Sans v. Monticello Ins. Co.

• Decision Date: 13 March 1997
• Docket Number: No. 49A02-9603-CV-147,49A02-9603-CV-147
• Citation: 676 N.E.2d 1099
• Parties: Peter SANS, Appellant-Defendant, Tick Tock Lounge, Inc. and Michael Elkins, Appellant-Defendant, v. MONTICELLO INSURANCE COMPANY, Appellee-Plaintiff.
• Court: Indiana Appellate Court

Page 1099

676 N.E.2d 1099

Peter SANS, Appellant-Defendant Tick Tock Lounge, Inc. and Michael Elkins, Appellant-Defendant, v. MONTICELLO INSURANCE COMPANY, Appellee-Plaintiff.

No. 49A02-9603-CV-147.

Court of Appeals of Indiana.

March 13, 1997.

Transfer Denied July 11, 1997.

James H. Young, Young & Young, William F. Thoms, Indianapolis, for Appellants-Defendants.

Kelly J. Pitcher, David M. Mattingly, Ice Miller Donadio & Ryan, Indianapolis, for Appellee-Plaintiff.

OPINION

ROBERTSON, Judge.

Peter Sans, Michael A. Elkins, and the Tick Tock Lounge, Inc. appeal the summary judgment entered in favor of the Monticello Insurance Company [Insurance Co.]. We restate and consolidate the dispositive issue raised on appeal as:

whether the trial court correctly found that coverage was excluded under the insurance policy where the evidence in the light most favorable to the nonmovants indicates that Elkins did not intend to fire the gun.

We reverse.

FACTS

The undisputed facts disclose that, on September 8, 1992, Elkins was working as a bartender employed by the Tick Tock Lounge and Sans was a patron of the lounge. Elkins ordered Sans out of the lounge. When Sans attempted to reenter the tavern, Elkins raised his arm, brandishing a .25 caliber handgun. The gun went off and the bullet struck Sans in the head causing serious personal injuries. The facts in the light most favorable to the nonmovants, as contained in Elkins' affidavit, are as follows:

5. I never intended to shoot Peter Sans or anyone else.

6. I did not intentionally shoot Peter Sans.

7. I did not intend to even fire the gun.

8. I hoped the presence of the gun would scare Mr. Sans but never intended to shoot Mr. Sans or even fire the gun.

9. The gun accidentally fired when I was raising my arms as Mr. Sans was reentering the tavern after he had been asked to leave.

10. I am the person that first called 911 emergency personnel to the scene of the accident.

11. I was acquitted of all charges arising from the shooting occurrence at the Tick Tock Lounge September 8, 1992, by a jury of my peers.

(Pertinent part only).

Sans sued Elkins and the Tick Tock Lounge, Inc. alleging that Elkins had "carelessly and negligently" shot Sans. Insurance Company brought the instant declaratory judgment action, and ultimately obtained summary judgment, on the basis that coverage was excluded under the policy because the shooting incident was not an occurrence (an accident neither expected nor intended from the standpoint of the insured), and because the incident fell under the following exclusion contained in a policy endorsement:

It is agreed that the insurance does not apply to bodily injury or property damage arising out of assault and battery or out of any act or omission in connection with the prevention or suppression of such acts, whether caused by or at the instigation or direction of the insured, his employees, patrons or any other person.

The policy does not define the term "assault and battery."

In granting summary judgment, the trial court entered the following findings:

4. The Court finds that [Elkins'] subjective intent as to the shooting is not material. Intent is a standard that is governed by the action of Elkins that can be determined as a matter of law by this Court.

5. As a matter of law, [Elkins'] expectation and intent to shoot Sans is inferred by [Elkins'] undisputed actions and the injury to Sans that was the actual consequence of his actions.

(Pertinent part only). ¹

DECISION

As recently stated in Stevenson v. Hamilton Mutual Insurance Company, 672 N.E.2d 467 (Ind.Ct.App.1996), trans. pending:

In reviewing a motion for summary judgment, this court applies the same standard as the trial court. We must determine whether there is a genuine issue of material fact and whether the law has been correctly applied by the trial court. Summary judgment is appropriate only if no genuine issues of material fact exist and the moving party is entitled to judgment as a matter of law. Neither the trial court, nor the reviewing court, may look beyond the evidence specifically designated to the trial court. Once the movant for summary judgment has established that no genuine issue of material fact exists by submission of materials contemplated by T.R. 56, the nonmovant may not rest on his pleadings but must set forth specific facts, using supporting materials contemplated under the rule, which show the existence of a genuine issue for trial. A trial court's grant of summary judgment is "clothed with a presumption of validity," and the appellant bears the burden of demonstrating that the trial court erred.

