State Farm Fire and Cas. Co. v. Leverton

• Decision Date: 26 June 2000
• Docket Number: No. 4-99-0069.,4-99-0069.
• Citation: 314 Ill. App.3d 1080,732 N.E.2d 1094,247 Ill.Dec. 762
• Parties: STATE FARM FIRE AND CASUALTY COMPANY, Plaintiff-Appellee, v. George G. LEVERTON, as Father and Next Friend of Tiffany Nichole Leverton, and George G. Leverton, Individually, Defendants-Appellants (Jeff Presswood, Defendant).
• Court: United States Appellate Court of Illinois

732 N.E.2d 1094

314 Ill. App.3d 1080

247 Ill.Dec. 762

STATE FARM FIRE AND CASUALTY COMPANY, Plaintiff-Appellee, v. George G. LEVERTON, as Father and Next Friend of Tiffany Nichole Leverton, and George G. Leverton, Individually, Defendants-Appellants (Jeff Presswood, Defendant).

No. 4-99-0069.

Appellate Court of Illinois, Fourth District.

June 26, 2000.

Steven W. Perbix, Shay & Perbix, Decatur, for George G. Leverton.

Stephen W. Thomson, Dayna L. Johnson, Thomson Law Offices, P.C., Edwardsville, for State Farm Fire & Casualty Company.

Presiding Justice COOK delivered the opinion of the court:

Defendants, George Leverton, as father and next friend of Tiffany Nichole Leverton and individually, appeal from the circuit court's declaratory judgment that State Farm had no duty to indemnify its insured, Jeff Presswood, for injuries that he, Leverton, received during a barroom scuffle between the two men. Leverton argues that State Farm's coverage exclusion for intentional conduct is inapplicable because Presswood's acts were negligent, rather than intentional. We affirm.

I. BACKGROUND

In June 1994, Presswood was in the Alley Bi Saloon in Lincoln, Illinois. Leverton arrived, accompanied by Shannon Follis, Presswood's former girlfriend. Follis approached Presswood and asked him to speak with her outside in the alley. Presswood accompanied Follis outside and stood with his back to the alley door as they spoke. Leverton watched them through the back door, eventually exiting and stating, "havin' a fuckin' problem?" Although Leverton denies being the aggressor, Press-wood testified that Leverton shoved him in the back, causing Presswood to bump into Follis. According to Presswood, he turned quickly and, in a backhand motion, swung the beer bottle in his right hand in the direction of the shove. Leverton was struck in the face with the beer bottle and injured. Presswood was charged with aggravated battery after the incident and ultimately convicted.

In November 1994, Leverton filed a two-count civil complaint against Presswood. Count I of the civil complaint alleged that Presswood "violently assaulted" Leverton and "wrongfully struck him * * * with a beer bottle," constituting a "willful and malicious" assault and battery. Count II alleged that Presswood negligently swung the beer bottle while in close proximity to Leverton, creating an unreasonably dangerous condition.

Presswood tendered the defense in the civil action to State Farm, his homeowner's insurer. State Farm defended under a reservation of rights and filed this declaratory judgment action. State Farm sought a ruling that it was not required either to defend or indemnify Presswood under his homeowner's policy because Presswood's acts were intentional and excluded from coverage.

State Farm moved for summary judgment and the motion was initially denied. However, on a motion for reconsideration, the circuit court reversed its prior ruling, granting summary judgment to State Farm. On appeal, we reversed and remanded because the ruling was premature. The circuit court was obligated to abstain from deciding the coverage issue in the declaratory judgment action until the culmination of Leverton's civil suit. State Farm Fire & Casualty Co. v. Leverton, 289 Ill.App.3d 855, 225 Ill.Dec. 308, 683 N.E.2d 476 (1997).

Leverton's civil case against Presswood proceeded to trial. Before trial, Leverton voluntarily dismissed the count alleging "willful and malicious" assault and battery, leaving only the negligence count at issue. The jury found Presswood at fault, rendering a verdict in the amount of $160,889.66. The jury reduced Leverton's recovery by 10%, finding him contributorily negligent.

Subsequently, the trial court conducted a bench trial in this declaratory judgment action. On June 5, 1998, the court entered judgment in favor of Presswood and against State Farm. After reviewing the record and the testimony at trial, the circuit court concluded that Leverton's injury was "due to Presswood's unreasonable use of force in self-defense and therefore not excluded from coverage." (Emphasis added.) State Farm again moved for reconsideration. The circuit court ultimately agreed with State Farm and vacated its June 5, 1998, order.

The circuit court's order of September 3, 1998, holds that Leverton's injuries were expected or intended and therefore excluded from coverage; Presswood's actions were intentional and not an "accident"; and the facts presented did not constitute an "occurrence" that would trigger coverage. The court denied Leverton's motion to vacate the September 3, 1998, order and this appeal followed.

