Opinion ID: 1187797
Heading Depth: 3
Heading Rank: 7

Heading: Does Public Policy Preclude an Award to Tammy Raymer?

Text: State Farm argues that Tammy's partial summary judgment violates public policy because the superior court may be rewarding a wrongdoer. State Farm argues that because Michael and Tammy are still married and functioning as one economic unit, any award to Tammy will benefit Michael. State Farm seems untroubled by the obvious inconsistency of this argument with its contention that Tammy's proceeds should be held in trust for Michael. Tammy argues that we decided the public policy issue in Atlas. Although the husband and wife in Atlas had divorced after their house burned, we did not rely on that fact in concluding that the innocent co-insured could recover on fire insurance after her co-insured intentionally burned the property. [33] We first noted that public policy precludes recovery by one who burns his or her own property: Public policy dictates that an insured who intentionally sets fire to property covered by the insurance contract may not recover thereon. See Dairy Queen v. Travelers Indem. Co., 748 P.2d 1169, 1172 (Alaska 1988). We have not addressed whether an innocent co-insured is likewise precluded from recovery. [34] We agree with these authorities. We noted in Atlas that, [a]t least one court has allowed the innocent spouse to recover one-half of the proceeds even where she continued to live with the wrongdoer spouse after the fire, reasoning that any benefit to the wrongdoer was indirect. [35] Other courts have also concluded that although there may be additional policy concerns when the innocent co-insured and the wrongdoer remain married, the equities favor the innocent spouse's recovery. [36] The Supreme Court of Georgia, in Richards v. Hanover Insurance Co., [37] addressed these concerns by placing the burden on the co-insured claiming coverage to prove her nonparticipation in the alleged wrongful conduct. There may be merit to this approach. But we need not decide whether to adopt it, given the procedural context of this case. We conclude that Tammy's recovery is not barred by public policy even though she remains married to Michael.