Smith v. Sears, Roebuck & Co.

• Citation: 447 S.E.2d 255,191 W.Va. 563
• Decision Date: 07 July 1994
• Docket Number: No. 21887,21887
• Court: Supreme Court of West Virginia
• Parties: Charles E. SMITH and Annette Smith, Plaintiffs Below, v. SEARS, ROEBUCK & COMPANY, Gregory Bond and Ora L. "Bud" Patton, Jr., Defendants Below. Ora L. "Bud" PATTON, Jr., Third-Party Plaintiff Below, Appellee, v. NATIONWIDE MUTUAL FIRE INSURANCE COMPANY, Third-Party Defendant Below, Appellant.

Page 255

447 S.E.2d 255

191 W.Va. 563

Charles E. SMITH and Annette Smith, Plaintiffs Below, v. SEARS, ROEBUCK & COMPANY, Gregory Bond and Ora L. "Bud"

Patton, Jr., Defendants Below.

Ora L. "Bud" PATTON, Jr., Third-Party Plaintiff Below, Appellee, v. NATIONWIDE MUTUAL FIRE INSURANCE COMPANY, Third-Party

Defendant Below, Appellant.

No. 21887.

Supreme Court of Appeals of

West Virginia.

Submitted May 4, 1994.

Decided July 7, 1994.

Syllabus by the Court

1. "A motion for summary judgment should be granted only when it is clear that there is no genuine issue of fact to be tried and inquiry concerning the facts is not desirable to clarify the application of the law." Syllabus point 3, Aetna Casualty and Surety Co. v. Federal Ins. Co. of New York, 148 W.Va. 160, 133 S.E.2d 770 (1963).

2. "An insurance company seeking to avoid liability through the operation of an exclusion has the burden of proving the facts necessary to the operation of that exclusion." Syllabus point 7, National Mutual Ins. Co. v. McMahon & Sons, Inc., 177 W.Va. 734, 356 S.E.2d 488 (1987).

Mary H. Sanders and Blake Benton, Huddleston, Bolen, Beatty Porter & Copen, Charleston, for appellant.

Vincent King, Charleston, for appellee.

PER CURIAM:

Nationwide Mutual Fire Insurance Company (hereinafter Nationwide) appeals a partial summary judgment order of the Circuit Court of Kanawha County requiring Nationwide to provide a defense to Ora "Bud" Patton in a suit brought against him by Charles E. and Annette Smith for assault and battery, intentional infliction of emotional distress and defamation. On appeal, Nationwide argues that under Mr. Patton's homeowner's insurance policy, Nationwide has no duty to provide coverage or a defense for Mr. Patton's intentional acts or business pursuits. Mr. Patton argues that because the matter presents a mixed question of fact and law, the circuit court properly reserved the matter's resolution for the jury. Because we agree that the factual questions should be resolved by a jury and not by summary judgment, we affirm the order of the circuit court.

This case is a third-party declaratory judgment action brought by Mr. Patton, the insured, against his insurance company, Nationwide, seeking to require Nationwide to defend and, if appropriate, indemnify him in Smith v. Sears, Roebuck & Company, et al., (hereinafter the underlying suit). In the underlying suit, Mr. and Mrs. Smith's complaint alleges that on December 28, 1991, Mr. Smith was attacked by Mr. Patton in the parking lot outside of Sears, Roebuck & Company (hereinafter Sears). Mr. Smith alleges that he was injured when Mr. Patton struck him on the left side of his head. Mr. and Mrs. Smith allege that the assault and battery occurred after Mr. Smith and Mr. Patton, two appliance salesmen at Sears, argued about commissions earned during a traded shift. Mr. and Mrs. Smith also allege that Mr. Patton libeled and slandered Mr. Smith during Sears' investigation of the incident, which resulted in Sears' discharging Mr. Smith from his employment on January 7, 1992. In his answer, Mr. Patton alleges that: (1) Mr. Smith invited him to go outside; (2) he was merely defending himself; and (3) Mr. Smith reported the incident to Sears. Mr. Patton alleges that Sears fired both men and notes that, in the alternative, Mr. Smith alleges that Sears fired both men as part of a nationwide practice of age discrimination.

After Nationwide refused to defend him in the underlying suit citing the insurance policy's exclusions for intentional acts and business pursuits, Mr. Patton brought a third-party complaint against Nationwide seeking to compel Nationwide to defend and, if required by the jury, indemnify him. Nationwide answered and immediately moved for summary judgment. Mr. Patton responded and cross-motioned for partial summary judgment on the duty to defend.

