the affidavits submitted by Norma and Benjamin proved otherwise.

The Court of Appeals disagreed, holding that Farm Bureau was properly granted summary judgment. In the dog owners’ complaint against Benjamin and the Trust, they alleged that Benjamin intentionally shot the dogs while acting within the scope of authority to oversee the Trust’s property and that his outrageous behavior was ratified by the Trust. Upon review of the factual allegations in the complaint, the policies unequivocally exclude coverage for “bodily injury or property damage caused intentionally by you or anyone covered by it or at the direction of you or anyone covered by it.” (My emphasis.)

The obligation to defend oneself occurs when there is a possibility that the damage falls within the insurance cover. If there is no possibility that the injury alleged in the complaint may be covered by insurance, there is no duty to defend.

The Court of Appeals concluded that there is no possibility that the injury alleged in the complaint would fall within the insurance coverage, because if Benjamin was acting on behalf of the board, as alleged in the dog owners’ complaint, the insurance was excluded because having committed an intentional act would apply and defeat coverage. Conversely, if Benjamin acted unilaterally and not on behalf of the Trust, the Farm Bureau policy would not provide coverage because Benjamin was not a named insured as defined in the policies.

Therefore, the district court’s decision on summary judgment was upheld.

The Trust denied causation and claimed the shooter did not act for it. If he acted for the trust, there was no coverage because of the intentional act. If he did not act for the trust, he was not an insured and there is no coverage. Intentionally killing two thin dogs can never be a covered event under any liability insurance.

(c) 2022 Barry Zalma & ClaimSchool, Inc.

Barry Zalma, Esq., CFE, now limits his practice to serving as an insurance consultant specializing in insurance coverage, insurance claims management, insurance bad faith and insurance fraud almost equally for insurers and policyholders. He practiced law in California for more than 44 years as an insurance coverage and claims attorney and more than 54 years in the insurance industry. He can be reached at http://www.zalma.com and zalma@zalma.com. Subscribe and receive videos limited to Excellence in Claims Handling subscribers at locals.com https://zalmaoninsurance.locals.com/subscribe.Subscribe to Excellence in Claims Handling at https://barryzalma.substack.com/welcome.

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