Fire Ins. Exchange v. Estate of Therkelsen

• Decision Date: 08 June 2001
• Docket Number: No. 990716.,990716.
• Citation: 27 P.3d 555,2001 UT 48
• Parties: FIRE INSURANCE EXCHANGE, Plaintiff and Appellee, v. The ESTATE OF Otto F. THERKELSEN, Jr., and Steven A. Ness, Defendants and Appellant.
• Court: Utah Supreme Court

27 P.3d 555

2001 UT 48

FIRE INSURANCE EXCHANGE, Plaintiff and Appellee, v. The ESTATE OF Otto F. THERKELSEN, Jr., and Steven A. Ness, Defendants and Appellant.

No. 990716.

Supreme Court of Utah.

June 8, 2001.

Rehearing Denied July 26, 2001.

Lewis B. Quigley, Salt Lake City, for plaintiff.

Reed L. Martineau, Rex E. Madsen, Keith A. Call, Salt Lake City, for The Estate of Otto F. Therkelsen.

Mark Dalton Dunn, Salt Lake City, for Steven A. Ness. DURRANT, Justice:

¶ 1 On the evening of November 8, 1997, Otto Therkelsen, Jr., shot Steven A. Ness with a 9-millimeter semi-automatic handgun. Immediately afterward, he shot and killed his wife, Linda Therkelsen, and then fatally shot himself. Ness survived. He filed a complaint against Otto Therkelsen's estate, alleging both battery and negligence in the shooting. The estate tendered the defense of the lawsuit to Fire Insurance Exchange, which had issued a homeowners policy to Therkelsen. Fire Insurance then filed a complaint against the estate and Ness seeking a declaratory judgment regarding its obligation to defend and, ultimately, indemnify the estate. Fire Insurance argued that the facts related to the shooting did not support a claim for negligence, and, therefore, it should not be required to defend or indemnify the estate. The trial court agreed and granted summary judgment to Fire Insurance. The estate appeals.¹

BACKGROUND

¶ 2 "In reviewing a grant of summary judgment, we view the facts and all reasonable inferences drawn therefrom in the light most favorable to the nonmoving party. . . . We state the facts in this case accordingly." Tretheway v. Miracle Mortgage, Inc., 2000 UT 12, ¶ 2, 995 P.2d 599 (citations omitted).

¶ 3 Ness met Linda Therkelsen at a bowling league in the fall of 1996. At the time, Linda and Otto Therkelsen were married. Ness and Linda became friends, and their relationship evolved into an intimate affair by the summer of 1997. Linda filed for divorce in October 1997 and also obtained a protective order against her husband. At some point in the Therkelsens' marriage, Therkelsen had told his wife that if she ever divorced him he would kill her and himself. After filing for divorce, Linda became concerned for her and her husband's safety, so she asked her son, Kendall, to remove the guns from the Therkelsens' house.

¶ 4 Shortly after filing for divorce, Linda began moving into Ness's home. She continued to work at her house during the day. Otto Therkelsen had apparently moved out of the house and was staying in a room above his business, Otto's Auto and Marine. He wrote several letters to his wife in an attempt to reconcile the relationship, but to no avail.

¶ 5 At about 6:00 p.m. on November 8, 1997, Otto Therkelsen purchased a 9-millimeter semi-automatic handgun from Doug's Shoot'n Sports. Less than an hour later, Therkelsen appeared at Ness's doorstep. Ness answered the door, and Therkelsen told him he wanted to see Linda. Therkelsen attempted to enter but Ness pushed him back, telling him that he would ask her if she wanted to talk to him. Therkelsen pulled out the gun and told Ness, "You don't understand, I want to talk to her right now. You've been f* * *ing with the wrong guy." Ness yelled into the house, "Otto's here, and he's got a gun." Therkelsen forced Ness up the short flight of stairs near the entryway of the split level home. He pushed Ness down a hallway past a bathroom where Linda was. He grabbed his wife out of the bathroom and forced her and Ness into the master bedroom.

¶ 6 Linda pled with her husband "not to do this." Ness asked him, "Do you want to go to jail?" Therkelsen raised the gun in Ness's direction "and said something about his [Therkelsen's] life being over." The gun fired, hitting Ness in the right hand and shoulder, and Ness fell back behind the bed. Otto and Linda Therkelsen left the master bedroom. Ness grabbed a telephone and dialed 911. He heard shouting in the hallway, followed by two gunshots. Therkelsen then reentered the bedroom with his head down, attempting to insert a shell into the firing chamber of the newly-purchased handgun. Ness grabbed a .22 handgun that was under the bed and pointed it at Therkelsen. He pulled the trigger but nothing happened as the gun was not loaded. Therkelsen then looked over at Ness, who was still pointing the empty gun at him. Ness told him to leave or he would kill him. Therkelsen walked out of the room, and Ness heard another gunshot. ¶ 7 When police arrived at the scene, they found the Therkelsens dead, Otto from a self-inflicted gunshot wound and Linda from wounds in the face and chest. Ness was taken to the hospital.

