Stoebner v. S. DAK. FARM BUREAU MUT. INS.

• Citation: 1999 SD 106,598 N.W.2d 557
• Decision Date: 11 August 1999
• Docket Number: No. 20577.,20577.
• Parties: Jeanette STOEBNER, Plaintiff and Appellee, v. SOUTH DAKOTA FARM BUREAU MUTUAL INSURANCE COMPANY, Defendant and Appellant.
• Court: Supreme Court of South Dakota

598 N.W.2d 557

1999 SD 106

Jeanette STOEBNER, Plaintiff and Appellee, v. SOUTH DAKOTA FARM BUREAU MUTUAL INSURANCE COMPANY, Defendant and Appellant.

No. 20577.

Supreme Court of South Dakota.

Argued March 22, 1999.

Decided August 11, 1999.

Timothy L. James of James & Associates, P.C., Yankton, South Dakota, Attorneys for plaintiff and appellee.

Mark D. O'Leary, Sioux Falls, South Dakota, Attorney for defendant and appellant.

SABERS, Justice

[¶ 1.] Farm Bureau appeals a summary judgment that it breached a duty to defend. Finding genuine issues of material fact, we reverse and remand for trial.

FACTS

[¶ 2.] On May 26, 1991, an altercation occurred between Jeanette Stoebner and her daughter-in-law, Lori Gregerson, at Gregerson's home. Gregerson later filed a complaint claiming Stoebner committed intentional torts of assault and battery. Stoebner claimed that she acted in self-defense.

[¶ 3.] On the date of the altercation, Stoebner was insured by Farm Bureau. She submitted the defense of Gregerson's claim to Farm Bureau. It refused to defend asserting that the claim was excluded under the intentional acts exclusion of the policy. Stoebner hired an attorney and the case of Gregerson v. Stoebner proceeded to trial. The jury returned a defense verdict in favor of Stoebner on July 23, 1997.

[¶ 4.] Stoebner filed a complaint against Farm Bureau on June 26, 1997 claiming breach of contract, bad faith, negligent and intentional infliction of emotional distress, and breach of a duty to defend. Stoebner sought punitive damages. Both parties filed motions for summary judgment supported by exhibits, including depositions, copies of letters denying coverage, and portions of the trial transcript.

[¶ 5.] The trial court found that self-defense is an exception to the intentional acts exclusion. It concluded that because Farm Bureau had knowledge of Stoebner's claim of self-defense, it had a duty to defend. Therefore, the trial court granted Stoebner summary judgment on her breach of a duty to defend claim. It granted Farm Bureau summary judgment on the bad faith and emotional distress claims. Farm Bureau appeals.

STANDARD OF REVIEW

[¶ 6.] Our standard of review for summary judgment is well established:

In reviewing a grant or a denial of summary judgment under SDCL 15-6-56(c), we must determine whether the moving party demonstrated the absence of any genuine issue of material fact and showed entitlement to judgment on the merits as a matter of law. The evidence must be viewed most favorably to the nonmoving party and reasonable doubts should be resolved against the moving party. The nonmoving party, however, must present specific facts showing that a genuine, material issue for trial exists. Our task on appeal is to determine only whether a genuine issue of material fact exists and whether the law was correctly applied. If there exists any basis which supports the ruling of the trial court, affirmance of a summary judgment is proper.

Weiss v. Van Norman, 1997 SD 40, ¶ 9, 562 N.W.2d 113, 115 (quoting Lamp v. First Nat'l Bank of Garretson, 496 N.W.2d 581, 583 (S.D.1993) (citation omitted)).

[¶ 7.] GENUINE ISSUES OF MATERIAL FACT EXIST WHETHER STOEBNER WAS ACTING FOR THE PURPOSE OF PREVENTING INJURY TO HERSELF OR FOR THE PURPOSE OF INTENDING INJURY TO GREGERSON.

[¶ 8.] The trial court found that Farm Bureau had a duty to defend Stoebner because her claim of self-defense established the possibility of coverage. The trial court found that "[b]ecause there is generally not an intent to injure when acting in self-defense, self-defense is an exception to the exclusions relied on by Farm Bureau." It further found that, although the complaint against Stoebner alleged intentional torts which would be excluded from coverage under the intentional acts exclusion, Farm Bureau had actual knowledge of Stoebner's claim of self-defense. After reviewing the motions and exhibits submitted by the parties, the trial court granted summary judgment that Farm Bureau breached its duty to defend.

[¶ 9.] The insurance policy that Farm Bureau issued to Stoebner provides:

We cover:

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

a. pay up to our limit of liability for the damages for which the insured is legally liable; and

b. provide a defense at our expense by counsel of our choice, even if the suit is groundless, false or fraudulent.

An occurrence is defined in the policy as "an accident, including continuous or repeated exposure to conditions." A definition of "accident" is not provided. The policy excludes coverage for bodily injury or property damage "which is expected or intended by the insured[.]"

