Globe American Cas. Co. v. Lyons

• Decision Date: 22 December 1981
• Docket Number: CA-CIV,No. 1,1
• Parties: , 33 A.L.R.4th 972 GLOBE AMERICAN CASUALTY COMPANY, a corporation, Plaintiff-Appellee, v. Denny LYONS, Earsel Hall and Laura L. Lemon, Defendants-Appellants. 5168.
• Court: Arizona Court of Appeals

Page 251

641 P.2d 251

131 Ariz. 337, 33 A.L.R.4th 972

GLOBE AMERICAN CASUALTY COMPANY, a corporation, Plaintiff-Appellee, v. Denny LYONS, Earsel Hall and Laura L. Lemon, Defendants-Appellants.

No. 1 CA-CIV 5168.

Court of Appeals of Arizona, Division 1, Department A.

Dec. 22, 1981.

Rehearing Denied Jan. 18, 1982.

Petition Denied Feb. 2, 1982.

Monbleau, Vermeire & Turley, P. C. by Kent E. Turley, Phoenix, for plaintiff-appellee.

Robinson & Syme by James J. Syme, Jr., Glendale, for defendants-appellants.

OPINION

OGG, Judge.

This appeal involves the applicability of an insurance contract provision excluding coverage for "intentional" acts of its insured. We are asked to determine the requisite mental capacity necessary to form "intent" for purposes of this exclusion and determine whether the record contains substantial evidence that the insured had such mental capacity.

This litigation was instituted as a result of a collision occurring on November 18, 1976 when Patricia M. LeDoux drove her automobile directly into a pickup truck occupied by appellants Denny Lyons, Earsel Hall and Laura L. Lemon. The incident occurred on Cave Creek Road near its intersection with Pima Road in Maricopa County. Appellants sustained personal injuries as a result of the collision and filed suit against Mrs. LeDoux for damages.

Appellee Globe American Casualty Company, Mrs. LeDoux' automobile liability insurance carrier, filed a complaint for declaratory judgment against appellants and Mrs. LeDoux on April 14, 1977 in Maricopa County Superior Court. The complaint sought to have the court declare that a policy provision excluding coverage for intentional acts operated to preclude insurance coverage for Mrs. LeDoux' actions. On May 15, 1979, a trial to the court was held in the declaratory judgment action. Judgment was entered in favor of Globe American on August 24, 1979. Appellants filed a motion for new trial which was denied. This appeal followed.

Appellants have raised numerous issues on appeal. However, because our determination of the issues of mental capacity and sufficiency of the record relative to mental capacity requires a reversal of the judgment, our opinion addresses only those issues.

Appellee relies upon the following provision in its insurance contract with Mrs. LeDoux to deny coverage for her involvement in the collision.

This policy does not apply:

(b) under all coverages ... to any bodily injury or property damage (i) caused intentionally by or at the direction of the insured; ....

It is appellants' position that Mrs. LeDoux did not act intentionally because she was suffering from a mental illness that impaired her reasoning faculties to the extent that she was incapable of distinguishing right from wrong. More specifically, appellants argue that by driving her car into the vehicle in which appellants were riding, Mrs. LeDoux was attempting to commit suicide in an uncontrollable response to auditory hallucinations that overcame her ability to act rationally.

Appellee contends that it is immaterial whether Mrs. LeDoux was insane at the time of the collision. Rather, appellee contends that Mrs. LeDoux' understanding of the physical consequences of her act and deliberate commission of the act are sufficient to deem the act "intentional" for purposes of exclusion of coverage. Appellee further argues that even if an understanding of the natural consequences of the act and the ability to differentiate between right and wrong are required, the evidence supports the conclusion that Mrs. LeDoux had such mental capacity.

Two distinct positions on the issue of the relationship between an actor's mental capacity and "intent" for purposes of insurance coverage have developed in other jurisdictions. One line of cases holds that if an injury results from an insane act, the intentional injury exclusion clause is inoperative and the insurer is liable. See Congregation of Rodef Sholom of Marin v. American Motorists Ins. Co., 91 Cal.App.3d 690, 154 Cal.Rptr. 348 (1979); Arkwright-Boston Mfrs. Mut. Ins. Co. v. Dunkel, 363 So.2d 190 (Fla.1978); George v. Stone, 260 So.2d 259 (Fla.App.1972); Ruvolo v. American Cas. Co., 39 N.J. 490, 189 A.2d 204 (1963). The other line of authority holds that an injury inflicted by a mentally ill person is "intentional" where the actor understands the physical nature of the consequences of the act and intends to cause the injury, even though he is incapable of distinguishing right from wrong. See Colonial Life & Accident Ins. Co. v. Wagner, 380 S.W.2d 224 (Ky.1964); Rider v. Preferred Acc. Ins. Co. of N. Y., 182 App.Div. 42, 170 N.Y.S. 974 (1918); Deloache v. Carolina Life Ins. Co., 233 S.C. 341, 104 S.E.2d 875 (1958); Pruitt v. Life Ins. Co. of Virginia, 182 S.C. 396, 189 S.E. 649 (1937).

