Allstate Ins. Co. v. Freeman
Decision Date | 18 July 1989 |
Docket Number | Nos. 81239,81433,s. 81239 |
Citation | 443 N.W.2d 734,432 Mich. 656 |
Parties | ALLSTATE INSURANCE COMPANY, Plaintiff-Appellee, v. Marshall FREEMAN, Alonda Freeman, and Mary Helen Kelly, Defendants-Appellants. METROPOLITAN PROPERTY & LIABILITY INSURANCE COMPANY, Plaintiff-Appellant, v. David DiCICCO, Defendant, and James Gravenmier, Defendant-Appellee. |
Court | Michigan Supreme Court |
In these cases, consolidated for purposes of appeal, we are asked to decide the meaning of a coverage provision and two exclusionary clauses within a homeowner's liability insurance policy.
In Allstate Ins. Co. v. Freeman, we hold that the exclusionary clause requires application of a two-part objective test. An insurer may relieve itself of its duty to defend and indemnify if (1) the insured acted either intentionally or criminally, and (2) the resulting injuries occurred as the natural, foreseeable, expected, and anticipated result of an insured's intentional or criminal acts. In the instant case, we agree with the Court of Appeals that the exclusion precludes coverage for Alonda Freeman. We find that Alonda Freeman acted either intentionally or criminally and Mary Kelly's injuries were the "expected" result of Alonda Freeman's acts. We also hold that "an insured" unambiguously refers to "all" or "any" insureds under the homeowner's policy. Therefore, the exclusion also excluded coverage for Marshall Freeman. Accordingly, we affirm the decision of the Court of Appeals in Freeman. 160 Mich.App. 349, 408 N.W.2d 153 (1987).
In Metropolitan Property & Liability Ins. Co. v. DiCicco, we hold that a proper analysis of whether an insurer has a duty to defend and indemnify an insured under a homeowner's policy requires a determination of whether coverage exists under the policy, and if coverage exists, then there must follow a determination of whether the exclusionary clause applies. In the present case, we find that the claimed incident constituted an "occurrence" under the coverage provision of the insured's policy. However, unlike a majority of this Court, we would hold that, in order to avoid its duty to defend and indemnify under the exclusion, the insurer must show that an objective insured "intended or expected" injury to result from those intentional acts. In this case, we find that an objective insured would expect injury to result from the stabbing incident. Even assuming we agreed with the majority and applied a subjective standard of review to the "intended or expected" exclusion, we would conclude that a subjective insured would "expect" injury to result in the instant case. Therefore, we would reverse the decision of the Court of Appeals in DiCicco and reinstate the decision of the trial court. 1
I. INTRODUCTION
In reviewing a grant or denial of summary disposition under MCR 2.116(C)(10), we consider the pleadings, affidavits, depositions, admissions, and any other documentary evidence in favor of the party opposing the motion. A motion for summary disposition tests the factual basis for plaintiff's allegations and may be granted only if "there is no genuine issue as to any material fact, and the moving party is entitled to judgment as a matter of law." MCR 2.116(C)(10); Velmer v. Baraga Area Schools, 430 Mich. 385, 390, 424 N.W.2d 770 (1988). An insurer may utilize this procedure in a declaratory action to determine whether it must indemnify and provide a defense for an insured in an underlying tort action. See, e.g., Wright v. White Birch Park, 118 Mich.App. 639, 325 N.W.2d 524 (1982).
The duty of an insurance company to provide a defense in an underlying tort action depends upon the allegations in the complaint and extends to allegations which "even arguably come within the policy coverage." Detroit Edison Co. v. Michigan Mutual Ins. Co., 102 Mich.App. 136, 142, 301 N.W.2d 832 (1980). The duty to defend is broader than, and not necessarily conclusive of, an insurer's duty to indemnify. The court must resolve any doubt pertaining to the duty to defend in favor of the insured. Guerdon Industries, Inc. v. Fidelity & Casualty Co. of New York, 371 Mich. 12, 18-19, 123 N.W.2d 143 (1963); Illinois Employers Ins. of Wausau v. Dragovich, 139 Mich.App. 502, 362 N.W.2d 767 (1984). However, it is equally clear that an insurer's duty to defend and indemnify does not depend solely upon the terminology used in a plaintiff's pleadings. Rather, Illinois Employers Ins., supra, 139 Mich.App. at 507, 362 N.W.2d 767; Shepard Marine Construction Co. v. Maryland Casualty Co., 73 Mich.App. 62, 250 N.W.2d 541 (1976). It is against this backdrop that we must decide the cases before us today.
II. METROPOLITAN INS. CO. v. DiCICCO
The parties stipulated that the trial judge would decide the case upon the basis of the briefs and deposition transcripts. We adopt the facts as set forth by the trial court:
The prosecutor filed criminal assault charges against DiCicco, but eventually dismissed the charges. The plaintiff argues that the prosecutor dismissed the charges because Gravenmier withheld his cooperation, fearful that a criminal conviction would eliminate any possibility that DiCicco's insurer would pay damages awarded in a civil suit. Although plausible, there is no record support for this theory.
Defendant Gravenmier filed a civil suit against DiCicco, and plaintiff Metropolitan has provided a defense for DiCicco in the civil suit under a homeowner's insurance policy issued to DiCicco's father. That case remains pending in Grand Traverse Circuit Court.
Plaintiff filed the instant suit, seeking a declaration that the policy does not cover the stabbing incident between DiCicco and Gravenmier and, therefore, it does not have a duty to defend or indemnify DiCicco in the underlying tort action. The trial court granted summary disposition in favor of plaintiff.
Defendant appealed, and the Court of Appeals reversed, remanding the case to the trial court to determine whether DiCicco intended to stab Gravenmier. This Court granted leave to appeal in consolidation with Allstate Ins. Co. v. Freeman. 2
Initially, in determining whether a policy applies, we first must determine whether the policy is clear and unambiguous on its face. We look to the language of the policy and we construe any ambiguity in favor of the insured. Powers v. DAIIE, 427 Mich. 602, 624, 398 N.W.2d 411 (1986). 3 In the instant case, the policy sets forth the essential terms and phrases in bold-faced type under conspicuously marked sections entitled ...
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