Animal Exclusion defeats concurrent causation argument

Charles Stafford v. Scottsdale Ins. Co., No. 10-1397 (3d Cir.) (December 3, 2010) (applying N.J. law), reh’g en banc den. (Jan. 4, 2011)

Type of Case: Insurance Coverage

Practice Area(s): Insurance Appellate

Lawyer(s): Bradley M. Jones Thomas H. Crouch

Office(s): Minneapolis Chicago

Date: Jan 4 2011

The Third Circuit Court of Appeals upheld the Animal Exclusion despite a negligent owner claim. Tank the pit bull attacked the claimant, who then secured a default judgment of over $1,000,000 against Scottsdale Insurance Company’s insured. Following judgment, the claimant sought to obtain the benefits of the insured’s liability coverage, under a homeowner’s policy issued by Scottsdale. The claimant also sought damages in excess of policy limits, arguing that Scottsdale had refused to defend and indemnify its insured in bad faith. The policy contained an Animal Exclusion endorsement, barring insurance coverage for “‘bodily injury’ . . . caused by any animal.” The claimant argued that the exclusion did not apply because the judgment obtained in the underlying liability action was predicated on the dog owner’s negligence in permitting the dog attack, and not based on Tank’s attack on the claimant. Meagher & Geer distinguished a line of New Jersey case law applying the doctrine of concurrent causation, where an insured can recover where there are both covered and excluded causes of loss. Meagher & Geer argued that the doctrine did not apply because the dog owner’s negligence was not a concurrent cause, but was instead inextricably intertwined with Tank’s attack, and thus the exclusion operated to bar coverage. The Third Circuit Court of Appeals agreed, concluding that Scottsdale had no duty to defend or indemnify the insured and had not acted in bad faith.

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