Metropolitan Property & Casualty Insurance Co. v. Morrison

Summary

The Massachusetts Supreme Judicial Court interprets a homeowner’s policy exclusion for bodily injury resulting from an insured’s “intentional and criminal acts.” It holds that a guilty plea to general-intent crimes does not, by itself, eliminate the insurer’s duty to defend because the plea lacks preclusive effect. The court further holds that if the insurer breached its duty to defend and the insured defaulted, the insurer may be bound by the underlying complaint’s factual allegations of negligence when determining its indemnity obligation, and remands for further proceedings.

Holdings

1. An exclusion for bodily injury resulting from an insured's intentional and criminal acts applies when the insured intended to commit the conduct that caused the injury and that conduct was criminal; it does not require proof that the insured intended the resulting harm.
2. A guilty plea resulting in a criminal conviction does not conclusively establish that a policy exclusion applies and does not, by itself, eliminate an insurer's duty to defend.
3. When an insurer breaches its duty to defend and the insured defaults in the underlying action, the insurer is bound by the factual allegations in the complaint establishing negligence when determining whether it owes indemnification, unless another coverage issue remains that is not inconsistent with negligence.

Questions Presented

1. Whether a homeowner's liability-policy exclusion for bodily injury resulting from an insured's intentional and criminal acts applies when the insured intended the conduct causing the injury and the conduct was criminal, without proof that the insured intended the resulting harm.
2. Whether an insurer owes a duty to defend when the underlying complaint alleges negligence or recklessness that is reasonably susceptible of coverage, even though the insured pleaded guilty to general-intent crimes arising from the same incident.
3. Whether an insurer that breaches its duty to defend is bound by the factual allegations establishing the insured's negligence when the insured defaults in the underlying action, for purposes of determining the insurer's duty to indemnify.

Disposition

vacated