 |
 |
to fill out a simple form to connect to Employee Leasing Services in your area.
|
|
|
|
|
Grinnell Mutual Reinsurance Company v. Jungling6/19/2002
p. 8 (1981). Our power to invalidate a contract on public policy grounds must be used cautiously and exercised only in cases free from doubt. Shelter Gen. Ins. Co. v. Lincoln, 590 N.W.2d 726, 730 (Iowa 1999). We must harmonize public policy with the freedom of parties to contract. Principal Cas. Ins. Co. v. Blair, 500 N.W.2d 67, 69 (Iowa 1993).
The central idea of insurance is that is covers fortuitous losses only and does not provide coverage for intentional losses. Altena v. United Fire & Cas. Co., 422 N.W.2d 485, 487 (Iowa 1988). It is contrary to public policy to require insurers to pay for losses occasioned by willful acts. St. Paul Fire & Marine Ins. Co. v. Briggs, 464 N.W.2d 535, 539 (Minn. Ct. App. 1990). "It is axiomatic in the insurance industry that one should not be able to insure against one's own intentional misconduct." Decorative Ctr. of Houston v. Employers Cas. Co., 833 S.W.2d 257, 260 (Tex. Ct. App. 1992); see also Restatement (Second) of Contracts § 195(1), p. 65 (1981) (A contract provision exempting a party for tort liability for harm intentionally caused by the party is unenforceable on public policy grounds).
One reason for this rule is that the availability of insurance may directly stimulate the intentional wrongdoer to violate the law. Ranger Ins. Co. v. Bal Harbour Club, Inc., 549 So.2d 1005, 1007 (Fla. 1989). One court has stated:
Underlying this public policy coverage bar is the concern that permitting coverage in certain circumstances will encourage insureds to engage in intentional misconduct. Barring coverage in these circumstances discourages insureds from intentionally harming others, as intentional wrongdoers cannot then rely on the availability of insurance to shield them from the civil consequences of their misconduct. Similarly, the public policy coverage exclusion bars insureds from recovering for self-inflicted wounds, thereby appropriately preventing insureds from enjoying the fruits of their wrongful acts. Thus, not only does the public policy exclusion deprive intentional wrongdoers of the economic benefits arising from coverage of their wrongful acts, it reaffirms the "moral principle [that] no person should be permitted to allege his own turpitude as a ground for recovery." St. Paul Fire & Marine Ins. Co. v. Jacobson, 826 F. Supp. 155, 162-63 (E.D. Va. 1993) (citations omitted).
Thus, courts have determined it is contrary to public policy to provide insurance coverage for certain types of conduct. See Oktibbeha County Sch. Dist. v. Coregis Ins. Co., 173 F. Supp. 2d 541, 544 (N.D. Miss. 2001) (intentional failure to pay overtime wages); Ranger, 549 So.2d at 1009 (intentional act of religious discrimination); Altena, 422 N.W.2d at 490 (sexual abuse); Briggs, 464 N.W.2d at 539 (willful failure to pay taxes); Cunningham & Walsh, Inc. v. Atlantic Mut. Ins. Co., 744 P.2d 1317, 1320 (Or. Ct. App. 1987) (misrepresentation and deceit). But see Jacobson, 826 F. Supp. at 165 (public policy did not bar coverage of doctor who inseminated women without their knowledge).
The present case involves a claim of fraudulent misrepresentation. Similar claims of misrepresentation and deceit were raised in Cunningham. The complaint alleged the seller had intentionally deceived the purchaser with an intent to cause him to rely on the misrepresentation and to enter into a beer distribution franchise agreement. The Oregon Court of Appeals stated, "we conclude the conduct could not be insured, because to provide coverage for fraud would violate public policy." Cunningham, 744 P.2d at 1318. See also Restatement (Second) of Contracts § 196, p. 69 (1981) (A contract term unreasonably exempting a party from the legal consequenc
Page 1 2 3 Iowa Employee Leasing Services
Employee Leasing Services
|
| |
to fill out a simple form to connect to Employee Leasing Services in your area.
|
|