Miller v. Fidelity-Phoenix Insurance

Lewis, Chief Justice:

This appeal involves the liability of appellant, the insurer, to pay a judgment obtained against its ten-year old insured for damages to respondent’s property caused when the in*74sured set fire to respondent’s home. Appellant contended that the actions of its insured in setting fire to respondent’s home constituted “intentional” damage and therefore it was not liable because of a policy provision which excluded coverage for damage to property “caused intentionally by or at the direction of the insured.”

This is an action at law with the factual and legal issues submitted to the trial judge for determination. In our opinion, the trial judge decided the issues under sound principles of law; and his findings of fact, that the damages to respondent’s property were not intentionally caused by the insured, were supported by the evidence and, therefore, binding on this Court on appeal.

The following portions of the order of the lower court correctly dispose of the issues:

The case involves a suit based on insurance coverage, brought by the plaintiff for damages to property as a result of a fire occurring in plaintiff’s home. Defendant is the homeowners insurer under a policy providing liability coverage in the amount of Twenty-Five Thousand ($25,000.00) Dollars. In prior proceedings, it has been determined that the fire was caused by a minor, Randy Gottlieb, a neighbor of the plaintiff. At the hearing, the defendant did not deny that the minor was an insured and I conclude from the evidence that he was within the definition of “insured” under the policy. The principal legal and factual issue before the Court was defendant’s claim that coverage was precluded under the exclusion in the policy related to damages caused intentionally by or at the direction of the insured. It was further stipulated at the hearing that the amount of damages exceeded the limits of the policy and that if defendant was liable, it would be so to the extent of such coverage, which is Twenty-Five Thousand ($25,000.00) Dollars.

In construing the “intentional exclusion” provision of the policy, the beginning point is the often related conclusion that the provisions of an insurance policy *75are to be liberally construed in favor of the insured and strictly construed against the company which prepared the policy. Whittington v. Ranger Insurance Co., 261 S. C. 582, 201 S. E. (2d) 620 (1973). Apparently different courts have adopted varying constructions of the intentional act exclusion. Of the varying views, I am persuaded that the better rule is to the effect that not only the act causing the loss must have been intentional but that the results of the act must also have been intended. Thus, under this rule, the insured must be shown not only to have intentionally acted in setting the fire but must also have intended that the fire cause the type of loss or injury which resulted to the plaintiff. The Connecticut Indemnity Company v. Nestor, 4 Mich. App. 578, 145 N. W. (2d) 399.

Based upon this legal construction of the policy and the appropriate rule of law to be applied, the factual question which must be resolved becomes “Did the minor intend to cause damage to the property of the plaintiff when he set the fire in the house?” Based upon the evidence, it is my decision that the minor did not intend to cause such damages. The sole evidence before the Court was hearsay evidence presented by the defendant and that the fire was set primarily because the minor wanted the excitment of seeing the fire trucks come. Based upon this testimony, it appears that the reasonable factual conclusion is that the minor set the fire as a prank without any conscious intent to cause major destruction and property damage to plaintiff. For that reason, I conclude that the insured minor did not have the malicious purpose and intent in mind necessary to allow the intentional act exclusion to be invoked. This conclusion is supported by additional evidence which established the friendly and close relationship between the child and the plaintiff, in whose home he was a frequent visitor. The physical evidence concerning the fire also supports this conclusion, since it apparently was started by burning pictures and papers and that no flammable substance was involved.

*76For the foregoing reasons the judgment is affirmed.

Ness and Gregory, JJ., concur. Littlejohn and Rhodes, JJ., dissent.