Bad shot: Insurer says “no accident”
Edgar and Laurie Cook owned 200 acres of property in Bonner County, Idaho. The property included a lake, a cabin, and a campground. The Cooks allowed people to use the lake and campground without charging a fee, but they solicited donations to help with the property’s upkeep.
For about 20 years Michael Chisholm stayed in the cabin in exchange for maintaining the property.
On June 28, 2015, Joseph Stanczak and his girlfriend were camping at the property. Chisholm invited them into the cabin, and a dispute later arose between Chisholm and Stanczak. Chisholm shot Stanczak twice with a .45 caliber handgun, then left the scene. Authorities later apprehended Chisholm and charged him with aggravated battery and use of a deadly weapon in commission of a felony. Chisholm was sentenced to prison.
The Cooks’ property was insured under a policy with Farm Bureau Mutual Insurance Company of Idaho. The policy defined an occurrence as an accident, including continuous or repeated exposure to the same harmful conditions, that results in unexpected bodily injury or property damage. All bodily injury and property damage that resulted from a common cause was considered to be the result of one occurrence.
The policy provided that if a claim was made or a suit was brought against any insured for damages because of bodily injury or property damage caused by a covered occurrence, the insurer would pay up to its limit of liability for the damages for which the insured was legally liable and provide a defense.
Subject to the limit of liability, the policy stated that the insurer would pay reasonable and necessary medical and funeral expenses that resulted from bodily injury caused by a covered occurrence. The policy stated: “This coverage does not apply to you or residents of your household other than residence employees. This coverage applies only:
1. To a person on the insured location with the permission of any insured … .”
Stanczak asserted claims against Chisholm, the Cooks, and Farm Bureau for injuries he sustained from the shooting. Farm Bureau denied coverage and sent a letter to the Cooks informing them of its denial. Stanczak later filed a complaint against Chisholm and the Cooks. In his complaint against the Cooks, Stanczak alleged premises liability and negligent supervision. The Cooks tendered defense of the action to Farm Bureau, and Farm Bureau found no coverage and no duty to defend against Stanczak’s complaint. Stanczak filed an amended complaint that deleted references to the property as for profit and Chisholm as an employee. Farm Bureau did not change its coverage decision.
Farm Bureau filed a complaint for declaratory judgment and amended it in response to Stanczak’s amended complaint. Farm Bureau sought a declaration that (1) there was no coverage under the policy for Stanczak’s claimed injuries, and (2) it did not have a duty to defend the Cooks against Stanczak’s claims against them. The Cooks counterclaimed, asserting breach of contract and requesting a declaration of coverage. Farm Bureau filed a motion for summary judgment on the coverage issues. The court granted the motion and entered judgment in favor of Farm Bureau. The Cooks appealed.
On appeal, the Cooks contended that coverage existed under the policy because the determination of whether an event was an “occurrence” (defined as an accident) should be viewed from the standpoint of the insured. They claimed that Chisholm’s shooting Stanczak—although intentional from Chisholm’s point of view—was an accident from theirs and thus was a covered occurrence under the policy. Farm Bureau asserted that the injuries on which Stanczak’s claims were based flowed directly from the intentional shooting and thus could not be an occurrence under the policy.
The court noted that, in the context of insurance policies, an occurrence must be an accident and added that this principle was affirmed in extensive case law. While acknowledging that the Cooks’ argument was not unfounded, the court affirmed the lower court’s grant of summary judgment in favor of Farm Bureau.
Farm Bureau Mutual Insurance Company of Idaho vs. Cook-Supreme Court of Idaho-March 30, 2018-No. 44897.
