State Farm Mut. Auto. Ins. Co. v. Wertz

Decision Date21 November 1995
Docket NumberNo. 18729,18729
Citation540 N.W.2d 636
PartiesSTATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY, Plaintiff and Appellant, v. Randall P. WERTZ, Kathy Wertz, Travis P. Wertz, Dale Anderson, and Dawnelle Martin, Defendants and Appellees.
CourtSouth Dakota Supreme Court

Roy A. Wise of Richardson, Groseclose, Kornmann and Wyly, Aberdeen, for plaintiff and appellant.

Thomas P. Tonner of Tonner, Tobin and King, Aberdeen, for defendants and appellees Wertz.

Marilyn Marshall Maloney of Maloney and Maloney, Aberdeen, for defendants and appellees Anderson and Martin.

MILLER, Chief Justice (on reassignment).

State Farm Mutual Automobile Insurance Company (State Farm) appeals the trial court's declaratory judgment requiring coverage for intentionally inflicted injuries. We reverse and remand.


State Farm issued an automobile insurance policy to Randall and Kathy Wertz, covering a 1986 Oldsmobile Calais automobile. According to the policy, State Farm agreed to "pay damages which an insured becomes legally liable to pay because of: (a) bodily injury to others, and (b) damage to or destruction of property including loss of its use, caused by accident resulting from the ownership, maintenance or use of your car[.]" (Emphasis supplied.)

On August 30, 1991, their adult son Travis Wertz (Wertz) received permission to use the insured vehicle and thereby became an insured under the policy. He drove to a bar in Aberdeen, South Dakota, to talk to Dawnelle Martin, a woman with whom he had maintained a stormy relationship. In order to hold a more private discussion, the two went outside to Wertz's car to visit. An argument ensued and Wertz drove out of the parking lot, refusing to let Martin leave the vehicle.

Wertz headed east from Aberdeen on Highway 12, telling Martin he was going to drive to the Interstate, find a semi-truck, and collide with it in order to kill them both. Wertz had threatened Martin in this manner on previous occasions. However, as the drive continued, Wertz's anger subsided. He returned toward Aberdeen to take Martin home. During the episode, Wertz stopped the vehicle twice; once, to allow Martin to use the restroom and another time to engage in sexual relations with her.

Fearing she may be in trouble, Martin's friends left the bar in search of the couple and drove to her residence. Upon seeing the Wertz vehicle, many of Martin's friends jumped into their cars to give chase. Once again, Wertz drove out of Aberdeen with Martin, this time heading north on Highway 281. At times, Wertz veered toward the other cars and, at other times, he simply sped off.

One of Martin's friends notified the Brown County Sheriff's Office of the situation. The deputy sheriff arrived on the scene, took over the chase and pursued Wertz to Ellendale, North Dakota. North of Ellendale, a semi-truck owned by Dale Anderson was parked off the road. Still under hot pursuit, Wertz deliberately steered his vehicle toward the parked semi. Martin grabbed the steering wheel in order to avoid a collision. Wertz jerked back the wheel, intentionally causing his vehicle to collide with the parked semi.

Martin commenced a civil action against Wertz. She sought damages for false imprisonment, assault, and negligence. Anderson also sued Wertz on a theory of negligence for damage to his truck. State Farm responded by bringing a declaratory judgment action, seeking a determination of its rights and liabilities under the policy. It argued that, since Wertz intentionally collided with the semi, it was not an "accident." State Farm alleged it had no obligation to defend Wertz under the policy.

The trial court found in pertinent part: "Although defendant Travis P. Wertz claimed at the trial that he did not intentionally run into the parked semi, the evidence to the contrary is overwhelming. This court finds that his actions were intentional." The trial court ruled that State Farm had no duty to defend or indemnify Wertz on the assault and false imprisonment claims. The court reasoned that false imprisonment and assault could have been accomplished without the use of a motor vehicle and injuries resulting from such torts were not a foreseeable risk contemplated by the South Dakota Legislature or State Farm. In contrast, the trial court ruled State Farm did have an obligation to defend and indemnify Wertz on the negligence claims filed by Martin and Anderson. The court concluded that the language of the policy and the state's Financial Responsibility Laws provide coverage for injuries sustained by "accident." Because the injuries sustained were accidental from the standpoint of the injured parties, the court held State Farm was responsible for defending and indemnifying Wertz. State Farm appeals, raising the following issues:





