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Seeking an exclusion for innocent co-insured

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A LaPorte County woman who lost her home to a fire, allegedly started by her estranged husband, is at the center of a legal dispute with her insurance company that could set precedent in Indiana caselaw.

The case focuses on the issue of excluding so-called “innocent co-insureds” from coverage after intentional acts. Insurance companies have traditionally denied claims when a fire was set by only one party listed on the joint policy.

il-insurance03-15col.jpg Ice Miller LLP attorneys (from left) Elizabeth Timme, Sarah Murray and Angela Krahulik are working pro bono to help a LaPorte County woman left homeless by a house fire.(IL Photo/ Perry Reichanadter)

However, a trend has been emerging nationally, according to an article in Property Casualty 360. Increasingly, courts have been holding that the language of “any insured” or “an insured” included in many homeowners’ policies does not enable insurance providers to bar innocent co-insureds from coverage.

Arizona, California, Idaho, Massachusetts and Michigan are some of the states where courts have struck down the coverage denials, finding the intentional act exclusion was invalid.

Gwendolen Womack, a LaPorte County resident, was denied coverage under her policy’s intentional act exclusion clause. Although her husband, Robert, has been charged with setting the house on fire and remains in jail, Allstate Property & Casualty Insurance Co. did not honor her claim because the loss was caused by one of the insured individuals.

A trio of attorneys from Ice Miller LLP has taken Womack as a pro bono client. They counter that by having her claim refused, Womack, a survivor of domestic violence, is continuing to be victimized. They have filed a complaint in LaPorte Superior Court against Allstate, asking for unspecified declaratory relief, damages and costs arising from the house fire and denial of coverage.

Indiana courts have ruled for innocent co-insureds in past cases, namely American Economy Ins. Co. v. Liggett, 426 N.E.2d 136 (Ind. Ct. App. 1981), and Fuston v. National Mutual Ins. Co., 440 N.E.2d 751 (Ind. Ct. App. 1982). However, the state’s judiciary is believed to have never addressed separating co-insureds in cases of domestic violence.

“This is an opportunity to set a good precedent and to make some pretty good public policy,” said Kerry Hyatt Blomquist, legal director at the Indiana Coalition Against Domestic Violence.

Continued victimization

Womack lost her home and her belongings to a fire on May 31, 2012. If not for the advice of a police officer, she could have lost her life.

kerry blomquist Blomquist

Her marriage had endured instances of abuse, but in May 2012, after her husband became violent during an argument, Womack gathered her two children and left. She subsequently filed a protective order that required her husband to stay away from the residence and her place of employment.

A law enforcement official who escorted Womack to the house insisted she gather some essential items and stay elsewhere for her own protection. Womack spent the night at her parents’ house with the intention of returning to her own home after work the next day.

Hours after Womack settled at her parents, her husband called her father and said the house was on fire. By the time Womack was allowed to go to her house, her husband had been arrested and everything she and her children owned was gone.

“We have nothing,” Womack said. “We don’t have anything.”

In a letter dated Nov. 21, 2012, Allstate rejected Womack’s claim. The company stated the policy covering the home imposed joint obligations, which means the responsibilities, acts and failures to act of one insured person will be binding to the other insured person.

Allstate went on to explain that its own investigation had determined that Robert Womack had “both motive and opportunity to set the fire.” It also contended that both Gwen and Robert Womack had “made material misrepresentations regarding this claim.”

Therefore, based upon the policy’s language, the company stated it would not be providing coverage.

Blomquist noted denial of insurance claims from domestic violence victims not only continues the victimization of individuals who have already been abused but also bolsters the position of their abusers who are trying to either kill their victims, devastate them or cause them to be homeless.

womack-burnedhouse-15col.jpg The house was allegedly burned by the woman’s estranged husband. (Photo submitted)

In this case, Blomquist believes Womack has a right to at least half of the amount provided for in the homeowner’s policy.

Allstate declined to further discuss the basis for its decision since the matter is currently under litigation. However, in an email to Indiana Lawyer, the insurance company pointed to its support of domestic violence victims.

“We were very concerned to learn of the unfortunate and criminal circumstances surrounding Ms. Womack’s claim and are saddened by her personal situation,” the email stated, adding the company has invested more than $30 million in support of domestic violence victims. “Allstate understands the devastating impact that domestic violence can have on individuals and households. We are strongly committed to help reduce the incidence and impact of this terrible crime.”

Since the fire, Womack has no permanent place to live. She maintains with the insurance payment, she would be not only able to afford a residence, but also she could have kept her home out of foreclosure.

Now her family is separated, with her teenage daughters staying in two separate locations while she lives with a neighbor.

“It’s hard to say ‘good night’ over a text message,” Womack said.

Unique and special issue

Angela Krahulik, partner at Ice Miller, has handled insurance cases that involved denial of coverage because of an intentional act, but those have mostly been related to environmental contamination matters. Never has she seen a claim be denied where an allegation of domestic violence results in a criminal act.

