Prank Gone Wrong: When Homeowner's Insurance Still Covers an 'Intentional' Act

Published January 25, 2011 · Ohio Supreme Court

On a November night in Hardin County, a group of teenage boys stood a Styrofoam target deer in the lane of a hilly, 55-mile-per-hour county road, just past the crest of a hill where drivers could not see it until they were a few car lengths away. Then they waited to watch. Within minutes, a driver came over the hill, swerved, lost control, and rolled his car into a field. He and his passenger were seriously hurt.

The boys' families had homeowner's insurance. Four insurance companies went to court to argue that they owed nothing, because the prank was an "intentional act." On December 30, 2010, the Supreme Court of Ohio told three of those four insurers they could not walk away that easily.

The decision: Allstate Insurance Co. v. Campbell

The case is Allstate Ins. Co. v. Campbell, 128 Ohio St.3d 186, 2010-Ohio-6312. The injured driver, Robert Roby, and his passenger, Dustin Zachariah, sued the boys, their parents, and the families' insurers. Allstate, Erie, Grange, and American Southern each filed what is called a declaratory judgment action, asking a judge to declare that their policies did not cover the crash.

The trial court sided with the insurers. It did not find that the boys actually meant to hurt anyone, but it "inferred" their intent to harm as a matter of law and granted summary judgment to all four companies. The court of appeals reversed, and the Supreme Court largely agreed with the court of appeals.

Why "intentional act" exclusions matter to crash victims

Nearly every homeowner's and auto policy covers accidents but excludes injuries the insured "expected or intended." That makes sense for a punch in the face. The problem comes when an insurer stretches the exclusion to cover any deliberate conduct that happened to cause harm, even when the person never meant for anyone to get hurt.

For the injured person, this is not an abstract argument. The teenagers in this case had no money. The only realistic source of compensation for two seriously injured young men was the parents' liability coverage. If the exclusion applied, the victims would be left with nothing but a worthless judgment.

What the Court held

Ohio courts had already recognized a doctrine called "inferred intent." In cases of sexual molestation of a child or murder, a court will infer the intent to harm as a matter of law, no matter what the wrongdoer says, because the act and the harm cannot be separated. The insurers asked the Court to expand that doctrine to any act that was "substantially certain" to cause injury.

The Court refused. It held that the doctrine of inferred intent is not limited to molestation and murder, but it applies "only in cases in which the insured's intentional act and the harm caused are intrinsically tied." In the Court's words, intent is inferred only where "the act has necessarily resulted in the harm."

Placing a fake deer in the road did not meet that test. The Court noted that other cars had passed the decoy and avoided it. The act was, in the Court's description, "ill-conceived and irresponsible," but the action and the harm were not inseparable the way they are in a murder. So the question of whether the boys expected or intended injury is a question of fact for a jury, not something a judge can decide on paper.

For the Allstate, Erie, and Grange policies, which excluded injury "expected or intended" by the insured, the result was that summary judgment for the insurers was improper. The case goes back to the trial court for a factual determination.

The important exception: policy wording controls

One insurer did win. American Southern's policy did not exclude injuries that were expected or intended. It excluded any injury that "results directly or indirectly from" an intentional act of the insured. The Court held that this much broader language freed American Southern from the whole intended-injury analysis, and it reinstated the finding of no coverage under that policy.

Two justices dissented on that point, warning that read literally, such language would exclude coverage for almost every accident, since most accidents begin with some deliberate act. But the majority's ruling stands: the exact words of the exclusion decide the case.

What this means for you

• If you were hurt by someone's reckless prank, horseplay, or stunt, do not assume there is no insurance. Unless the act was one that could not possibly have been done without hurting someone, the insurer has to prove the person actually expected or intended your injury.
• Every policy that might apply must be read, word for word. In Campbell, the same facts produced coverage under three policies and no coverage under a fourth because of a few words in the exclusion.
• When a wrongdoer has no coverage, your own uninsured and underinsured motorist coverage may fill the gap. We explained how that coverage works in an earlier post.
• Insurers file declaratory judgment actions to get out of paying. Those cases move on their own track, and the injured person needs a lawyer in that courtroom too.

This decision follows a pattern we saw last year, when the Court held that an insurer had to pay attorney fees tied to a punitive verdict against a drunk driver. The insurance company does not get to redefine its own promise after the crash.