NO. 85-71 INTHE SUPREME COURT OF THE STATE OF MONTANA 1986

NEAL HEGGEN, Plaintiff and Appellant,

MOUNTAIN WEST FARM RUREAU MUTUAL INSURANCE COMPANY, Defendant and Respondent.

APPEAL FROM: District Court of theSixteenthJudicialDistrict, In and for theCounty of Fallon, The Honorable A. B. Martin, Judge presiding.

COUNSEL OF RECOPJ): For Appellant: Huntley & Eakin; Gene Huntley argued, Baker, Monta-na

For Respondent: Crowley, Haughey, Banson, Toole & Dietrich; Herbert I. Pierce argued, Billings, Montana L. R. Cazzens, Billings, Montana

Submitted: ~ovember 14, 1985 

# 18 Decided: march4&, 1986 

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# a ClerkMr. Justice Fred J. Weber delivered the Opinion of the Court. Neal Heggen appeals a judgment of the Fallon County District Court which grantedMountainWest Farm Bureau Mutual Insurance Co. (Mountain West) a summary judgment. The District Court ruled that George Eichhornls steer-roping contests were a business pursuit, and as such, were excluded from coverage under a policy of insurance relating to farm operations. We affirm. While Mr. Heggen raises three issues on appeal,we find the following issue dispositive: Did the District Court err in ruling that the jackpot steer-roping contests held by Mr. Eichhorn were a "business pursuit" excluded from insurance coverage, rather than a spare time recreational activity within the insurance coverage? George Eichhorn, a Baker, Montana resident,had worked for the State ofMontana as abrand inspector since 1962. In July 1973,he purchased a policy of insurance for his small ranch from Mountain West. The policy provided coverage for accidental bodily injury topersons on thepremises with the permission of the insured. However, it specifically excluded from coverage all "business pursuits." The policy also provided that written notice of an accidentwas to be given by the insured to Mountain West as soon as practicable, but inno event to exceed 60days. In 1975,Mr. Eichhorn constructed a roping arena on his land. He began holding jackpot steer-roping contests. He held three or four steer-roping contests in each of theyears 1975, 1976 and 1977. Nonprofessional cowboys and ranchers participated in the contests and paid a $48 to $50 fee to rope a certain number of cattle. Mr. Eichhorn reservedapproximately $300 to $400 fromeach contest,and the balance of the feeswere distributed to thewinning ropersasprizes. After Mr. Heimbuch, the local agent for Mountain West, had observed that Mr. Eichhorn was constructing a roping

arena in 1975,he advised Mr. Eichhorn that the roping arena and roping contests were not covered under theMountain West insurancepolicy. Mr. Eichhorn testified that the agent made it plain to him that he should have another policy to cover the ropers. He did not take any steps to get such a policy, because of the cost. On July 23, 1977, Neal Heggen was permanently injured when his horse tripped and fell on him during one of Mr. Eichhorn's contests. Mr. Eichhornwaspresent on the day of the accidentandwas aware thatMr. Heggen'sinjurieswere serious. Mr. Eichhorn did not immediately notify Mountain West of the accident,based in part on his belief that Mr. Heggen would not sue him. Mr. Heggen's attorney contacted Mr. Eichhorn in the springof 1980,and in July 1980, filed a complaint against him. Mr. Eichhorn notified Mountain West and delivered a copy of the complaint to Mountain West. In turn,Mountain West advised Mr. Eichhorn theywere not going to defend him in the action,because the jackpot steer-roping

was a "business pursuit" and excluded from coverage, and because Eichhorn failed to timely notifyMountain West pursuant to thepolicy provisions. Mr. Eichhornallowed adefault judgment to be taken against him in the action brought by Mr. Heggen. On October 1,1980,Mr. Heggen signed a covenant not to execute on the judgment against Mr. Eichhorn, in exchange for an assignment to Mr. Heggen of all of Mr. Eichhorn's policy rights against Mountain West. Mr. Heggen then filed suit against Mountain West, alleging that the insurance company wrongfully refused to defend Mr. Eichhornin the suit brought by Mr. Heggen and wrongfully refused to pay Mr. Heggen any damages forpersonal injuries. Mountain West moved for summary judgment. The District Court entered summary judgment for Mountain West, holding that 

