Benjamin v. Amica Mut. Ins. Co.

Decision Date07 July 2006
Docket NumberNo. 20040974.,20040974.
Citation140 P.3d 1210,2006 UT 37
PartiesArthur BENJAMIN, Plaintiff and Appellee, v. AMICA MUTUAL INSURANCE COMPANY, a Rhode Island corporation, Defendant and Appellant.
CourtUtah Supreme Court

James A. Boevers, John S. Chindlund, Salt Lake City, for plaintiff.

S. Baird Morgan, Michael K. Woolley, Salt Lake City, for defendant.

PARRISH, Justice:

¶ 1 Defendant Amica Mutual Insurance Company ("Amica") seeks interlocutory review of the district court's grant of partial summary judgment in favor of its insured, plaintiff Arthur Benjamin. Amica challenges the district court's determination that ambiguity in Amica's insurance policies triggered coverage for various claims arising from alleged sexual assaults committed by Benjamin. We conclude that the unambiguous plain language of the policies provides for coverage of the claims in question. Therefore, although we disagree with its reasoning, we affirm the result reached by the district court.

FACTS

¶ 2 In August 2000, Jeanette Borthick and Angela Allen filed separate lawsuits against Benjamin. Both Borthick and Allen, coworkers of Benjamin, alleged that he had sexually assaulted them. The women asserted identical causes of action for (1) assault, (2) battery, (3) intentional infliction of emotional distress, (4) negligent infliction of emotional distress, (5) false imprisonment, and (6) invasion of privacy.

¶ 3 Borthick alleged that Benjamin sexually assaulted her on May 11, 2000, while the two were conducting business in Phoenix. According to Borthick, Benjamin forced his way into her hotel room and raped her. Though she alleged that Benjamin committed horrific, intentional acts, Borthick also claimed that Benjamin was liable for negligent infliction of emotional distress. While Benjamin admitted that he engaged in sexual intercourse with Borthick, he claimed it was consensual.

¶ 4 Allen's claims arose from a series of incidents that allegedly took place between May and October 1999 at several locales, including various hotels, Benjamin's home, and Allen and Benjamin's place of employment. Allen alleged that Benjamin sexually assaulted her on each of these occasions. Like Borthick, Allen sought damages for negligent infliction of emotional distress in addition to a variety of intentional torts. Benjamin denied that he ever engaged in any sexual activity with Allen.

¶ 5 Benjamin tendered the defense of both cases to Amica. Benjamin had purchased two insurance policies from Amica: a homeowners policy (the "Homeowners Policy") and a Personal Excess Liability Policy (the "Excess Policy"). The Homeowners Policy provided Benjamin with personal liability coverage of up to $300,000 per covered occurrence. Under that policy, Amica promised to defend allegations triggering coverage, even if they were "groundless, false or fraudulent." The Excess Policy provided for personal liability coverage of up to $2,000,000 "in excess of primary insurance."

¶ 6 Amica initially defended both cases, subject to a reservation of rights to deny coverage. But after questioning Benjamin under oath about the allegations, Amica discontinued its defense in the Borthick case. Amica continued to defend Benjamin in the Allen case, subject to its reservation of rights.

¶ 7 Borthick's claims against Benjamin were tried to a jury in February 2003. The jury rejected all of Borthick's intentional tort claims and found Benjamin liable only for negligent infliction of emotional distress. The trial court, however, entered judgment notwithstanding the verdict in favor of Benjamin on the ground that worker's compensation was Borthick's exclusive remedy for her claim of negligent infliction of emotional distress.

¶ 8 After the Borthick trial, Benjamin entered into settlement negotiations with both Borthick and Allen. Benjamin notified Amica of the negotiations and asked Amica to participate, but Amica refused. Benjamin subsequently settled both cases and asked Amica to indemnify him for the settlement amounts; Amica again refused.

¶ 9 Benjamin filed a complaint against Amica, alleging three causes of action: (1) breach of the express terms of his insurance contracts, (2) breach of implied covenants of good faith and fair dealing, and (3) breach of fiduciary duties. Benjamin moved for partial summary judgment on the breach of contract claim, arguing that Amica breached its insurance contracts by discontinuing its defense in the Borthick case and failing to indemnify Benjamin for the amount he paid to settle the covered Borthick and Allen claims. Amica filed a cross-motion for summary judgment.

¶ 10 The district court ultimately granted Benjamin's motion for partial summary judgment, ruling that the claims for negligent infliction of emotional distress, false imprisonment, and invasion of privacy were covered by "Amica's insurance policies." The district court concluded that the policies were ambiguous as to coverage and that, as standard form contracts, the ambiguities should be construed in favor of coverage. The court further concluded that Amica had breached the terms of the policies by discontinuing its defense in the Borthick case and by failing to indemnify Benjamin for the amount he paid to settle the covered Borthick and Allen claims.

