COURT CASE:
Animal Liability Exclusion Stands As Written
In March 2006, Katherine Fowler met with Barbara Bode, an agent for Horace Mann Insurance Company, to
apply for a new homeowners policy. Katherine and her husband, Alan Bode, already had a homeowners
policy through the Massachusetts Property Insurance Underwriting Association’s assigned risk pool (“FAIR
plan”). They wanted to replace this policy with one that was less expensive. While preparing the application for
the Horace Mann policy, Bode requested a copy of the FAIR plan policy declarations page, and it indicated
that the personal liability limit was $500,000.
While completing the application, Bode asked Katherine if she owned certain specific breeds of dogs.
Katherine stated that she did not own any of these particular breeds. She did state that she owned an
American Bulldog, which was not one of the specific breeds Bode asked about.
When the application was completed, both parties signed it and Katherine gave Bode a check for 40% of the
premium amount. Bode then gave Katherine a “Verification of Coverage” sheet, showing personal liability
limits of $500,000.
When Katherine received her full policy in the mail, she “skimmed” it and noticed that it contained an “Animal
Liability Endorsement” that limited coverage to $25,000 for animal bite claims. The endorsement also
excluded coverage for bites by specific breeds of dogs. These breeds did not include the American Bulldog.
At the time she purchased the policy, Katherine believed that it would provide the full $500,000 in liability
coverage for claims involving dog bites so long as the dog was not one of the specified breeds. She did not
discuss the endorsement with Bode.
In June 2006, Katherine’s American Bulldog bit and severely injured Scott Caron. Caron and his wife sued the
Fowlers, and the jury awarded them $250,559.96. Horace Mann paid $25,000 of the judgment. The Carons
eventually settled with the Fowlers with regard to the outstanding judgment, and the Fowlers assigned any
claims they had against Horace Mann to the Carons.
The Carons then filed an action against Horace Mann alleging that the Fowlers and Horace Mann were
mutually mistaken as to the application of the animal liability endorsement, and that the policy should be
reformed to strike the endorsement. The lower court found in favor of the Carons and ordered judgment
against Horace Mann for $225,559.96 plus interest totaling $77,197.80. Horace Mann appealed.
On appeal, the parties agreed that the policy as written limited coverage for claims arising from dog bites to
$25,000. The parties also agreed that Horace Mann intended the endorsement to be included in the policy; in
fact, this endorsement was mandatory in all Horace Mann policies. Bode testified that she mistakenly believed
that the policy would provide coverage of up to $500,000 for dog bites, although she never conveyed this
belief to Katherine. Katherine testified that she thought the policy provided up to $500,000 of coverage as
well, but that she never expressed this understanding to Bode.
The issue on appeal was whether Bode’s misunderstanding provided a basis on which the Carons could claim
mutual mistake and seek reformation of the policy. The Supreme Judicial Court of Massachusetts, Essex,
found that it did not. In reaching its decision, the court noted that, although Bode’s misunderstanding was
consistent with Katherine’s misunderstanding, Bode never communicated it to Katherine, and Katherine
silently harbored her own assumption of coverage. Therefore there was no “mutuality of mistake,” an essential
element of the legal doctrine of mutual misunderstanding. Without mutuality of mistake, there could be no
reformation.
The judgment in favor of the Carons was vacated and set aside, and the case was remanded to the lower
court for further proceedings consistent with the appellate court decision.
Supreme Judicial Court of Massachusetts, Essex. Caron v. Horace Mann Insurance. WJC-11273. August 9,
2013. 2013 WL 4017302 (Mass.)