Erie Ins. Exch. v. Moore

228 A.3d 258

ERIE INSURANCE EXCHANGE, Appellant

v.Tracy L. MOORE and Harold E. McCutcheon, III, Individually and as Administrators of the Estate of Harold Eugene McCutcheon, Jr., and Richard A. Carly, Appellees

No. 20 WAP 2018

Supreme Court of Pennsylvania.

Argued: April 11, 2019

Decided: April 22, 2020

OPINION

JUSTICE DOUGHERTY¹

We consider whether the alleged conduct of an insured, Harold Eugene McCutcheon, Jr. (McCutcheon), as described in a personal injury lawsuit filed against his estate by Richard A. Carly (Carly), obligates McCutcheon's insurer, appellant Erie Insurance Exchange (Erie) to defend the estate against Carly's complaint. We hold Carly's allegations were sufficient to trigger Erie's duty to defend and accordingly affirm the order of the Superior Court.

I.

The following material facts are alleged in Carly's complaint. On the evening of September 26, 2013, McCutcheon broke into the home of his ex-wife, Terry McCutcheon, in order to shoot and kill her, and then kill himself. He communicated these intentions in a note he left for his adult children. McCutcheon succeeded in executing this plan, first shooting and killing Terry and, eventually, shooting and killing himself. However, after McCutcheon killed Terry but before he killed himself, Carly arrived on the scene. Carly, who had been dating Terry, approached the front door of her home, rang the doorbell and received no answer. Carly became concerned, placed his hand on the doorknob "in order to enter and the door was suddenly pulled inward by [McCutcheon] who grabbed [Carly] by his shirt and pulled him into the home." McCutcheon was "screaming, swearing, incoherent, and acting ‘crazy.’ " Then, "a fight ensued between the two and at the time, [McCutcheon] continued to have the gun in his hand" which he apparently had used to kill Terry. During this "struggle" between the two men, McCutcheon was "knocking things around, and in the process [he] negligently, carelessly, and recklessly caused the weapon to be fired which struck [Carly] in the face," causing severe injuries. In addition, "other shots were carelessly, negligently and recklessly fired" by McCutcheon, "striking various parts of the interior of the residence and exiting therefrom." Carly Complaint, 2/20/2014 at ¶¶5-21.

Carly filed suit against McCutcheon's estate, and the estate — administered by McCutcheon's adult children — sought coverage of the lawsuit under two insurance policies issued by Erie to McCutcheon: the Erie Insurance Home Protector Policy (homeowner's policy) and the Erie Insurance Personal Catastrophe Liability Policy (personal catastrophe policy).

McCutcheon's homeowner's policy states, in relevant part:

We will pay all sums up to the amount shown on the Declarations which anyone we protect becomes legally obligated to pay as damages because of bodily injury or property damage caused by an occurrence during the policy period. We will pay for only bodily injury or property damage covered by this policy.

Homeowner's Policy at 14. The homeowner's policy defines an "occurrence" as "an accident, including continuous or repeated exposure to the same general harmful conditions." Id . at 5. Similarly, McCutcheon's personal catastrophe policy provides coverage for amounts an insured becomes legally obligated to pay due to personal injury resulting from an "occurrence," and defines a covered "occurrence" as "an accident, including continuous or repeated exposure to conditions, which results in personal injury or property damage which is neither expected nor intended." Personal Catastrophe Policy at 3-4. Finally, both policies expressly exclude from coverage "bodily injury, property damage or personal injury expected or intended by anyone we protect." Homeowner's Policy at 15; Personal Catastrophe Policy at 4 (excluding "personal injury or property damage expected or intended by anyone we protect"). The homeowner's policy further provides expected or intended injury is excluded even if "the degree, kind or quality of the injury or damage is different than what was expected or intended," or "a different person, entity, real or personal property sustained the injury or damage than was expected or intended." Homeowners Policy at 15. Based on these provisions, Erie concluded it owed no coverage to the estate because Carly's injuries were not caused by an accidental "occurrence," but rather were "expected or intended" by McCutcheon. As a result, Erie filed the present declaratory judgment action.

