Kangas v. Aetna Cas. & Sur. Co.

• Decision Date: 27 August 1975
• Docket Number: Docket No. 21447
• Citation: 64 Mich.App. 1,235 N.W.2d 42
• Parties: Donald J. KANGAS and William Sharkey, Plaintiffs-Appellants, v. AETNA CASUALTY & SURETY COMPANY, Defendant-Appellee. 64 Mich.App. 1, 235 N.W.2d 42
• Court: Court of Appeal of Michigan — District of US

Page 42

235 N.W.2d 42

Donald J. KANGAS and William Sharkey, Plaintiffs-Appellants, v. AETNA CASUALTY & SURETY COMPANY, Defendant-Appellee.

Docket No. 21447.

64 Mich.App. 1, 235 N.W.2d 42

Court of Appeals of Michigan.

Aug. 27, 1975.

Released for Publication Nov. 12, 1975.

Leave to Appeal Denied Nov. 19, 1975.

[64 MICHAPP 2] Wisti & Jaaskelainen by Andrew H. Wisti, Hancock, for plaintiffs-appellants.

Strom, Hoehn, Butch, Quinn & Rosemurgy by Terrill S. Jardis, Escanaba, for defendant-appellee.

Before D. E. HOLBROOK, P.J., and ALLEN and D. E. HOLBROOK, Jr., JJ.

ALLEN, Judge.

This is a case of first impression arising out of defendant's refusal to defend the plaintiffs in a prior civil assault and battery action. Plaintiffs, against whom the jury in the prior action had reported a verdict of $12,500, filed suit February 6, 1974. Defendant countered with a motion for summary judgment. Following a hearing the trial judge rendered an opinion granting the motion and an appropriate order was entered [64 MICHAPP 3] August 14, 1974. Plaintiffs appeal the granting of the motion as of right.

At approximately 10:30 a.m., June 17, 1971, William Byrnes, a minor, was walking on highway M--107 in Ontonagon County at a point approximately 6/10 of a mile from the junction of highway M--107. A vehicle owned and driven by plaintiff Kangas and occupied by plaintiff Sharkey with Ronald E. Giddis and John G. Giddis, pulled over on the right shoulder of the highway opposite from the point where Byrnes was walking. Some or all of the occupants of the vehicle exited the car and proceeded to assault and batter Byrnes who ran out into the highway where he was struck by a truck driven by one Henry J. Bode. Subsequently, a civil action was brought on behalf of Byrnes against the four occupants of the Kangas vehicle and against Bode, the driver of the truck. The complaint in that lawsuit alleged that the Giddises, William Sharkey and Donald Kangas:

'got out of the car at or near the junction of highways M--107 and M--64 and beat up the minor plaintiff, causing or contributing to the injuries hereintofore set forth in said complaint; said assault and battery and intentionally and negligently administered and most severe'.

The jury returned a verdict against the Giddises for assault and battery and against Donald Kangas and William Sharkey for aiding and/or abetting the Giddises in an assault and battery.

At the time of the accident, plaintiff Kangas was insured with the defendant under the terms of a family automobile policy. Kangas demanded that defendant defend him in the prior suit. Defendant Aetna refused to defend either Kangas or Sharkey.

Two sections of the family automobile policy [64 MICHAPP 4] issued to Kangas are relevant to this appeal. Liability coverage is defined as follows:

'To pay on behalf of the insured all sums which the insured shall become legally obligated to pay as damages because of:

'A. bodily injury, sickness or disease, including death resulting therefrom, hereinafter called 'bodily injury' sustained by any person;

Arising out of the ownership, maintenance or use of the owned automobile or any non-owned automobile, and the Company shall defend any suit alleging such bodily injury or property damage and seeking damages which are payable under the terms of this policy, even if any of the allegations of the suit are groundless, false or fraudulent; * * * (Emphasis supplied)

Under exclusions, the policy reads as follows:

'This policy does not apply under the Liability Coverage:

'(b) to bodily injury or property damage caused intentionally by or at the direction of the Insured.'

In inverse order to their appearance in the policy, we examine whether the above provisions justify the trial court's grant of summary judgment in favor of defendant. Before doing so it will be helpful to state the general rules governing our analysis.

The obligation of a liability insurance company to defend an action brought against its insured by a third party is to be determined by the allegations of the complaint in such third party action. 50 A.L.R.2d 458, § 4, pp. 465--466; Guerdon Industries,[64 MICHAPP 5] Inc. v. Fidelity & Casualty Co., 371 Mich. 12, 18, 123 N.W.2d 143 (1963); Aetna Casualty & Surety Co. v. State Farm Mutual Automobile Insurance Co., 16 Mich.App. 658, 659, 168 N.W.2d 465 (1969). In some jurisdictions, including Michigan, this obligation has been extended to include the duty to defend if the insurer knows that a true but unpleaded fact or set of facts would bring the claim within the coverage of the policy. Judge DeMascio, in Transport Insurance Co. v. Michigan Mutual Liability Insurance Co., 340 F.Supp. 670, 676 (E.D.Mich., 1972), ¹ stated the rule as follows:

'But, this general rule is not without exception as defendant would have us believe.

