Case of the Month: Insurer Not Obligated To Defend Homeowner in Property Dispute

Disputes between neighbors over property lines and encroaching fences are common events. Not so common is the use of an automatic rifle and threats of death by a homeowner in such a dispute. The 10th Circuit court recently affirmed a decision in Colorado finding an insurer did not have a duty to defend a homeowner against a lawsuit. The suit alleged that the homeowner made threats of violence and discharged an automatic rifle in the presence of the neighbor and their contractors constructing a fence on a disputed property line. The case is Browning v. American Family Mut. Ins. Co., 2010 U.S. App. LEXIS 19697 (10th Cir. Sept. 22, 2010).

The insured owned residential property on which the previous owner had constructed a fence. The fence, however, encroached on the neighbor's property. The neighbor sold his property and the new owner took action to remove the allegedly encroaching fence and reconstruct it on the true property line. The insured engaged in an extreme course of conduct which started with verbal barbs and escalated to the insured removing the neighbor's survey markers, stealing fencing materials, and threatening the neighbor with harsh verbal threats and by discharging an automatic rifle in his presence. After the neighbor complained to the sheriff, the insured pled guilty to felony menacing.

The insured eventually filed a quiet title action against the neighbor, and the neighbor filed a counterclaim for trespass, intentional and negligent infliction of emotional distress, and related claims. The jury determined the insured indeed owned the disputed property and that the relocated fence was an encroachment. Nonetheless, the jury also awarded the neighbor damages for the trespass and emotional distress claims.

The insured sought a defense and indemnity which the homeowners insurer denied based on the intentional and criminal conduct of the insured. The insured argued that the claim for negligent infliction of emotional distress and the trespass claim triggered coverage because neither claim necessarily involved intentional conduct. However, the court disagreed finding that the significant part of the neighbor's complaint was the egregious, intentional conduct of the insured, not accidental conduct which is required to trigger coverage under a homeowners policy.

This case reaffirms the principle that whether an insurer has a duty to defend an insured is not based on whether the complaint against the insured alleges injuries caused by an accident. Courts look to the complaint as a whole and not whether a single allegation, taken out of context, might by itself trigger coverage.

Go to Browning v. American Family Mut. Ins. Co. for more details.

The case of the month summary was written by Patrick B. Omilian of Goldberg Segalla, LLP, Buffalo, New York.