Economy Fire & Cas. Co. v. Beeman

• Decision Date: 10 August 1981
• Docket Number: No. 80-2066,80-2066
• Citation: 656 F.2d 269
• Parties: ECONOMY FIRE & CASUALTY CO., Plaintiff-Appellee, v. Norma Jane BEEMAN and William A. Beeman, Defendants-Appellants.
• Court: U.S. Court of Appeals — Seventh Circuit

Page 269

656 F.2d 269

ECONOMY FIRE & CASUALTY CO., Plaintiff-Appellee, v. Norma Jane BEEMAN and William A. Beeman, Defendants-Appellants.

No. 80-2066.

United States Court of Appeals,

Seventh Circuit.

Argued Feb. 23, 1981.

Decided Aug. 10, 1981.

Robert C. Rupp, Stewart, Gilliom, Fuller & Meyer, Indianapolis, Ind., for defendants-appellants.

William M. Olah, Terre Haute, Ind., for plaintiff-appellee.

Before FAIRCHILD and PELL, Circuit Judges, and CRABB, Chief District Judge. ^*

PELL, Circuit Judge.

The defendants in this diversity suit ¹ appeal from the district court's declaratory judgment in favor of the plaintiff, Economy Fire & Casualty Company (Economy). The court ruled that Economy was not liable to the defendants under the homeowner's policy of its insured, George Adams.

The defendant-appellant, Norma Jane Beeman (Beeman), was on duty as a counter waitress at a Dairy Queen store in Sullivan, Indiana on September 26, 1975. The defendants concede that George Adams (Adams) was summoned to the store on that day to perform electrical repair services. Although the exact circumstances are less than clear, it appears that Adams in some fashion lifted or moved Beeman aside allegedly to gain access to an electrical appliance situated behind the spot in which Beeman was standing. As a result of this contact, Beeman alleged that she sustained injuries to her back, hips, and leg. Beeman and her husband, William Beeman, codefendant in the instant action, sued Adams in state court.

George Adams was insured by Economy at the time of the incident under a homeowner's policy which provided personal liability coverage for bodily injury, but excluded coverage for injuries "arising out of business pursuits of any Insured except activities therein which are ordinarily incident to non-business pursuits." Economy instituted the present lawsuit against the Beemans, George Adams and his wife to determine its liability under the policy.

At trial, the defendants contended that Adams' activity of attempting to repair a machine was not a business pursuit and therefore not within the business pursuits exclusion of the policy. Alternatively, they argued that even if Adams' activity did constitute a business pursuit, his particular act of lifting or moving Beeman nonetheless was an activity ordinarily incident to nonbusiness pursuits, thus within the exception to the business pursuits exclusion.

The trial court found that Adams came to the store on September 26, 1975 to investigate an electrical problem, and that this activity constituted a business pursuit. The court further found that Economy was not liable under the policy because Adams moved or lifted Beeman while searching for the electrical problem. On appeal, the defendants do not contest that Adams' repair work at the Dairy Queen store constituted a business pursuit. They contend only that the court erred in finding that Adams' contact with Beeman was incidental to his business activities.

Exclusionary clauses for business pursuits in homeowners' policies have spawned frequent litigation over the precise issue disputed here whether a particular momentary act occurring within an overall business context is incident to the business pursuit, or ordinarily incident to a nonbusiness pursuit. The defendants contend that the question is properly analyzed by inquiring whether or not the activity occurring at the precise moment of injury was necessary to the business pursuit. They argue that "(l)ifting or moving Mrs. Beeman, under the facts of this case, have to be acts incidental to a non-business pursuit because it was not necessary to lift or move Mrs. Beeman and the act was not justified in any way." Adams' physical contact with Beeman may indeed have been unnecessary. ² No doubt the more polite and businesslike approach would have been for Adams to request Beeman to move.

