U.S. Fire Ins. Co. v. Reynolds, CA83-54
| Decision Date | 11 April 1984 |
| Docket Number | No. CA83-54,CA83-54 |
| Citation | 667 S.W.2d 664,11 Ark.App. 141 |
| Parties | UNITED STATES FIRE INSURANCE COMPANY, Appellant, v. Johnathan L. REYNOLDS, Appellee. |
| Court | Arkansas Court of Appeals |
Barber, McCaskill, Amsler, Jones & Hale, Little Rock, for appellant.
Compton, Prewett, Thomas & Hickey, P.A. by Robert C. Compton, El Dorado, for appellee.
This case involves the liability coverage of a homeowner's insurance policy issued by the appellant to the appellee.
The appellee, Johnathan Reynolds, was employed by Natural Resources, Inc., a company primarily engaged in the growing and selling of timber. Appellee's father was the owner and president of the company and appellee was the timber manager for about 600 acres of the company's timberland. Appellee's duties included spotting the timber to be sold, negotiating prices, checking the timber to see that it was properly cut, maintaining the boundary lines, and protecting against theft, fire, and arson.
For about three weeks prior to the incident giving rise to this suit, appellee had been aware that timber was being cut and removed from the company's land without authorization. He reported this to his father who contacted the sheriff's office, and appellee was instructed to work with the sheriff and his deputies to stop the stealing. Appellee went to the sheriff's office, discussed the matter with some deputies, and was told to keep on the lookout for the thieves and try to find out who they were.
A few days later appellee discovered three men cutting timber without authorization. He had seen two of them on the land before and had been told that they might be the timber thieves and that they were armed and dangerous. Without making his presence known, the appellee watched these men load the timber into a truck and drive away. He reported this information to the sheriff's office. After some discussion, it was decided that the value of the timber appellee saw cut and carried away would not amount to a felony and that he should try to catch the men stealing some more timber so they could be charged with a felony.
On October 19, 1978, appellee was in the woods and heard a chainsaw. He drove closer, and taking his 30.06 rifle, he got out of his vehicle and walked to within 40 or 50 yards of where some timber was being cut. At that point he could see two trucks. One truck, loaded with timber, began to pull away and appellee shot out a rear tire. The driver got out and began walking toward the other truck. He was one of the men appellee had seen cutting the timber on the earlier occasion. Appellee told him to stop, and when he did not comply, appellee fired a shot into the motor and another shot into a tire of that truck. Another man, Finis Lee, then appeared from the woods and walked toward appellee. Four times the appellee called upon Lee to stop but Lee, cursing appellee, continued to advance toward him. Appellee then fired a shot into the ground near Lee; the bullet shattered and fragments ricocheted into Lee's leg.
Appellee testified that when he fired that shot he did not intend to injure Lee and that he could have hit him ten out of ten times if that had been his purpose. He said it was a warning shot fired for self-protection; that arresting Lee or stopping him from stealing timber did not cause him to fire the shot; and that it was fired for his own defense. He did admit, however, that he shot the trucks to disable them and let the sheriff proceed from there.
Lee filed suit for personal injuries and damages against appellee. The appellant denied coverage under the "business pursuits" and the "expected or intentional injuries" exclusions of the policy. The personal injury suit is still pending and the case here is a declaratory judgment action in which the appellee has obtained a judgment that appellant must defend the suit brought by Lee and pay any sum that may be found due by appellee to Lee.
The "business pursuits" exclusion of the policy provides that the liability coverage does not apply "to bodily injury or property damage arising out of business pursuits except activities therein which are ordinarily incident to non-business pursuits."
The trial court, sitting without a jury, found as follows:
The Court finds that the shot which injured Mr. Lee did not arise out of the business pursuits of Mr. Reynolds, but arose out of his sense of self-protection in what he perceived to be a threat to his person from Mr. Lee and his associates. He was not at that point protecting the property of his employer, but protecting himself. The injury to Mr. Lee did not "arise out of" Mr. Reynolds' business pursuits. It did arise out of Mr. Lee's own actions. The Court finds that Mr. Reynolds' act of firing the shot which injured Mr. Lee was an activity "ordinarily incident to non-business pursuits."
The parties have cited a number of cases to support their positions in this matter. The factual situations are so varied and the ways in which the issue reaches the appellate court so different, it is really not possible to formulate a concise statement that will explain the results reached, and it would not be helpful to make an extensive review of the specific cases. We start, therefore, with some general observations.
In 7A Appleman, Insurance Law and Practice § 4501.10 (Berdal ed. 1979), it is said, "Whether an activity is a business pursuit is almost always a factual question presented for the determination by a court." In that regard, in Comm. Union Ins. Co. of Amer. v. Henshall, 262 Ark. 117, 553 S.W.2d 274 (1977), it was said that "the courts strictly interpret exclusions from insurance coverage and resolve all reasonable doubts in favor of the insured who had no part in the preparation of the contract," and that "the burden of proof is on the insurer to show that an injury was caused by an excepted event." It is also clear that the exclusion does not apply to all injuries or damages arising out of a business pursuit since the clause itself explicitly states "except activities therein which are ordinarily incident to non-business pursuits." This is pointed out in the 1982 pocket supplement to 7A Appleman, Insurance Law and Practice, supra. In the supplement to section 4501.10, footnote 11 contains the following comment on a case cited there:
The court failed to even consider the effect of the exception. The mere fact the insured is engaged in a business pursuit is not enough. It must also not be an activity ordinarily incident to nonbusiness pursuits.
In our case, the trial court relied upon Farmers Insurance Exchange v. Sipple, 255 N.W.2d 373 (Minn.1977), where the insured, Andrew Baud, employed as a senior highway...
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