Controlled Substances Exclusion in Homeowner's Policy Applicable to Guest

 

In Massachusetts Property Ins. Underwriting Ass'n v. Gallagher, 2009 WL 2568547 (Mass.App.Ct.), 18-year-old Stephen McMaster died in an apparent suicide after ingesting an overdose of propoxyphene. Gallagher's mother sued Scaduto, alleging that Scaduto had negligently left the drug in a place in his home accessible to McMaster, despite knowing of McMaster's fragile emotional state.

 

Scaduto had in force a homeowner's policy from the plaintiff insurer. Following Scaduto's demand on the insurer, the insurer brought an action seeking a declaration that its policy did not provide coverage against Gallagher's claim.

 

The principal issue in the case was whether the claim was excluded from coverage by a provision of the policy which excluded claims for bodily injury “arising out of the use, sale, manufacture, delivery, transfer or possession by any person of [] Controlled Substance(s). . .” Per the policy's language, the exclusion did not apply to the legitimate use of prescription drugs by a person following the orders of a licensed physician.

The court noted that the phrase “arising out of” suggested causation analogous to “but for” causation.

Gallagher argued that McMaster's death came within the exception to the exclusion because it “arose out of” Scaduto's legitimate prescription use of the drug. The Appeals Court of Massachusetts explained, however, that Gallagher's argument was flawed, as it overlooked the separate and independent application of the exclusion to McMaster's own use of the propoxyphene. According to the court, even if it accepted as a threshold proposition that, to the extent that McMaster's death arose out of Scaduto's use of his prescribed propoxyphene, it was excepted from the exclusion (and was, therefore, covered), the fact remained that McMaster's own use of the propoxyphene clearly did not fall within the exception.

 

Because there was no serious question that McMaster's use of the propoxyphene fell within the exclusion , his death was excluded from coverage under the policy. The court explained that it had ruled previously that the fact that other causes for an injury also may exist did not preclude a determination that the injury arose out of activities excluded from coverage under the policy.

 

The court stated that the instant case furnished an even more compelling basis for application of the exclusion, as the excluded use stood as the immediate cause of McMaster's death and what ever causal contribution Scaduto's use may have furnished was decidedly more remote.

 

Thus, the judgment of the lower court was affirmed.