Unless we adopt the position that Adams' role as an electrician ceased the moment he acted discourteously, inefficiently, or in a negligent fashion, however, we cannot accept the defendants' definition of business pursuits to include only those activities strictly necessary to the business activity. To the contrary, numerous cases have held activities resulting in injury to be incident to business pursuits even though the actions in question were not strictly necessary, and in most events were counterproductive, to carrying out the business activities. See, e. g., Stanley v. American Fire & Casualty Co., 361 So.2d 1030 (Ala.1978) (no coverage where child fell into babysitter's fireplace because injury arose from negligent supervision which was a business pursuit); Neil v. Celina Mutual Insurance Co., 522 S.W.2d 179, 181 (Ky.App.1975) (accidental discharge of pistol which fell from the insured gasoline station operator's pocket while settling an account for gasoline purchased by an off-duty employee, the decedent, was a business pursuit even though the incident occurred after hours and after the decedent had received his wages because "the collection of the money was a business pursuit of ... the insured"); Pitre v. Pennsylvania Millers Mutual Insurance Co., 236 So.2d 920 (La.App.1970) (insured's activation of an augur without determining the location of his fellow employee, who thereby lost an arm, was not covered by homeowner's policy); Berry v. Aetna Casualty & Surety Co., 221 So.2d 272 (La.App.1969) (no coverage for fellow employee's injury caused by insured's negligent operation of a forklift truck); Dieckman v. Moran, 414 S.W.2d 320 (Mo.1967) (no coverage where insured's activation of power brake on sheet metal machine injured fellow employee); North River Insurance Co. v. Poos, 553 S.W.2d 500 (Mo.App.1977) (insurer not liable to child bitten by wolf kept by insured since insured was obligated, as an employee of the Wild Canid Survival & Research Center, to keep and maintain the wolf at his residence); Martinelli v. Security Insurance Co., 490 S.W.2d 427 (Mo.App.1972) (no coverage when insured employee, in going to pick up an item related to his work on his employer's premises, collided with a fellow employee); Wiley v. Travelers Insurance Co., 534 P.2d 1293 (Okl.1974) (no coverage for dog bite where insured raised, bred, and sold puppies at her residence and person bitten was a customer who visited the insured in response to an advertisement); Davis v. Frederick's, Inc., 30 Utah 2d 321, 517 P.2d 1014 (1973) (no homeowner's policy coverage where the insured, a restaurant employee, knocked the plaintiff to the ground as he swung open a door while departing the restaurant).

In support of the contrary position, the defendants cite Gulf Insurance Co. v. Tilley 393 F.2d 119 (7th Cir. 1968), in which this court affirmed an Indiana district court's finding that although babysitting might be a business pursuit, the babysitter's act of making coffee for herself and a guest was incident to a nonbusiness pursuit. Therefore, the exception to the business exclusion clause applied and the insurer was liable to compensate for injuries sustained by a baby who upset the coffee pot by pulling on the percolator cord. Beeman also relies upon Michigan Mutual Liability Co. v. Ferguson, 15 Mich.App. 298, 166 N.W.2d 525 (1968), in which the insured was removing snow from the roof of his business premises. When the shovel broke, he threw it off of the roof. The shovel struck a power line thereby causing damage to another building and some automobiles. The court affirmed the trial court's ruling that the insured's act of throwing the shovel was ordinarily incident to a nonbusiness pursuit. In Morrill v. Gallagher, 370 Mich. 578, 122 N.W.2d 687 (1963), the Michigan Supreme Court approved a judgment finding the insured's act of throwing a cherry bomb into a room where a fellow employee was working to be a prank not ordinarily incident to a business pursuit. Finally, in State Farm Fire & Casualty Co. v. National Union Fire Insurance Co., 87 Ill.App.2d 15, 230 N.E.2d 513 (1967), the insured elevator repairer's impulsive horseplay, striking a rubber mallet against a fire door behind the head of another worker, was held to be incident to a nonbusiness purpose.

The defendant's acceptance of the trial court's finding of fact that "while searching for the ... electrical problems, George Adams either lifted or moved aside Norma Jane Beeman" concedes a theory they had advanced at trial, i. e., that Adams was momentarily engaging in horseplay and was not seeking to move Beeman to further any business-related purpose. This case is therefore unlike Morrill v. Gallagher, supra, and State Farm v. National Union, supra. The other two cases relied upon by the defendants, Gulf Insurance v. Tilley, supra, and Michigan Mutual v. Ferguson, supra, are factually closer to the case at bar than either Morrill or State Farm. But, in all four cases, the reviewing court was merely affirming findings originally entered by the trial court which does not imply that the result obtained was the only conclusion reasonably possible. Indeed the court in State Farm recognized that the interpretation chosen by the trial court in that case was not necessarily the only reasonable application. The court supported a finding of liability in part by noting that "(t)he incident under consideration occurred during a business...