The parties engaged in discovery and eventually filed cross-motions for summary judgment. The trial court agreed with Erie and granted summary judgment in its favor, holding Erie had no duty to defend the estate against Carly's complaint. The court reasoned "[t]he shooting of Carly plainly resulted from human agency. Moreover, the prospect of injury from a gun firing during a physical struggle over that gun was no less plainly and reasonably anticipated." Erie Ins. Exch. v. Moore , No. CR 2014 – 4931, unpublished order at 7, 2016 WL 11513406 (Wash. Co. filed May 31, 2016), citing United Serv. Auto. Ass'n v. Elitzky , 358 Pa.Super. 362, 517 A.2d 982, 989 (1986) ("An insured intends an injury if he desired to cause the consequences of his act or if he acted knowing that such consequences were substantially certain to result."). The court stated the shooting "cannot fall within the definition of an accident," and "the deliberate conduct of [McCutcheon] did not constitute an ‘occurrence’ that would trigger coverage[.]" Id . The court further opined the use of the terms "negligently, carelessly, and recklessly" in Carly's complaint did not result in a duty to defend; instead, the court found "no evidence that the shooting was accidental or negligent." Id . at 8. Specifically, the court noted McCutcheon "forcibly pulled Carly inside," and after Carly was shot, McCutcheon "did not verbally indicate that he did not mean to injure Carly nor did he attempt to assist Carly in any way." Id . The court concluded McCutcheon thus "intended to cause serious harm to Carly." Id .²

On appeal, the Superior Court reversed in a published opinion. Erie Ins. Exch. v. Moore , 175 A.3d 999 (Pa. Super. 2017). The panel considered whether the allegations of the complaint set forth a claim that the shooting was a covered occurrence, i.e. , an accident resulting in injuries that were not expected or intended by the insured. Id . at 1009. The panel observed "gunshot wounds commonly are inflicted deliberately," but "not all injuries from gun violence are intentional." Id . at 1010. The panel eschewed "abstract notions about the reasonably foreseeable results of gun violence" and focused instead on "the specific events that gave rise to Carly's injuries as a result of McCutcheon's brandishing of a firearm." Id ., citing , inter alia , Elitzky , 517 A.2d at 987 ("Insurance coverage is not excluded because the insured's actions are intentional unless he also intended the resultant damage. The exclusion is inapplicable even if the insured should reasonably have foreseen the injury which his actions caused.").³ The panel recognized the complaint's "legal terminology" of negligence and carelessness "cannot control the outcome," but nevertheless determined the allegations "fairly portray a situation in which injury may have been inflicted unintentionally." Id . at 1012. Distinguishing prior cases where the allegations of the complaint clearly described intentional conduct by an insured, the panel concluded Erie had a duty to defend McCutcheon's estate against Carly's lawsuit.⁴

Erie filed a petition for allowance of appeal and we granted discretionary review of the following questions:

1. Does the Superior Court's ruling that shooting a person during a fight, in turn, during a planned murder-suicide, constituted an "occurrence" under a liability insurance policy conflict with Pennsylvania law as established by this Court?

2. Does the Superior Court's ruling conflict with its own decision in American National Property and Casualty Co. v. Hearn , 93 A.3d 880 (Pa.Super. 2014), and misconstrue the intentional acts exclusion of a liability insurance policy?

3. Does the Superior Court's ruling conflict with Pennsylvania public policy, as stated in Mutual Benefit Ins. Co. v. Haver , 555 Pa. 534, 725 A.2d 743, 747 ( [Pa.] 1999), that liability insurance does not cover damages caused as a result of evil or illegal conduct?

Erie Ins. Exch. v. Moore , 647 Pa. 321, 189 A.3d 382 (2018) (per curiam ). The issues present legal questions as to which our scope of review is plenary and our standard of review is de novo . Skotnicki v. Ins. Dep't , 644 Pa. 215, 175 A.3d 239, 247 (2017). We consider whether the Superior Court erred when it reversed the trial court's grant of summary judgment in favor of Erie, and more specifically, whether the trial court erroneously determined the "four corners of the complaint" cannot support a conclusion that Carly's injuries were caused by a covered "occurrence." See, e.g., American & Foreign Ins. Co. v. Jerry's Sport Ctr., Inc ., 606 Pa. 584, 2 A.3d 526, 541 (2010) ("[W]hether a claim is potentially covered is answered by comparing the four corners of the insurance contract to the four corners of the complaint.").

II.

A.

Erie argues the trial court correctly granted summary judgment in its favor and the Superior Court erred in reversing that decision. Erie contends it does not have a duty to defend McCutcheon's estate against Carly's lawsuit because the factual allegations in the Carly complaint do not constitute an insurable "occurrence." Erie asserts instead the facts "describe a shooting during the commission of multiple felonies." Erie's Brief at 17. Erie notes the term "occurrence," in the context of a liability insurance policy, is defined as an "accident," and this Court has interpreted "accident" as something that is "unexpected" or "undesirable." Id . at 18-19, citing Kvaerner Metals Div. of Kvaerner U.S., Inc....