Heggen v. Mountain West Farm Bureau Mut. Ins. Co.

• Citation: 715 P.2d 1060,220 Mont. 398
• Decision Date: 18 March 1986
• Docket Number: No. 85-71,85-71
• Court: Montana Supreme Court
• Parties: Neal HEGGEN, Plaintiff and Appellant, v. MOUNTAIN WEST FARM BUREAU MUTUAL INSURANCE COMPANY, Defendant and Respondent.

Page 1060

715 P.2d 1060

220 Mont. 398

Neal HEGGEN, Plaintiff and Appellant, v. MOUNTAIN WEST FARM BUREAU MUTUAL INSURANCE COMPANY Defendant and Respondent.

No. 85-71.

Supreme Court of Montana.

Submitted Nov. 14, 1985.

Decided March 18, 1986.

Huntley & Eakin, Gene Huntley argued, Baker, for plaintiff and appellant.

Crowley, Haughey, Hanson, Toole & Dietrich, Herbert I. Pierce argued, L.B. Cozzens, Billings, for defendant and respondent.

WEBER, Justice.

Neal Heggen appeals a judgment of the Fallon County District Court which granted Mountain West Farm Bureau Mutual Insurance Co. (Mountain West) a summary judgment. The District Court ruled that George Eichhorn's steer-roping contests were a business pursuit, and as such, were excluded from coverage under a policy of insurance relating to farm operations. We affirm.

While Mr. Heggen raises three issues on appeal, we find the following issue dispositive:

Did the District Court err in ruling that the jackpot steer-roping contests held by Mr. Eichhorn were a "business pursuit" excluded from insurance coverage, rather than a spare time recreational activity within the insurance coverage?

George Eichhorn, a Baker, Montana resident, had worked for the State of Montana as a brand inspector since 1962. In July 1973, he purchased a policy of insurance for his small ranch from Mountain West. The policy provided coverage for accidental bodily injury to persons on the premises with the permission of the insured. However, it specifically excluded from coverage all "business pursuits." The policy also provided that written notice of an accident was to be given by the insured to Mountain West as soon as practicable, but in no event to exceed 60 days.

In 1975, Mr. Eichhorn constructed a roping arena on his land. He began holding jackpot steer-roping contests. He held three or four steer-roping contests in each of the years 1975, 1976 and 1977. Nonprofessional cowboys and ranchers participated in the contests and paid a $48 to $50 fee to rope a certain number of cattle. Mr. Eichhorn reserved approximately $300 to $400 from each contest, and the balance of the fees were distributed to the winning ropers as prizes.

After Mr. Heimbuch, the local agent for Mountain West, had observed that Mr. Eichhorn was constructing a roping arena in 1975, he advised Mr. Eichhorn that the roping arena and roping contests were not covered under the Mountain West insurance policy. Mr. Eichhorn testified that the agent made it plain to him that he should have another policy to cover the ropers. He did not take any steps to get such a policy, because of the cost.

On July 23, 1977, Neal Heggen was permanently injured when his horse tripped and fell on him during one of Mr. Eichhorn's contests. Mr. Eichhorn was present on the day of the accident and was aware that Mr. Heggen's injuries were serious. Mr. Eichhorn did not immediately notify Mountain West of the accident, based in part on his belief that Mr. Heggen would not sue him. Mr. Heggen's attorney contacted Mr. Eichhorn in the spring of 1980, and in July 1980, filed a complaint against him. Mr. Eichhorn notified Mountain West and delivered a copy of the complaint to Mountain West. In turn, Mountain West advised Mr. Eichhorn they were not going to defend him in the action, because the jackpot steer-roping was a "business pursuit" and excluded from coverage, and because Eichhorn failed to timely notify Mountain West pursuant to the policy provisions. Mr. Eichhorn allowed a default judgment to be taken against him in the action brought by Mr. Heggen. On October 1, 1980, Mr. Heggen signed a covenant not to execute on the judgment against Mr. Eichhorn, in exchange for an assignment to Mr. Heggen of all of Mr. Eichhorn's policy rights against Mountain West. Mr. Heggen then filed suit against Mountain West, alleging that the insurance company wrongfully refused to defend Mr. Eichhorn in the suit brought by Mr. Heggen and wrongfully refused to pay Mr. Heggen any damages for personal injuries.

Mountain West moved for summary judgment. The District Court entered summary judgment for Mountain West, holding that "[t]he totality of the circumstances strongly indicate that Eichhorn was engaged in a business pursuit excluded by the policy." Mr. Heggen argues that summary judgment was not appropriate because there is a genuine issue of fact as to whether the jackpot steer-roping contests were a business pursuit.

Mr. Eichhorn's insurance policy provides that "[t]his policy does not apply ... to any business pursuits of an Insured ..." The policy defines "business" as follows:

"Business" means trade, profession or occupation, other than:

(a) farming

(b) the operation of roadside stands maintained on the farm premises principally for the sale of the produce raised thereon, or

(c) newspaper delivery, babysitting, caddying, lawn care, and similar activities ordinarily performed by minors, when the activity is not the principal occupation of the Named Insured, and is not a full-time occupation of any insured.

Montana has not specifically adopted criteria for determining what is a "business pursuit" for purposes of insurance policy exclusionary clauses. Other jurisdictions, in their definitions of "business pursuit," have addressed the idea of profit or profit motive, and most have required some level of continuity or regularity of the activity. See Annot., 48 A.L.R.3d 1096 (1973).

The Supreme Court of Oklahoma has elaborated upon the profit or profit motive element of a business pursuit as follows:

In a business pursuit the profit motive, or purpose of a profit, is important. Whether there is or is not actual profit is immaterial. Does a pursuit have to be successful from a profit standpoint before it is a business pursuit? If a business suffers a loss, was it not a business? The answers are obvious. Profit motive, not actual profit, makes a pursuit a business pursuit.

Wiley v. Travelers Insurance Company (1974 Okla.), 534 P.2d 1293, 1295. That court found that a man who bred, raised, and sold St. Bernard puppies part-time at his residence, in addition to holding another full-time job, was engaged in a business pursuit because of the presence of a profit motive. There was testimony that he intended to retire and raise St. Bernard puppies. Wiley, 534 P.2d at 1295. The part-time aspect of the dog operation did not prevent it from involving a profit motive, and it was not necessary that the activity result in actual net profits to possess a profit motive. We agree with the reasoning of the Oklahoma court and hold that the presence of a profit motive is one characteristic of a "business pursuit."

The exclusionary provision in the insurance policy in the Wiley case defined business, as does the present policy, as "a trade, profession, or occupation." Yet, the part-time nature of Mr. Wiley's dog operation did not prevent it from being a "business pursuit." The Oklahoma Court...