Title: Farm Bureau Ins v. Cook

State: idaho

Issuer: Idaho Supreme Court (civil)

Document:

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IN THE SUPREME COURT OF THE STATE OF IDAHO 
 
Docket No. 44897 
 
FARM BUREAU MUTUAL INSURANCE 
COMPANY OF IDAHO, 
 
           Plaintiff-Respondent, 
 
v. 
 
EDGAR WILKINS COOK JR. and LAURIE 
FRANCES COOK, husband and wife, 
 
           Defendants-Appellants, 
 
and 
 
JOSEPH STANCZAK, 
 
           Defendant. 
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Boise, January 2018 Term 
 
2018 Opinion No. 27 
 
Filed: March 30, 2018 
 
Karel A. Lehrman, Clerk 
 
Appeal from the District Court of the First Judicial District of the State of Idaho, 
Bonner County.  Hon. Barbara A. Buchanan, District Judge. 
 
The district court’s judgment is affirmed. 
 
James, Vernon & Weeks, P.A., Coeur d’Alene, for appellants. Wes S. Larsen 
argued.  
 
Hawley Troxell Ennis & Hawley LLP, Boise, for respondent. James L. Martin 
argued.  
_____________________ 
 
BRODY, Justice 
This case involves the interpretation of the insuring clause of a bodily injury liability 
provision in a property insurance contract.  This case originated from an intentional shooting at a 
campground. Michael Chisholm shot Joseph Stanczak during an altercation on property owned 
by the Cooks, who had property insurance through Farm Bureau. Farm Bureau determined it had 
no duty to defend or indemnify the Cooks because the shooting was not a covered act under the 
policy. Farm Bureau filed a declaratory judgment action seeking judicial confirmation of its 
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determination. Farm Bureau filed a motion for summary judgment, requesting that the district 
court find as a matter of law that the intentional shooting was not an “occurrence.” The district 
court granted Farm Bureau’s motion. We affirm the district court’s judgment in favor of Farm 
Bureau. 
I. BACKGROUND 
 
Edgar and Laurie Cook own 200 acres of property (“Property”) in Bonner County, Idaho. 
The Property includes Bloom Lake, a cabin, and a campground. The Cooks allow people to use 
the lake and campground without charging a fee, but they solicit voluntary donations to help with 
the Property’s upkeep. Approximately twenty years ago, Michael Chisholm asked the Cooks if 
he could stay in the cabin in exchange for maintaining the Property. They agreed, and Chisholm 
began caring for the Property. 
 
On June 28, 2015, Joseph Stanczak and his girlfriend were camping at the Property. 
Chisholm invited them into the cabin, and a dispute later arose between Chisholm and Stanczak. 
Chisholm shot Stanczak twice with a .45 caliber handgun, then left the scene. Authorities later 
apprehended Chisholm and charged him with Aggravated Battery and Use of a Deadly Weapon 
in Commission of a Felony. Chisholm entered an Alford plea, by which he pleaded guilty 
without admitting guilt as to all the elements of the crimes. He was sentenced to prison. 
 
The Cooks have an insurance policy (“Policy”) with Farm Bureau that insures the 
Property. The Policy’s only insureds are Edgar and Laurie Cook. The Policy includes the 
following relevant definitions: 
Occurrence means an accident, including continuous or repeated exposure to the 
same harmful conditions, which results in unexpected bodily injury or property 
damage during the policy period. All bodily injury and property damage 
resulting from a common cause will be considered the result of one occurrence. 
Additionally, the Policy’s Section II contains two relevant coverage sections: F1 (Bodily Injury 
Liability) and F2 (Premises Medical). Coverage F1 provides in relevant part: 
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: 
1. Pay up to our limit of liability for the damages for which the 
insured is legally liable (damages includes any awarded 
prejudgment interest); and 
2. Provide a defense at our expense by counsel of our choice. . . . 
Coverage F2 offers the following: 
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Subject to the limit of liability, we will pay reasonable and necessary medical and 
funeral expenses resulting from bodily injury caused by an occurrence as 
described below. This coverage does not apply to you or residents of your 
household other than residence employees. This coverage applies only: 
1. To a person on the insured location with the permission of any 
insured. . . . 
 (emphasis in original for all policy language above) 
Stanczak asserted claims against Chisholm, the Cooks, and Farm Bureau for injuries 
stemming from the shooting. Through counsel, Stanczak made a demand on Farm Bureau for 
damages under the Policy. Farm Bureau denied coverage and sent a letter to the Cooks informing 
them of its denial. Stanczak later filed a complaint against both Chisholm and the Cooks. In his 
complaint against the Cooks, Stanczak alleged premises liability and negligent supervision. The 
Cooks tendered defense of this action to Farm Bureau, and Farm Bureau found no coverage and 
no duty to defend against Stanczak’s complaint. Stanczak filed an amended complaint, which 
deleted references to the Property as for-profit and Chisholm as an employee. Farm Bureau did 
not change its coverage decision. 
 
