The Four Corners Rule Strikes Again

It is axiomatic that the duty to defend is broader than the duty to indemnify. However, every liability policy excludes coverage for the intentional act of shooting a plaintiff in the stomach with a gun. However, in Pennsylvania, where the four corners rule of policy interpretation applies, when a plaintiff alleges both intentional and negligent acts, regardless of actual facts, the insurer must defend the shooter. In Michael D’Imperio v. Nationwide General Insurance Company A/K/A Nationwide Mutual Insurance Company A/K/A Nationwide Property And Casualty Insurance Company, No. 1474 EDA 2020, Superior Court of Pennsylvania (July 13, 2021) evidence extrinsic to the complaint established that the insured intentionally shot the plaintiff since his suit alleged both accidental and intentional acts, the potential for coverage existed and Nationwide was required to defend.

Nationwide General Insurance Company appealed from the judgment entered in favor of Michael D’Imperio, following a non-jury trial.

FACTS

In the DiBello complaint, Mr. DiBello alleged that [Appellee] intentionally fired a gun at Mr. DiBello. Mr. DiBello alternatively alleged that [Appellee] “carelessly fir[ed] a gun in the vicinity of a crowd of people,” “creat[ed] a trap and/or nuisance and/or dangerous condition,” and “fail[ed] to properly control a firearm.”

Nationwide insures [Appellee] pursuant to a homeowner’s policy (“the Policy”). The Nationwide homeowners policy provides liability coverage to [Appellee]. The policy excluded coverage caused by an act intending to cause harm done by or at the direction of any insured.

The trial court entered a decision in favor of Appellee requiring Nationwide to defend.

Appellant argued that the trial court erred in concluding that Appellant had a duty to defend Appellee in the DiBello action based on the allegations in the DiBello complaint. However, under Pennsylvania law, the duty to defend is governed by the allegations of the complaint in the underlying action. Appellant claimed that the factual allegations of the DiBello complaint indicates that Appellee acted intentionally by accosting DiBello and firing his gun at DiBello.

Nationwide argued, logically, that to claim that Appellee aiming his handgun at DiBello and firing a shot was an accident “strains common sense.” However, the four corners rule effectively eliminates common sense and limits an appellate court’s work to the words of the complaint and orders the court to ignore evidence extrinsic to the complaint.

ANALYSIS

When an insured who has been sued requests coverage under an insurance policy, the insurer is required to accept all of the allegations contained in the third party’s complaint as true and provide a defense if there is a possibility that the injury alleged could fall within the scope of the policy. Generally, exclusionary clauses are strictly construed against the insurer and in favor of the insured.

As long as a complaint alleges an injury which may be within the scope of the policy, the insurer must defend its insured until the claim is confined to a recovery the policy does not cover.

In his complaint, Mr. DiBello alleges that he was “accosted by [Appellee],” and that “[Appellee] produced a handgun and fired it at [Mr. DiBello] thereby striking [him] in the abdomen.” Mr. DiBello brings a negligence claim against [Appellee], claiming that [Appellee] “carelessly [fired] a gun in the vicinity of a crowd of people,” “[created] a trap and/or nuisance and/or dangerous condition;” and “[failed] to properly control a firearm.” Therefore, on the face of the complaint, Mr. DiBello’s injury may have been an “occurrence” resulting from [Appellee] accidentally firing a gun, i.e., “failing to properly control a firearm.” If true, these allegations constitute an “unexpected or undesirable event,” and therefore fall within the scope of Nationwide’s Policy.

The factual allegations of the DiBello complaint, could be read to allege that Appellee intentionally shot DiBello, but in liberally construing the underlying complaint in favor of Appellee as the insured, its factual allegations could also depict an accidental shooting. The court of appeal concluded that: “[T]he factual allegations of the DiBello complaint do not necessarily preclude the possibility that the shooting was accidental, therefore the trial court did not err in concluding the DiBello pled an “occurrence” as defined in the Policy.

The allegations of the underlying complaint are that Appellee drew a handgun and fired it at DiBello. The factual allegations of the underlying complaint, when liberally construed in favor of the insured, do not preclude the possibility that the shooting was accidental. As for Appellant’s contention that the underlying plaintiff has artfully pleaded the factual allegations of his complaint to avoid coverage exclusions, the appellate court disagreed. Here, the underlying complaint alleges both intentional and negligent conduct. Therefore, we do not hold that the factual allegations of the underlying plaintiff complaint constitute artful pleading designed to avoid coverage exclusions.

Appellant essentially argues that it is against public policy to require an insurer to defend a case based upon false and fraudulent claims to verdict without the ability to pursue a declaratory judgment action to resolve the question of coverage. Appellant contends that to require the insurer to defend the insured creates a conflict between the attorney hired to defend the insured and the insurer who is responsible for paying the attorney and the verdict.

The initial determination of whether an insurer has a duty to defend requires the trial court to examine the underlying complaint. The appellate court’s analysis is limited to the four corners of the complaint and the four corners of the insurance contract and extrinsic evidence may not be considered.

The trial court could not, therefore, consider evidence outside the complaint. The trial court’s decision was affirmed.

ZALMA OPINION

The four corners rule is a creation to provide coverage for defense that an insurer never intended to insure and to require a defense for the most intentional of all acts: shooting a plaintiff in the stomach. Evidence provided to the court established the shooting was intentional but the court concluded it could not consider the extrinsic evidence and must limit its analysis to the pleading. Coverage for a defense in states like Pennsylvania ignores evidence and limits itself to the charges regardless of how ridiculous were the allegations and contrary to the actual facts.