Republic Ins. Co. v. Feidler
| Decision Date | 03 March 1998 |
| Docket Number | CA-CV,No. 1,1 |
| Citation | 969 P.2d 173,193 Ariz. 8 |
| Parties | , 264 Ariz. Adv. Rep. 14 REPUBLIC INSURANCE COMPANY, a Delaware corporation, Plaintiff-Appellant, v. Robert Michael FEIDLER and Jane Doe Feidler, husband and wife, Defendants-Appellees. 97-0047. |
| Court | Arizona Court of Appeals |
¶1 Republic Insurance Company (Republic) brought a declaratory judgment action against Robert Michael Feidler (Feidler) to determine whether the intentional acts exclusion of a homeowners insurance policy denied him coverage for his injuries. The jury decided that when Thomas Davis (Davis) repeatedly stabbed Feidler, he did not possess sufficient mental capacity to form the intent to injure Feidler; therefore, the intentional acts exclusion of Davis's homeowners insurance policy did not apply. Republic challenges the verdict and the resulting judgment claiming, among other things, that several jury instructions were erroneous and that the evidence was insufficient to support the verdict. We affirm.
¶2 On November 12, 1988, Davis and three of his friends went to a party at an apartment complex in Tempe. Prior to the party, Davis drank at least six beers 1 and shared a couple of marijuana "joints." Davis also believes he consumed approximately one quart of tequila at the party.
¶3 When they left the party, Davis and his friends went to Davis's truck, which was parked nearby. Feeling sick, Davis left his friends asleep in his truck and walked behind some garbage bins. When he tried to return to his truck, he could not locate it.
¶4 While searching for his truck, Davis approached Feidler and his cousin, Patrick Foley (Foley), and asked them to assist him. When they refused, Davis and Foley got into a wrestling match. After separating them, Feidler walked Davis a short distance away from Foley. As Feidler was returning to Foley, Davis charged Feidler, stabbing him in the back several times. As a result, Feidler suffered serious injuries, including the loss of a kidney.
¶5 Davis unsuccessfully attempted to flee the complex by getting into a moving pizza delivery vehicle. He then attempted to hide behind a parked truck where he was discovered and arrested. He entered a plea of no contest to the charge of aggravated assault and was sentenced to eight years in prison.
¶6 Feidler sued Davis, who was an insured under a homeowners policy issued to his parents by Republic. The policy contains an intentional acts exclusion which provides that coverage does not apply to bodily injury "which is expected or intended by the insured." Republic argued that this provision excluded coverage for Davis's stabbing of Feidler because Davis intentionally harmed Feidler.
¶7 Feidler settled his case against Davis and, as part of the settlement, Davis assigned to Feidler his rights against Republic. Feidler and Republic then stipulated that if the jury found there was coverage, Feidler would be entitled to policy limits. Republic filed its declaratory action. In a motion for summary judgment, Republic argued that the policy's intentional acts exclusionary clause precluded coverage. The trial court granted the motion and Feidler appealed. In Republic Insurance Co. v. Feidler (Feidler I ), 178 Ariz. 528, 875 P.2d 187 (App.1993), we reversed the judgment and remanded, finding that Davis's intoxication and his capacity to form intent created a genuine issue of material fact. Republic again moved for summary judgment, arguing that voluntary intoxication was no longer a defense because of a recent amendment to Arizona Revised Statutes Annotated (A.R.S.) section 13-503 (Supp.1997) (effective Jan. 2, 1994) and that under A.R.S. section 13-807 (1989) 2, Davis had the mental capacity to form intent as a matter of law. The trial court denied the motion.
¶8 The case was tried to a jury. The jurors were instructed that they had only one question to answer: "At the time of the stabbing of Robert Feidler, did Thomas Davis possess sufficient mental capacity to form the intent to stab him?" The jury returned a verdict in favor of Feidler. Republic's motion for a new trial and motion for judgment notwithstanding the verdict were denied and Republic appealed.
I. Did the trial court err by instructing the jury that Republic bore the burden of proving that Davis's acts fell within the exclusionary clause of its policy?
II. Did the trial court err by instructing the jury that Republic bore the burden of proving Davis's mental capacity to form intent?