### "[t] he totality of the circumstances strongly indicate that Eichhorn was engaged in a business pursuit excluded by thepolicy." Mr. Heggen argues that summary judgmentwas not appropriate because there is a genuine issue of fact as to whether the jackpot steer-roping contests were a busirress pursuit. Eichhorn's insurance policy provides that 

### "[t] his policy does not apply 

# ... to any business pursuits of an Insured 

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# . ." The policy defines "busi.n.ess"as follows: "Business" means trade, profession or occupation, other than:

(a) farming (b) the operation of roadside stands maintained on the farm premises principally for the sale of the produce raised thereon,or

(c) newspaper delivery, babysitting, caddying, lawn care, and similar activitiesordinarily performed byminors,when the activity isnot theprincipal occupation of the Named Insured,and is not a full-time occupation of any insured. Montana has not specifically adopted criteria for determining what is a "businesspursuit" forpurposes of insurance policy excl.usionaryclauses. Other jurisdictions, in their definitions of "businesspursuit," have addressed the idea.of profit orprofitmotive,andmost have required some 1-eve1of continuity or regularity of the activity. See Annot., 48 A.L.R.3d 1096 (1973). The Supreme Court of Oklahoma has elaborated upon the profit or profit motive element of 

### a business pursuit 

### as follows:In a business pursuit the profit motive, or purpose of a profit, is important. Whether there is or is not actualprofit is immaterial. Does apursuit have to be successful from a profit standpoint before it is a business pursuit? If a business suffers a loss, was it not a business? The answers are obvious. Profitmotive, not actualprofit,makes a pursuit a businesspursuit. Wiley v. Travelers Insurance Company (1974Okla.)

## , 534 P.2d 1.293, 1295. That court found that a man who bred, raised, and sold St. Bernard puppies part-time at his residence, in addition to holding another full-time job, was engaged in a business pursuit because of the presence of a profitmotive. There was testimony that he intended to retire and raise St. Bernard puppies. Wiley, 534 P.2d at 1295. The part-time aspectof the dog operationdid not prevent it from involving

a profit motive, and itwas not necessary that the activity result in actualnetprofits to possess a profit motive. We agree with the reasoning of the Oklahoma court and hold that the presence of a profit motive is one characteristic of a "businesspursuit." The exclusionary provision in the insurance policy in the Wiley case defined business, as does thepresent policy,

as "a trade,profession, or occupation." Yet, the part-time nature of Mr. Wiley's dog operation did not prevent it from being a "businesspursuit." The Oklahoma Court distinguished 

### Mr. Wiley's business of raising, breeding, and selling St. Bernardpuppies from simply holding a familypet litter sale. It pointed out the continuing nature of Mr. Wiley's venture--he had extensively renovated a barn to serve as a kennel and had done extensive fencing in his back yard. FJiley, 534 P.2d at 1295. In contrast, some jurisdictions require an activity to be the sole or primary occupation of the insured, in order to be a "continually orregularly-conducted activity." See Brown v. Peninsular Fire Ins. Co. (Ga. 1984), 320 S.E.2d 208, 209. We reject that view. The more expansive interpretation of regularity or continuity in a. "business pursuit" is consistent with the provision in Mr. Eichhorn's insurance policy that "business pursuits 

### - of an insured" (emphasis added) are not covered. We, as have others, hold that an activity which is continually or regularly conducted may be a business pursuit even though it isnot the primary occupation of the insured. See citations at Krings v. Safeco Ins. Co. of America (Kan. 1981)

