The Alaska Supreme Court has ruled an insurance company is liable under its policy for no more than $300,000 in a lawsuit where the Juneau parents of two shooting victims argued for three times that amount.
The high court issued the ruling Friday in favor of United Services Automobile Association, saying their position was “most in accord” with the express language of the policy. It reversed a prior trial court ruling which said the policy taken out could cover up to $900,000.
The lawsuit was originally filed after a December 2008 shooting that killed Juneau teenager Aidan Neary, 14, and seriously wounded another teen, Charles Schneider. They were at the house of friend Kevin Michaud, then 15, who was handling a gun belonging to his parents.
Michaud had loaded one bullet into the gun’s chamber, pointed the revolver at his own head and pulled the trigger but the gun didn’t fire. Then, Michaud pointed the gun at Neary, unbeknownst to him as he walked to get popcorn from the microwave 12 to 15 feet away. The gun fired, and bullet struck and passed through Neary’s torso. The same bullet deflected and lodged into Schneider’s back as he was sitting on a stool drinking juice. It remains lodged in Schneider’s back to this day.
The Neary and Schneider families sued Michaud, his parents and their insurance company USAA since the Michauds had a policy that afforded coverage of $300,000 for “each occurrence” of personal liability.
As the plaintiffs sought judgment as to how much USAA would owe under the policy, the insurance company said it owed no more than $300,000 since it was a “single per-occurrence” policy limit for all claims against the three Michauds. The victim’s parents opposed, arguing there was more than one occurrence, which should increase the amount available.
A trial court judge ruled that each of the three Michauds were entitled to a separate coverage limit of $300,000, but that there was only one occurrence, which would cap the funds available at $900,000.
USAA appealed the first prong of the ruling, saying that the policy limit does not vary depending on the number of people insured while the parents appealed the second matter, saying there were at least six separate occurrences because there were six injured victims (the two teens who suffered bodily injury and the four parents who suffered emotional distress).
In its ruling, the state supreme court held that the Michauds are in fact not entitled to separate policies under the one policy they had taken out. In a 17-page document, Justice Peter J. Maassen wrote that USAA’s policy was clear: The $300,000 limit is the same regardless of the number of people insured, claims made or persons injured.
“The provisions at issue here regarding the limits of the Michauds’ and homeowners’ policy are not ambiguous,” Maassen wrote. “The policy’s Declarations page states that the “Personal Liability” limit of $300,000 applies to “Each Occurrence.” Nothing on the Declarations page suggests that this number will be increased depending on the number of the insureds; indeed, such a construction is expressly prohibited by other language in the policy.”
Regarding the second matter on the number of occurrences, Maassen wrote the shooting was one event despite the number of “effects” or injuries that arose in its wake.
“We consider it unlikely that the ordinary insured who hears of an accident in the home, in the workplace, or on the highway will mentally convert that single event into some other number of accidents depending on the number of negligent acts and omissions that led up to it, or on the number of persons who were injured as a result,” the justice wrote. “There was a single accident in this case — the unforeseen and unexpected firing of the single gunshot that caused all of the plaintiffs’ injuries — and therefore a single occurrence for purposes of liability coverage under the USAA policy.”
The families involved in the case either did not return phone calls or declined to comment by press time Tuesday.
• Contact reporter Emily Russo Miller at 523-2263 or at firstname.lastname@example.org.