SW Legal studies in Business

Homeowner Insurance Does Not Cover Sale of Deadly Heroin
Description Appeals court held that a homeowner who sold heroin in his home, which killed a user in his home, had no right to insurance coverage in a lawsuit filed by the heirs of the deceased. The sale of heroin was an intentional act excluded from coverage.
Topic Insurance
Key Words Homeowner Insurance; Coverage; Intentional Act; Drugs
C A S E   S U M M A R Y
Facts Greenfield sold heroine to Angela Smith, who ingested the drug at Greenfield's home. She fell unconscious and died. Greenfield pled guilty to criminal charges. Smith's parents sued Greenfield for various torts and demanded that Greenfield's homeowner's insurer had a duty to cover the action. The trial court held that the insurer had a duty to defend and indemnify Greenfield on the tort claim. The insurer appealed.
Decision

Reversed. The insurance policy excluded coverage for intentional acts. An intentional act is defined as one where the consequences of the action are substantially certain. The act of selling heroin in the residence falls within this exlcusion. Even if Greenfield did not intend for the heroin to kill Smith, the risk of adverse effects from heroin was not unexpected, so Greenfield knew that by supplying the heroin he endangered Smith's life.

Citation Minnesota Fire and Casualty v. Greenfield, --- A.2d --- (2002 WL 1822420, Super. Ct., Pa., 2002)

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