Swift v. Fitchburg Mut. Ins. Co.
| Decision Date | 09 October 1998 |
| Docket Number | No. 97-P-1671,97-P-1671 |
| Citation | 700 N.E.2d 288,45 Mass.App.Ct. 617 |
| Parties | Carolyn SWIFT & another 1 v. FITCHBURG MUTUAL INSURANCE COMPANY. |
| Court | Appeals Court of Massachusetts |
George P. Field, Boston (Thomas P. Gay, Taunton, with him), for plaintiffs.
Stephen M.A. Woodworth, South Easton, for defendant.
Before BROWN, KAPLAN and PERRETTA, JJ.
We hold that the defendant insurer under a homeowners policy was in breach of the contract and, the "criminal acts" exclusion being inapplicable, is liable for expenses incurred by the insured in responding to a third-party suit and for the amount of the judgment against the insured in that suit.
1. On February 12, 1994, the plaintiff Anne Francis (then seventy-seven years old) and her daughter, the plaintiff Carolyn Swift, were at their home in Rehoboth. Ralph Goff, Jr., forty-one years old, had driven to their house in his truck that morning and was asked in for lunch. (Goff's mother resided nearby and Goff occasionally did carpentry work around the plaintiffs' house.) After lunch, Goff intended to drive off but found his truck stuck in the snow in the plaintiffs' driveway. Francis offered to call Goff's uncle for assistance; unable to reach the uncle, she left a message at Goff's mother's house. Goff, waiting outside, kept coming to the door of the sun porch to check with Francis about when his uncle would arrive. He became increasingly irritated while questioning Francis: he got Finally, he called Francis a "liar" and broke in the door of the sun porch.
Francis rushed outside to get past Goff. Goff knocked her down in the snow. Then he entered the house, broke through an interior door, found Swift and slashed her in the leg with a utility knife. Swift fled upstairs. Meanwhile Francis was outside in the road trying to summon help. A car driving by slowed down, but sped off on seeing Goff approach Francis with a knife in one hand and a long-handled shovel in the other. He did not speak but struck Francis in the head with the shovel. As Swift emerged from the house Goff struck her with the shovel till it snapped.
Goff's uncle then arrived with a friend. Attempting to subdue Goff, the uncle was met with a knife slash to the ear. As the friend interceded, police arrived and placed Goff under arrest. The plaintiffs received medical attention: Swift for lacerations in the right thigh and left knee, Francis for multiple injuries to her hand, face, and body Goff for his part was charged with and arraigned in Taunton District Court on eight counts to which he pleaded not guilty. Pending trial he was held without bail at Bridgewater State Hospital. It appears that sometime before the attack he had been admitted to a two-week outpatient program for mental problems at Fuller Memorial Hospital and was prescribed an antidepressantmedication, "Imipramine." But he had stopped taking this medication by the time of the attack.
resulting in hospitalization for three days. Both women were damaged psychologically. 2
2. An attorney representing Swift wrote to Goff's wife on May 25, 1994, mentioning his representation and suggesting that she pass his letter to her insurance company as her insurance might cover the injuries that were due to "Mr. Goff's diminished mental capacity." The Goffs owned a home in Taunton and were coinsured on a homeowners policy of defendant Fitchburg Mutual which provided "personal liability coverage" up to $300,000 subject to certain exclusions. Mrs. Goff's insurance agent on May 31, 1994, sent the company a "general liability notice of occurrence/claim" with the attorney's letter attached. On October 24, 1994, the company in a letter to the Goffs' attorney denied coverage on the basis of a policy exclusion which stated that coverage did not extend to bodily injury or property damage "which is expected or intended by the 'insured.' " 3
3. On November 15, 1994, Swift and Francis filed a complaint against Ralph Goff, Jr., in Taunton District Court (hereafter sometimes called the "civil action"): counts I and III alleged that the defendant had committed an assault and battery against the respective plaintiffs; counts II and IV alleged that the injuries sustained by the respective plaintiffs were the result of the defendant's negligence, in that he failed to take his medication when he knew or should have known that he "had a propensity to become irate and uncontrollable if he failed to take his medication as prescribed." A copy of the complaint was sent to Fitchburg Mutual.
