Domestic Abuse Exception to Intentional Act Exclusion
Post 4888
Read the full article at https://lnkd.in/greCfR_2, see the full video at https://lnkd.in/gjDDr7gS and at https://lnkd.in/gQh4rP7i and at https://zalma.com/blog plus more than 4850 posts.
Brenda Welch owned a home in Lynnwood, and lived there throughout her marriage to David Morgan. The home was subject to a mortgage held by CitiMortgage Inc. During their marriage, Welch and her ex-husband David Morgan had one child together, K.W.
On May 21, 2014, the court finalized their divorce, awarding Morgan the family home and requiring that he “either sell the property or refinance the debts into his sole name within three (3) years of February 25, 2014.” After the divorce, Welch met a new partner and moved in with him. Still, Welch and Morgan shared custody of K.W., and their parenting plan called for joint decision-making.
On November 16, 2014, Welch went to the Lynnwood home at a prearranged time to pick up K.W. from Morgan’s care. But K.W. was not there. Instead, Morgan attacked Welch, beat her unconscious, doused her in gasoline, and set her and the house on fire. Welch survived but suffered significant mental and physical injuries. The fire destroyed the house.
In Brenda Welch v. Pemco Mutual Insurance Company, No. 85466-6-I, Court of Appeals of Washington (September 3, 2024) PEMCO Mutual Insurance Company denied Brenda Welch insurance coverage for loss incurred after her ex-husband assaulted her and burned down their former marital home. PEMCO determined that the loss was intentional and rejected Welch’s argument that the loss arose from an act of domestic abuse, an exception to the intentional loss exclusion. Welch sued PEMCO. The trial court dismissed Welch’s claims at summary judgment.
THE INSURANCE CLAIM
At the time of the fire, Morgan had not yet sold or refinanced the Lynnwood home. So, the deed still named Welch as an owner and obligor on the mortgage. Welch and Morgan held an all-risk insurance policy on the property through PEMCO. The policy named both Welch and Morgan as insureds. It also listed CitiMortgage as a mortgagee.
The PEMCO policy excluded coverage for “any loss arising out of any act committed by or at the direction of an insured with the intent to cause a loss.” But it has an exception to that intentional loss exclusion for acts of “domestic abuse,” which provides that the exclusion “will not apply to deny an insured’s claim for an otherwise covered property loss if such loss is caused by an act of domestic abuse by another insured under the policy.”
A jury found Morgan guilty of attempted first degree murder domestic violence and first degree arson domestic violence. The trial court sentenced him to 260 months in prison. Welch then sued Morgan for her injuries from the assault. Morgan did not respond, and the trial court entered a default order and judgment against Morgan for $5.06 million. Welch also claimed coverage under the PEMCO policy. And CitiMortgage claimed coverage for the outstanding balance on the mortgage. PEMCO estimated the repair or replacement cost of the damage to the home was $463,732.82.
In June 2016, PEMCO found coverage for CitiMortgage but PEMCO denied Welch’s claim. It explained that the intentional loss provision “precludes coverage not only to the arsonist but to any insured, including Ms. Welch.”
Welch sued PEMCO. The trial court granted in part and denied in part PEMCO’s motion. The court denied PEMCO’s motion on the applicability of the domestic abuse exception. It concluded that Welch and Morgan were not family, so the domestic abuse exception to the intentional loss exclusion did not apply.
ANALYSIS
The Court of Appeals must construe insurance policies as the average person purchasing insurance would. That is, give the language a fair, reasonable, and sensible construction. And the Court of Appeals give undefined terms their plain, ordinary, and popular meaning. The Court of Appeal may turn to the dictionary definition of an undefined term to determine its plain meaning.
Welch’s policy excludes coverage for intentional loss unless “an act of domestic abuse by another insured under the policy” causes the loss. The PEMCO policy language parallels former RCW 48.18.550 (1998), the statute in effect when Morgan tried to kill Welch and burned down the house.
