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Kentucky Supreme Court addresses mental capacity as applicable to intentional act exclusion in homeowner’s policy

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Kentucky Supreme Court addresses mental capacity as applicable to intentional act exclusion in homeowner’s policy

In Foreman vs. Auto Club Property-Casualty Insurance Company, ____ S.W. 3d ____ (Ky 2021) the Kentucky Supreme Court addressed whether the intentional act exclusion in a homeowner’s insurance policy barred coverage for a home fire set by the insured’s 16 year old son who had a long history of severe mental illness.  In reversing a summary judgment in favor of the homeowner/parents as to coverage the Court noted that while the language of the exclusion was unambiguous, an insured can nonetheless defeat application of the intentional act exclusion if they can show on remand that at the time of the act that their son did not know right from wrong and further did not understand the nature and quality of his actions so as to make him unable to understand the physical nature of their consequences.  Although not addressed by the majority given that the insureds had not raised this additional issue before the trial court, Justice Keller in a three-justice concurrence noted that the parents might, as innocent co-insureds, still be entitled to coverage if they could show that they were not complicit in their son’s conduct.  An analogy was drawn to the protection that KRS 304.12-211(2)(b) provides to an innocent co-insured whose loss arose out of a pattern of domestic violence and abuse and the perpetrator is criminally prosecuted for the act.  In their concurrence these three judges call upon the Kentucky legislature to enact broader protection for innocent co-insureds on insurance claims, finally noting that changes in public policy should not be made by judicial fiat.

Prepared by Peter Sewell