Keckler v. Meridian Security Insurance Co.
2012 Ind. App. LEXIS 196
| Ind. Ct. App. | 2012Background
- June 29, 2008, Creighton, insured under Meridian umbrella, caused a head-on collision on State Road 25; passengers Keckler, Holloway, Felda, Norman, Scott, and the Boganwrigh ts sued for injuries and wrongful death.
- Creighton was found in possession of marijuana; hospital tests were positive for cannabin oids, but exact last use time was uncertain and no psychoactive level test was performed.
- Meridian issued an umbrella policy with a controlled substances exclusion covering bodily injury arising out of use or possession of a controlled substance (marijuana).
- Meridian filed a declaratory judgment action seeking no coverage for the accident; Appellants countered that the exclusion did not apply because Creighton’s marijuana use was not proven to be the efficient and predominant cause of the accident.
- The trial court granted summary judgment for Meridian, relying on public policy and absence of conclusive causation; Appellants appealed.
- The Indiana Court of Appeals reversed and remanded, holding the exclusionary clause could not be applied as a matter of law based on the record.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the policy’s exclusion for use of a controlled substance applies here | Keckler/Memo: exclusion should apply if marijuana use was the efficient cause | Meridian: exclusion applies if Creighton’s marijuana use was efficient and predominant cause | Exclusion not established as a matter of law; material facts remain |
| Whether public policy supports introducing a public policy exclusion to deny coverage | Appellants: public policy should not allow coverage for injuries tied to illegal drug use | Meridian: public policy should support excluding coverage | Public policy not read into policy; not supported; reversal on other grounds |
Key Cases Cited
- Sharp v. Indiana Union Mutual Insurance Co., 526 N.E.2d 237 (Ind. Ct. App. 1988) (arising-out-of language requires efficient and predominant cause for exclusion)
- Bennett v. State, 801 N.E.2d 170 (Ind. Ct. App. 2003) (criminal-conduct/impairment distinctions in criminal statutes differ from insurance coverage exclusions)
- Shepler v. State, 758 N.E.2d 966 (Ind. Ct. App. 2001) (no agreed threshold for impairment; testing limitations in determining impairment)
- Forman v. Penn, 945 N.E.2d 717 (Ind. Ct. App. 2011) (homeowner’s policy exclusion for controlled substances; distinctions from car-accident context)
- Abney v. State, Abney v. State, 766 N.E.2d 1175 (Ind. 2002) (driving conduct as substantial cause in criminal prosecutions; relevance to causation in insurance exclusion)
- Greenfield v. Minnesota Fire & Casualty Co., 855 A.2d 854 (Pa. 2004) (public policy exception for Schedule I drugs to preclude recovery; persuasive butnot controlling)
- Eisenman v. Hornberger, 264 A.2d 673 (Pa. 1970) (refused to rewrite contracts to exclude coverage; noted limits of public policy)