The issue of the effect of the purported insanity of an insured upon the "intentional acts" exclusionary provision of an insurance policy has not been directly addressed in Arizona. However, the assumption that insanity can, as a matter of law, preclude the characterization of an act as "intentional" for insurance purposes is implicit in several Arizona decisions. See, e.g., Steinmetz v. Nat. Am. Ins. Co., 121 Ariz. 268, 589 P.2d 911 (App.1978); Cavanagh v. Ohio Farmers Ins. Co., 20 Ariz.App. 38, 509 P.2d 1075 (1973). This assumption was most recently expressed by Division Two of this court in Parkinson v. Farmers Ins. Co., 122 Ariz. 343, 345, 594 P.2d 1039, 1041 (App.1979), wherein it was stated:

Absent mental illness or intoxication destroying the capacity to form this intent (to cause injury) the intent exists when one acted under circumstances where the natural and probable consequence of the act is some injury.

However, Arizona courts have not determined what mental capacity is necessary to "intend" an injurious act for purposes of interpreting an exclusionary clause in an insurance contract.

The trial court in the instant case made a finding of fact that Mrs. LeDoux "intentionally" caused the collision. Based upon this finding of fact, the court concluded as a matter of law that appellee's insurance contract did not provide coverage because an individual is presumed to have intended the ordinary consequences of his voluntary actions. In so holding, the trial court cited Clark v. Allstate Ins. Co., 22 Ariz.App. 601, 529 P.2d 1195 (1975). However, Clark does not address the effect of the mental illness on the presumption. Rather, that case dealt with intended acts versus intended consequences.

To hold, as appellees urge, that mental illness is irrelevant for purposes of determining whether an act is "intentional" is inconsistent with long standing policy considerations in insurance law. Exclusionary provisions are to be strictly construed against an insurer. C. H. Leavell & Co. v. Fireman's Fund Ins. Co., 372 F.2d 784 (9th Cir. 1967); Brenner v. Aetna Ins. Co., 8 Ariz.App. 272, 445 P.2d 474 (1968). Further, to deny coverage for acts caused by an individual lacking the mental capacity to act rationally is inconsistent with a primary purpose for incorporating intentional injury exclusions into insurance policies, i.e., to preclude individuals from benefiting financially when they deliberately cause injury. An individual who lacks the capacity to conform his behavior to acceptable standards will not be deterred by the existence or nonexistence of insurance coverage for the consequences of his acts. See Congregation of Rodef Sholom of Marin v. American Motorists Ins. Co., supra.

We recognize that some jurisdictions have held that the M'Naghten test for criminal insanity is the appropriate test for mental capacity to apply under these circumstances. See, e.g., Markland v. Clover Leaf Casualty Co., 209 S.W. 602 (Mo.Ct.App.1919). See generally 10 Couch on Insurance 2d § 41:667 (1961). However, we are of the opinion that the better rule is set forth in Congregation of Rodef Sholom of Marin v. American Motorists Ins. Co., supra, and Ruvolo v. American Cas. Co., supra, which hold that the criminal standard is inappropriate. We find the following language by the New Jersey Supreme Court to be persuasive:

It has been said many times that exclusionary clauses, drawn for the company by men learned in the law of insurance are to be strictly construed against the insurer; that the insured is entitled to protection to the full extent that any reasonable interpretation of them will permit. (citations omitted) And justice demands that particular emphasis be laid on that doctrine where the conduct insured against involves possible injury or damage to members of the public. For that reason, while such mental incapacity as would excuse an act from criminal responsibility would preserve the insured's protection under this policy, in our opinion coverage should not be limited to cases which satisfy that definition. We hold that if the insured was suffering from a derangement of his intellect which deprived him of the capacity to govern his conduct in accordance with reason and while in that condition (acted) on an irrational impulse ... his act cannot be treated as "intentional" within the connotation of defendant's insurance contract.

Ruvolo v. American Cas. Co., supra, 189 A.2d at 208-209. See also Congregation of Rodef Sholom of Marin v. American Motorists Ins., supra, 154 Cal.Rptr. at 352.

Applying this test to the instant case, if Mrs. LeDoux was suffering from mental derangement which deprived her of her capacity to act in accordance with reason and while in that condition acted on an irrational compulsion to drive her vehicle into oncoming traffic, her act was not "intentional". It is not clear whether the trial court applied this test for mental capacity to determine whether there was "intent". Nevertheless, if the judgment is correct, it will be affirmed even if based upon the wrong reasons. Matter of Estate of Torstenson, 125 Ariz. 373, 609 P.2d 1073 (App.1980). Accordingly, we now consider whether...