Refusing to “condone” insurance coverage for criminal acts, the Minnesota Court of Appeals has ruled that an insurer does not have to defend a homeowner from civil liability in the overdose death of a woman whom he had supplied with methamphetamine.

State Farm had filed a declaratory relief action against Gary Schwich, arguing that the death of Alicia Hackbarth was not an accident or occurrence covered by his homeowners policy. She died in his home after he pressured her to inject meth, rather than snort it, and prepared two syringes of the drug.

Surprising as it may seem, Scott County District Court Judge Carol Hooten found State Farm had a duty to defend Schwich from the wrongful death suit filed by Hackbarth's next of kin and granted him summary judgment.

But the appeals court said in a May 20 decision that Hooten had erred in deciding Hackbarth's death was not excluded from coverage as an intentional, willful, or malicious act. While Schwich did not intend to kill her, it concluded,

when an insured has knowingly provided an injured party with methamphetamine, by preparing a syringe and encouraging the injured party to inject the drug, intent to injure is inferred as a matter of law.

According to the coroner's report, Hackbarth, who was living in Schwich's home, died of cardiac arrhythmia caused by acute meth and alcohol intoxication. Before she injected herself, she had snorted meth twice and drunk steadily all day.

Schwich was a habitual meth user himself and, unlike Hackbarth, preferred to inject the drug so he could achieve a quicker high. He testified that he did not consider meth to be a dangerous drug and had never heard of anyone overdosing or dying from using it.

But Judge Roger M. Klaphake, writing for the appeals court, said it “strains credibility for Schwich to assert that he was unaware of the serious dangers posed by meth use.”

“Schwich knew that providing Hackbarth with meth was unlawful, but he did so regardless of its iillegality, and did it with a deliberate and calculated indifference to the risk of injury,” the opinion said.

Klaphake also agreed with State Farm's public policy arguments against allowing coverage. Insurance policies, he said,

are intended to protect an insured from the consequences of unintended and accidental actions, even those undertaken with breathtaking stupidity and resulting in serious injury. But they are not intended to relieve an insured from the consequences of serious criminal acts, and we, as a matter of public policy, cannot condone coverage for such acts.

Schwich was convicted of aiding and abetting third-degree murder without intent to cause death. Another resident of his home, Jeanne Stone, helped Hackbarth inject the meth.

By Matthew Heller
5/30/08