- Ohio Supreme Court Signals Narrow Application of Ohio’s Inferred Intent Doctrine
- March 23, 2016 | Author: David J. Oberly
- Law Firm: Marshall Dennehey Warner Coleman & Goggin, P.C. - Cincinnati Office
- Inferred intent doctrine infers intent of insured to cause harm in certain limited circumstances.
- Where inferred intent doctrine applies, coverage is precluded under intentional acts exclusion.
- In Ohio, inferred intent doctrine has limited applicability.
In Granger v. Auto-Owners Insurance, 40 N.E.3d 1110 (Ohio 2015), the Ohio Supreme Court was afforded its first opportunity since Allstate Insurance Company v. Campbell, 942 N.E.2d 1090 (Ohio 2010) to clarify the reach of Ohio’s inferred intent doctrine, which automatically triggers an insurance policy’s intentional acts exclusion to preclude an insured from obtaining coverage as a matter of law. While the court failed to provide a bright-line rule as to the applicability of the doctrine, the decision is significant nonetheless, as it provides a strong signal that the court is willing to apply the doctrine only in a very limited scope of cases involving conduct that, without question, could not have been engaged in without causing harm or injury.
Steve Granger and Paul Steigerwald owned and operated a rental property in Akron that they rented on a month-to-month basis. Valerie Kozera called Granger in June 2010 to inquire about renting a unit at the complex for her and her son. According to Kozera, during their phone conversation, Granger told Kozera that he did not rent to people with children and ended the phone call. Kozera contacted the Fair Housing Contact Service, Inc. (FHCS), which investigated her claims by using trained testers to interact with Granger. Kozera and FHCS filed suit against Granger and Steigerwald. Based on information from Kozera and the testers, FHCS contended that Granger had discriminated against Kozera, an African-American, on the basis of familial status and race in violation of federal and state law. Kozera claimed that she had “experienced out-of-pocket costs and emotional distress as a result of Defendants’ conduct.”
Granger and Steigerwald were covered under an insurance policy that defined “personal injury” to include “humiliation.” However, the policy excluded coverage for intentional acts, stating, “We do not cover . . . [p]ersonal injury or property damage expected or intended by the insured.” The insurer denied coverage.
At issue on appeal was the insurer’s duty to defend under the policy. After concluding that Kozera’s claim for “emotional distress” damages fell within the policy’s coverage for humiliation, the court turned its attention to determining whether any potential duty to defend was obviated by the policy’s intentional acts exclusion.
Ohio public policy generally prohibits obtaining insurance to cover damages caused by intentional torts. Consequently, most insurance contracts contain an “intentional acts exclusion” stating that the insurer will not be liable for harm intentionally caused by the insured.
An intentional acts exclusion relieves the obligation of an insurance company to provide coverage when the harm alleged is intentionally caused by the insured. The inferred intent doctrine applies when there is no evidence of direct intent to cause harm and the insured denies the intent to cause any harm. Under the doctrine, the insured’s intent to cause harm is inferred as a matter of law in certain instances so as to exclude insurance coverage under the intentional act. The doctrine of inferred intent is based on the principle that the insured’s commission of a particular, deliberate act may, as a matter of law, give rise to an inference of intent, i.e., that the insured intended to cause the resulting harm. The rule applies to those cases in which the insured’s testimony on harmful intent is irrelevant because the intentional act could not have been done without causing harm.
Until recently, the Ohio Supreme Court had only applied the doctrine in cases involving murder and sexual molestation of a minor. However, in Campbell, the court held that the doctrine of inferred intent invokes an insurance policy’s intentional act exclusion when the intentional act of an insured and the resulting harm are intrinsically linked—the insured’s action necessitates the harm. However, while the Campbell court extended the scope of the doctrine, it also cautioned the courts to avoid applying the doctrine in cases where the insured’s intentional act does not necessarily result in the harm caused by that act. Rather, the court held that for an act to fall within the doctrine, the harm must be the inherent result of an intentional act.
The insurer sought application of the inferred intent doctrine in Granger. The insurer argued that discriminatory intent is inferred as a matter of law for purposes of an intentional act exclusion on a claim for pre-leasing housing discrimination. The Ohio Supreme Court disagreed. In its analysis, the court framed the question as whether Granger expected or intended Kozera to be humiliated by his conduct. The court answered the question in the negative, finding that humiliation was not so intrinsically tied to pre-leasing discrimination that Granger’s act necessarily resulted in the harm suffered by Kozera.
Although emotional distress damages are available to victims of housing discrimination, the court noted that such damages are not automatically awarded and that a court is precluded from presuming emotional distress from the mere fact of discrimination. Rather, a plaintiff is required to actually prove that he suffered from emotional distress and that the discrimination caused that distress. With those principles in mind, the court concluded that it could not say that personal injury was intended in that particular instance, or that emotional distress was inherent in the very nature of housing discrimination. For that reason, the court held that the inferred intent doctrine did not apply to bar coverage under the intentional acts exclusion as a matter of law.
The implications of the Granger decision are significant. The opinion provides a clear signal of the court’s willingness to apply the inferred intent doctrine in a particularly narrow fashion. The Ohio Supreme Court is now “two-for-two” in declining to apply the doctrine since expanding the rule of inferred intent beyond cases of murder and sexual molestation. In both Campbell and Granger, the underlying facts were such that harm was almost certain to result from the conduct of the insureds. However, the takeaway from these two decisions is that, to satisfy the inferred intent standard, “almost certain” is not enough; rather, it must be demonstrated that the insured’s conduct could not have possibly been carried out without causing harm or injury. In this respect, it appears clear now that the court is unwilling to infer intent as a matter of law where other consequences of an insured’s conduct are possible.
With respect to the Granger decision in particular, it is difficult to imagine a situation where intentional discrimination fails to result in some type of harm to the recipient. However, the Granger court found that such conduct was insufficient to trigger the inferred intent doctrine. Accordingly, in Ohio, the current state of the law is that the inferred intent doctrine still has limited capability to preclude coverage for allegedly intentional acts.