In Liberty Insurance Corp. v. Keck, the court was faced with competing motions stemming from an assault that occurred during a concert at Lincoln Financial Field. On June 29, 2009, Keck was assaulted by the insured, Hickey, while attending a concert. She sustained serious injuries. She initially sued Hickey, the stadium operator, and the stadium’s hired security in the Court of Common Pleas of Philadelphia County, and included a negligence claim in her complaint. Hickey made a demand on his carrier for a defense and for indemnification, pursuant to a homeowners insurance policy issued by the insurer.
In February 2011, the insurer filed this action for Declaratory Judgment, seeking a declaration that it is not required to indemnify the insured from any judgment, verdict, or award entered against him as a result of the victim’s original lawsuit; or to provide a defense in that suit. Even though a negligence claim was pleaded, the insurer asserted that the victim’s injuries did not result from an “occurrence” as defined by the carrier’s policy because the injuries were not the result of an accident, but were intended by Hickey in his aggravated assault of Keck.
Hickey counterclaimed that the insurer violated Pennsylvania’s bad faith statute by denying coverage and a defense without any reasonable basis for doing so. Specifically, the insured alleged that the insurer denied coverage solely on the basis of the victim’s allegations against him, without conducting any investigation of the facts underlying the incident.
The insurer argued that Hickey failed to state a valid claim because it only has an obligation to defend or indemnify if the victim’s injuries were accidental.
Under Pennsylvania law, the duty to defend is determined by comparing the four corners of the complaint with the policy’s term, and a defense must be provided unless it is clear that the allegations made do not potentially fall within the policy’s coverage parameters. While the court found that the insurer’s policy did exclude from personal liability coverage “bodily injury” that is “expected or intended,” it recognized three factors running contrary to the carrier’s position that intent was conclusively established for purposes of denying a defense and coverage: (1) Keck’ complaint does not allege that the insured’s actions were intentional; (2) although Hickey was convicted of aggravated assault, this did not conclusively establish intent; rather, the court recognized that intent is not a required element in an aggravated assault conviction; and (3) the insured was intoxicated at the time of the assault – bearing negatively upon the ability to act intentionally.
Therefore, the court found that the counterclaim alleged a plausible claim that the insurer acted in bad faith by asserting the absence of coverage on the basis of its reading of the allegations in the victim’s complaint alone, without further investigation; and by denying Hickey a defense.
Date of Decision: August 22, 2011