II. ANALYSIS

The rules of civil procedure permit circuit courts to "make binding declarations of rights" in certain matters, including "the construction of * * * [a] contract or other written instrument." 735 ILCS 5/2-701(a) (West 1998). The grant or denial of such declaratory relief is discretionary, and we will only reverse upon a showing of an abuse of discretion. Bodine Electric v. City of Champaign, 305 Ill.App.3d 431, 435, 238 Ill.Dec. 368, 711 N.E.2d 471, 474 (1999). "Abuse of discretion" means clearly against logic; the question is not whether the appellate court agrees with the circuit court, but whether the circuit court acted arbitrarily, without employing conscientious judgment, or whether, in view of all the circumstances, the court exceeded the bounds of reason and ignored recognized principles of law so that substantial prejudice resulted. Bodine Electric, 305 Ill. App.3d at 435, 238 Ill.Dec. 368, 711 N.E.2d at 474.

A. The Policy

The homeowner's policy State Farm issued to Jeffrey Presswood states in pertinent part:

"SECTION II—LIABILITY AND COVERAGES

COVERAGE L—PERSONAL LIABILITY

If a claim is made or a suit brought against an insured for damages because of bodily injury or property damage to which this coverage applies, caused by an occurrence, we will:

(1) pay up to our limit of liability for the damages for which the insured is legally liable; and

(2) provide a defense at our expense by counsel of our choice. We may make any investigation and settle any claim or suit that we decide is appropriate. Our obligation to defend any claim or suit ends when the amount we pay for damages, to effect settlement or satisfy a judgment resulting from the occurrence, equals our limit of liability.

* * * * * *

DEFINITIONS

Certain words and phrases are defined as follows:

* * * * * *

(8) `Occurrence,' when used in section II of this policy, means an accident, including exposure to conditions, which results in:

(a) bodily injury; or

(b) property damage;

during the policy period. Repeated or continuous exposure to the same general conditions is considered to be one occurrence.

* * * * * *

SECTION II—EXCLUSIONS

1. Coverage L and Coverage M do not apply to:

(a) bodily injury or property damage:

(1) which is either expected or intended by an insured; or

(2) to any person or property which is the result of willful and malicious acts of an insured." (Emphasis in original.)

In sum, the policy provides coverage for any "occurrence" that results in bodily injury but excludes coverage where the bodily injury "is either expected or intended by the insured." We must determine whether Presswood "expected or intended" to injure Leverton when he swung the beer bottle at him during the barroom scuffle.

When construing an insurance policy, a court must apply the policy language's plain and ordinary meaning if the words are unambiguous. However, if the words are susceptible to more than one interpretation, they are ambiguous and will be construed in favor of the insured and against the insurer who drafted the policy. Lincoln Logan Mutual Insurance Co. v. Fornshell, 309 Ill.App.3d 479, 483, 242 Ill.Dec. 750, 722 N.E.2d 239, 242 (1999). After reviewing the policy at issue, we find that its terms are not ambiguous. The clear language of the policy excludes coverage for bodily injury that is expected or intended.

In fact, personal liability insurance contracts typically contain exclusionary clauses for intentional misconduct. Further, an agreement to indemnify against intentional misconduct would, as a general rule, be contrary to public policy and unenforceable. Lincoln Logan, 309 Ill.App.3d at 483, 242 Ill.Dec. 750, 722 N.E.2d at 242. Exclusions for intentional acts are necessary to help insurers set rates and supply coverage. If a single insured is allowed, through an intentional act, to consciously control risks covered by the policy, the central concept of insurance is violated.

B. Intentional Conduct

We recently noted that virtually all tortfeasors who embark upon a course of conduct act "intentionally" in some measure. Lincoln Logan, 309 Ill.App.3d at 483, 242 Ill.Dec. 750, 722 N.E.2d at 242. For example, a child who accidentally hits a baseball through a neighbor's window "intended" to hit the baseball but did not intend to break the window. We must distinguish intentional conduct from "accidents."

An accident has been defined as an unforeseen occurrence, usually of an untoward or disastrous character or an undesigned sudden or unexpected event of an inflictive or unfortunate character. Aetna Casualty & Surety Co. v. Freyer, 89 Ill. App.3d 617, 619, 44 Ill.Dec. 791, 411 N.E.2d 1157, 1159 (1980). The natural and ordinary consequences of an act do not constitute an accident. Further, an injury caused by an assault and battery normally is not considered to be accidental, even if the specific injury was not intended. Aetna, 89 Ill.App.3d at 619, 44 Ill.Dec. 791, 411 N.E.2d at 1159. The construction generally afforded to intentional act exclusions is to deny coverage where the insured has (1) intended to act and (2) specifically intended to harm a third party. This construction is the most logical interpretation and best represents the parties' intentions. Lincoln Logan, 309 Ill.App.3d at 483,242 Ill. Dec. 750,722 N.E.2d at 242.

Here, Presswood was...