Heacker v. Safeco Insurance Co. of America
676 F.3d 724, 2012 U.S. App. LEXIS 7633, 2012 WL 1289787 (2012)
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Rule of Law:
Under Kansas law, an insured's conduct that is intended or expected to cause harm does not constitute an "occurrence" or "accident" for insurance coverage purposes, even if the resulting claims are framed as negligence. Furthermore, purely emotional injuries with physical manifestations do not qualify as "bodily injury," and a policy exclusion for "mental abuse" will bar coverage for harassment-based torts like defamation and invasion of privacy.
Facts:
- Beginning around 2005 and continuing for nearly five years, Jessica Wright engaged in a course of harassing conduct against Lewis Heacker.
- Wright's conduct included hacking into Heacker's voicemail and Facebook, sending disparaging letters and emails about him, and making anonymous, harassing phone calls and texts.
- As a result of the harassment, Heacker suffered emotional distress, which manifested physically and through post-traumatic stress disorder and alcoholism.
- For a portion of the harassment period, beginning in May 2006, Wright was insured by Nationwide Insurance Company under a Homeowner's Policy and an Umbrella Policy.
- The Homeowner's Policy covered "bodily injury" caused by an "occurrence," which was defined as an "accident."
- The Umbrella Policy covered "personal injury" arising from defamation or privacy violations but contained an exclusion for personal injury arising from "mental abuse."
Procedural Posture:
- Lewis Heacker sued Jessica Wright in the Circuit Court of Jackson County, Missouri, a state trial court.
- During the trial, Heacker amended his complaint.
- The trial court entered a $7.3 million judgment in favor of Heacker against Wright.
- Heacker then filed an equitable garnishment action in state court against Wright and her insurers, including Nationwide, to collect the judgment.
- The insurers removed the garnishment action to the United States District Court for the Western District of Missouri.
- The district court granted summary judgment to Nationwide, finding no coverage under its policies.
- Heacker, as the appellant, appealed the district court's grant of summary judgment to the U.S. Court of Appeals for the Eighth Circuit.
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Issue:
Does an insurance policy that covers "bodily injury" from an "occurrence" and "personal injury" but excludes "mental abuse" require an insurer to pay a judgment against its insured for prolonged harassment, where an "occurrence" is defined as an accident and the insured should have expected her conduct to cause harm?
Opinions:
Majority - Benton, Circuit Judge.
No. The insurance policies do not provide coverage for the judgment against the insured. The Homeowner's Policy does not apply because Wright's prolonged harassment was not an "occurrence" or "accident," which Kansas law defines as an undesigned, sudden, and unexpected event. Given the nature of the conduct, Wright either expected or should have expected Heacker's injuries, so the acts cannot be considered accidental, even when framed under a negligence theory. Furthermore, Heacker’s PTSD and alcoholism, being rooted in emotional trauma, do not constitute "bodily injury" under the policy, which requires actual physical harm, not just physical manifestations of emotional distress. The Umbrella Policy's coverage is barred by its exclusion for "mental abuse." The court determined that a reasonably prudent insured would understand "mental abuse" to mean mental maltreatment, and all of Wright's harassing acts, including the defamation and privacy violations, fall within this definition.
Analysis:
This decision reinforces the principle that insurance coverage is generally limited to fortuitous, accidental events and does not extend to harms resulting from intentional or predictable conduct. By looking past the 'negligence' label on the claims to the underlying tortious acts, the court prevents insured parties from transforming uncovered intentional torts into covered 'accidents.' The case also provides a significant interpretation of policy terms, holding that 'bodily injury' requires a physical origin, not just physical symptoms of emotional harm. Finally, it demonstrates that broad exclusions like 'mental abuse' can effectively preclude coverage for a wide range of harassment and defamation-related activities.
