Country Mutual Insurance Co. v. Eric J. Orloske
820 F.3d 335
8th Cir.2016Background
- Eric Orloske accidentally shot and killed his brother Brian after retrieving a shotgun to scare him; Eric did not know the gun was loaded and tripped on the stairs, causing it to discharge.
- Eric pleaded guilty to second-degree manslaughter; Brian’s next of kin obtained an arbitration award against Eric.
- Country Mutual, Eric’s homeowner insurer, filed a declaratory judgment action seeking a ruling that its policy did not cover Brian’s death based on a criminal-acts exclusion.
- The policy’s criminal-acts exclusion barred coverage for bodily injury or property damage "arising from any criminal act," regardless of conviction or intent.
- The district court granted summary judgment to Country Mutual, finding the exclusion applicable and not ambiguous; the Trustee appealed invoking Minnesota’s reasonable-expectations doctrine.
- The Eighth Circuit reviewed de novo and affirmed, holding the reasonable-expectations doctrine did not invalidate the clear, prominently placed criminal-acts exclusion.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Minnesota's reasonable-expectations doctrine renders the criminal-acts exclusion unenforceable | Trustee: doctrine should apply because insureds would not reasonably expect criminal-acts exclusion to bar coverage for negligent acts; doctrine addresses obscure/unexpected provisions and adhesive policies | Country Mutual: exclusion is clear, unambiguous, and prominently placed in exclusions section; doctrine applies only to ambiguous or hidden provisions | Court: Held for Country Mutual — doctrine is narrow and applies only to ambiguous or obscured/hidden exclusions; exclusion here was clear and conspicuous |
Key Cases Cited
- Carlson v. Allstate Ins. Co., 749 N.W.2d 41 (Minn. 2008) (explains Minnesota's narrow reasonable-expectations doctrine and limits to ambiguous or obscured provisions)
- Atwater Creamery Co. v. Western Nat'l Mut. Ins. Co., 366 N.W.2d 271 (Minn. 1985) (early application of reasonable-expectations doctrine where insurer could not enforce an exclusion contrary to purchaser expectation)
- Bd. of Regents v. Royal Ins. Co. of Am., 517 N.W.2d 888 (Minn. 1994) (limits Atwater to situations where exclusions are unreasonably hidden)
- Babinski v. Am. Family Ins. Group, 569 F.3d 349 (8th Cir. 2009) (applies Minnesota law and reiterates doctrine’s narrow scope)