¶ 11 Amica filed a timely petition for interlocutory appeal. We initially transferred the matter to the court of appeals, which granted Amica's petition. We subsequently vacated the transfer order and recalled the case. We have jurisdiction pursuant to Utah Code section 78-2-2(3)(j) (2001).

ANALYSIS

¶ 12 We review the district court's grant of partial summary judgment "for correctness, granting no deference to the district court." Swan Creek Vill. Homeowners Ass'n v. Warne, 2006 UT 22, ¶ 16, 134 P.3d 1122 (internal quotation marks and brackets omitted). A court appropriately grants summary judgment "only when there is no genuine issue as to any material fact and the moving party is entitled to a judgment as a matter of law." Id. (internal quotation marks omitted).

¶ 13 We begin by analyzing the duties that the policies imposed upon Amica in the Borthick and Allen cases. We conclude that the Homeowners Policy required Amica to defend Benjamin against all of the claims raised by Borthick and Allen. We further hold that the Homeowners Policy imposed upon Amica a duty to indemnify Benjamin with respect to the negligent infliction of emotional distress claims. Moreover, we conclude that the plain language of the Excess Policy provides coverage for two of the intentional torts alleged by Borthick and Allen. We therefore affirm the district court's holding that Amica breached its duty to defend in the Borthick case and its duty to indemnify in the Borthick and Allen cases. We disagree, however, with the district court's conclusion that the policies are ambiguous. We therefore affirm the district court's grant of partial summary judgment, but vacate its reasoning. Finally, we consider and reject Benjamin's request for an award of attorney fees and costs incurred in defending against this appeal.

I. COVERAGE

¶ 14 "An insurance policy is merely a contract between the insured and the insurer." Alf v. State Farm Fire & Cas. Co., 850 P.2d 1272, 1274 (Utah 1993). As a result, we interpret insurance policies as we do contracts: "if the language within the four corners of the contract is unambiguous, the parties' intentions are determined from the plain meaning of the contractual language." Saleh v. Farmers Ins. Exch., 2006 UT 20, ¶ 21, 133 P.3d 428 (internal quotation marks omitted). Barring ambiguity, therefore, our exegesis of the policies focuses on the plain meaning of the language they employ. We first examine the Homeowners Policy and then move to the Excess Policy.

A. The Homeowners Policy

¶ 15 The Homeowners Policy charged Amica with two specific duties in connection with the Borthick and Allen cases. First, it imposed a duty to defend Benjamin against all of the claims raised by Borthick and Allen. Second, it imposed a duty to indemnify Benjamin for the negligent infliction of emotional distress claims. We discuss each of these duties in turn.

1. The Duty to Defend

¶ 16 When we engage in a duty-to-defend analysis, we focus on two documents: the insurance policy and the complaint. "An insurer's duty to defend is determined by comparing the language of the insurance policy with the allegations of the complaint." Fire Ins. Exch. v. Estate of Therkelsen, 2001 UT 48, ¶ 21, 27 P.3d 555 (internal quotation marks omitted); see also Nova Cas. Co. v. Able Constr., Inc., 1999 UT 69, ¶ 8, 983 P.2d 575; Sharon Steel v. Aetna Cas. & Sur., 931 P.2d 127, 133 (Utah 1997). In Therkelsen, we cited to an alternative formulation of this rule: "`The test is whether the complaint alleges a risk within the coverage of the policy.'" 2001 UT 48, ¶ 21 n. 3, 27 P.3d 555 (quoting Continental Cas. Co. v. Alexis I. duPont Sch. Dist., 317 A.2d 101, 103 (Del. 1974)). We must therefore determine if Borthick and Allen alleged claims that are covered by the terms of the Homeowners Policy. We conclude that they did.

¶ 17 We begin our analysis with the four corners of the Homeowners Policy. Because the duty to defend is contractual, Therkelsen, 2001 UT 48, ¶ 22, 27 P.3d 555, our starting point must always be the underlying policy. Section II, Coverage E of the Homeowners Policy describes Amica's duty to defend:

If a claim is made or a suit is brought against an insured for damages because of bodily injury . . . caused by an occurrence to which coverage applies, [Amica] will:

....

2. Provide a defense at [Amica's] expense by counsel of [Amica's] choice, even if the suit is groundless, false or fraudulent. [Amica] may investigate and settle any claim or suit that [Amica] decide[s] is appropriate. [Amica's] duty to settle or defend ends when the amount [Amica] pay[s] for damages resulting from the occurrence equals [Amica's] limit of liability.

...

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