III. Did the trial court err by instructing the jury that the existence of subjective intent to injure was one of the questions of fact for its determination?
IV. Does A.R.S. section 13-807 preclude Feidler from asserting that Davis was incapable of forming the intent to injure him?
V. Can A.R.S. section 13-503 be applied retroactively to preclude Feidler from arguing that Davis's voluntary intoxication rendered him incapable of forming the intent to injure?
VI. Does substantial evidence exist to support the jury's verdict?
VII. Did the trial court abuse its discretion by allowing Feidler to reopen his case?
VIII. Did the trial court err by awarding attorneys' fees to Feidler because the settlement agreement in Feidler's tort action against Davis precludes such an award?
¶9 The first three issues discussed involve the trial court's instructions to the jury. Reversal on the basis of a challenge to a jury instruction "is justified only if the instruction was both erroneous and 'prejudicial to the substantial rights of the appealing party.' " Gemstar Ltd. v. Ernst & Young, 185 Ariz. 493, 504, 917 P.2d 222, 233 (1996) (quoting Walters v. First Fed. Sav. & Loan Ass'n, 131 Ariz. 321, 326, 641 P.2d 235, 240 (1982)). Whether the error was prejudicial "will not be presumed but must affirmatively appear from the record." Id.
¶10 Republic contends that Arizona law requires the insured to bear the burden of proving that his claimed loss falls within the coverage of the insurance policy, i.e., that his injuries were caused by an "occurrence" or "accident." At trial, Republic unsuccessfully argued that it was Feidler's burden to establish coverage by proving that he was the victim of an unintended "accident." Because of the court's ruling on its burden of proof argument, Republic asserts that the trial court incorrectly instructed the jury that Republic, as insurer, had to bear the burden of proving that Davis's acts were intentional and fell within the exclusionary clause of its policy. The jury was instructed as follows:
In this case, the plaintiff, Republic Insurance Company, has the burden of proving that the "intentional acts" exclusion of its policy applies to the conduct of Thomas Davis, its insured, because Davis acted with the intent to stab Michael Feidler with the knife.
¶11 Feidler argues that coverage exists because it is undisputed that there is a policy of insurance and that Davis is an insured who caused an injury to Feidler. Feidler argues that Republic must bear the burden of proving that Davis's acts were "intentional" thereby avoiding coverage.
¶12 We believe that the issues were framed by Republic's complaint for declaratory relief. In its complaint, Republic asked the trial court to decide if Davis's conduct was intentional and to "declare as a matter of law" that the policy does not provide coverage. The "accident" or "occurrence" argument raised in this appeal was not mentioned. Republic impliedly admitted in its complaint that there was a policy of insurance, Davis was an insured, and there was an event that had occurred upon which Feidler was going to claim coverage. The inquiry was focused entirely upon Davis's state of mind and upon the exclusionary provision of the insurance policy.
¶13 When the application of an exclusionary clause in an insurance policy is the issue, the insurer has the burden of showing that the loss fell within the exclusion. Pacific Indem. Co. v. Kohlhase, 9 Ariz.App. 595, 597, 455 P.2d 277, 279 (1969); see also Hartford Accident & Indem. Co. v. Villasenor, 21 Ariz.App. 206, 209, 517 P.2d 1099, 1102 (1974) (); Arizona Title Ins. & Trust Co. v. Smith, 21 Ariz.App. 371, 373, 519 P.2d 860, 862 (1974) (); Vanguard Ins. Co. v. Cantrell, 18 Ariz.App. 486, 489, 503 P.2d 962, 965 (1972) (). The trial court correctly instructed the jury that Republic had the burden of proving that the intentional acts exclusion of the policy applied to preclude coverage.
¶14 It is Feidler's position that the exclusionary clause does not void coverage because Davis was too intoxicated to form the intent to injure anyone. In response, Republic argues that because Davis repeatedly stabbed Feidler, which was certain to cause injury, it gave rise to the Steinmetz-Clark 3 conclusive presumption of intent to injure. Therefore, it argues that the burden shifted to Feidler to rebut this presumption by proving that Davis lacked sufficient mental capacity to form the intent to injure. Republic argues that because the law presumes a person to be competent and sane at the time of an act, the party that challenges mental capacity bears the burden of proving...
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