Insurance

Facts of the Case

In Allstate Insurance Co. v. Barron (848 A.2d 1165 (Conn. 2004), during the early morning hours of June 10, 1999, a homeowner's policyholder, Kelly S., who had bipolar disorder, stabbed her husband to death and then started a fire that killed her and two of the couple's children. Wrongful‐death actions were filed against the policyholder's estate by the estates of the other decedents. The insurer claimed that it had no duty to defend or indemnify the policyholder's estate, because the incident was not an “occurrence” within the meaning of the policy and because the policy's exclusions relating to intentional or criminal acts applied to the policyholder's conduct. The insurer filed a declaratory judgment action against the defendants seeking a determination that it had no such duty. It then filed a motion for summary judgment claiming, inter alia, that there was no genuine issue of material fact as to whether the insured's conduct was intentional within the meaning of the policy's intentional‐conduct exclusion clause.

The defendants objected to the motion for summary judgment. In support of their argument that there was a genuine issue of material fact as to whether Kelly's conduct had been intentional, the defendants presented to the court the transcript of the deposition of Dr. Kazarian, Kelly's treating psychiatrist. During her deposition, Dr. Kazarian testified that she had diagnosed bipolar II disorder in Kelly, but because she had not seen Kelly since July 2, 1998, she did not believe that she could give an opinion as to whether postpartum depression (Kelly was two months postpartum) had impaired Kelly's ability to tell right from wrong, to control her actions, or to form an intent during the events of June 10, 1999. The defendants also presented an affidavit by Walter Borden, an independent psychiatrist who reviewed the available information in this case and opined that “…Kelly was incapable of appreciating the nature of her behavior, unable to control herself and incapable of forming rational intent to do the acts attributed to her.”

The Superior Court in the Judicial District of Waterbury (Connecticut), relying on the appellate court's decision in Home Ins. Co. v. Aetna Life & Casualty Co., 644 A.2d 933 (Conn. Ct. App. 1994), concluded that, although Kazarian's testimony established that Kelly had had a severe mental illness in July, 1998, it did not create a factual dispute as to whether Kelly was “legally insane” when she committed the acts of June 10, 1999. The trial court also determined that Borden's affidavit did not constitute a basis for denying the motion for summary judgment, because it was conclusory and did not set forth any facts to support those conclusions. Accordingly, the trial court determined that there was no genuine issue of material fact as to whether Kelly had a mental condition negating her intent and barring application of the policy's exclusion for intentional acts, and it therefore granted the plaintiff's motion for summary judgment.

The defendants filed an appeal with the appellate court claiming that the trial court improperly determined that there was no genuine issue of material fact as to the insured's state of mind. The appeal was transferred to the Supreme Court of Connecticut pursuant to Connecticut General Statutes.

Ruling and Reasoning

The judgment was reversed and remanded for further proceedings. With regard to the defendants' claim that the trial court improperly determined that there was no genuine issue of material fact that Kelly's conduct was intentional within the meaning of the intentional‐conduct exclusion clause, the Supreme Court of Connecticut reasoned that, under Home Ins. Co., the crucial issue of fact in this case was not whether Kelly's actions were intentional in the narrow sense that they were deliberate, but whether her intent was negated by her inability to understand the wrongfulness of her conduct or to control her conduct. They concluded that the documents submitted by the plaintiff in support of its motion for summary judgment simply did not address that issue. Accordingly, they held that the trial court properly could have denied the plaintiff's motion in the absence of any objection or supporting documents filed by the defendants. With regard to the plaintiff's claim that Kelly's conduct was not “accidental” and, therefore, not an “occurrence” covered by the policy, the court concluded that, to the extent that Kelly engaged in conduct for which she could not be held responsible because her mental incapacity negated her intent, the consequences of her conduct were accidental and, therefore, an “occurrence” within the meaning of the policy.

Discussion

The question addressed in this case is whether a policyholder's mental condition could negate her intent for a criminal act and bar the application of an intentional‐act exclusion clause. Under the law, the terms of an insurance policy are construed according to the general rules of contract construction. The determinative question is the intent of the parties, that is, what coverage the insured expected to receive and what the insurer was to provide, as disclosed by the provisions of the policy. If the terms of the policy are clear and unambiguous, then the language, from which the intention of the parties is to be deduced, must be accorded its natural and ordinary meaning. However, when the words of an insurance contract are susceptible to two equally reasonable interpretations, the one that will sustain the claim and cover the loss must, in preference, be adopted. This rule of construction favorable to the insured extends to exclusion causes.

Intentional‐act exclusion clauses were adopted primarily to prevent individuals from benefiting financially when they deliberately injure others. An individual who lacks the capacity to conform his or her behavior to acceptable standards of society will not, however, be deterred by the existence of insurance coverage for injuries caused by his or her actions. Therefore, the consideration of mental capacity when interpreting an exclusionary clause is not inconsistent with the purposes of such an exclusion. Furthermore, both principles meet the public interest in compensating victims for their injuries. Under a rule whereby damages caused by an insured's conduct are not denied coverage where the insured lacks a certain capacity, the injured person will have redress for his or her damages, even if the insured is judgment proof. However, some insurance companies have excluded coverage for: …an act or omission which is criminal in nature and committed by an insured person who lacked the mental capacity to appreciate the criminal nature or wrongfulness of the act or omission or to conform his or her conduct to the requirements of the law or to form the necessary intent under the law… such provisions have received unfriendly treatment from certain courts.