RCW 48.18.550(3) requires insurers to cover intentional loss caused by an act of domestic abuse by another insured under the policy. Modern editions of the dictionary define “family” as “the basic unit in society traditionally consisting of two parents rearing their children,” or “[a] group consisting of parents and their children.” Merriam-Webster Dictionary, (last visited Aug. 20, 2024). Welch meets these definitions because she and Morgan were raising K.W. under a parenting plan that granted them shared custody and called for joint decision-making. As such, they were two parents rearing their child.
An average person purchasing insurance would understand the term “family” under the more modern definition. Because Welch and Morgan share a child that they were raising together, Welch is “family” under the policy’s domestic abuse exception to the intentional loss exclusion. Therefore, the trial court erred by granting summary judgment for PEMCO and refusing to grant partial summary judgment for Welch. Therefore, Summary judgment for PEMCO was reversed and the trial court was directed to enter partial summary judgment for Welch for breach of contract
ZALMA OPINION
The exception to the exclusion was found to apply because – although divorced and no longer married – since Welch and Morgan still had joint custody of a child they fit a dictionary definition of “family” sufficient to allow Ms. Welch to recover her share of the insurance recovery over that paid to the mortgagee. Her ex-husband gets nothing and she will never recover the $5 million judgment she obtained against her ex-husband who will be in jail a long, long time.
(c) 2024 Barry Zalma & ClaimSchool, Inc.
Please tell your friends and colleagues about this blog and the videos and let them subscribe to the blog and the videos.
Subscribe to my substack at https://barryzalma.substack.com/subscribe or
Subscribe to my substack at https://lnkd.in/gmmzUVBy;
Go to X @bzalma; Go to Newsbreak.com https://www.newsbreak.com/@c/1653419?s=01; Go to Barry Zalma videos at Rumble.com at https://rumble.com/account/content?type=all; Go to Barry Zalma on YouTube- https://www.youtube.com/channel/UCysiZklEtxZsSF9DfC0Expg
Go to the Insurance Claims Library – https://lnkd.in/gwEYk
Expert May Not Testify About STOLI for Lack of Experience
Post 5227
Read the full article at https://lnkd.in/g8MPwJxM, see the video at https://lnkd.in/gx6rzPH3 and at https://lnkd.in/gumfUqXv, and at https://zalma.com/blog plus more than 5200 posts.
Insurer Needs to be Careful When Retaining an Expert With No Experience About the Key Issue in the Case.
In Ameritas Life Insurance Corp. v. Wilmington Savings Fund Society, FSB, United States District Court for the District of Delaware (Civil Action No. 23-236-GBW), Judge: Gregory B. Williams (November 7, 2025) Ameritas Life Insurance Corp. (“Ameritas”) sought to void a $3 million life insurance policy on the life of Marvin Flaks (the “Policy”) as a stranger-originated life insurance (“STOLI”) policy lacking an insurable interest under Delaware law.
Defendant Wilmington Savings Fund Society, FSB (“Wilmington Savings”), as securities intermediary and counterclaim-plaintiff, opposed and sought to enforce the Policy.
Motion at Issue:
Wilmington Savings’ Daubert ...
Policy Terms Control Right to Return of Overpayments
Post 5226
See the video at https://lnkd.in/gxtJVDse and at https://lnkd.in/gGBxEHHH, and at https://zalma.com/blog plus more than 5200 posts.
An Insurer that Claims it Paid More than it Owed Admits to an Incompetent Claims Staff
In Scott A. Saveraid Trust for Scott A. Saveraid Revocable Trust v. QBE Specialty Insurance Company 2:25-cv-394-SPC-DNF, United States District Court for the Middle District of Florida, Fort Myers Division, Judge: Sheri Polster Chappell, U.S. District Judge (Date: November 7, 2025)
Key Facts
The plaintiff, Scott A. Saveraid Trust (the “Trust”), owns real property in Fort Myers Beach, FL. The Trust purchased a homeowners insurance policy (the “Policy”) from defendant QBE Specialty Insurance Company (“QBE”). In September 2022, the property sustained damage from Hurricane Ian, a covered peril under the Policy.
