Trisler v. Indiana Ins. Co.

• Decision Date: 31 July 1991
• Docket Number: No. 41A01-9102-CV-56,41A01-9102-CV-56
• Citation: 575 N.E.2d 1021
• Parties: G. Ray TRISLER, Appellant-Defendant, v. INDIANA INSURANCE COMPANY, Appellee-Plaintiff.
• Court: Indiana Appellate Court

Page 1021

575 N.E.2d 1021

G. Ray TRISLER, Appellant-Defendant, v. INDIANA INSURANCE COMPANY, Appellee-Plaintiff.

No. 41A01-9102-CV-56.

Court of Appeals of Indiana First District.

July 31, 1991.

Robert P. Thomas, Thomas Law Office, Indianapolis, for appellant-defendant.

James L. Whitlatch, Bunger, Robertson, Kelley & Steger, Bloomington, for appellee-plaintiff.

ROBERTSON, Judge.

G. Ray Trisler appeals the entry of summary judgment in favor of Indiana Insurance Company in the insurance company's suit for declaratory judgment.

We reverse.

By its declaratory judgment action, the insurance company sought a declaration that it did not owe insurance coverage under policies of insurance issued to Trisler and/or Trisler d/b/a Spirit of '76 Inn. The question of coverage arose out of two claims filed against Trisler in separate suits, both having been subsequently resolved by summary judgment or dismissal in favor of Trisler. The insurance company's position is simply that under the very clear language of the policies, coverage is not provided for the kinds of claims alleged against Trisler. The insurance company maintains that the only claim raised in the first lawsuit, Executive Builders, Inc. v. G. Raymond Trisler, Cause No. 73C01-8803-CP-057, was one for tortious interference with contract or business relation. Since this first claim is based upon intentional conduct allegedly committed by Trisler, coverage is not provided. Similarly, the insurance company argues that the allegations made in the counterclaim brought against Trisler under cause no. 73C01-8804-CP-113 do not disclose an occurrence within the meaning of the policy.

In Indiana, the duty to defend is broader than coverage liability. Cincinnati Ins. Co. v. Mallon (1980), Ind.App., 409 N.E.2d 1100, 1105. It is the nature of the claim, not its merit, which establishes the insurer's duty to defend. Consequently, if it is determined that an insurer has a contractual duty to defend a suit based upon risks it has insured, the insurer will not be relieved of that obligation, regardless of the merits of the claim. Id.

The insurer's duty to defend is determined from the allegations of the complaint coupled with those facts known to or ascertainable by the insurer after reasonable investigation. See American States Ins. Co. v. Aetna Life & Casualty Co. (1978), 177 Ind.App. 299, 379 N.E.2d 510, 517; United States Fidelity & Guaranty Co. v. Baugh (1970), 146 Ind.App. 583, 600, 257 N.E.2d 699, 710, trans. denied. Accordingly, in evaluating the factual basis of a claim and the insurer's concomitant duty to defend, this court may properly consider the evidentiary materials offered by the parties to show coverage or exclusion. See Allstate Ins. Co v. Herman (1990), Ind., 551 N.E.2d 844. If the pleadings fail to disclose a claim within the coverage limits or one clearly excluded under the policy, and investigation also reveals the claim is outside the coverage of the policy, no defense will be required. Heshelman v. Nationwide Mutual Fire Ins. Co. (1980), Ind.App., 412 N.E.2d 301, 302.

Construction of a written contract is a question of law for which summary judgment is appropriate where the terms of the contract are unambiguous and there is no genuine issue of material fact. B & R Farm Services, Inc. v. Farm Bureau Mutual Ins. Co. (1985), Ind., 483 N.E.2d 1076, 1077. An unambiguous policy must be enforced according to its terms, even those which limit the insurer's liability. American States Ins. Co. v. Aetna Life & Casualty Co., 379 N.E.2d at 516. This court may not extend coverage delineated by the policy nor may it rewrite the clear and unambiguous language of the policy; but, an exclusionary clause in a policy will not be read so loosely as to effectively exclude all coverage. Id.

Trisler's comprehensive personal liability endorsement policy contains the following provisions concerning coverage:

COVERAGE: The company will pay on behalf of the insured the ultimate net loss which the insured shall become legally obligated to pay, in excess of the applicable (retained) limit, because of personal injury or property damage caused by or arising out of an occurrence during the endorsement period; provided that:

EXCLUSIONS--This insurance does not apply: ...

(b) to any act committed by or at the direction of the insured with intent to cause personal injury or property damage, ...

OCCURRENCE means an accident, including continuous or repeated exposure to conditions, which results in personal injury or property damage, neither expected nor intended from the standpoint of the insured.

PERSONAL INJURY means Bodily injury, shock, mental anguish, sickness or disease, including death resulting therefrom; injury arising out of the false arrest, detention or imprisonment, malicious prosecution, wrongful entry or eviction, humiliation, libel, slander, defamation of character or invasion of privacy.

Hence, the policy covers Trisler's liability only for personal injury caused by or arising out of an occurrence as defined by the policy, i.e. "an accident ... which results in personal injury ... neither expected nor intended from the standpoint of the insured," and excludes coverage for acts committed by Trisler "with intent to cause personal injury."

The phrases "neither expected nor intended from the standpoint of the insured" and "with intent to cause" personal injury have both been interpreted by Indiana courts. "Intended" and "expected" are not synonyms, but apply to situations in which differing degrees of proof are required. Auto-Owners (Mutual) Ins. Co. v. Stroud (1991), Ind.App., 565 N.E.2d 1093, 1095. Indiana common law has rejected the interpretation of intent urged by the insurance company in the present case, that the intent qua the act is drawn from the standard applied to the liability of the insured party to the third party for his actions, in favor of a standard requiring greater factual specificity. But cf. City of Muncie v. United National Insurance Co. (1991), Ind.App., 564 N.E.2d 979, citing with approval, Town of South Whitley v. Cincinnati Ins. Co. (N.D.Ind., 1989), 724 F.Supp. 599, affirmed, 921 F.2d 104 (7th Cir.1990). The intent aspect of the phrases utilized in this case contemplate the "volitional performance of an act with an intent to cause injury, although not necessarily the precise injury or severity of damage that in fact occurs." Herman, 551 N.E.2d at 845; Snodgrass v. Baize (1980), Ind.App., 409 N.E.2d 645, on rehearing; Home Ins. Co. v. Neilsen (1975), 165 Ind.App. 445, 332 N.E.2d 240. It is met either by showing an actual intent to injure, or by showing the nature and character of the act to be such that an intent to cause harm to the other party must be inferred as a matter of law. Id. 332 N.E.2d at 244.

"Expected" injury means injury that occurred when the insured acted even though he was consciously aware that harm was practically certain to occur from his actions. Stroud, 565 N.E.2d at 1096; Indiana Farmers Mutual Ins. Co. v. Graham (1989), Ind.App., 537 N.E.2d 510, 512, trans. denied. However, the definition of "expected" does not exclude harm that the insured ...