¶ 8 At the time of the shooting, Therkelsen held a homeowners insurance policy issued by Fire Insurance. The policy stated Fire Insurance would "pay those damages which an insured becomes legally obligated to pay because of bodily injury or property damage resulting from an occurrence to which this coverage applies." The policy defined an "occurrence" as an "accident." The policy also specifically excluded from coverage "bodily injury or property damage which:. . . is either . . . caused intentionally by or at the direction of an insured; or . . . results from any occurrence caused by an intentional act of any insured where the results are reasonably foreseeable."

¶ 9 Ness filed suit against Therkelsen's estate alleging both negligence and battery. In the allegation for negligence, Ness stated that Therkelsen "apparently did not know how to operate his gun" and "may have been simply attempting to frighten [Ness] and negligently fired his gun in the direction of [Ness]." The estate tendered the defense of the action to Fire Insurance, arguing that the negligence claim, if proven, could be covered under the homeowners policy as an "occurrence." Fire Insurance agreed to provide a defense, but also filed a reservation of rights.

¶ 10 After deposing Ness and Detective Mark Chidester, the homicide detective assigned to investigate the case, Fire Insurance concluded the shooting was intentional, taking it outside the homeowners policy's potential scope of coverage. Accordingly, Fire Insurance filed a complaint against the estate and Ness seeking a judgment declaring that it was no longer obligated to provide the estate with a defense in Ness's action and that it had no duty to indemnify the estate in that action.² Fire Insurance presented the depositions of Ness and Chidester as evidence that the shooting could not have been an "occurrence" under the homeowners policy. The estate argued that the trial court should only consider the allegations in the complaint in the underlying action to determine Fire Insurance's duty to defend and that the depositions, even if considered, did not remove Fire Insurance's duty to defend or indemnify the estate. Fire Insurance then filed a motion for summary judgment, which the trial court granted. The estate appeals.

DISCUSSION

¶ 11 The issue before us is whether the trial court erred in granting Fire Insurance's motion for summary judgment. Summary judgment is appropriate "if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." Utah R. Civ. P. 56(c). "We review the trial court's summary judgment ruling[ ] for correctness." Sur. Underwriters v. E & C Trucking, 2000 UT 71, ¶ 14, 10 P.3d 338.

¶ 12 The trial court determined Therkelsen's shooting of Ness did "not constitute an `occurrence' under the Fire Insurance Exchange policy, and that the shooting incident [was] excluded as an intentional act under the Fire Insurance Exchange policy." Therefore, the trial court held Fire Insurance has no duty to either defend or indemnify the estate in the pending, underlying action.

¶ 13 On appeal, the estate contends the evidence was insufficient to eliminate Fire Insurance's potential duty to indemnify the estate in the underlying action. Further, the estate contends that, in determining whether Fire Insurance has a duty to defend the estate in the underlying action, the trial court's consideration of extrinsic evidence, i.e., evidence adduced during discovery in the underlying action, was error. Alternatively, the estate argues that even if the trial court properly considered this extrinsic evidence, the evidence was insufficient to negate Fire Insurance's duty to defend the estate in the underlying action. We affirm the trial court's determination that Fire Insurance has no duty to indemnify the estate in the underlying action. However, we conclude the trial court did not have a sufficient basis to determine whether Fire Insurance has a duty to defend the estate in the underlying action.

I. THE DUTY TO INDEMNIFY

¶ 14 We first address the issue of whether the trial court properly granted Fire Insurance's motion for summary judgment as it relates to the potential duty to indemnify the estate in the underlying action. The duty to indemnify is a contractual one, and, accordingly, the issue at hand is governed by the terms of the parties' contract, i.e., Therkelsen's homeowners policy.

¶ 15 As it relates to the duty to indemnify, the policy provides that Fire Insurance will "pay those damages which an insured becomes legally obligated to pay because of bodily injury . . . resulting from an occurrence to which this coverage applies." The policy defines an "occurrence" as an "accident," but did not define the term "accident." Accordingly, we turn to our case law to define the term:

the word [accident] is descriptive of means which produce effects which are not their natural and probable consequences . . . . An effect which is the natural and probable consequence of an act or course of action is not an accident, nor is it produced by accidental means. It is either the result of actual design, or it falls under the

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