Auto-Owners (Mut.) Ins. Co. v. Stroud

• Decision Date: 28 January 1991
• Docket Number: AUTO-OWNERS,No. 11A01-9008-CV-337,11A01-9008-CV-337
• Citation: 565 N.E.2d 1093
• Parties: (MUTUAL) INSURANCE COMPANY, Plaintiff-Appellant, v. Netta STROUD, Netta Stroud d/b/a Ma Stroud's Country Corner, and Randall Stroud, Defendants-Appellees.
• Court: Indiana Appellate Court

Page 1093

565 N.E.2d 1093

AUTO-OWNERS (MUTUAL) INSURANCE COMPANY, Plaintiff-Appellant, v. Netta STROUD, Netta Stroud d/b/a Ma Stroud's Country Corner and Randall Stroud, Defendants-Appellees.

No. 11A01-9008-CV-337.

Court of Appeals of Indiana First District.

Jan. 28, 1991.

Robert D. Maas, Kirk A. Horn, Jennings & Maas, Carmel, for plaintiff-appellant.

John J. Thomas, David O. Thomas, Thomas & Thomas, Brazil, for defendants-appellees.

BAKER, Judge.

Plaintiff-appellant Auto-Owners Mutual Insurance Company (Auto-Owners) appeals the trial court's award of judgment for the insured parties Netta Stroud, Randall Stroud, and Netta Stroud d/b/a Ma Stroud's Country Corner (collectively, the Strouds) in this declaratory judgment action. Auto-Owners contends trial judge Ernest E. Yelton erred in finding it has the duty to defend and indemnify the Strouds in an action pending against them for bodily injuries sustained by an eleven-year-old boy. The central question in this case is whether the Strouds' actions which injured the boy were "intended or expected," thus removing from Auto-Owners the duty to defend and indemnify the Strouds under the terms of the insurance policy. We affirm Judge Yelton's findings that the Strouds' actions were not intended or expected.

FACTS

Netta Stroud is the owner of Ma Stroud's Country Corner, a sole proprietorship. Her son Randall was employed by the business as a butcher, cook, and general clerk. During the month of December, 1985, the business experienced three burglary attempts upon various areas of the building. On December 16, 1985, after the three attempts had occurred, Randall informed Netta that he would be spending the night in the building that night. In addition to guarding the store, Randall was going to keep heat lamps on the water pipes because they were in danger of freezing due to the extreme cold. Randall returned shortly before closing time to stay the night. Netta saw that he brought a shotgun with him into the store, but she did not discuss this with Randall.

Randall fell asleep, and was awakened at approximately 11:30 p.m. by someone attempting to enter the building through the west door by means of a bar, causing the door to bulge inward. Randall fired one shot at the door, aiming approximately a foot and one half from the bottom of the door. He then telephoned the sheriff and Netta. When the sheriff and Netta arrived, they discovered Randall's shot had struck the knee of eleven-year old Randy Foster, the would-be burglar. Another youth apparently involved in the attempted burglary was not injured.

The parents of the unsuccessful burglar filed suit against the Strouds alleging Netta and Randall were guilty of gross negligence and willful and wanton conduct in injuring their son. Auto-Owners then filed this declaratory judgment action, seeking a determination that it was not required to defend and indemnify the Strouds due to the exclusionary terms of the insurance policy. Auto-Owners' motion for summary judgment was denied, and after a bench trial, the trial court found Auto-Owners has a duty to defend and indemnify the Strouds in the action pending against them.

DISCUSSION AND DECISION

The trial court entered special findings and conclusions of law upon Auto-Owners' motion. When the trial court has entered special findings, this court applies a two-tier standard of review. Kaminszky v. Kukuch (1990), Ind.App., 553 N.E.2d 868, trans. denied. We first determine whether the evidence supports the findings, and then determine whether the findings support the judgment. Id. Special findings and the judgment flowing from the findings will be set aside only if they are clearly erroneous. Id.; Ind.Trial Rule 52(A). In determining whether the findings and judgment are clearly erroneous, this court will neither reweigh the evidence nor judge the credibility of the witnesses. Craig v. ERA Mark Five Realtors (1987), Ind.App., 509 N.E.2d 1144. We consider only the evidence in the record which supports the judgment along with the reasonable inferences to be drawn from the evidence. Id. This court will disturb the trial court's findings only if the record is devoid of facts or inferences to support the findings. Id.

The insurance policy issued by Auto-Owners provides it will pay on behalf of the insured all sums which the insured shall become legally obligated to pay as damages because of bodily injury, property damage, or personal injury caused by an occurrence to which the insurance applies. "Occurrence means an accident, including continuous or repeated exposure to conditions, which results in bodily injury or property damage neither expected nor intended from the standpoint of the insured...." Record at 173 (emphasis in original). Auto-Owners contends the injury to the youth was intended or at least expected when Randall shot at the door knowing someone was on the other side. The Strouds counter they did not intend or expect the injury, that Randall was only attempting to scare the intruders away, and that he shot low on the door to avoid injuring anyone.

Auto-Owners challenges the trial court's findings as well as its judgment. We first turn to a determination of whether the evidence supports the trial court's findings. Auto-Owners argues the trial court's finding that Randall intended only to scare the intruder was in error. We cannot say that this finding is clearly erroneous. The trial court was in a position to observe the witnesses and judge their credibility. There was conflicting evidence; however, it is not for this court to reweigh this evidence. Randall testified that he initially aimed high on the door, but then lowered the gun and aimed low on the door and to the left because "I didn't intend to hurt anybody." Record at 344. The record is not devoid of facts or inferences to support the trial court's finding, and we will thus not disturb the finding.

We next determine whether the findings support the judgment; more specifically, whether the intruder's injury was intended or expected from the standpoint of the insured. The finding that Randall was only trying to scare the intruder was supported by the evidence; however, we must evaluate the language of the insurance policy and determine whether the injury was expected or intended as a matter of law from Randall's actions. We hold that it was not, and affirm Judge Yelton's decision.

This court has found the phrase "intended or expected" in a similar exclusionary clause to be ambiguous. Indiana Farmers Mutual Insurance Co. v. Graham (1989), Ind.App., 537 N.E.2d 510, trans. denied. If there is ambiguity in a policy, the terms of the policy should be interpreted in a manner most favorable to the insured, and the ambiguous language is strictly construed against the insurer. Id. "Intended" and "expected" are not synonyms, but apply to situations in which differing degrees of proof are required. Id. A greater degree of proof is required to establish intent than is needed to establish expectation. Id. Intent may be established by showing an actual intent to injure or by showing the nature and character of the act is such that intent to cause harm must be inferred as a matter of law. Graham, supra. There must be an intent to cause injury, although it is not necessary that there be an intent to cause the precise injury or severity of damage that in fact occurs. Allstate Insurance Co. v. Herman (1990), Ind., 551 N.E.2d 844. This court has held expected injury "means that the insured acted although he was consciously aware that the harm caused by his actions was practically certain to occur." Bolin v....