Animal Exclusion Prevents Coverage under Homeowners Policy
The claimant sued the insurer seeking a declaration that a homeowner's policy provided personal liability coverage for injuries sustained in a dog attack. The district court granted summary judgment to the insurer and this appeal followed. This case is Stafford v. Scottsdale Insurance Company, 2010 WL 4923542 (C.A.3, N.J.).
Stafford was attacked by Kennedy's dog, a pit bull mix named Tank. The injuries were severe, requiring seven surgeries to repair. Stafford sued Kennedy for negligent supervision of his dog as well as a strict liability violation of New Jersey's dog bite act. Stafford decided not to pursue the strict liability claim, but he won a $1,107,500 default judgment stemming from Kennedy's negligence.
At the time of the attack, Kennedy was living with his sister who had a homeowners policy issued by Scottsdale . The policy had an exclusion conspicuously marked that denied coverage for bodily injury caused by any animal, whether owned or not owned by any insured. Thus, Scottsdale refused to defend Kennedy and declined to indemnify him for the judgment against him. Kennedy assigned his claim for coverage to Stafford who then brought this action seeking a declaration that the policy provided coverage for the negligence claim. The United States District Court for the District of New Jersey granted summary judgment to Scottsdale and Stafford appealed.
The appeals court noted that New Jersey law dictated that if an exclusion designed to limit the protection provided by an insurance policy is applied, a strict interpretation of that exclusion is applied. Applying a strict interpretation, the appeals court agreed with the district court's ruling; the animal exclusion in the homeowners policy explicitly denied coverage for injury caused by any animal. Read in accordance with its plain and ordinary meaning, the court said that this contractual language could only lead a reasonable person to conclude that the policy does not provide personal liability coverage for injuries sustained in the course of an animal attack.
Stafford argued that the animal exclusion did not preclude personal liability coverage under the circumstances because Kennedy's negligence in supervising the dog was a concurrent source of his liability, independent of the dog's attack. Stafford was relying on the concurrent causation doctrine. However, the court found that Kennedy's alleged negligent supervision of the dog simply cannot be considered a cause of Stafford's injuries, separate and apart from the dog's attack.
The court said that New Jersey law makes clear that liability for negligent supervision is grounded in the insured's failure to protect a plaintiff from injury in a situation where the insured bore the legal obligation to do so. And, viewed in such a light, it is readily apparent that an insured's negligence in supervising the cause of the harm cannot, as a matter of logic be considered a source of liability that is isolable from the harm itself. The two are inextricably intertwined; there is no liability but for the harm. In this case, Kennedy's negligence in supervising Tank was the cause of Stafford's injuries and the animal exclusion precludes coverage for the lawsuit stemming therefrom. To hold otherwise, the court said, would require a strained construction of the policy that New Jersey law prohibits.
Stafford also argued that Scottsdale acted in bad faith when it refused to defend Kennedy. The court said that, in order for Stafford to succeed in his claim, he must demonstrate that, comparing the policy language to the allegations in the complaint, there existed no fairly debatable reason for denying coverage; the court found that this, Stafford cannot do. Having concluded that the animal exclusion clearly and unambiguously precludes personal liability coverage for the injuries caused by Tank's attack, the court concluded that, at the very least, there did exist a fairly debatable reason for Scottsdale to refuse to defend against Stafford's claim for negligent supervision of the dog.
The judgment of the district court was affirmed.
Editor's Note: The United States Court of Appeals formed its opinion in this case by simply applying the language of the exclusion to the allegations against the insured. The court did not “engage in a strained construction to support the imposition of liability” and coverage for the insured. Even an attempt by the claimant to use the concurrent causation theory to force coverage for the claim did not work. The court showed that plain, unambiguous language in an exclusion can be effective in denying coverage.