The circuit court noted that Mr. Patton contends "that his swing at the plaintiff was in self defense and that no bodily harm was intended" and that "there remains a question of fact as to whether the conduct complained of was a 'business pursuit,' and whether the same falls within the contractual exception to that exclusion." The circuit court then ordered Nationwide to "tender a defense until such time as the necessary facts are determined by the jury" and conditioned Nationwide's payment of damages on the factual determinations. Nationwide then appealed to this Court alleging that under Mr. Patton's homeowners policy it had no duty to provide a defense for Mr. Patton.

We have long held that when material facts are in controversy, summary judgment is not appropriate.

A motion for summary judgment should be granted only when it is clear that there is no genuine issue of fact to be tried and inquiry concerning the facts is not desirable to clarify the application of the law.

Syl. pt. 3, Aetna Casualty and Surety Co. v. Federal Ins. Co. of New York, 148 W.Va. 160, 133 S.E.2d 770 (1963). In accord Syl. pt. 2, Rich v. Allstate Ins. Co., 191 W.Va. 308, 445 S.E.2d 249 (1994); Syl. pt. 1, Peters v. Peters, 191 W.Va. 56, 443 S.E.2d 213 (1994); Syl. pt. 6, Lieving v. Hadley, 188 W.Va. 197, 423 S.E.2d 600 (1992). Summary judgment is not proper "unless the facts established show a right to judgment with such clarity as to leave no room for controversy and show affirmatively that the adverse party cannot prevail under any circumstances." Aetna, 148 W.Va. at 171, 133 S.E.2d at 777.

Rule 56(c) [1978], W.Va.R.C.P. states that a motion for summary judgment can be granted only if it is clear "that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law."

In Syl. pt. 6, Aetna supra, we explained that the party moving for summary judgment has the burden of proof. Syl. pt. 6, Aetna states:

A party who moves for summary judgment has the burden of showing that there is no genuine issue of fact and any doubt as to the existence of such issue is resolved against the movant for such judgment.

In Syl. pt. 7, National Mutual Ins. Co. v. McMahon & Sons, Inc., 177 W.Va. 734, 356 S.E.2d 488 (1987), we stated:

An insurance company seeking to avoid liability through the operation of an exclusion has the burden of proving the facts necessary to the operation of that exclusion.

See Carney v. Erie Ins. Co., Inc., 189 W.Va. 702, 704 n. 1, 434 S.E.2d 374, 376 n. 1 (1993).

In this case, Nationwide maintains that based on the insurance policy's exclusions and our holding in Horace Mann Ins. Co. v. Leeber, 180 W.Va. 375, 376 S.E.2d 581 (1988), it should not be required to provide a defense for Mr. Patton. In Section II-Exclusions, the Nationwide's homeowners policy provides, in pertinent part:

1. Coverage E-Personal Liability, and Coverage F-Medical Payments to Others do not apply to bodily injury or property damage:

a. which is expected or intended by the insured.

. . . . .

b. arising out of business pursuits of an insured....

In Leeber, we found that when an insurance policy contains a "so-called 'intentional injury' exclusion" "[t]here is neither a duty to defend an insured in an action for, nor a duty to pay for, damages allegedly caused by the sexual misconduct of an insured." Syl., in part, Leeber. In Leeber, Mr. Leeber, a teacher who plead guilty to two counts of sexual abuse in the third degree, alleged that under his homeowners insurance policy, the insurance company had a duty to defend him and to pay for damages arising from a civil suit brought by the parents of a victim of his sexual abuse. In Leeber we noted that our holding rejecting insurance coverage was consistent with our doctrine of "reasonable expectations" as defined in Syl. pt. 8 of National Mutual Ins. Co. v. McMahon & Sons, Inc., 177 W.Va. 734, 356 S.E.2d 488 (1987). Sly. pt. 8, McMahon states:

With respect to insurance contracts, the doctrine of reasonable expectations is that the objectively reasonable expectations of applicants and intended beneficiaries regarding the terms of insurance contracts will be honored even though painstaking study of the policy provisions would have negated those expectations.

See Nadler v. Liberty Mut. Fire Ins. Co., 188 W.Va. 329, 337, 424 S.E.2d 256, 264 (1992).

In Leeber, we noted that "[m]ost courts deny liability insurance coverage for alleged sexual misconduct by applying an objective test to an intentional injury exclusion" because the sexual misconduct "is so inherently injurious, or 'substantially certain' to result in some injury" that "public policy precludes a claim of unintended consequences, that is, a claim that no harm was intended to result from the act."...