Falkenstein's Meat Co. v. Maryland Cas. Co

• Decision Date: 18 May 1988
• Citation: 91 Or.App. 276,754 P.2d 621
• Parties: FALKENSTEIN'S MEAT COMPANY, an Oregon corporation, Appellant, v. MARYLAND CASUALTY COMPANY, a foreign corporation, Respondent. 16-86-01587; CA A40977.
• Court: Oregon Court of Appeals

Page 621

754 P.2d 621

91 Or.App. 276

FALKENSTEIN'S MEAT COMPANY, an Oregon corporation, Appellant, v. MARYLAND CASUALTY COMPANY, a foreign corporation, Respondent.

16-86-01587; CA A40977.

Court of Appeals of Oregon.

Argued and Submitted May 26, 1987.

Decided May 18, 1988.

Randall E. Thwing, Eugene, argued the cause for appellant. With him on the briefs were Sidney E. Thwing, and Thwing & Thwing, Eugene.

I. Franklin Hunsaker, Portland, argued the cause for respondent. With him on the brief were S. Joel Wilson, R. Daniel Lindahl, and Bullivant, Houser, Bailey, Hanna, Pendergrass, Hoffman, O'Connell & Goyak, Portland.

Before RICHARDSON, P.J., and NEWMAN and DEITS, JJ.

DEITS, Judge.

Plaintiff brought this declaratory judgment action against its liability insurer to determine whether it has a duty to defend an action brought by a former employe. On cross-motions for summary judgment, the trial court granted defendant's motion, denied plaintiff's and entered judgment for defendant. Plaintiff appeals. We agree with the trial court's determination that defendant had no duty to defend plaintiff and affirm.

Defendant issued a comprehensive general liability policy to plaintiff. It provides, in part:

"The company will pay on behalf of the insured all sums which the insured shall become legally obligated to pay as damages because of

"A. bodily injury or

"B. property damage

"to which this insurance applies, caused by an occurrence, and the company shall have the right and duty to defend any suit against the insured seeking damages on account of such bodily injury or property damage, even if any of the allegations of the suit are groundless, false or fraudulent * * *."

On February 22 and 23, 1984, plaintiff's employe Michaud complained that plaintiff was not providing a safe place of employment and that the vehicle which he was assigned to operate was unsafe. On February 24, 1984, plaintiff removed Michaud from his position as a permanent long-haul driver and re-assigned him to a permanent on-call position, which required that he call each morning at 7 a.m. to determine whether he was to work that day. Michaud's working hours were reduced from an average of 45 hours per week to 22 hours per week.

In 1985, Michaud sued plaintiff, contending that plaintiff's action was in retaliation for his complaints and constituted an unlawful employment practice. The complaint prayed for damages for emotional distress, impaired personal dignity and loss of wages. ¹ Plaintiff tendered defense of the action to defendant. Defendant refused to defend, asserting that the harm alleged was not "bodily injury," that the alleged conduct did not constitute an "occurrence" within the meaning of the policy and that the alleged conduct was specifically exempt from coverage pursuant to an exclusion in the insurance contract.

We first address whether plaintiff's alleged conduct constitutes an "occurrence" within the meaning of the policy. An insurer has a duty to defend if the claimant can recover against the insured under the allegations of the complaint on any basis for which the policy affords coverage. Nielsen v. St. Paul Companies, 283 Or. 277, 280, 583 P.2d 545 (1978). The duty to defend is determined by comparing the terms of the insurance policy with the allegations of the complaint. Oakridge Comm. Ambulance v. U.S. Fidelity, 278 Or. 21, 24, 563 P.2d 164 (1977). The policy defines "occurrence" as "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." Defendant argues that the allegation of retaliation in Michaud's complaint involves intentional rather than accidental conduct and, therefore, is not within the policy definition of "occurrence." Plaintiff contends that, because Michaud's complaint does not allege that defendant intended the harm which occurred as a result of the conduct, it did involve an "occurrence" under the policy. ²

In Cunningham & Walsh, Inc. v. Atlantic Mutual Ins., 88 Or.App. 251, 255, 744 P.2d 1317 (1987), rev. den. 305 Or. 102, 750 P.2d 496 (1988), we held that an allegation that an insured acted intentionally or volitionally was not enough to prevent coverage under a policy which included the identical definition of "occurrence" at issue in this case. It must also be alleged or necessarily inferred that some harm was intended by the intentional act. In Cunningham, which involved an action for deceit, we held that, although no specific type of intentional harm was alleged, because deceit by its nature is an action from which the intention to do harm must necessarily be inferred, it was of no consequence that the specific harm for which relief was sought was not alleged to have been intended. In this case, the underlying complaint alleges retaliation and is based on a claim of intentional discriminatory conduct in violation of ORS 654.062(5)(a). ³ The complaint does not allege a specific type of intentional harm. However, retaliatory and discriminatory conduct pursuant to ORS 654.062(5)(a) are acts from which...