Brown v. State Auto. & Cas. Underwriters

• Decision Date: 18 April 1980
• Docket Number: No. 49296.,49296.
• Citation: 293 NW 2d 822
• Court: Minnesota Supreme Court
• Parties: Aaron L. BROWN, Respondent, v. STATE AUTOMOBILE & CASUALTY UNDERWRITERS, Appellant.

293 N.W.2d 822 (1980)

Aaron L. BROWN, Respondent, v. STATE AUTOMOBILE & CASUALTY UNDERWRITERS, Appellant.

No. 49296.

Supreme Court of Minnesota.

April 18, 1980.

Barnett, Ratelle, Hennessy, Vander Vort Stasel & Herzog and W. Scott Herzog, Minneapolis, for appellant.

Sachs, Latz & Kirshbaum and Robert Latz, Minneapolis, for respondent.

Heard before PETERSON, KELLY, and SCOTT, JJ., and considered and decided by the court en banc.

KELLY, Justice.

Defendant, State Automobile & Casualty Underwriters, appeals from the decision of the district court granting plaintiff's, the insured's, motion for summary judgment and denying defendant's cross motion for summary judgment. We affirm in part and reverse and remand in part.

The facts giving rise to this declaratory judgment action arose out of an altercation between the insured, Aaron L. Brown, and Lawrence Hellendrung, Jr., a baggage clerk, at the Minneapolis-St. Paul International Airport in April of 1970. The insured misplaced a baggage claim ticket and proceeded to a taxi stand without producing his claim ticket. The baggage clerk, Hellendrung, pursued the insured, insisting that he produce the claim check. When the cab arrived, an argument and tug-of-war ensued over the piece of luggage the insured held in his hand. This tugging resulted in a deep cut on the insured's finger. The insured then struck Hellendrung with his open right hand. In the instant declaratory judgment action, the insurer maintained the insured verbally threatened Hellendrung several times before actually striking him. The insured argued, both in the Hellendrung action and in this action, that he struck Hellendrung reflexively, as a result of the cut on his finger.

Hellendrung filed a complaint in April of 1972. He alleged the insured "* * * did strike upon the head and body of plaintiff and caused said plaintiff personal injuries * * *." On April 25, 1972, the insured, plaintiff in this action, tendered defense of the matter to his insurer, the defendant in this case. In September of 1972, the insurer declined to defend the Hellendrung action on the ground the incident fell within the terms of the intentional acts exclusion in the insured's homeowner's liability policy. The insured unsuccessfully defended the suit against him at his own expense. On February 6, 1976, the trial court awarded Hellendrung $6,000 in compensatory damages and made the following conclusions of law.

"Plaintiff is entitled to the judgment of Court finding:

1. That defendant without provocation or justification did strike the plaintiff.

2. That said striking was a direct cause of injuries to plaintiff.

3. That although defendant intended to strike the plaintiff, defendant did not intend to cause bodily injury to plaintiff and thus the injuries were unintended. (Emphasis added.)

4. That plaintiff was in no way negligent."

After the insurer refused to satisfy the judgment and reimburse its insured for attorney's fees incurred in defending the Hellendrung action, the insured, Aaron Brown, instituted this declaratory judgment action. He sought a declaration that the insurer breached its duties to defend and indemnify him. He sought to recover consequential damages flowing from the breaches of the contract of insurance and punitive damages. Both parties moved for summary judgment. The district court granted summary judgment in the insured's favor. The court held that the insurer breached its duty to defend the insured because it failed to resolve the pleading's ambiguity in the insured's favor. The court further held that the insurer breached its duty to indemnify the insured. The court collaterally estopped the insurer from litigating the issue of intent to injure, resolved in the insured's favor in the Hellendrung action and determinative on the issue of coverage afforded by the policy. The court ordered the insurer to satisfy the Hellendrung judgment and to pay the insured's attorney's fees incurred in defense of that action and in the instant declaratory judgment action. He denied the insured's request for punitive damages.

Defendant, the insurer, appeals arguing that the district court erred in granting the plaintiff's, its insured's, motion for summary judgment. The insurer urges us to hold that its insured intended to injure the baggage clerk as a matter of law and to direct the trial court to enter judgment in its favor. In the alternative, the insurer argues that the trial court erred in barring the litigation of the question of intent to injure because it was not a necessary issue in the determination of its insured's liability to Hellendrung.

I. The Duty To Indemnify

The insured's homeowner's liability policy contained a standard intentional acts exclusion which excluded coverage for "bodily injury or property damage caused intentionally by or at the direction of the insured." In Caspersen v. Webber, 298 Minn. 93, 213 N.W.2d 327 (1973), this court interpreted an identical intentional acts exclusion. We held that the exclusion is not applicable where the act inflicting an assault and battery is intended but the resulting injury is not intended. Id. at 98-99, 213 N.W.2d at 329-30. Accord, Farmers Ins. Exchange v. Sipple, 255 N.W.2d 373 (Minn. 1977).

The insurer argues that it was entitled to summary judgment on the issue of its duty to indemnify because intent to injure as a matter of law should have been inferred from the "undisputed" material facts pertaining to the character of the insured's act in striking Hellendrung.

We inferred intent to injure as a matter of law in Iowa Kemper Ins. Co. v. Stone, 269 N.W.2d 885 (Minn.1978) and Continental Western Ins. Co. v. Toal, 309 Minn. 169, 244 N.W.2d 121 (1976). These cases are factually more extreme than this case. In Stone the insured wrapped a belt buckle around his hand and struck the plaintiff. In Toal the insureds killed an employee in the course of an armed robbery. The facts in this case are more akin to those in Farmers Ins. Exchange v. Sipple, 255 N.W.2d 373 (Minn.1977) where the insured struck another man in the course of a heated discussion. The insured contended he struck the injured person instinctively in the form of a reflex. We upheld the trial court's submission of the issue of intent to injure to the jury because the facts were in dispute. Similarly, in Caspersen v. Webber, 298 Minn. 93, 213 N.W.2d 327 (1973), we held that where the insured shoved his way past a hat check girl the issue of intent to injure was a question of fact.

In light of these cases, the district court properly denied defendant's cross-motion for summary judgment.

The insurer argues more persuasively that the district court erred when it entered summary judgment in the insured's favor on the indemnification issue. The Hellendrung trial court concluded the insured did not intend to injure the baggage clerk. The district court in the instant case held that the insurer could not collaterally attack this finding. The district court correctly perceived that the issue of intent to injure determines whether coverage is afforded by the policy. However, it failed to consider an essential requirement in the application of the doctrine of collateral...