Court Of Appeal Finds No Coverage For The Unintended Consequences Of An Intended Act

The California Court of Appeal recently held in, State Farm General Insurance Co. v. Frake, that the term "accident" applies to the unintended acts of the insured, but not to the unintended consequences of the insured's intentional acts.

Underlying the Frake decision is the drunken horseplay of several friends on a weekend trip to Chicago. In September 2004, Frake (the insured) went to visit his friend King in Chicago. Frake and King "engaged in a form of consensual horseplay that involved hitting each other in the groin." After attending a Chicago Cubs baseball game, where Frake became very intoxicated, Frake and King continued their game of horseplay. While leaving the game, King tried to hit Frake in the groin, but Frake blocked King's attempt. A short while later, Frake retaliated by "throwing his arm out to the side, where King was standing, and [striking] King in the groin." Frake and King spent the remainder of the weekend together, and King never mentioned that he was in any pain or discomfort as a result of Frake's strike to King's groin. Frake left Chicago after the weekend.

A short while after leaving Chicago, Frake learned that King had sustained "significant injuries" as a result of Frake's strike to King's groin. King later contacted Frake and requested that Frake pay King's medical bills. Ultimately King filed suit against Frake in 2006 alleging causes of action for negligence, assault and battery, and intentional infliction of emotional distress.

Frake tendered the defense of King's lawsuit to State Farm under a "renters policy" which provided liability coverage for "damages because of bodily injury caused by an occurrence." An occurrence was defined as an "accident . . . which results in bodily injury . . . during the policy period." Despite initially declining to defend Frake, State Farm eventually agreed to provide a defense under a reservation of rights. A jury awarded King $450,000. In exchange for not executing the judgment, Frake assigned all claims he had against State Farm to King.

State Farm then brought a declaratory relief action against Frake and King to determine its duty to defend and indemnify Frake in King's lawsuit. State Farm moved for summary judgment on the grounds that because Frake had admitted that he intentionally struck King, Frake's conduct was not an "accident," and therefore State Farm did not have a duty to defend or indemnify. Frake maintained that although he intended to hit King, he did not...