I have no doubt that my wife would love to sue me for certain things that I do around the house. Putting the milk back in the refrigerator, with less than an ounce left, is a capital offense. Leaving dishes in the sink – or putting them in the dishwasher -- but not stacked properly (I can’t win). Leaving a wet shower towel on the bed should subject me to liability. Eating ice cream out of the carton – oh man, don’t even go there.

A wife’s suit against her husband -- and then the husband’s claim for coverage – was at issue in Pennsylvania National Mutual Ins. Co. v. Lewis, No. 15-1575 (4th Cir. May 27, 2016). The case is very brief, but interesting.

Jo Lewis filed a federal maritime tort action against her husband, Roger Lewis, and his solely owned company, Excel Mechanical, for injury sustained in a boating accident involving a boat owned and operated by Roger. Jo Lewis asserted that, in attempting to ground the boat on a sandbar, Roger caused a collision that trapped her lower leg between the boat and the sandbar, resulting in serious permanent injuries. Jo alleged that, at the time of the accident “there were two other passengers on the boat whom [Mr.] Lewis was entertaining as business prospects of Excel.” Thus, Jo argued that Roger “was engaged in the conduct of Excel’s business,” and, therefore, “[i]n light of the purported business purpose of the trip,” Excel is vicariously liable for Roger’s actions and Jo is entitled to actual and punitive damages. (Yes, punitive damages!).

Six months after the accident Roger sought coverage from Penn National, Excel’s insurer. He argued that, at the time of the accident, a potential customer was on board. Therefore, the trip was a business-related activity, covered by his company’s general liability policy. Penn National felt that the story was contrived to fit within the policy’s coverage.

Penn National filed an action seeking a declaration that it owed no duty to defend or indemnify Roger or Excel against Jo’s suit. Penn National’s argument was that “the boat trip was not business-related and that Mr. Lewis was only claiming it was to obtain coverage. Penn National pointed to the fact that no one, besides Mr. Lewis, testified that they had thought the trip was business-related, that Mr. Lewis had filled the boat’s gas tank that day but not expensed the cost to Excel, and that he had not submitted his Penn National claim until six months after the accident.”

Jo countered that “he routinely entertained potential customers on his boat to cultivate business relationships. He conceded that he had not bought gas that day but contended that he did expense to Excel the gas he had bought a week prior in anticipation of the outing. Mr. Lewis also explained that he did not file his claim for coverage under the Penn National Policy immediately because his life was ‘in turmoil’ while he helped his wife recover from her injuries, and because he only discovered he had watercraft coverage when reviewing his policy months later in connection with an unrelated event.”

Penn National also tried to make hay with the fact that the Lewises contacted State Farm ten days after the accident and received $5,000 for medical payments and a State Farm agent stated in a deposition that, “had State Farm been aware the accident was business-related, the Lewises would not have qualified for the payouts they received, but State Farm’s claim file did not contain any indication that whether the trip was business-related had ever come up.” The District Court saw this as irrelevant.

The District Court held that Roger was credible, the Penn National policy was unambiguous, and that “at the time of the Trip and resulting Accident, Mr. Lewis was operating the Boat in the course of his employment and with respect to the conduct of Excel’s business and his duties as the manager of Excel, as required for coverage under the Policy.” The District Court held that “[t]he fact that the trip included or may have included elements of familial entertainment and friendly fellowship does not deprive the Trip of its business purpose.” The Fourth Circuit affirmed.

If “elements of familial entertainment and friendly fellowship” do not deprive an activity of a business purpose, then other insurers may find themselves in situations feeling the same way Penn National did here.