Farm Bureau filed a complaint for declaratory judgment and amended it in response to 
Stanczak’s amended complaint. In its amended complaint, Farm bureau sought a declaration that 
(1) there is no coverage under the Policy for Stanczak’s claimed injuries, and (2) it does not have 
a duty to defend the Cooks against Stanczak’s claims against them. The Cooks counterclaimed, 
asserting breach of contract and requesting a declaration of coverage. Farm Bureau filed a 
motion for summary judgment on the coverage issues. The district court granted the motion and 
entered judgment in favor of Farm Bureau. The Cooks timely appealed. 
II. STANDARD OF REVIEW 
 
This Court reviews a summary judgment motion under the same standards the district 
court used. Mackay v. Four Rivers Packing Co., 145 Idaho 408, 410, 179 P.3d 1064, 1066 
(2008). “The court must grant summary judgment if the movant shows that there is no genuine 
dispute as to any material fact the movant is entitled to judgment as a matter of law.” I.R.C.P. 
56(a). All disputed facts must be liberally construed in favor of the nonmoving party, and all 
reasonable inferences from the record must be drawn in favor of the nonmoving party. Mackay, 
145 Idaho at 410, 179 P.3d at 1066. “Summary judgment is appropriate where the nonmoving 
party bearing the burden of proof fails to make a showing sufficient to establish the existence of 
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an element essential to that party’s case.” Id. This Court reviews questions of law de novo. 
Castorena v. Gen. Elec., 149 Idaho 609, 613, 238 P.3d 209, 213 (2010) (citation omitted). 
III. ANALYSIS 
A. The district court properly granted summary judgment for Farm Bureau since the 
shooting was not an “occurrence” under the Policy. 
 
The Cooks contend that coverage exists under the Policy since the determination of 
whether an event was an “occurrence” (defined as an accident) should be viewed from the 
standpoint of the insured. They claim that Chisholm shooting Stanczak—while intentional from 
Chisholm’s point of view—was an accident from theirs, and thus is a covered “occurrence” 
under the Policy. Farm Bureau asserts that the injuries upon which Stanczak’s claims were based 
flowed directly from the intentional shooting, and thus cannot be an “occurrence” under the 
Policy. Farm Bureau cites this Court’s precedent in analogous cases as controlling. 
 
Both the Cooks and Farm Bureau address two of this Court’s prior cases which discussed 
how intentional acts of a non-insured party impacted coverage for the insured. The first is Mutual 
of Enumclaw v. Wilcox, 123 Idaho 4, 843 P.2d 154 (1992). In Wilcox, twelve anonymous 
plaintiffs brought an action against Shirley Wilcox and her ex-husband for sexual abuse suffered 
at their home—committed by the ex-husband—over a seven-year period. Id. at 5, 843 P.2d at 
155. The plaintiffs alleged that Shirley Wilcox, who was the only insured under the policy, was 
negligent for her failure to report, failure to warn, and failure to provide adequate safety for the 
minor plaintiffs. Id. Enumclaw filed a declaratory judgment action alleging it was not liable 
under the policy. Id. “Specifically, Enumclaw stated that it denied liability because ‘it appears 
that the basis of the claims against Shirley Wilcox are not an accident or “occurrence” as set out 
in the terms of the insurance policy . . . .’” Id. 
 
The Court first determined that “accident” has a settled legal meaning in line with the 
following definitions: 
Insurance contract. An accident within accident insurance policies is an event 
happening without any human agency, or, if happening through such agency, an 
event which, under circumstances, is unusual and not expected by the person to 
whom it happens. A more comprehensive term than “negligence,” and in its 
common signification the word means an unexpected happening without intention 
or design. 
Id. at 9, 843 P.2d at 154 (citing Black’s Law Dictionary 14 (5th ed. 1979)). 
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1. an undesirable or unfortunate happening, unintentionally caused and usually 
resulting in harm, injury, damage, or loss; casualty; mishap: automobile accidents. 
2. any event that happens unexpectedly, without a deliberate plan or cause . . . . 
Id. (citing Webster’s Encyclopedic Unabridged Dictionary 9 (1989)). The Court then looked at 
both Wilcox’s and her ex-husband’s conduct. Id. The Court first dismissed the ex-husband’s 
conduct as intentional, and thus “clearly not an ‘occurrence.’” Id. However, the Court stated that 
it must look at the events in light of the policyholder’s conduct, not the ex-husband’s, to 
determine whether or not an “occurrence” existed. Id. Here too, the Court determined Wilcox’s 
conduct was “not an ‘occurrence’ under the policies because it was not the conduct which caused 
the injury.” Id. The Court further noted, “While the acts or failure to act by Wilcox may have 
created or contributed to the environment which permitted her ex-husband’s conduct, Wilcox did 
not commit the acts complained of by the twelve anonymous plaintiffs.” Id. 
 
Five years later, this Court decided State Farm Fire & Casualty Co. v. Doe, 130 Idaho 
693, 946 P.2d 1333 (1997). This case also concerned sexual abuse of minors, which the Does’ 
teenage son committed at the Does’ daycare. Id. at 694, 946 P.2d at 1334. The plaintiffs brought 
suit alleging negligent entrustment and negligent supervision, among other causes of action. Id. 
State Farm brought a declaratory judgment action “seeking a determination that the sexual abuse 
is outside its policy coverage.” Id. The Court only looked at the action giving rise to the injury 
and found it was an intentional act and thus not an “occurrence” under the policy. Id. at 696, 946 
P.2d at 1336. 
 
