COA orders judgment for insurer after fatal shooting

An insurance company is under no obligation to defend or indemnify a southern Indiana father whose son shot and killed a man on their property, the Indiana Court of Appeals ruled, reversing a trial court order denying summary judgment for the insurer.

The COA reversed the Perry Circuit Court, which denied an insurance company’s motion for summary judgment in United Farm Mutual Insurance Company v. Stacy B. Matheny, Earl R. Matheny, et al.,18A-CT-515.

Stacy Matheny lived with his father, Earl, in an apartment on the second floor of Earl’s home, after Stacy was released from prison. “Earl thought Stacy was not allowed to live in a house with guns. Earl stored his long guns off-site but kept his handgun with him for personal protection. Earl kept the gun under his pillow and took it with him in a bag when he travelled,” Judge Melissa May wrote for the panel.

Earl also had three mobile homes that he rented to tenants including Pete Paris, who had a frequent visitor, Phillip Chase. Earl and Stacy wanted Chase to stay away because they suspected he was making drugs on the property.

On March 26, 2016, Earl and Stacy stopped at Paris’ mobile home to ask him to clean up about 30 trash bags outside, and Stacy, who noticed Chase’s car present, asked Paris to have Chase come out so they could talk. “Stacy shot Chase in the head with Earl’s handgun. Chase died. Earl did not know when or how Stacy obtained his gun,” May wrote.

Chase’s estate filed a wrongful death action against Earl, claiming he had been negligent in storing the gun and controlling his son. The estate alleged a special relationship between Earl and Stacy, who it alleged “had a history of violent and criminal activity, had been in prison for shooting someone, had an ‘emotional and/or mental disturbance,’… and was prohibited from owning or using a handgun because he is a convicted felon.”

Earl had homeowner’s insurance with United Farm Mutual Insurance Co., but the insurer in February 2017 moved for summary judgment. It argued under its policy that it was not obligated to defend or indemnify Earl or Stacy because the policy included an exclusion for damages resulting from a criminal act.

In January of this year, the trial court denied United Farm’s summary judgment motion, ruling that Stacy was not listed on Earl’s policy and that he lived alone in his own apartment and had no access to Earl’s home.

But the panel took exception to many of the trial court findings. “… Stacy received all his mail at the single address for the home and Earl paid all Stacy’s expenses. Stacy paid no rent. Earl stated several times that Stacy lived with him. Maybe most important, Earl, without being directed to do so by law enforcement, removed all the long guns from the downstairs because he believed Stacy, as a felon, could not live in a house with guns. Earl admitted he nevertheless kept the handgun for personal protection.”

Further, Stacy had access to Earl’s part of the house, where he spent considerable time and regularly ate meals with his father. Therefore, Stacy qualified as a resident of Earl’s house and an insured under the policy, which provides insureds no coverage for damages resulting from criminal acts.

“Because no question of material fact existed as to whether Stacy was a resident of Earl’s household, the trial court erred in denying summary judgment to United,” the panel concluded. “Accordingly, we reverse and remand with instructions to grant summary judgment in favor of United.”