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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. It really doesn't matter what the law IS, if law enforcement refuses to take reports (or take them seriously), if courts refuse to allow unrepresented parties to speak (especially in Small Claims, which is supposedly "informal"). It doesn't matter what the law IS, if constituents are unable to make effective contact or receive any meaningful response from their representatives. Two of our pets were unnecessarily killed; court records reflect that I "abandoned" them. Not so; when I was denied one of them (and my possessions, which by court order I was supposed to be able to remove), I went directly to the court. And earlier, when I tried to have the DV PO extended (it expired while the subject was on probation for violating it), the court denied any extension. The result? Same problems, less than eight hours after expiration. Ironic that the county sheriff was charged (and later pleaded to) with intimidation, but none of his officers seemed interested or capable of taking such a report from a private citizen. When I learned from one officer what I needed to do, I forwarded audio and transcript of one occurrence and my call to law enforcement (before the statute of limitations expired) to the prosecutor's office. I didn't even receive an acknowledgement. Earlier, I'd gone in to the prosecutor's office and been told that the officer's (written) report didn't match what I said occurred. Since I had the audio, I can only say that I have very little faith in Indiana government or law enforcement.

  2. One can only wonder whether Mr. Kimmel was paid for his work by Mr. Burgh ... or whether that bill fell to the citizens of Indiana, many of whom cannot afford attorneys for important matters. It really doesn't take a judge(s) to know that "pavement" can be considered a deadly weapon. It only takes a brain and some education or thought. I'm glad to see the conviction was upheld although sorry to see that the asphalt could even be considered "an issue".

  3. In response to bryanjbrown: thank you for your comment. I am familiar with Paul Ogden (and applaud his assistance to Shirley Justice) and have read of Gary Welsh's (strange) death (and have visited his blog on many occasions). I am not familiar with you (yet). I lived in Kosciusko county, where the sheriff was just removed after pleading in what seems a very "sweetheart" deal. Unfortunately, something NEEDS to change since the attorneys won't (en masse) stand up for ethics (rather making a show to please the "rules" and apparently the judges). I read that many attorneys are underemployed. Seems wisdom would be to cull the herd and get rid of the rotting apples in practice and on the bench, for everyone's sake as well as justice. I'd like to file an attorney complaint, but I have little faith in anything (other than the most flagrant and obvious) resulting in action. My own belief is that if this was medicine, there'd be maimed and injured all over and the carnage caused by "the profession" would be difficult to hide. One can dream ... meanwhile, back to figuring out to file a pro se "motion to dismiss" as well as another court required paper that Indiana is so fond of providing NO resources for (unlike many other states, who don't automatically assume that citizens involved in the court process are scumbags) so that maybe I can get the family law attorney - whose work left me with no settlement, no possessions and resulted in the death of two pets (etc ad nauseum) - to stop abusing the proceedings supplemental and small claims rules and using it as a vehicle for harassment and apparently, amusement.

  4. Been on social security sense sept 2011 2massive strokes open heart surgery and serious ovarian cancer and a blood clot in my lung all in 14 months. Got a letter in may saying that i didn't qualify and it was in form like i just applied ,called social security she said it don't make sense and you are still geting a check in june and i did ,now i get a check from my part D asking for payment for july because there will be no money for my membership, call my prescription coverage part D and confirmed no check will be there.went to social security they didn't want to answer whats going on just said i should of never been on it .no one knows where this letter came from was California im in virginia and been here sense my strokes and vcu filed for my disability i was in the hospital when they did it .It's like it was a error . My ,mothers social security was being handled in that office in California my sister was dealing with it and it had my social security number because she died last year and this letter came out of the same office and it came at the same time i got the letter for my mother benefits for death and they had the same date of being typed just one was on the mail Saturday and one on Monday. . I think it's a mistake and it should been fixed instead there just getting rid of me .i never got a formal letter saying when i was being tsken off.

  5. Employers should not have racially discriminating mind set. It has huge impact on the society what the big players do or don't do in the industry. Background check is conducted just to verify whether information provided by the prospective employee is correct or not. It doesn't have any direct combination with the rejection of the employees. If there is rejection, there should be something effective and full-proof things on the table that may keep the company or the people associated with it in jeopardy.

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