In this post, I will look at the intentional acts exclusion. A recent case in Kansas, Parker v. Farm Bureau,1 dealt with intended or expected injuries/damages. The court in Parker found you must look to whether an injury was intended or substantially certain to occur, not just whether an injury happened.
Parker was a co-owner of D&B Parker Farms. Both he and the company were insured under a property and liability policy from Farm Bureau. “Advertising injury” was included in the coverage for infringement or misappropriation of copyright, trademark, title or disparagement of an organization’s goods or products. Parker advertised wheat seed for sale, stating it was a three-variety blend including the Fuller variety. Under the Plant Variety Protection Act, the ‘Fuller variety’ is federally protected. Parker was unaware of the PVPA or the protection it granted.
The Kansas Wheat Alliance had an exclusive license to make, use and sell the Fuller variety of wheat. The seed was certified by an approved agency prior to sale. After learning of Parker’s ad, the KWA sued Parker and the farm. Parker and the farm filed a claim with Farm Bureau, who denied the same and refused to defend. Eventually the PVPA claim was settled and suit was filed against Farm Bureau to recoup costs. Farm Bureau moved to dismiss the case and argued there was no coverage due to the intentional acts exclusion since Parker voluntarily and intentionally advertised the Fuller wheat seed variety. This argument was rejected as the court found that the issue was whether Parker intended an injury and not whether an injury was actually caused. Since Parker had not heard of the PVPA, he did not intend that sales would cause an injury.
Proof of a subjective intent to cause injury is not required if an insured does something that a reasonable person would expect would cause injury. The standard in Kansas is as follows:
The insured must have intended both the act and to cause some kind of injury or damage. Intent to cause the injury or damage can be actual or it can be inferred from the nature of the act when the consequences are substantially certain to result from the act.2
Parker did not intend his wheat sales to cause injury and it cannot be said that an injury was substantially certain to occur. There was not “an expected or intended injury” so Farm Bureau’s motion to dismiss the case was denied.
Numerous obscure laws are on the books, and the court here got it right by finding that the plaintiff was not responsible to know every single one of them.