Title: Hawaiian Ins. & Guar. Co. v. Blanco

State: hawaii

Issuer: Hawaii Supreme Court

Document:

804 P.2d 876 (1990) HAWAIIAN INSURANCE & GUARANTY COMPANY, LTD., Plaintiff-Appellee, v. Saturnino BLANCO, Gloria Blanco, Charlene Blanco, Allen Blanco and Jay Blanco, Defendants-Appellants, and Ireneo V. Garcia, Defendant. No. 14242. Supreme Court of Hawaii. December 31, 1990. *877 John M. Adams, Dixon & Okura, Hilo, for defendants-appellants. Melvyn M. Miyagi (Davis, Reid & Richards, of counsel), Honolulu, for plaintiff-appellee. Before LUM, C.J., and PADGETT, HAYASHI, WAKATSUKI and MOON, JJ. PADGETT, Justice. This is an appeal from a summary judgment entered below in favor of plaintiff-appellee Hawaiian Insurance and Guaranty Company, Ltd. (HIG) in a declaratory judgment action brought by it. We affirm. On May 6, 1987, defendant-appellant Saturnino Blanco (Saturnino) was injured when defendant Ireneo V. Garcia (Garcia) shot a rifle in his direction. Gloria Blanco (Gloria), Saturnino's wife, was standing in the doorway of their home and observed the shooting incident. She claims to have suffered serious mental and emotional distress as a result thereof. *878 At the time of the shooting, Garcia was standing in the yard of his home. He was insured by HIG under a homeowner's policy issued by that company which provided in part: There is an exclusion in the policy which provides in part: On May 14, Garcia was indicted for the crimes of second degree attempted murder and place to keep firearms. On July 31, 1987, he entered a plea of no contest to attempted assault in the first degree. HRS § 707-710, reads as follows: On November 18, 1987, Saturnino and Gloria Blanco and their children filed an amended complaint for personal injury against Garcia. That complaint alleged in Count I that Garcia willfully and intentionally fired a rifle at Saturnino, striking him in the leg. Alternatively in Count III, it was alleged that Garcia fired the rifle negligently. In Count IV it alleged that Gloria was standing a few feet away from Saturnino when Garcia maliciously and/or negligently discharged his loaded rifle at Saturnino, that she witnessed the shooting, and that Garcia's acts thus negligently inflicted serious emotional and psychological trauma and distress upon her. On December 29, 1987, Garcia's attorney tendered the defense of the Blancos' suit to HIG. On February 3, 1988, HIG replied, acknowledging receipt of the letter, reserving its rights and asking cooperation in its investigation. The letter said in part: (Emphasis in original.) Apparently Garcia's attorney did not respond because on March 28, 1988, HIG again wrote to the attorney, rejecting the tendered defense, calling attention to the failure to respond and stating: (Emphasis in original.) On April 18, 1988, Garcia's attorney belatedly replied, again tendering defense and stating: On September 15, 1988, Garcia and the Blancos entered into a stipulation which stated in part: Thereafter, the arbitrator entered awards, denying compensation to the Blanco children but awarding Saturnino $1,917 in special damages and $8,083 in general damages, and awarding Gloria $7,518.01 in special damages and $32,481.99 in general damages. (The record before us does not disclose what the special damages awarded in either case were.) Subsequently Gloria and Saturnino made demand upon HIG to pay the judgments, HIG refused and brought this action seeking a declaration that it was neither obliged to defend the action nor pay the judgments. The court below granted summary judgment to HIG and this appeal followed. Under the terms of policy, HIG had a duty to defend if a claim was brought against Garcia for damages because of bodily injury or property damage caused by an occurrence to which the bodily injury coverage applied. An "occurrence" is defined as an accident causing bodily injury. As previously noted, there is an exclusion from coverage for bodily injury which is expected or intended by the insured. Two of our previous cases, both of which, interestingly enough, involved HIG, deal with the issue of when an insurer is obliged to defend its insured. In Standard Oil Co. of California v. Hawaiian Ins. & Guaranty Co. Ltd., 65 Haw. 521, 654 P.2d 1345 (1982), we stated: 65 Haw. at 527, 654 P.2d at 1349. Our only reported decision dealing with the problem of whether there is a duty to defend when the act which was done by the insured was an intentional one is Hawaiian Ins. & Guaranty Co., Ltd. v. Brooks, 67 Haw. 285, 686 P.2d 23 (1984). Our opinion in that case approached the question of whether there had been an occurrence, that is an accident, by analyzing it from the viewpoint of the insured. We ruled that if the insured did something or, in the Brooks case, failed to do something, and the insured's expected result of the act or omission was the injury, then the injury was not caused