The U.S. Court of Appeals for the Eighth Circuit has affirmed a district court decision reforming a commercial insurance policy to include an exclusion that the insurance company had inadvertently omitted.

The case

Harleysville Worchester Insurance Company issued a commercial insurance policy to Diamondhead Property Owners Association, Inc., a gated community in Hot Springs, Arkansas. Although the parties intended for the policy to exclude coverage for law enforcement, Harleysville inadvertently omitted that exclusion from the policy itself.

Following an alleged altercation between a Diamondhead police officer and two Diamondhead residents, Harleysville sued Diamondhead, the officer, and the two residents, seeking reformation of the insurance contract and a declaration that it had no duty to defend or indemnify the officer.

The district court granted Harleysville its desired relief, and the officer appealed.

The circuit court's decision

The circuit court affirmed.

In its decision, the circuit court found that the “uncontroverted evidence” demonstrated that Harleysville, the insurance agent and Diamondhead all had intended to enter into an insurance policy that excluded coverage for law enforcement and that Harleysville's failure to exclude that coverage from the policy had been inadvertent. The circuit court then held that the district court, therefore, had not erred in reforming the policy to reflect the parties' intent.

The case is Harleysville Worchester Ins. Co. v. Diamondhead Property Owners Ass'n, Inc., No. 13–2061 (8th Cir. Feb. 4, 2014). Attorneys involved include: Luther Oneal Sutter, Benton, AR, for appellant; Mariam T. Hopkins, Mark D. Wankum, Little Rock, AR, for appellee.

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Special Reports /

The Case, the Policy and the Decision: Policy That Inadvertently Omitted Exclusion Can Be Reformed

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