On December 30, 2010, the Ohio Supreme Court issued a
significant decision which clarified the ever-changing law on
coverage for intentional acts. In a key part of the ruling, the
Court emphasized the importance of the doctrine of inferred intent,
defining when it should apply to preclude coverage. Commenting on
prior key cases, the Court explained that the doctrine is not
limited to cases of sexual molestation or homicide. Rather, it can
be applied whenever the insured's intentional act and the harm
caused by that act are intrinsically tied so that the act has
necessarily caused the harm.
The strange facts involve an ill-fated teenage prank. A group of
teenagers positioned a lightweight Styrofoam target deer, fastened
to a piece of wood so that it could stand upright, just below the
crest of a hill on a hilly and curvy two-lane, 55-mile-per-hour
road. The teens placed the target on the road after dark in a
position where drivers could not see it until they were 15 to 30
yards away. After placing the target, the teenagers remained nearby
to watch the reaction of motorists. Shortly thereafter, Robert Roby
drove over the hill, saw the target, took evasive action, but lost
control of his vehicle, which left the road and overturned. Roby
and his passenger, Dustin Zachariah, suffered serious injuries as a
result.
Roby and Zachariah sued the teens, their parents, and their four
insurance companies in the Franklin County Court of Common Pleas.
The insurers filed declaratory judgment actions, seeking
declarations that they were under no duty to defend or indemnify
their insureds because their respective insurance policies
contained intentional-act exclusions.
The trial court granted the insurers' motions for summary
judgment, inferring intent to injure as a matter of law, relying in
part on the finding that the teens' conduct was substantially
certain to result in harm. The Tenth District Court of Appeals
reversed, finding genuine issues of material fact regarding the
teenagers' intent. The Ohio Supreme Court affirmed the Tenth
District's decision that the trial court erred in granting the
motions for summary judgment of three of the insurers (though it
allowed summary judgment to stand for one insurer whose policy
contained an "extremely broad" exclusion for
"'bodily injury' or 'property damage'
which results directly or indirectly from * * * an intentional act
of any 'insured'"). This split decision shows, as
is often the case, that the precise language of the policy can be
very important in determining the result.
Justice Lanzinger authored the opinion of the majority, which found
summary judgment to be improper as to three of the insurers whose
policies generally excluded coverage for injuries which were
expected or intended by the insured. Describing the prior legal
landscape in Ohio pertaining to inferred intent, the Court noted
the two recognized examples of when inferred intent applies --
sexual molestation and homicide. The Court stated that the
inferred-intent doctrine is not limited to those two categories of
cases.
To determine whether the inferred-intent doctrine applies, a court
must determine whether the insured's intentional act and the
harm caused are intrinsically tied so that the act has necessarily
resulted in the harm. Essentially, when the intentional act could
not have been done without causing harm, the insured's
testimony regarding intent is irrelevant, and coverage is
precluded. The Court warned, however, that Ohio courts must avoid
applying the doctrine in cases where the insured's intentional
act will not necessarily result in the harm caused by the
act.
Embracing this new test, the Court rejected the substantial
certainty test (i.e., whether the act is substantially certain to
result in the harm) in place in some other jurisdictions, like
Massachusetts.
The Court held that the act of placing a target deer in the road,
as the teens did here, did not trigger the application of the
inferred-intent doctrine because the Court could not say, as a
matter of law, that the act necessarily resulted in the harm. The
Court pointed out that other cars drove by and avoided the target.
As the Court declined to infer intent, it remanded the case for a
factual inquiry as to whether the teens intended or expected harm
and, in turn, whether the insurance agreements provided coverage
under three of the policies. A question remains under this decision
as to whether and how the insurers' duty to defend should be
determined in such cases where fact finding remains on the issue of
inferred intent. Normally, if fact questions remain, a duty to
defend applies. Here, the Court is not clear. Future clarification
may be needed.
Three justices concurred in part and dissented in part. Justice
Pfeifer stated that he would have held that the broader
exclusionary language in the American Southern policy was not
materially different from the exclusionary language in the other
policies. Justice O'Donnell expressed his opinion that the Ohio
Supreme Court adopted the substantial certainty test in Gearing
v. Nationwide Ins. Co., 76 Ohio St.3d 34, 665 N.E.2d 1115
(1996), and that the new test departed from this law.
Notwithstanding the dissenting opinions, in Ohio, the
inferred-intent doctrine applies only in cases in which the
insured's intentional act and the harm caused by that act are
intrinsically tied so that the harm necessarily results from the
act.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.