American Hardware Mutual Insurance Co. v. Mitchell

LEIBSON, Justice,

dissenting.

Respectfully, I dissent.

I would affirm the trial court’s decision to grant summary judgment in this case. The ex-husband, Forest D. Mitchell, was a named insured on this insurance policy. This should make a critical difference in the way this case is decided.

The policy excludes from coverage:

“Intentional Loss, meaning any loss arising out of any act committed:
(1) by or at the direction of an insured; and
(2) with the intent to cause a loss.”

I would agree that this exclusion should not foreclose Shirley Mitchell’s right to recover for her loss had the fire been set by a person or persons other than another named insured. This is so because the broad definition of the unqualified word “insured” elsewhere in the policy is too attenuated from the intentional loss exclusion to provide adequate notice. It is defined to include any relative in the same household or even nonre-latives who are children residing in the same household. This definition would be inadequate to put Shirley Mitchell on notice that coverage is excluded for a fire set intentionally by persons who fit within this' broad definition of an insured, where she has no knowledge and no complicity in setting the fire. To extend the exclusion so broadly would exclude coverage beyond the reasonable expectations of the policyholder.

Nevertheless, it is well within the reasonable expectations of the policyholder, under the language of this policy, to understand that if the fire is set by another named insured, with or without her complicity, coverage is excluded. The “Intentional Loss” proviso, standing alone, is sufficient to convey this meaning.

Shirley Mitchell had no legitimate expectations of recovery for her loss under this policy if the loss was caused by the other named insured. Forest D. Mitchell was another named insured; therefore, the trial court’s summary judgment was appropriate.

The marital relationship of the named insured is not the issue. If Shirley and Forest Mitchell were brothers rather than husband and wife, or, indeed, if they were completely unrelated, so long as they are both named insured, neither could reasonably expect any right to recover for the loss, individually or collectively, where the fire was set intentionally by another named insured. The policy exclusion is sufficient to provide notice in these circumstances.

SPAIN and WINTERSHEIMER, JJ., join.