Wargacki v. W. Nat’l Assurance Co., No. C13-5373RBL, 2015 WL 74111 (W.D. Wash. Jan. 6, 2015).

The U.S. District Court for the Western District of Washington grants summary judgment to an insurer ruling that the insurer had no duty to defend a complaint arising out of an insured’s intentional killing of his girlfriend despite the fact that the girlfriend’s estate had characterized the incident as “negligence.” 

On June 27, 2010, Michael Erb (“Erb”) shot his pregnant girlfriend, killing her and their unborn child.  Erb then took his own life.  Following an investigation, the police concluded that Erb had murdered his girlfriend and intentionally killed himself.  Erb had a homeowner’s insurance policy with Western National Assurance Company (“Western”).  The policy contained an exclusion barring coverage for criminal and intentional acts.

The girlfriend’s estate sued Erb’s estate for wrongful death.  The suit alleged that Erb caused his girlfriend’s death “either negligently, intentionally or recklessly.”  The suit further alleged that Erb’s actions constituted the tort of outrage.  The attorney for Erb’s estate informed Western of the lawsuit and requested a copy of the homeowner’s policy.  The attorney then wrote to Western and requested a “coverage determination.”  Upon investigation, Western concluded that because the shooting was not an accident, it was not covered by the policy.  Accordingly, Western did not defend or have any other role in the lawsuit.   

In the underlying litigation, Erb’s estate conceded liability to the girlfriend’s estate and judgment was entered against it.  Almost a year after judgment was entered, the girlfriend’s estate demanded payment from Western.  Western responded by filing a declaratory judgment action in the United States District Court for the Western District of Washington.  Western moved for summary judgment and sought a determination that it had no duty to defend in the underlying litigation.  The girlfriend’s estate filed a cross motion for summary judgment, arguing that the complaint in the underlying litigation triggered Western’s duty to defend, and that its failure to provide a defense was bad faith.

The court had previously ruled that the policy’s intentional and criminal acts exclusion applied.  Because the shooting was intentional, Western had no duty to indemnify the Erb estate.  Nevertheless, the girlfriend’s estate argued that Western still had a duty to defend the Erb estate in the underlying case and that its failure to do so was bad faith resulting in coverage by estoppel.  The court rejected the estate’s argument and entered summary judgment in Western’s favor.  The estate had argued that because the complaint in the underlying case characterized the shooting as “negligence,” the duty to defend was triggered and the exclusion did not apply.  The estate further asserted that because it was impossible to know exactly what transpired, it was arguably conceivable that the shooting was unintentional and non-criminal.  The court reasoned that while the complaint did use the term “negligence,” it did not allege any facts that would suggest the shooting was an accident.  The mere conceivable possibility that the shooting might have been accidental was not sufficient to trigger coverage where all facts and Western’s investigation led to the necessary conclusion that the killing was an intentional and criminal act.  Accordingly, Western had no duty to defend and there was no bad faith as a matter of law.