An attorney representing the Goffs on January 13, 1995, wrote to Thomas Noonan, casualty claims supervisor at Fitchburg Mutual, stating that denial of coverage "based on the intended acts of Mr. Goff" was dubious where there was "a serious question as to whether or not Mr. Goff had the mental capacity to intentionally commit the acts alleged." Goff, counsel pointed out, had now been confined to Bridgewater State Hospital for almost a year and the company had "insufficiently documented that Mr. Goff's acts were intentional and premeditated." Counsel asked the company to reconsider its denial of coverage and said failure fully to investigate the incident and prematurely to deny coverage would give rise to a claim under G.L. c. 93A and c. 176D. (Apparently the attorney for Swift and Francis had also communicated with the company regarding coverage.) On January 19, 1995, Noonan wrote to the plaintiffs' attorney and also to the Goffs' attorney. To the latter Noonan wrote, "[W]e do not owe [Goff] a defense nor will we indemnify any judgment relative to the incident which occurred on 2/12/94." Now Noonan referred to "endorsement FMHO-915 (7-92)" which stated that coverage was excluded for bodily injury or property damage which "may reasonably be expected to result from the intentional or criminal acts of an 'insured' or which in fact are intended by an 'insured.' " (See note 3, supra.) The January 19, 1995, letter to the plaintiffs' attorney was to similar effect.
4. Five days later, on January 24, 1995, Goff was found "not guilty by reason of mental illness" in the District Court prosecution on two counts of assault and battery with a dangerous weapon on a person aged more than sixty-five years, and one count of breaking and entering in the daytime, with "nolle prosequi in the interest of justice" on five other criminal counts. Goff was ordered to Bridgewater State Hospital for forty days for the "observation and examination" called for by G.L. c. 123, § 16(a ).
The company was notified of the disposition of the criminal proceeding and on May 9, 1995, the Goffs' attorney sent a c. 93A demand letter asserting that the company should have known that it had an obligation to defend Goff in the civil action and that it could not rely on an exclusion where the company's position was "contrary to both the court's and Bridgewater State Hospital's conclusions." The letter also demanded that Fitchburg Mutual pay any judgment awarded to the plaintiffs in the civil action and costs incurred by Goff in defending that action. This drew a response from Noonan which, besides denying any c. 93A violation, offered "in the spirit of compromise" to review the medical records at Bridgewater and to "research the impact a medical condition has on insurance coverage." Goff's attorney then sent Noonan a report of Dr. Petrou regarding Goff's mental capacity at the time of the incident; in the doctor's "conclusion and opinion, Mr. Goff lacked any ability to formulate a criminal intent." 4 There was no further response from the company.
5. The plaintiffs Swift and Francis and the defendant Goff in the civil action agreed to go forward on the negligence counts of the complaint. 5 Upon the plaintiffs' "motion for assessment of damages," a hearing was held in which they introduced as documentary evidence bearing on Goff's negligence, a psychiatrist's report where Goff is recorded as stating, "he thought he was well enough to stop taking Imipramine; until then he was 'doing fine.' " Also introduced were photographs of the plaintiffs' injuries and their medical and counseling records (revealing stress and depression following the incident). The plaintiff Francis testified to the incident.
On June 10, 1996, the judge "so found" certain proposed findings; included among them: Goff had a history of psychological problems for which he had been placed on medication; his failure to take his prescribed medication was the proximate cause of his losing control and attacking the plaintiffs; this failure amounted to negligence on Goff's part; the plaintiffs were entitled to monetary damages: on count II (negligence) the judge found for Swift for $36,899, and on count IV (negligence) for Francis for $51,938. Judgment entered on July 24, 1996, for damages assessed and interest, in total $107,307.15.
6. On September 26, 1996, the plaintiffs commenced the present action (with jury demand) in Bristol Superior Court, against Fitchburg Mutual. The plaintiffs charged the insurer with breach of duty to furnish the insured with defense in the third-party action (count II) and to indemnify the insured for the judgment therein, subject to the plaintiffs' right to reach and apply (count I). In count III, the plaintiffs complained of unfair and deceptive practices by the insurer in handling claims under the policy. The company answered, denying liability.
In due course, on April 4, 1997, the plaintiffs moved for (partial) summary judgment on counts I and II. The materials available on the motion comprised the essentials of the story as set forth above. As pictured to, and known by the insurer, the circumstances were that the insured, by his neglect, was driven into an irrational frenzy and in the course of it did bodily injury to the plaintiffs. (The plaintiffs cannot claim strict res judicata benefits from the "not guilty by...
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