The interpretation of a insurance policy is primarily a question of law for the court, and it is therefore a question which is particularly well-suited for disposition by summary judgment. Where there is an ambiguity, policies are to be construed strictly against the insurance company. Strict construction against the insurer is 'driven by the fact that the insurer drafts the policy and foists its terms upon the customer.' The insurance companies write the policies; we buy their forms or we do not buy insurance. Thus, the insurance company is bound by the plain and ordinary meaning of the words viewed from the standpoint of the insured. However, there is no rule of construction that every term in an insurance contract must be defined, and the mere fact that a term is not defined does not render it ambiguous. Whether a contract is ambiguous is a question of law; and where the court determines there is no ambiguity, the terms of the contract are conclusive and the construction of those terms is also a matter of law to be determined by the court. An insurance contract is ambiguous when it is susceptible to more than one interpretation and reasonably intelligent persons would honestly differ as to its meaning. An ambiguity does not exist simply because a controversy exists between the parties, with each favoring a different interpretation.

An unambiguous policy must be enforced according to its terms, even those which limit the insurer's liability. Courts may not extend coverage delineated by the policy nor may it rewrite the clear and unambiguous language of the policy. However, an exclusionary clause will not be read so broadly as to effectively exclude all coverage.

Indiana courts have long upheld standard exclusionary clauses for the insured's intentional acts as in furtherance of the public policy that a person should not be permitted to insure against harms he may intentionally and unlawfully cause others, and thereby acquire a license to engage in such activity. As stated in R.E. Keeton & A.I. Widiss, Insurance Law (1988) § 5.4(d)(1):

The principle that insurance should only be employed to transfer risks associated with fortuitous occurrences means that generally no coverage will exist for a loss that is caused intentionally. In the context of liability insurance, claims seeking indemnification for intentionally caused harm are usually denied on the basis of specific coverage terms--typically set forth in the basic definition of coverage--which state the insurer will pay damages for which an insured ... becomes legally responsible because of an accident. Furthermore, liability insurance policies have generally included clauses that explicitly preclude coverage for an 'injury ... caused intentionally.' For example, contemporary liability insurance policies frequently state that insurance is provided for damages that are caused by an 'occurrence' which is defined as an 'accident' that 'results in bodily injury or property damage neither expected nor intended from the standpoint of the insured.'

* * * * * *

Courts have clearly and repeatedly affirmed the general proposition that public policy prohibits the use of insurance to provide indemnification for civil tort liability that results from an insured's intentional wrongdoing.

[Keeton] at 518-19 (Emphasis original).

[We have] analyzed Indiana law with respect to standard 'intended or expected' exclusionary clauses, and noted:

The intent aspect ... contemplate[s] the 'volitional performance of an act with an intent to cause injury, although not necessarily the precise injury or severity of damage that in fact occurs.' It is met either by showing an actual intent to injure, or by showing the nature and character of the act to be such that an intent to cause harm to the other party must be inferred as a matter of law.

'Expected' injury means injury that occurred when the insured acted even though he was consciously aware that harm was practically certain to occur from his actions. However, the definition of 'expected' does not exclude harm that the insured 'should have anticipated, ...' Consciousness of the likelihood of certain results occurring is determined by examination of the subjective mental state of the insured.

672 N.E.2d at 470-72 (Citations omitted).

The validity and enforceability of "assault and battery" exclusions, such as the one involved in the case at bar, is well-established. See Franklin General Insurance Company v. Hamilton, 126 Ind.App. 537, 133 N.E.2d 93, (1956); Britamco Underwriters, Inc. v. Grzeskiewicz, 433 Pa.Super. 55, 639 A.2d 1208 (1994), appeal discontinued; United National Insurance Company v. Tunnel, Inc., 988 F.2d 351 (2nd Cir.1993); Wallace v. Huber, 597 So.2d 1247 (La.App.1992); Sphere Drake Insurance Company v. Ross, 80 Ohio App.3d 506, 609 N.E.2d 1284 (1992); Gregory v. Western World Insurance Company, Inc., 481 So.2d 878 (Ala.1985); Thornton v. Illinois Founders Insurance Company, 84 Ill.2d 365, 49 Ill.Dec. 724, 418 N.E.2d 744 (1981). However, as battery is necessarily an intentional act, a policy exclusion for assault and battery will...