Shooting Your Deer Hunting Partner is Not Nice and Possibly Not Covered

HOMEOWNERS – CRIMINAL ACT EXCLUSION – CRIMINAL NEGLIGENCE
Gruninger v. Nationwide Mut. Ins. Co.
(4th Dept., decided 6/11/2010)

While deer hunting together, Nationwide's insured, Jeffrey Harmer (actual name), shot and injured plaintiff Michael Gruninger.  As a result of the incident, Harmer pleaded guilty to assault in the third degree , a class A misdemeanor, in violation of subsection 3 of section 120.00 of the New York Penal Law, which provides:

A person is guilty of assault in the third degree when:

     3.  With criminal negligence, he causes physical injury to another person by means of a deadly weapon or a dangerous instrument.

After being notified of the incident, Nationwide denied liability coverage to Harmer based on, among other things, the criminal act exclusion of his homeowners policy with Nationwide, which negated coverage for bodily injury "caused by or resulting from an act or omission [that] is criminal in nature and committed by an insured."  Gruninger sued and obtained a money judgment against Harmer, and then brought this action pursuant to New York Insurance Law § 3420(a)(2) against Nationwide, seeking payment of the underlying judgment.  Nationwide successfully moved for summary judgment, and the plaintiffs appealed.

In unanimously AFFIRMING Supreme Court's order granting summary judgment to Nationwide, the Fourth Department agreed that the policy's criminal act exclusion applied to negate liability coverage in favor of Harmer:

In Slayko v Security Mut. Ins. Co. (98 NY2d 289, 292), the defendant's insured had pleaded guilty to assault in the second degree (Penal Law § 120.05 [4]), arising from an incident in which he pointed a shotgun at the plaintiff and pulled the trigger, incorrectly believing that the gun was unloaded. The Court of Appeals concluded that a provision in the insurance policy issued by the defendant excluding coverage for liability “arising directly or indirectly out of instances, occurrences or allegations of criminal activity by the insured'” did not violate public policy and that it properly excluded coverage for the plaintiff's injuries (Slayko, 98 NY2d at 294-296). 

Here, plaintiffs correctly concede that the shooting incident falls within the criminal act exclusion in the homeowners' policy and, based on the Court's decision in Slayko, such an exclusion is not barred by public policy.  Plaintiffs contend, however, that this case is of the sort anticipated by the Court when it acknowledged in Slayko that "[a] case may arise in which a broad criminal activity exclusion . . . facially applies, yet works an injustice because the prohibited act involves little culpability or seems minor relative to the consequent forfeiture of coverage" (id. at 294). We reject that contention. Pursuant to Penal Law § 120.00 (3), "[a] person is guilty of assault in the third degree when . . . [w]ith criminal negligence, he [or she] causes physical injury to another person by means of a deadly weapon or a dangerous instrument." Contrary to plaintiffs' contention, criminal negligence as defined in Penal Law § 15.05 (4) is not synonymous with the common-law negligence standard applied in civil cases (see PJI 2:10), and not every hunting accident would be excluded under the criminal activity exclusion inasmuch as such accidents do not necessarily involve criminal negligence. 

New York Penal Law § 15.05 defines "criminal negligence" as:

     4. "Criminal negligence."  A person acts with criminal negligence with respect to a result or to a circumstance described by a statute defining an offense when he fails to perceive a substantial and unjustifiable risk that such result will occur or that such circumstance exists.  The risk must be of such nature and degree that the failure to perceive it constitutes a gross deviation from the standard of care that a reasonable person would observe in the situation.

Is there a fundamental difference between the facts of this case and those of the 55-gallon oil drum wielding drunken college student in Massa v. Nationwide, or do the Fourth and Third Departments merely take differing views on the criminal act exclusion and when it applies?  Apparently key to the non-coverage finding in this case was the fact that the insured pleaded guilty to a crime that involved conduct amounting to criminal negligence, rather than just recklessness.

If there is a set of facts that would fall within what the New York Court of Appeals had in mind for a Slayko exception to application of a liability insurance policy's criminal act or criminal activity exclusion, this is not it.