The construction of a statute is a question of law. Aman v. Edmunds Cent. Sch. Dist. No. 22-5, 494 N.W.2d 198, 199 (S.D.1992) (citations omitted). The interpretation of a written contract is also a question of law. Dirks v. Sioux Valley Empire Elec. Ass'n, Inc., 450 N.W.2d 426, 427-28 (S.D.1990). Questions of law are reviewable on appeal under a de novo standard, and this Court is not required to defer to the trial court's legal determinations. Aman, 494 N.W.2d at 199 (citing In re SDDS, Inc., 472 N.W.2d 502, 507 (S.D.1991); In re State & City Sales Tax Liability of Quality Serv. Railcar Repair Corp., 437 N.W.2d 209, 210-11 (S.D.1989); Permann v. Dep't of Labor, Unemp. Ins. Div., 411 N.W.2d 113, 117 (S.D.1987)).

An insurer's duty to defend and its duty to pay on a claim are severable and independent duties. Hawkeye-Security Ins. Co. v. Clifford, 366 N.W.2d 489, 490 (S.D.1985). "The duty to defend is much broader than the duty to pay a judgment rendered against the insured." Id. The insurer bears the burden of showing that it has no duty to defend its insured. North Star Mut. Ins. Co. v. Kneen, 484 N.W.2d 908, 912 (S.D.1992). To satisfy this burden, "[t]he insurer must show that the claim clearly falls outside of policy coverage." Id. (citing City of Fort Pierre v. United Fire and Cas. Co., 463 N.W.2d 845, 847 (S.D.1990); Bayer v. Employers Reinsurance Corp., 383 N.W.2d 858, 861 (S.D.1986); Hawkeye-Security, 366 N.W.2d at 492) (emphasis in original). "If, after considering the complaint, and when appropriate, other record evidence, doubt exists whether the claim against the insured arguably falls within the policy coverage, such doubts must be resolved in favor of the insured." City of Fort Pierre, 463 N.W.2d at 847 (citing Hawkeye-Security, 366 N.W.2d at 492).


Under the State Farm policy at issue, State Farm agrees to pay damages on behalf of an insured for bodily injury and property damage "caused by accident" resulting from the use of the vehicle covered by the policy. State Farm also agrees to defend any suit against an insured for such damages. 1 The policy does not define the word "accident." Nor does the policy contain any exclusionary language concerning intentional acts or intentional harm caused by the insured.

South Dakota's Financial Responsibility Law, SDCL ch. 32-35, provides no definition of "accident." SDCL 32-35-2 simply requires a driver to prove the financial ability to pay damages "on account of accidents ... arising out of the ownership, maintenance, or use of a vehicle ..." up to a certain sum.

In Taylor v. Imperial Cas. & Indemnity Co., 82 S.D. 298, 302-03, 144 N.W.2d 856, 858 (1966) (citations omitted), we concluded that the word "accident" in a liability insurance policy is ordinarily defined as "an undesigned, sudden and unexpected event, usually of an afflictive or unfortunate character, and often accompanied by a manifestation of force."

State Farm argues that, because Wertz intentionally ran into the semi, the collision was not an "accident" as required for policy coverage. State Farm alleges no responsibility to either defend or indemnify Wertz. State Farm's interpretation of the policy is premised on viewing the word "accident" from the insured's perspective; State Farm reasons that since the insured, Wertz, acted intentionally, the injuries he caused were not "by accident." Appellees Anderson, Martin and Wertz do not challenge the trial court's finding that Wertz intentionally caused his vehicle to collide with Anderson's semi. Instead, they argue that whether or not an injury occurred by "accident" should be interpreted from the standpoint of the person injured; coverage would therefore extend to collisions which are intended by the tort-feasor but unforeseen by the injured party. The trial court accepted their contention and ruled that the word "accident" should "be defined from the standpoint of the injured party rather than the party perpetrating the intentional act." The trial court therefore held that State Farm was obligated to defend and indemnify Wertz on the negligence charges brought by Anderson and Martin. We disagree with the trial court's conclusions.

Martin and Anderson's existing claims involve allegations that Wertz acted negligently when he caused his vehicle to collide with Anderson's semi. " '[M]ere allegations of negligence in a transparent attempt to trigger insurance coverage by characterizing intentionally tortious conduct as negligent will not persuade [this] court to impose a duty to defend.' " Tri-State Co. of Minnesota v. Bollinger, 476 N.W.2d 697, 704 (S.D.1991) (Wuest, J. concurring in part and dissenting in part) (quotin...

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