UNITED SERVICES AUTOMOBILE ASSOCIATION, Appellant and Cross-Appellee,
Mary E. NEARY and Patrick T. Neary, individually, and on behalf of their deceased son, Aidan Neary, and Charles J. Schneider, II, and Dareen Puhlick, both individually and on behalf of their minor son, Charles J. Schneider, III, Appellees and Cross-Appellants.
Rehearing Denied Sept. 16, 2013.
Marc G. Wilhelm and Paul W. Waggoner, Richmond & Quinn, Anchorage, for Appellant/Cross-Appellee United Services Automobile Association.
Deborah A. Holbrook, Law Offices of Deborah A. Holbrook, Juneau, for Appellees/Cross-Appellants Neary.
Daniel G. Bruce and Megan A. Wallace, Baxter Bruce & Sullivan P.C., Anchorage, for Appellees/Cross-Appellants Schneider and Puhlick.
Before: FABE, Chief Justice, STOWERS, MAASSEN, and BOLGER, Justices.
Fifteen-year-old Kevin Michaud fired a single shot from a revolver belonging to his parents, killing one friend and seriously
wounding another. The parents of the two victims sued Kevin, his parents, and their insurance company, United Services Automobile Association (USAA). The Michauds' liability policy provided a $300,000 limit for " Each Occurrence" of " Personal Liability." The superior court ruled that the policy afforded $900,000 of coverage because there had been a single occurrence and Kevin and his parents were each entitled to a separate per-occurrence policy limit. USAA appeals, arguing that the policy affords a single per-occurrence policy limit of $300,000 regardless of the number of insureds. The victims' parents also appeal; they contend that not only were there three individual coverage limits, one each for Kevin and his parents, but there were also multiple occurrences. We conclude that USAA's position is most in accord with the express language of the policy, the reasonable expectations of an insured, and case law, and we therefore reverse the superior court's decision.
II. FACTS AND PROCEEDINGS
On December 10, 2008, Kevin Michaud was visiting with some friends in his home after school. He took a revolver from his father's gun cabinet, handled it for awhile, then put a bullet in one chamber of the cylinder. He aimed the revolver at himself and pulled the trigger, then aimed at his friend, 14-year-old Aidan Neary, and pulled the trigger again. The gun fired on the second pull of the trigger. The shot passed through Aidan's body, fatally wounding him, then struck 14-year-old Charles J. Schneider III (Chase) in the spine, where the bullet still remains.
Chase and his parents, Charles J. Schneider II and Dareen Puhlick, sued Kevin and his parents, Michael K. and Michele M. Michaud. They alleged several theories of liability, including negligence and negligent infliction of emotional distress (NIED). Aidan's estate and Aidan's parents, Mary E. and Patrick T. Neary, also sued the three Michauds on theories including negligence and NIED. The NIED claims were based on the emotional trauma the parents experienced upon witnessing the harm caused to their children. Both the Neary and the Schneider/Puhlick families also sued the Michauds' insurer, USAA, seeking a declaratory judgment as to USAA's liability under its policy. USAA counterclaimed for a declaratory judgment limiting coverage.
For ease of reference we refer to the parents of Aidan and Chase as " the parents" and to Kevin's parents as " the Michauds."
The Declarations Page of the Michauds' insurance policy, under the heading " COVERAGES AND LIMITS OF LIABILITY," provides: " SECTION II. E. Personal Liability— Each Occurrence $300,000." The definitions section of the policy defines the word " occurrence" as meaning " an accident, including continuous or repeated exposure to substantially the same general harmful conditions, which results, during the policy period, in: a. bodily injury; or b. property damage."
Section II, Coverage E, to which the Declarations Page refers, describes more specifically the grant of coverage for " Personal Liability" and provides, in pertinent part:
If a claim is made or a suit is brought against an insured for damages because of bodily injury or property damage caused by an occurrence to ...