Chubb and Hudson confirmed in denial of insurance for couple accused of delaying son’s murder case

Pennsylvania parents who allegedly found but did not turn over to authorities a gun their son allegedly used to murder a friend are not entitled to insurance to defend them against claims of emotional distress brought by the friend’s mother .

Howard I. Rosenberg and Kimberly L. Rosenberg sought defense and indemnity coverage under a home insurance policy issued by Chubb Indemnity and a personal umbrella from Hudson Insurance. Both insurers denied coverage citing language in their policies that prohibits coverage for intentional acts. The parents argue that their actions should be covered because they did not intend to cause the emotional distress alleged by the mother.

The federal district court for western Pennsylvania this week sided with insurers, calling the parents’ conduct a textbook example of actions not covered by insurance.

The Rosenbergs are sued by the mother of the boy their son allegedly killed in their residence, then dragged to a nearby public park to hide the body. The deceased’s mother alleges that the Rosenbergs found a handgun that could have been used in the murder and gave it to their marriage counselor, “for the purpose of preventing or delaying the arrest and prosecution” of their son, because that would probably be evidence. The marriage counselor then reportedly turned the gun over to homicide detectives, telling them she had found the handgun rather than revealing the gun was from the Rosenbergs. The mother claims their actions caused a delay in the police investigation and the discovery of her son’s decomposed remains. She is suing for intentional infliction of emotional distress.

The Rosenbergs argue that Chubb and Hudson should have provided cover despite the possibility that the underlying case against them would become moot, according to the appeal’s decision.

Chubb denied coverage under Masterpiece’s owners’ liability policy because she said the factual allegations made against the Rosenbergs did not constitute bodily injury caused by an “event,” as required. “This conclusion stems from the fact that the acts you are accused of having committed were intentional and not accidental or fortuitous,” the insurer told the Rosenbergs.

The court agreed with Chubb. The factual allegations contained in the deceased’s mother’s complaint, the wording of the policy and the case law regarding “events” and “accidents” lead to the “inevitable conclusion that the bodily harm suffered by the mother was not caused by an event within the meaning of Chubb policy,” the court concluded. The complaint is “full of factual allegations that cannot be characterized as incidental or accidental,” including that the Rosenbergs found the handgun, knew it was likely evidence of the crime, and transferred the possession of the weapon to their marriage counselor for the purpose of preventing/delaying the arrest and prosecution of their son. Due to these alleged actions and inactions, the police investigation and discovery of the body was delayed.

All of these alleged actions or inactions demonstrated that the Rosenbergs “acted with intent to accomplish their particular purpose” of preventing and/or delaying the prosecution of their son. “Such alleged conduct presents a simple example of actions that fall outside the realm of the accidental,” the court concluded.

The court asserted that “conclusive allegations of recklessness do not convert Rosenberg’s actions to events or accidental to trigger coverage in this case.”

Chubb also argued that even if the court found the underlying complaint alleged an “event,” the policy’s “intentional acts” exclusionary wording would exclude coverage. The court again agreed with the insurer.

Rosenberg’s Hudson policy was a personal umbrella policy providing excess insurance beyond the existing limits and coverages of other policies, such as a home or auto insurance policy. Hudson’s motives for denying coverage and the court’s analysis of Hudson’s politics generally follow the same path as Chubb’s situation, but with a little nuance.

The Rosenbergs, along with the mother suing them, argued that Hudson’s duty to defend was triggered by Chubb’s denial of coverage, even though Chubb’s policy limits had not been exhausted. They argue that when an underlying insurer, in this case Chubb, denies coverage for claims otherwise covered by the umbrella policy, the umbrella policy must “stand down” and provide a defense to the Rosenbergs.

However, the court asserted that its analysis and findings under Chubb’s policy of “occurrence”, “recklessness” and public order also apply to Hudson’s policy. Hudson’s duty of defense would only be triggered by an “event”.

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