Allstate Ins. Co. v. Freeman

Decision Date18 July 1989
Docket NumberNos. 81239,81433,s. 81239
Citation443 N.W.2d 734,432 Mich. 656
PartiesALLSTATE 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.
CourtMichigan Supreme Court
Rosalind Rochkind, James L. Borin, James C. Rabaut, Garan, Lucow, Miller, Seward, Cooper & Becker, P.C., Detroit, for plaintiff-appellee, Allstate Ins. Co

RILEY, Chief Justice.

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


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, "it is necessary to focus on the basis for the injury and not the nomenclature of the underlying claim in order to determine whether coverage exists.... [S]o must the allegations be examined to determine the substance, as opposed to the mere form, of the complaint." 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.



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:

"There is little dispute as to what occurred on February 25, 1984. DiCicco and Gravenmier were residents of the same college residence hall. Gravenmier was in a hallway with his girlfriend and a Graham Williamson. They had discovered glue in Gravenmier's door lock and suspected DiCicco had committed the prank. They knocked and kicked at DiCicco's door, and when DiCicco came out there was a scuffle in the hall with first Williamson and then with Gravenmier. Both DiCicco and Gravenmier landed blows, the glass of a fire extinguisher cabinet was broken. Gravenmier and DiCicco separated and the fight came to an abrupt end. DiCicco returned to his room and Gravenmier started down the hall with his girlfriend and Williamson. Within a short time DiCicco came from his room again holding a folding hunting knife with the three-inch blade exposed. DiCicco called Gravenmier and his girlfriend offensive names and Gravenmier returned to respond. Gravenmier observed the knife, put his hands up and told DiCicco in effect that if he were dumb enough or brave enough to use it on Gravenmier's stomach. DiCicco commenced poking at Gravenmier's chest with his left hand repeating the admonition, 'don't mess with me.' He backed Gravenmier against the wall. Gravenmier reacted by grabbing DiCicco by the throat, turning, and pushing DiCicco against the wall. Gravenmier then felt the knife being withdrawn from his stomach.

"DiCicco denies any intent to use the knife, claiming that he went to get the knife merely to scare away the other persons he considered to be a threat. No one observed him make a gesture of moving the knife as though to stab Gravenmier. The knife was held in his right hand and the poking was done with his left. DiCicco denies knowledge of in fact stabbing. Immediately following the stabbing, DiCicco looked shocked. Gravenmier obviously did not expect DiCicco would use the knife or he would not have engaged in his act of bravado.

"Subsequently Gravenmier commenced a tort action. Grand Traverse File 84-2119-NO. In that action Gravenmier makes allegations against DiCicco in Count I of negligence in the course of the dispute in that DiCicco inadvertently stabbed him. In Count II he alleges DiCicco intentionally inflicted the stab wound.

"There is no dispute that as of the date of the incident David DiCicco was an insured under a homeowner's insurance policy issued by Plaintiff, Metropolitan Property & Liability Insurance Company, to David DiCicco's parents."

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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