by an accident and therefore not an occurrence, and hence was not within the coverage of the policy, and since an investigation of the facts would have revealed that situation, there was no duty on the part of the insurer to defend the particular insured. In that case, the court was dealing with Carroll who was a driver of a company-owned vehicle, on which the company had taken out a casualty insurance policy, and thus was an additional insured. Carroll had given a ride to Brooks, the victim. Bunker, who was in the back of the truck, was an employee of Continental but Carroll, not an employee, was driving. Carroll observed Bunker raping the victim and did nothing to try to alleviate the situation. We held that neither Carroll nor Bunker was entitled to a defense from the insurance company in that situation. In the present case, when tender of the defense was made, and when the rejection of the defense occurred, HIG had available to it the fact of Garcia's no contest plea to attempted assault in the first degree, a willful and/or intentional crime. However, we note that a plea of no contest, by the weight of authority, cannot be used against the person making it as an admission in any civil suit for the same act. 29 Am.Jur.2d, Evidence § 702 (1967). On the other hand, the fact of Garcia's conviction would be evidence, although not conclusive evidence of his commission of the crime in question in a civil action. Asato v. Furtado, 52 Haw. 284, 474 P.2d 288 (1970). HIG thus could not rely solely on the conviction in refusing to defend. But HIG had available the extensive police report which clearly indicated an intentional firing of the rifle by Garcia at Saturnino. The only reported statement by Garcia in that police report was voluntarily made by him while being taken to the station. The police report states: HIG also had available to it the amended complaint by the Blancos against Garcia. With respect to Saturnino, that complaint alleged both intentional and negligent injury, *881 and, with respect to Gloria, alleged emotional distress and trauma arising out of witnessing Garcia's firing the rifle in the direction of her husband. Finally after Garcia's counsel had failed to respond to HIG's proper request for more information and HIG had refused the tender, counsel asserted that Garcia's intent in firing the rifle was only to scare Saturnino, that Saturnino was struck by a stone as a result of a ricochet (although the police report seems to indicate that he was struck by the bullet), and that Garcia had never told his attorney or the police that he intended to injure Saturnino. Insofar as the claim of Saturnino goes, we do not see how it logically can be said that, based upon the information available to HIG in refusing to defend the case, the injury to Saturnino was the result of an accident. Given the best possible interpretation, Garcia fired the rifle in Saturnino's direction intending to frighten him. That physical injury might result from such an action is certainly something which a reasonable man in Garcia's position should have anticipated and expected. We noted in Brooks, supra, that the reasonable expectation of policyholders regarding terms of insurance policies will be honored. Garcia could not reasonably expect to be covered or defended with respect to injuries to Saturnino which arose from his intentionally firing a rifle in Saturnino's direction to frighten him even though the particular injury was unexpected. That being so, with respect to Saturnino Blanco's bodily injury, there was no accident and therefore no occurrence and, hence, no duty to defend. The injury to Gloria Blanco poses a more difficult problem. However, the complaint alleges, and nothing in the record contradicts it, that Gloria's emotional injury and distress arose out of witnessing her husband being shot at. By the undisputed evidence in the record Gloria was in a position to be able to see Garcia and, accordingly, Garcia was in a position to be able to see her. His volunteered statement to the police indicates that he did see her. Moreover the police report indicates that Garcia and the Blancos were neighbors who knew one another. Hence Garcia knew there was a Mrs. Blanco living with Saturnino. Thus, regardless of whether Garcia saw Gloria, it is clear that a reasonable man in Garcia's position, firing a rifle intentionally in the direction of a woman's husband, would anticipate, and hence expect, that that woman might suffer emotional injury and distress at witnessing the incident. Accordingly, with respect to Gloria Blanco also, there was no accident and hence no occurrence and, therefore no duty to defend. As to the issue of coverage, what we have previously said applies. The exception to coverage was for expected bodily injury. The bodily injuries sustained here were expected and accordingly, there was no coverage. Affirmed.