[¶ 10.] To claim that no duty to defend exists, Farm Bureau must show that the claim clearly falls outside of Stoebner's policy coverage. Hawkeye-Security Ins. Co. v. Clifford, 366 N.W.2d 489, 492 (S.D. 1985) (citations omitted). "If, after considering the complaint, and when appropriate, other record evidence, doubt exists whether the claim against the insured arguably falls within policy coverage, such doubts must be resolved in favor of the insured." Id. Although Gregerson's complaint alleged intentional torts of assault and battery, Farm Bureau knew that Stoebner claimed she acted in self-defense. Therefore, the issue is whether Stoebner acted in self-defense and whether Farm Bureau breached its duty to defend under the policy.

[¶ 11.] Farm Bureau claims that this case is controlled by Hawkeye-Security and that if there is no judgment to pay, then there is no duty to defend. We disagree. Farm Bureau ignores that in Tri-State Co. of Minnesota v. Bollinger, 476 N.W.2d 697, 701 (S.D.1991) we stated that "an insurer's duty to defend and a duty to pay are on a totally independent footing" and "[a]n insurer's duty to defend and its duty to pay on a claim are severable and independent duties." State Farm Mut. Auto. Ins. Co. v. Wertz, 540 N.W.2d 636, 638 (S.D.1995) (citing Hawkeye-Security, 366 N.W.2d at 490

). "`The duty to defend is much broader than the duty to pay a judgment rendered against the insured.'" Wertz, 540 N.W.2d at 638 (quoting Hawkeye-Security, 366 N.W.2d at 490). "The insurer bears the burden of showing that it has no duty to defend its insured." Id. (citing North Star Mut. Ins. Co. v. Kneen, 484 N.W.2d 908, 912 (S.D.1992)).

[¶ 12.] Farm Bureau argues that, even if Stoebner acted in self-defense, her actions constituted deliberate acts that fall within the policy's intentional acts exclusion. However, the critical question is not whether Stoebner intended to act, but rather whether she intended to inflict the resulting injuries that Gregerson claimed to suffer. Wertz, 540 N.W.2d at 639. "`Most, if not all, negligently inflicted injuries or damages result from intentional acts of some kind, but coverage still exists under normal [insurance] policy provisions if there was no intention to cause, by the commission of the acts, the resulting injuries or damages.'" Id. (alteration in original) (quoting Snyder v. Nelson, 278 Or. 409, 564 P.2d 681, 683 (1977)). "An insurance policy exclusion for a loss caused intentionally by an insured applies only when the insurance company is able to show that the insured acted for the purpose of causing the loss." Wertz, 540 N.W.2d at 642 (Sabers, J., concurring specially). "That is, the loss itself must be intended before the exclusion will apply." Id.

Injuries are accidental or the opposite for the purposes of indemnity according to [the] quality of the results rather than the quality of the causes. The field of exclusion would be indefinitely expanded, if the [insurer's] argument were pursued to the limit of its logic. Every act, if we exclude, as we must, gestures or movements that are automatic or instinctive, is willful, when reviewed in isolation and irrespective of its consequences.

Bollinger, 476 N.W.2d at 701 (second alteration in original) (quoting Messersmith v. American Fidelity Co., 232 N.Y. 161, 133 N.E. 432 (1921)).

[¶ 13.] While the policy excludes an act which is "expected or intended by the insured," self-defense does not always fall within this type of policy exclusion. A genuine claim of self-defense is consistent with "accident" in that it is an event which must be by definition "an undesigned, sudden, and unexpected event ... and often accompanied by a manifestation of force." Taylor v. Imperial Cas. & Indem. Co., 82 S.D. 298, 302-03, 144 N.W.2d 856, 858 (1966). Here, there is some doubt whether Stoebner's claim of self-defense falls within the policy exclusions.

[¶ 14.] Other courts have found that acts committed in self-defense are not expected or intended acts within the meaning of insurance policies exempting bodily injuries or property damage expected or intended by the insured.¹ Safeco Ins. Co. of America v. Tunkle, 997 F.Supp. 1356, 1360 (D.Mont.1998); Western Fire Ins. Co. v. Persons, 393 N.W.2d 234, 237 (Minn.App. 1986); Allstate Ins. Co. v. Novak, 210 Neb. 184, 313 N.W.2d 636, 641 (1981); Preferred Mut. Ins. Co. v. Thompson, 23 Ohio St.3d 78, 491 N.E.2d 688, 691 (1986). "One who has acted in self-defense has not used insurance coverage as a license to commit wanton and malicious acts. In fact, someone properly acting in self-defense is, by definition, not acting unreasonably." Western Fire, 393 N.W.2d at 237. A person acting in self-defense is not engaging in the type of conduct that intentional acts exclusions are intended to discourage. Id.

[¶ 15.] Stoebner made a colorable claim of self-defense, which may have been accepted by the jury, and, under the facts of this case, there appears to be no showing that Stoebner intended anything other than self-defense. However, the jury verdict for defendant Stoebner could also mean that she intentionally assaulted Gregerson but that Gregerson failed to prove her damages. No...