The Trust filed a claim with QBE, which investigated and paid $307,622.32 for dwelling coverage and $20,600 for loss of use. QBE alleges the ...
Insured Refused to Pay Additional Premium for Assault & Battery Coverage
Post 5225
See the video at https://lnkd.in/g-h_eWr6 and at https://lnkd.in/gtcRKMiW, and at https://zalma.com/blog plus more than 5200 posts.
Exclusion for Assault & Battery Enforced
In Golden Bear Insurance Company v. The Levee Bar & Grill, LLC et al., No. 4:24-CV-00764-DGK (W.D. Mo. Nov. 7, 2025) the bar was sued because of an assault and battery by an intoxicated patron and sought defense and indemnity from its insurer. Golden Bear (GB) denied the claim because of an assault and battery exclusion in its policy.
FACTUAL BACKGROUND
Underlying Incident and Lawsuit:
On or about an unspecified date in 2024, Defendant Adrian Hubbard (“Hubbard”), a patron at The Levee, became intoxicated after being overserved alcohol. He was removed from the bar without incident but later engaged in a brief altercation outside, bumping a female security guard. An unknown employee of The Levee (“John Doe”), perceiving a threat to himself or the guard, struck Hubbard in the head, ...
The Professional Claims Handler
Post 5219
Posted on October 31, 2025 by Barry Zalma
An Insurance claims professionals should be a person who:
Can read and understand the insurance policies issued by the insurer.
Understands the promises made by the policy.
Understand their obligation, as an insurer’s claims staff, to fulfill the promises made.
Are competent investigators.
Have empathy and recognize the difference between empathy and sympathy.
Understand medicine relating to traumatic injuries and are sufficiently versed in tort law to deal with lawyers as equals.
Understand how to repair damage to real and personal property and the value of the repairs or the property.
Understand how to negotiate a fair and reasonable settlement with the insured that is fair and reasonable to both the insured and the insurer.
How to Create Claims Professionals
To avoid fraudulent claims, claims of breach of contract, bad faith, punitive damages, unresolved losses, and to make a profit, insurers ...
The History Behind the Creation of a Claims Handling Expert
The Insurance Industry Needs to Implement Excellence in Claims Handling or Fail
Post 5210
This is a change from my normal blog postings. It is my attempt. in more than one post, to explain the need for professional claims representatives who comply with the basic custom and practice of the insurance industry. This statement of my philosophy on claims handling starts with my history as a claims adjuster, insurance defense and coverage lawyer and insurance claims handling expert.
My Training to be an Insurance Claims Adjuster
When I was discharged from the US Army in 1967 I was hired as an insurance adjuster trainee by a professional and well respected insurance company. The insurer took a chance on me because I had been an Army Intelligence Investigator for my three years in the military and could use that training and experience to be a basis to become a professional insurance adjuster.
I was initially sat at a desk reading a text-book on insurance ...
The History Behind the Creation of a Claims Handling Expert
The Insurance Industry Needs to Implement Excellence in Claims Handling or Fail
Post 5210
This is a change from my normal blog postings. It is my attempt. in more than one post, to explain the need for professional claims representatives who comply with the basic custom and practice of the insurance industry. This statement of my philosophy on claims handling starts with my history as a claims adjuster, insurance defense and coverage lawyer and insurance claims handling expert.
My Training to be an Insurance Claims Adjuster
When I was discharged from the US Army in 1967 I was hired as an insurance adjuster trainee by a professional and well respected insurance company. The insurer took a chance on me because I had been an Army Intelligence Investigator for my three years in the military and could use that training and experience to be a basis to become a professional insurance adjuster.
I was initially sat at a desk reading a text-book on insurance ...