Illinois Employers Ins. of Wausau v. Dragovich

• Citation: 139 Mich.App. 502,362 N.W.2d 767
• Decision Date: 22 February 1985
• Docket Number: Docket No. 73653
• Parties: ILLINOIS EMPLOYERS INSURANCE OF WAUSAU, Plaintiff-Appellee, v. Rubin DRAGOVICH d/b/a Carmen's of Roseville, d/b/a Main Act and Roseville Lanes, Defendant-Appellant, and Davin Virta, Defendant.
• Court: Court of Appeal of Michigan — District of US

Page 767

362 N.W.2d 767

139 Mich.App. 502

ILLINOIS EMPLOYERS INSURANCE OF WAUSAU, Plaintiff-Appellee, v. Rubin DRAGOVICH d/b/a Carmen's of Roseville, d/b/a Main Act and Roseville Lanes, Defendant-Appellant and Davin Virta, Defendant.

Docket No. 73653.

Court of Appeals of Michigan.

Submitted June 19, 1984.

Decided Oct. 26, 1984.

Released for Publication Feb. 22, 1985.

Harvey, Kruse, Westen & Milan, P.C. by Paul S. Koczkur, Detroit, for plaintiff-appellee.

Irving D. Robinson, Center Line, for defendant.

Before ALLEN, P.J., and WAHLS and WARSHAWSKY, ^* JJ.

PER CURIAM.

In April, 1982, plaintiff filed a declaratory action seeking a determination that it was not obligated to provide coverage to or defend its insured, Rubin Dragovich (hereinafter referred to as defendant), in an action filed by a third party, Davin Virta, against defendant. Plaintiff's motion for summary judgment, GCR 1963, 117.2(2), was granted by the trial court on the grounds that plaintiff had no duty to defendant because the allegations of Virta in the underlying suit fell within a policy exclusion and that the delay in notifying plaintiff was unreasonable under the policy. Defendant appeals from the August 18, 1983, order as of right.

Davin Virta filed suit against defendant in July of 1981 claiming that he was injured in October, 1980, on premises owned by defendant. Virta alleged that defendant was "negligent and/or grossly negligent" in failing to maintain his premises in a safe manner and in failing to train and supervise his employees. He alleged that, as a direct result of that negligence, he was "sprayed with a gas ejecting device" and was "struck, pushed or physically assaulted by the employees, agents or servants" of defendant. Defendant notified plaintiff insurance company of the Virta suit sometime in August, 1981. Thereafter, plaintiff undertook the defense in the Virta action under an express reservation of rights.

In April, 1982, plaintiff commenced this declaratory action claiming that endorsement number three of the general liability policy excluded coverage for damage arising out of an assault or battery and that defendant failed to give notice of this occurrence within a reasonable time. In its answer, defendant denied that the Virta complaint was premised upon an assault or battery and averred that the complaint was based on negligence and further denied that notice was not within a reasonable time and that plaintiff had been prejudiced thereby. No affirmative defenses were raised by defendant. The status of the Virta suit is unknown.

In granting plaintiff's motion for summary judgment, the court held that plaintiff had no duty to defend or provide coverage to defendant finding that the allegations of the Virta complaint fell within the policy exclusion. The relevant language of the policy provides:

"Assault & Battery Exclusion:

"In consideration of the premium charged, it is agreed that this insurance does not apply to bodily injury or property damage arising out of an assault or battery, provoked or unprovoked, committed by an insured or by an employee or agent of the insured."

The duty of an insurance company to defend its insured is dependent upon the allegations in the complaint filed by a third party against the insured; the duty to defend and the duty to provide coverage are not synonymous. Iacobelli Construction Co., Inc. v. The Western Casualty & Surety Co., 130 Mich.App. 255, 343 N.W.2d 517 (1983); Reurink Bros. Star Silo, Inc. v. Maryland Casualty Co., 131 Mich.App. 139, 345 N.W.2d 659 (1983). The duty to defend extends to those cases where the allegations in the complaint filed against the insured "even arguably come within the policy coverage". Detroit Edison Co. v. Michigan Mutual Ins. Co., 102 Mich.App. 136, 142, 301 N.W.2d 832 (1980). (Emphasis in original.) Any doubt as to the extent of coverage is to be resolved in the insured's favor. 14 Couch, Insurance 2d, § 51:45, p. 538; Detroit Edison, supra.

It is equally true that clear and unambiguous language in an insurance policy will be enforced as written; courts will not interpret or rewrite the parties' contract. Usher v. St. Paul Fire & Marine Ins. Co., 126 Mich.App. 443, 337 N.W.2d 351 (1983). The insurer has the duty to clearly express the limitations on and exclusions from coverage in the policy. Kast v. Citizens Mutual Ins. Co., 125 Mich.App. 309, 336 N.W.2d 18 (1983). Analyzing the policy according to the ordinary meaning of the language used, any ambiguity will be construed in favor of the insured to allow for coverage. Herring v. Golden State Mutual Life Ins. Co., 114 Mich.App. 148, 318 N.W.2d 641 (1982).

Based on the foregoing principles, we find that summary judgment was properly granted and that the trial court correctly determined that the exclusion in the insurance policy was applicable. The language of the exclusion is clear and unambiguous in its application: coverage does not extend to bodily injury or property damage arising out of an assault or battery. Irrespective of the label accorded his claim, it is clear that Virta is seeking damages for the injuries he sustained when he was "struck, pushed or physically assaulted" by employees or agents of defendant. Virta's injuries were the result of the assault and, as such, are not included within the coverage afforded under the insurance policy at issue. Regardless of the label, be it negligence or intentional tort, plaintiff owed no duty to defend where the bodily injury arose out of an assault or battery. In the present case, it is necessary to focus on the basis for the injury and not the nomenclature of the underlying claim in order to determine whether coverage exists. Inasmuch as the insurer must look beyond the precise wording of the allegations in a third party's complaint against its insured to determine whether coverage is possible, so must the allegations be examined to determine the substance, as opposed to the mere form, of the complaint. See, Shepard Marine Construction Co. v. Maryland Casualty Co., 73 Mich.App. 62, 250 N.W.2d 541 (1976).

In the present case, the exclusion provided that bodily injury or property damage, as opposed to claims arising out of an assault or battery, were excluded from coverage. It is elementary that an insurance company may limit the risks that it is willing to assume and adjust its premiums accordingly. Lehr v. Professional Underwriters, 296 Mich. 693, 296 N.W. 843 (1941); Scanlon v. Western Fire Ins. Co., 4 Mich.App. 234, 144 N.W.2d 677 (1966); Usher, supra. Clear and specific exclusions must be given effect; an insurance company may not be held liable for a risk it did not assume. Kaczmarck v. LaPerriere, 337 Mich. 500, 60 N.W.2d 327 (1953). Pla...