19th May 2014

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One who knowingly contemplates the “result” of his act before committing the act is committing a deliberate act.  [Hogan v. Midland National Ins. Co., (1970) 3 Cal.3d 553, 560]  Hogan is perhaps the most instructive opinion from the California Supreme Court distinguishing between an intentional act that is covered under a liability policy and a “deliberate” act which is not covered under a liability policy.  The defendant insured in Hogan manufactured a saw.  The user of the saw not knowing there was a defect caused wood to be cut too narrowly.  This was deemed by the Supreme Court to be a covered act.  However the user of the saw in an attempt to eliminate the narrow cutting, made an adjustment which caused the wood to be cut too wide.  This act was held to be excluded as a deliberate act.  An insured performing “acts or activities” intentionally will have coverage for an “accident” in the absence of a finding that the insured intended to cause damages [consequences].  [Hogan v. Midland National Ins. Co. (1970) 3 Cal.3d 553, 561]  See § I58 INTENTIONAL ACT [§ I58:1 Categories of intentional acts; some are covered, some are not covered].

Delgado v. Inter-insurance Exchange (2009) 47 Cal.4th 302

An injury-producing event is not an accident within the policy’s coverage language when all of the acts, the manner in which they were done, and the objective accomplished occurred as intended by the actor.  [Delgado v. Inter-insurance Exchange (2009) 47 Cal.4th 302, 311-312]  Delgado involved two issues:

(1)    whether an act is unexpected, unforeseen, or undesigned determined NOT FROM THE perspective of the INJURED PARTY, but from the perspective of the insured [Delgado, 47 Cal.4th 302, 310] and
(2)    whether an assault and battery performed by the insured in self-defense transforms a knowingly and purposefully inflicted harm into an accident.  [Delgado, 47 Cal.4th 302, 316]

Delgado held that the “mistaken belief” of an insured cannot convert a false imprisonment, termination of an employee, forceable rape, or assault and battery into an accident.  [Delgado, 47 Cal.4th 302, 316]  See § A98 ASSAULT AND BATTERY [§ A98:7 Self-defense; relevancy].  The holding in Delgado is consistent with the holding in Hogan as it relates to the deliberate cutting of wood too wide.  The limited scope of the holdings in Delgado has no relationship to the holding in Hogan relating to the cutting of wood “too narrow” performed by the insured acting without any intent to cause damage.

Consistent with Hogan, Delgado defined any injury producing event as not an accident within a policy’s coverage WHEN all of the acts, i.e. (1) the manner in which they were done, and (2) the objective accomplished occurred as intended by the actor.  [Delgado v. Inter-insurance Exchange (2009) 47 Cal.4th 302, 311-312]  As in Hogan, when the defendant cut the wood “too narrow” there was no objective accomplished.  However when the actor in Hogan deliberately adjusted the saw to over compensate and cut wood “too wide” the actor accomplished the objective intended.

MRI Healthcare Center v. State Farm (2010) 187 Cal.App.4th 766, 781

In MRI Healthcare the court held that a decision to turn off an MRI medical diagnostic machine which thereafter affected the use of the MRI, made with knowledge that “ramping down of the MRI would cause it to malfunction”, was a deliberate act.  See § F44 FORTUITOUS [§ F44:01 In general]; § M38 MISTAKE; § C80 CONSEQUENCES OF THE ACT [§ C80:2].

MRI Healthcare as Delgado Inter-insurance Exchange, discussed above, are consistent with the Supreme Court holding in Hogan precluding deliberate acts intended to cause damage.

Circumstances surrounding the act of the insured must be considered

Before a determination can be made as to whether an intentionally performed act is (1) not covered by the insuring clause, (2) excluded as an intentional act, (3) is not an “accident”, or (4) is not an occurrence, the nature of the act and the circumstances surrounding the act must be considered.  [Hogan v. Midland National Ins. Co. (1970) 3 Cal.3d 553, 560 (the circumstances and the legal consequences differ as to boards cut too wide.)]  See discussion § I58 INTENTIONAL ACT [§ I58:1 Categories of intentional acts; some are covered, some are not covered].

 Delgado and MRI Healthcare, discussed above, involved circumstances supporting a “deliberate act” thereby precluding coverage under a liability or property policy.  On the other hand, circumstances surrounding intentional or deliberate acts which include common activities such as (1) driving an automobile, (2) cutting down foliage or trees, (3) hitting a baseball, (4) unexpected, unforeseen consequences of acts, are covered under liability policies.  See § I58 INTENTIONAL ACT [§ I58:1], § D24 DELIBERATE ACT [§ D24:2 Deliberate act defined].

References in bold are to Mr. Cornblum’s legal text CALIFORNIA INSURANCE LAW DICTIONARY AND DESK REFERENCE, published by ThomsonReuters (1-800-344-5008).  Those with WestLaw can search using the database CAINLAWDDR.

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