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Wisconsin Court of Appeals Holds Intentional Acts Exclusion Excludes Coverage Where Mentally Ill Person Shoots and Kills his Neighbor - Wright v. Allstate Cas. Co., 2011 WL 29238 (Wis. Ct. App. Feb. 1, 2011)

In Wright v. Allstate Cas. Co., 2011 WL 292138 (Wis. Ct. App. Feb. 1, 2011), the Wisconsin Court of Appeals held that an intentional acts exclusion excluded coverage when a mentally ill person shot and killed his neighbor. Plaintiff Wright sued Allstate Insurance Company and its insureds, Rene Stermole, who shot and killed Wright’s husband, and Maria Stermole, Rene’s mother and housemate. Wright’s lawsuit followed a criminal trial in which a jury convicted Rene of first-degree intentional homicide, but also concluded that he had a mental disease which precluded him from appreciating the wrongfulness of his conduct. Wright’s complaint alleged that Rene negligently shot and killed her husband and that Maria was negligent for keeping a gun in the house when she knew Rene was mentally ill and for failing to prevent Rene from causing harm.

The court held that the intentional acts exclusion in the Allstate policy excluded coverage for Rene’s actions, even though he was mentally ill at the time he killed the plaintiff’s husband. The court reasoned that Rene testified at his criminal trial that he intentionally shot and killed Mark Wright. The jury then found him guilty of intentional homicide. It was evident, therefore, that Rene’s mental illness did not prevent him “from intending his actions.” Id., ¶15. The court further reasoned that the intentional acts exclusion specifically provided that the exclusion applied even if the insured “lacks the mental capacity to govern his . . . conduct.” Id., ¶16. The Allstate policy thus accounted for an insured’s mental illness.

Wright argued that the mental capacity clause within the intentional acts exclusion violated public policy, but the court disagreed. The court observed that its role is to construe insurance policies to give effect to the intentions of the parties. The wording of Allstate’s policy clearly showed the parties’ intent to exclude intentional acts even if the insured lacked the mental capacity to govern his conduct. Accordingly, the mental capacity clause did not violate public policy.

Finally, the court held that the intentional acts of Rene precluded coverage for his mother, Maria. Maria could not have reasonably expected coverage for damages caused by the intentional homicide her son committed. In addition, the policy excluded coverage for all insureds if any insured caused damage.

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About this Author

Heidi Vogt, von Briesen Roper Law Firm, Milwaukee, Insurance and Litigation Law Attorney

Heidi Vogt is a Shareholder and Co-Chair of the Litigation and Risk Management Practice Group as well as the Chair of the Insurance Coverage and Risk Management Section. Her practice focuses on insurance coverage litigation, commercial disputes, constitutional law, and complex litigation. She has represented insurance companies in Wisconsin and across the country in both state and federal courts in complex insurance coverage matters for more than 20 years.

She represents and counsels insurance clients on a wide variety of...

Douglas Raines, Von Briesen Roper Law Firm, Milwaukee, Real Estate, Insurance And Litigation Law Attorney

Doug Raines is a Shareholder in the firm’s Litigation and Risk Management Practice Group. His practice focuses primarily on commercial litigation, insurance defense, and appellate work.

Doug has helped clients achieve positive outcomes through settlement of numerous cases ranging from slip-and-fall, breach of contract, landlord-tenant, and insurance coverage issues.

Before joining von Briesen, Doug served as the law clerk to the Hon. Patience D. Roggensack of the Wisconsin Supreme Court (2007 – 2008 term).

Doug is the author or co-author of multiple law review articles. His work on affirmative action jurisprudence, New Federalism, and Wisconsin’s risk contribution doctrine has been published in the Marquette Law ReviewBoston University Law Review (co-author with Scott A. Moss), and Pace Environmental Law Review (co-author with Peter G. Earle and Fidelma Fitzpatrick), respectively.