The Womack case, Krahulik said, involves a unique and special issue. Namely, the victim of the abuse has to deal with the mess caused by the criminal act while the accused abuser is not penalized by the denial of coverage.

Krahulik, along with associate attorneys Elizabeth Timme and Sarah Murray, decided to take this case after hearing Blomquist talk about Womack’s situation during a luncheon for the Women and the Law Division of the Indianapolis Bar Association.

The complaint they filed has one count against Womack’s husband under the Indiana Crime Victims Relief Act. It also lists three counts against Allstate: breach of duties of good faith and fair dealing, breach of contract and declaratory relief.

Cases in other states challenging the intentional act exclusion as applied to domestic violence victims have been carried to the appellate level and, in California, all the way to the state’s Supreme Court.

Krahulik is not looking that far ahead. She hopes Allstate will rescind its denial and provide Womack with coverage.

Although this is the first case of insurance denial to a domestic violence victim to reach the Indiana courts, Blomquist suspects there have been others. But those victims did not have the luck in securing pro bono legal assistance.

Blomquist said she trusts the courts to understand the equity issue in the Womack case. And, noting the national trend, she has faith in the court system.

“I’m cautiously optimistic,” she said. “I’m just glad we can at least make the argument.”

At this point, with the complaint filed and Ice Miller attorneys on her case, Womack described herself as “scared.”

“I feel like if they can’t help me, then I’m done,” she said.•

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  1. From back in the day before secularism got a stranglehold on Hoosier jurists comes this great excerpt via Indiana federal court judge Allan Sharp, dedicated to those many Indiana government attorneys (with whom I have dealt) who count the law as a mere tool, an optional tool that is not to be used when political correctness compels a more acceptable result than merely following the path that the law directs: ALLEN SHARP, District Judge. I. In a scene following a visit by Henry VIII to the home of Sir Thomas More, playwriter Robert Bolt puts the following words into the mouths of his characters: Margaret: Father, that man's bad. MORE: There is no law against that. ROPER: There is! God's law! MORE: Then God can arrest him. ROPER: Sophistication upon sophistication! MORE: No, sheer simplicity. The law, Roper, the law. I know what's legal not what's right. And I'll stick to what's legal. ROPER: Then you set man's law above God's! MORE: No, far below; but let me draw your attention to a fact I'm not God. The currents and eddies of right and wrong, which you find such plain sailing, I can't navigate. I'm no voyager. But in the thickets of law, oh, there I'm a forester. I doubt if there's a man alive who could follow me there, thank God... ALICE: (Exasperated, pointing after Rich) While you talk, he's gone! MORE: And go he should, if he was the Devil himself, until he broke the law! ROPER: So now you'd give the Devil benefit of law! MORE: Yes. What would you do? Cut a great road through the law to get after the Devil? ROPER: I'd cut down every law in England to do that! MORE: (Roused and excited) Oh? (Advances on Roper) And when the last law was down, and the Devil turned round on you where would you hide, Roper, the laws being flat? (He leaves *1257 him) This country's planted thick with laws from coast to coast man's laws, not God's and if you cut them down and you're just the man to do it d'you really think you would stand upright in the winds that would blow then? (Quietly) Yes, I'd give the Devil benefit of law, for my own safety's sake. ROPER: I have long suspected this; this is the golden calf; the law's your god. MORE: (Wearily) Oh, Roper, you're a fool, God's my god... (Rather bitterly) But I find him rather too (Very bitterly) subtle... I don't know where he is nor what he wants. ROPER: My God wants service, to the end and unremitting; nothing else! MORE: (Dryly) Are you sure that's God! He sounds like Moloch. But indeed it may be God And whoever hunts for me, Roper, God or Devil, will find me hiding in the thickets of the law! And I'll hide my daughter with me! Not hoist her up the mainmast of your seagoing principles! They put about too nimbly! (Exit More. They all look after him). Pgs. 65-67, A MAN FOR ALL SEASONS A Play in Two Acts, Robert Bolt, Random House, New York, 1960. Linley E. Pearson, Atty. Gen. of Indiana, Indianapolis, for defendants. Childs v. Duckworth, 509 F. Supp. 1254, 1256 (N.D. Ind. 1981) aff'd, 705 F.2d 915 (7th Cir. 1983)

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  5. Some in the Hoosier legal elite consider this prayer recommended by the AG seditious, not to mention the Saint who pledged loyalty to God over King and went to the axe for so doing: "Thomas More, counselor of law and statesman of integrity, merry martyr and most human of saints: Pray that, for the glory of God and in the pursuit of His justice, I may be trustworthy with confidences, keen in study, accurate in analysis, correct in conclusion, able in argument, loyal to clients, honest with all, courteous to adversaries, ever attentive to conscience. Sit with me at my desk and listen with me to my clients' tales. Read with me in my library and stand always beside me so that today I shall not, to win a point, lose my soul. Pray that my family may find in me what yours found in you: friendship and courage, cheerfulness and charity, diligence in duties, counsel in adversity, patience in pain—their good servant, and God's first. Amen."

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