The Cooks cite cases from other jurisdictions that have assessed whether  an event was an 
“occurrence” based on the standpoint of the insured. They further claim there is language in 
Wilcox that at least partly supports this contention. Farm Bureau acknowledged that some 
jurisdictions have interpreted insurance contracts from the Cooks’ desired perspective, but 
several others are in line with Idaho’s jurisprudence in Wilcox and State Farm. Couch on 
Insurance addresses the jurisdictional divergence as to whether a third party’s intentional act—
specifically an assault—is an “occurrence” under a liability insurance policy. “[S]ome courts still 
take the position that an accident or occurrence must be viewed from the insured’s standpoint.” 9 
Couch on Ins. § 127:21 (3d ed. 1997). However, “numerous courts have viewed the issue of 
whether an event constitutes an accident or occurrence not from the standpoint of the insured but 
by looking at the nature of the injury-causing event.” Id. Thus, under the “nature of the event” 
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approach, negligence claims “against an insured that directly arise out of the intentional act of a 
third party are not covered because the underlying causative act is not covered.” Id. 
 
The policy language at issue requires an “occurrence” to be an accident. In Idaho, “[a]n 
accident is an unexpected event which is the result of unintentional conduct or an intentional act 
which results in unexpected consequences.” State Farm, 130 Idaho at 696, 946 P.2d at 1336. 
While the Cooks claim that this incident falls precisely in line with the definition of an accident 
from their perspective—the shooting was an unexpected event resulting from their purported 
negligence—Idaho law demands a contrary interpretation. Wilcox’s discussion of the insured’s 
perspective led only to the acknowledgement that the insured didn’t commit the act that caused 
harm. This Court did not state that an intentional assault could be an “occurrence” under an 
accident policy, despite discussing events from an insured’s perspective. Our rulings in Wilcox 
and State Farm demonstrate that Idaho is, as Couch on Insurance describes, a “nature of the 
event” state and not a “standpoint of the insured” state. There is no perspective from which a 
reasonable person could possibly view Stanczak’s injuries as resulting from anything other than 
an assault in this case. An intentional shooting caused the injuries, and thus the shooting was not 
an “occurrence” under Idaho law. 
 
Given the above, the Cooks invite this Court to overturn its precedent on public policy 
grounds. In Idaho, “the rule of stare decisis dictates that we follow [controlling precedent] unless 
it is manifestly wrong, unless it has proven over time to be unjust or unwise, or unless overruling 
it is necessary to vindicate plain, obvious principles of law and remedy continued injustice.” 
Houghland Farms, Inc. v. Johnson, 119 Idaho 72, 77, 803 P.2d 978, 983 (1990). Idaho is 
squarely in line with several other states in our interpretation. See, e.g., Sears, Roebuck & Co. v. 
Nat’l Union, 772 N.E.2d 247, 256 (Ill. App. 2002) (no duty to defend against intentional conduct 
causing bodily injury despite complaint alleging negligence as well); Sweet Home Cent. Sch. 
Dist. of Amherst & Tonawanda v. Aetna Commercial Ins. Co., 695 N.Y.S.2d 445, 446 (N.Y. 
App. Div. 1999) (“Because the operative acts giving rise to any recovery are intentional acts, . . . 
it is of no import that the complaint in the underlying action alleges only negligent hiring, 
retention and supervision on the part of Sweet Home.”); GATX Leasing Corp. v. Nat’l Union 
Fire Ins. Co., 64 F.3d 1112, 1119 (7th Cir. 1995) (holding that volitional acts, even by third 
parties, cannot be characterized as “occurrences” under Texas law). We do not find our 
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controlling precedent to be manifestly wrong or unjust, and decline to overturn our existing case 
law. 
 
Farm Bureau additionally argues that the policy excludes coverage (a) under the business 
activities exclusion, and (b) even if Chisholm is classified as an insured under the policy. Given 
our analysis above—and the fact that the Cooks do not claim Chisholm was an insured under the 
policy—it is unnecessary for the Court to address these exclusions. 
B. Farm Bureau is not entitled to attorney’s fees. 
 
Farm Bureau requests attorney’s fees under Idaho Code section 12-121, which allows the 
Court to “award reasonable attorney’s fees to the prevailing party or parties when the judge finds 
that the case was brought, pursued or defended frivolously, unreasonably or without foundation.” 
I.C. § 12-121. The Cooks made a good faith argument to overturn existing case law. While we 
were not persuaded, they did not pursue the case frivolously or unreasonably. Their arguments 
were not without foundation. We do not award fees. 
IV. CONCLUSION 
For the foregoing reasons, the Court affirms the district court’s grant of summary 
judgment. Costs to Farm Bureau. 
 
 
Justice BEVAN and Justices Pro Tem LORELLO, TROUT, and SCHROEDER 
CONCUR.