Was State Farm entitled to the relief it sought?

Robert Baer and Dareen Dahlstrom had been close friends for more than 20 years. Dahlstrom, who was in the process of separating from her husband, went to visit Baer in July 1988. On various occasions, Baer had used a recreational drug known as Ecstacy. For several years after its discovery, Ecstasy was not an illegal drug. It was, however, designated by federal law as a prohibited controlled substance beginning in March 1988. Baer believed that the use of Ecstasy had certain psychological and emotional benefits, and that using it might help Dahlstrom cope with the personal problems she was experiencing at the time of her July 1988 visit. After she and Baer discussed his beliefs regarding Ecstasy, Dahlstrom told him that she wanted to use the drug. Baer and Dahlstrom went through various rituals in preparation for use of the drug and recited a prayer that “this [may] bring harm to no one and blessing to all.” Baer then removed some Ecstasy from his personal supply, which he had purchased prior to March 1988. Baer dissolved approximately one-half of his usual dose in a glass of water and gave it to Dahlstrom. She drank the mixture. Within approximately 30 minutes, she was dead. Dahlstrom’s survivors filed a wrongful death suit against Baer, who asserted that the claim fell within the liability coverage provided to him by State Farm Insurance Company as part of his homeowner’s policy. The policy afforded coverage for third parties’ claims for physical injury resulting from an “occurrence,” which was defined in terms of an “accident” that caused injury. The policy also contained an exclusion from coverage for injury that was either intended or expected by the insured. State Farm filed a declaratory judgment action in which it asked for a judicial determination that in light of the above provisions in the parties’ insurance contract as well as public policy considerations, it owed Baer no coverage duties regarding the suit that stemmed from Dahlstrom’s death. Was State Farm entitled to the relief it sought?

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