"It is a general rule that the duty of the insurer to defend an action against an insured is to be determined from the allegations of the complaint, Lee v. Aetna Casualty & Surety Co., 178 F.2d 750 (C.A.2, 1949); Annotation 51 A.L.R.2d 461, Unless the insurer knows that the true, but unpleaded, factual basis for the claims brings them within the coverage of the policy.' Albuquerque Gravel Products Co. v. American Emp. Ins. Co., 282 F.2d 218, 220 (C.A.10, 1960), (emphasis added).'

The distinction between the general rule and the more broadened rule becomes significant when one compares the third party complaint in the prior action (which alleged only that the present plaintiffs with the other occupants of the car 'got out of the car * * * and beat up the minor plaintiff') with the first amended complaint in the present appeal (which states that Kangas sat in the car all during the incident and Sharkey stood near the [64 MICHAPP 6] car during the scuffle). ² Under the broadened rule, plaintiffs contend that the exclusion clause does not constitute a defense because under the actual facts, as distinguished from the facts pled in the original complaint, the bodily injury of Byrnes was not 'caused intentionally by or at the direction of the Insured'. Similarly, plaintiffs argue that paragraphs 3, 4 and 5 of the amended complaint, noted below, contain facts showing that the assault and battery arose out of the use and operation of the vehicle. In rebuttal, the insurer notes that at the prior trial, the jury was given a special question reading:

'Did William Sharkey and Donald Kangas aid and/or abet Ronald Lee Giddis in an assault and battery on William Byrnes?'

to which the jury found in the affirmative. On this basis defendant argues the plaintiffs acted intentionally and the exclusion clause applies as a defense. Further, the insurer argues that even if one accepts the facts as pleaded in the amended bill of complaint as accurate, the use of the automobile was so incidental to the assault that the trial court was fully justified in finding that, as a matter of law, the third party's injuries did not [64 MICHAPP 7] arise out of the ownership, maintenance and use of the insured vehicle.

Although the trial court did not rely upon the exception clause in reaching its decision, this Court concludes the exception clause is a defense to plaintiff's claim. Once the jury in the prior suit responded affirmatively to the special question, it found that plaintiffs aided or abetted in an act of intention. Assault and battery is an intentional act. Tinkler v. Richter, 295 Mich. 396, 401--402, 295 N.W. 201 (1940). We reject plaintiffs' argument that the presence of the word 'negligently' in the complaint in the prior action removes the cause of action from the exception clause which refers only to intentional as distinguished from negligently inflicted injuries. We know of no such thing as negligent assault. Prosser, Torts (4th ed.), p. 41; Restatement of Torts 2d, § 21. In Young v. Morrall, 359 Mich. 180, 187, 101 N.W.2d 358, 362 (1960), our Supreme Court said:

'The stipulated facts of an accidental or negligent injury inflicted by the principal defendant, while she was the owner and operator of a tavern and while the policy of insurance was in effect, precludes the defense of assault and battery. The question of intent and/or willfulness is an element of assault and battery. Tinkler v. Richter, 295 Mich. 396, 295 N.W. 201 (1940); Cogswell v. Kells, 293 Mich. 541, 292 N.W. 483 (1940). This element has been stipulated out of the case by garnishee defendant in stipulating that Mrs. Morrall was Not intentionally pointing the gun at plaintiff's decedent.' (Emphasis supplied).

In Kraus v. Allstate Insurance Co., 379 F.2d 443 (C.A.3, 1967), defendant insurance company refused to defend its assured in a suit brought by a pedestrian who was killed when the assured deliberately killed himself and his wife by dynamiting his [64 MICHAPP 8] car. The insurance policy contained an exclusion clause, the wording of which was identical to the exclusion clause in the instant case. The court held that because the insured's action was clearly intentional, defendant insurer was relieved from defending because of the exclusion clause. However, we do not base our decision on the exclusion clause alone.

Let us assume, arguendo, that because Kangas sat in his car during the assault and was not directly a participant thereto, he does not come within the rule of Kraus, supra, and accordingly the exception clause does not constitute a defense. Let us further assume that the facts pled in the amended complaint in this appeal are true and were known by defendant-insurer. The issue then becomes whether, under the facts as pled, the assault upon the third party Byrnes arose out of the ownership, maintenance or use of the owned automobile as those terms are used in the policy in this case. We find no decision in Michigan directly construing the phrase 'arising out of the ownership, maintenance or use of a vehicle', but case law on the subject from other jurisdictions is voluminous. 12 Couch, Insurance ...