Tibert v. Nodak Mut. Ins. Co.

Decision Date12 April 2012
Docket NumberNo. 20110143.,20110143.
Citation816 N.W.2d 31,2012 ND 81
PartiesMark L. TIBERT, Melvin J. Tibert, Sue Votava Tibert, and William Tibert, Plaintiffs and Appellants v. NODAK MUTUAL INSURANCE COMPANY, a North Dakota Corporation, Defendant and Appellee.
CourtNorth Dakota Supreme Court

OPINION TEXT STARTS HERE

Scott D. Jensen, Grand Forks, N.D., for plaintiffs and appellants.

Scott K. Porsborg, Bismarck, N.D., for defendant and appellee.

SANDSTROM, Justice.

[¶ 1] Mark Tibert, Melvin Tibert, Sue Tibert, and William Tibert (Tiberts) appeal from a district court summary judgment dismissing their declaratory judgment action against Nodak Mutual Insurance Company (Nodak). We affirm in part, reverse in part, and remand for further proceedings, concluding the district court did not err in concluding Nodak had no duty to indemnify the Tiberts for damages they were ordered to pay in an underlying lawsuit but did err in concluding Nodak had no duty to defend the Tiberts in the lawsuit.

I

[¶ 2] Mark, Melvin, and William Tibert are brothers, and Sue Tibert is Mark's wife. The Tiberts have been involved in a lengthy dispute, including extensive litigation, with Minto Grain, LLC, and its owners, William and Katherine Slominski (collectively “Minto Grain”). See Minto Grain, LLC v. Tibert, 2009 ND 213, 776 N.W.2d 549;Tibert v. City of Minto, 2006 ND 189, 720 N.W.2d 921;Tibert v. Slominski, 2005 ND 34, 692 N.W.2d 133;Tibert v. Minto Grain, LLC, 2004 ND 133, 682 N.W.2d 294;Minto Grain, LLC v. Tibert, 2004 ND 107, 681 N.W.2d 70;Tibert v. City of Minto, 2004 ND 97, 679 N.W.2d 440;see also Nowling v. BNSF Ry., 2002 ND 104, 646 N.W.2d 719. Mark and Sue Tibert and Melvin Tibert owned homes on property adjacent to a grain elevator owned and operated by Minto Grain. Minto Grain, 2009 ND 213, ¶ 2, 776 N.W.2d 549. Minto Grain intended to expand its facility to a 110–car unit train load-out facility. Id. at ¶ 3. As part of the expansion, Minto Grain acquired a portion of BNSF Railway's right-of-way on Kilowatt Drive, a roadway abutting and providing access to the Tiberts' properties. Id. The Tiberts alleged the proposed expansion would have affected their use of and access to their property.

[¶ 3] The Tiberts had various homeowner's policies and umbrella policies, which included personal injury liability endorsements, with Nodak. In 2004, Minto Grain brought an action against the Tiberts, alleging civil conspiracy, wrongful interference with business, tortious interference with contract, nuisance, trespass, and abuse of process. Id. at ¶ 4. The Tiberts delivered the complaint to Nodak. Nodak denied it had a duty to indemnify or defend the Tiberts under the policies.

[¶ 4] The Tiberts hired their own attorney to defend them in Minto Grain's lawsuit. After Minto Grain's civil conspiracy and abuse of process claims were dismissed by partial summary judgment, the remaining claims were tried to a jury. The jury returned a special verdict in favor of Minto Grain, finding that all four of the Tiberts, acting in concert, had unlawfully interfered with Minto Grain's business, intentionally interfered with contract, and created a nuisance, and that Mark, Sue, and Melvin Tibert, acting in concert, had committed trespass. The jury held the Tiberts jointly and severally liable for damages in the amount of $455,000, but limited damages against William Tibert to $305,000. Id. at ¶ 5. The judgment was affirmed on appeal. Id. at ¶ 54. The Tiberts have paid and fully satisfied the judgment.

[¶ 5] The Tiberts brought this declaratory judgment action against Nodak, seeking indemnification and recovery of their costs of defending the underlying action. The district court granted Nodak's motion for summary judgment, holding the jury's finding that the Tiberts had acted in concert was res judicata on the issue of whether their conduct was intentional, and coverage was therefore barred by the intentional acts exclusions in the various policies and by N.D.C.C. § 26.1–32–04. The district court concluded Nodak had no duty to defend or indemnify the Tiberts, and judgment was entered dismissing the action.

[¶ 6] The district court had jurisdiction under N.D. Const. art. VI, § 8, and N.D.C.C. §§ 27–05–06 and 32–23–01. The appeal was timely under N.D.R.App.P. 4(a). This Court has jurisdiction under N.D. Const. art. VI, §§ 2 and 6, and N.D.C.C. §§ 28–27–01 and 32–23–07.

II

[¶ 7] The Tiberts contend the district court erred in concluding Nodak had no duty to indemnify them for Minto Grain's damages.

