Unigard Mutual Insurance Company v. Argonaut Insurance Company

On July 8, 1973, 11-year-old William Winkler broke into Wilson Elementary School (Wilson), which is part of School District No. 81, and set fire to the contents of a trash can. He tried to extinguish the fire but was unable to. The fire spread, causing damage. Winkler had previously started fires. His parents, Ruth Winkler Hensley and Charles Hensley, had an insurance policy with Unigard Mutual Insurance Co. (Unigard) (plaintiff). Under this policy, Unigard agreed to “pay on behalf of the Insured all sums which the Insured shall become legally obligated to pay as damages because of bodily injury or property damage, to which this insurance applies, caused by an occurrence.” “Occurrence” was defined under the policy as “an accident, including injurious exposure to conditions, which results, during the endorsement term, in bodily injury or property damage.” School District No. 81 sued the Hensleys and Winkler, alleging that Winkler had carelessly and negligently caused the fire at Wilson and that the Hensleys knew Winkler had the propensity to start fires but failed to supervise him. Winkler testified that he intended to light the fire but did not intend to damage the Wilson school building. Unigard brought an action for declaratory judgment against the insurers of School District No. 81 (defendants). seeking a declaration that Unigard was not required to cover Winkler and the Hensleys. The trial court determined that Unigard was not required to cover Winkler and the Hensleys upon finding that the fire was not an accident and was therefore not an insurable occurrence under the Unigard policy. The defendants appealed.