A

[¶ 8] We have outlined the standard for reviewing a summary judgment:

Summary judgment is a procedural device for the prompt resolution of a controversy on the merits without a trial if there are no genuine issues of material fact or inferences that can reasonably be drawn from undisputed facts, or if the only issues to be resolved are questions of law. A party moving for summary judgment has the burden of showing there are no genuine issues of material fact and the moving party is entitled to judgment as a matter of law. In determining whether summary judgment was appropriately granted, we must view the evidence in the light most favorable to the party opposing the motion, and that party will be given the benefit of all favorable inferences which can reasonably be drawn from the record. On appeal, this Court decides whether the information available to the district court precluded the existence of a genuine issue of material fact and entitled the moving party to judgment as a matter of law. Whether the district court properly granted summary judgment is a question of law which we review de novo on the entire record.

Myaer v. Nodak Mut. Ins. Co., 2012 ND 21, ¶ 9, 812 N.W.2d 345 (quoting Riverwood Commercial Park, LLC v. Standard Oil Co., Inc., 2011 ND 95, ¶ 6, 797 N.W.2d 770).

[¶ 9] Interpretation of an insurance contract is a question of law fully reviewable on appeal. Wisness v. Nodak Mut. Ins. Co., 2011 ND 197, ¶ 5, 806 N.W.2d 146;Grinnell Mut. Reinsurance Co. v. Thies, 2008 ND 164, ¶ 7, 755 N.W.2d 852;State v. North Dakota State Univ., 2005 ND 75, ¶ 12, 694 N.W.2d 225. We independently examine and construe the insurance contract to determine whether there is coverage. Thies, at ¶ 7. We summarized our standards for construing an insurance contract in Thies, at ¶ 7 (quoting North Dakota State Univ., at ¶ 12):

Our goal when interpreting insurance policies, as when construing other contracts, is to give effect to the mutual intention of the parties as it existed at the time of contracting. We look first to the language of the insurance contract, and if the policy language is clear on its face, there is no room for construction. “If coverage hinges on an undefined term, we apply the plain, ordinary meaning of the term in interpreting the contract.” While we regard insurance policies as adhesion contracts and resolve ambiguities in favor of the insured, we will not rewrite a contract to impose liability on an insurer if the policy unambiguously precludes coverage. We will not strain the definition of an undefined term to provide coverage for the insured. We construe insurance contracts as a whole to give meaning and effect to each clause, if possible. The whole of a contract is to be taken together to give effect to every part, and each clause is to help interpret the others.

Exclusions from coverage in an insurance contract must be clear and explicit and are strictly construed against the insurer. Wisness, at ¶ 13;Schleuter v. Northern Plains Ins. Co., Inc., 2009 ND 171, ¶ 8, 772 N.W.2d 879;North Dakota State Univ., at ¶ 13. Although exclusionary provisions must be strictly construed, we will not rewrite a contract to impose liability on the insurer if the policy unambiguously precludes coverage. Wisness, at ¶ 13;Schleuter, at ¶ 8;North Dakota State Univ., at ¶ 13.

[¶ 10] The interpretation of a statute is a question of law, which is fully reviewable on appeal. In re T.H., 2012 ND 38, ¶ 22, 812 N.W.2d 373;Grinnell Mut. Reinsurance Co. v. Thompson, 2010 ND 22, ¶ 9, 778 N.W.2d 526.

B

[¶ 11] The Tiberts had been insured by Nodak for many years under numerous policies. Mark and Sue, Melvin, and William Tibert had separate homeowners' policies on their respective properties, and had additionally purchased personal injury liability endorsements on their respective policies. The personal injury endorsements each included intentional acts exclusions. They also had purchased separate umbrella policies that included personal injury liability coverage.

[¶ 12] Although the operative language setting out coverage and exclusions in the numerous policies varies to some degree, the parties do not rely upon the variations in language when arguing for or against coverage. Rather, each side has taken an all-or-nothing approach: the Tiberts claim there is coverage under all of the policies, and Nodak claims coverage under all of the policies is barred by the intentional acts exclusions or public policy. We agree with the parties that the differences in the language of the respective policies do not affect the ultimate decision in this case.

[¶ 13] For purposes of illustration, one of the relevant personal injury liability endorsements provided:

A. Personal Injury Liability

“Personal Injury” means injury, other than bodily injury, arising out of one or more of the following offenses:

1. false arrest, detention or imprisonment;

2. malicious prosecution;

3. the wrongful eviction from, wrongful entry into, or invasion of the right of private occupancy of a room, dwelling or premises that a person occupies, by or on behalf of its owner, landlord or lessor;

4. oral or written publication of material that slanders or libels a person or organization or disparages a person's or organization's goods, products or services; or

5. oral or written publication of material that violates a person's right of privacy.

B. Section II Exclusions do not apply to personal injury.

Personal injury insurance does not apply to:

....

2....

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