## , 628P.2d 1.071,1075. Mr. Eichhorn's testimony, in a deposition which was before the District Court when it considered the motion for summary judgment, establishes a profit motive. From his testimony, it is clear that he received something in the vicinity of $1,200 to $1,500 each year from the feespaid on the steer-roping contests. He listed those amounts on his income tax returns. He listed a.s expenses on his income tax returns the steers which he purchased for the steer-roping and the hay which he fed the steers and the eight or ten horses which were used in the steer-roping. It is true that he testified thathis income tax return showednoprofit,but that appeared to be because he lost money on buying and selling the steers. We hold thatMr. Eichhorn's testimony on the income and expenses, and his treatment of them on his income tax returns,established aprofitmotive. Mr. Eichhorn testified that he held three or four steer-roping contests in each of the years 1975, 1976 and 1977. Mr. Eichhorn also testifiedby depositionat lengthas to the roping arena which he built in 1975. It was apermanent arena,with catchpen, return alley,timer'sbox,chutes and bleachers. He described the fence around the outside ofthe arena as having posts which consist of railroad ties and

woven wire on the posts with a plank around the top of the

woven wire and a bumper pole in the middle, the fence being five feet high. The planks were 2"x 8". There were two sets of bleachers with three plank rows for each set. The total capacity of the bleachers was approximately forty persons. Mr. Eichhorn's testimony clearly establishes that these steer-roping contests were held on a regular basis in a permanently designed roping arena constructed expressly for that purpose. We hold that the evidence established that there was a regular and continuous level of activity which amounted to a businesspursuit. A summary judgment isproper if the record discloses no genuine issue of material fact. Downs v. Smyck (1982), 200 Mont. 334, 344, 651 P.2d 1238, 1243. There is no issue of material fact which has been shown. There is no contradiction in the facts. The question tobe decided iswhether the testimony on behalf of the plaintiff, uncontradicted in any aspect, is sufficient to establish that Mr. Eichhorn was engaged in a business pursuit. We hold that Mr. Eichhorn's

own testimony establishes that therewas a profit motive and that he conducted the steer-roping contests on a regular and continuing basis. We affirm the District Court in its conclusion that Mr. Eichhorn was engaged in a business pursuit. We therefore do not consider the other issuesraised. Affirmed

# .JusticesMr. JusticeWilliam E. Hunt, Sr., dissenting:

The majority holds that as a matter of law jackpot steer-roping contests are a business pursuit. I cannot agree. A businesspursuit is characterizedby continuityand the existenceof aprofit motive. In the case at bar, the steer-roping contestswere not hel-don a regular basis. Three to four were held in the

summer of 1976, for example, but only one in the summer of 1980. Throughout this period, Eichhorn continued in his occupation as a State Brand Inspector. While Eichhorn participated. in the contests held at his ranch, he did not participate in all the contestsheld in the area. There is a genuine issue of fact whether this level 

### of activity is "continuous" enough to amount to abusinesspursuit. A business pursuit is also characterized by the existence of a profit motive. As the majority correctly points out, it is the motive to realize a profit and not the actual realization of a profit that is the critical factor. All the money Eichhorn collected from the participants in the contests was awarded to the contest winners with the exceptionof a small amount retainedby Eichhorn to cover the cost of feeding the stock. Bleacherswere sometimes erected to accommodate spectators,but spectatorswere never charged admission. While Eichhorn listed the fees he collected and the expenses he incurred from the contests on his income tax returns, the majority's reliance on this fact is misplaced. Income tax returns are a device to determine the amount of tax owed to the governmert,and nothing more. They are not used to demonstrate financial worth or a profitmotive. Had Eichhorn failed to report these items on his income taxreturn,hewould have been in violation of the law. The fact that he did report these items as required by law does not evince aprofitmotive. Since this is an appeal from a summary judgment, all reasonable inferences that can be dra.wn must be drawn in favor of the losing party, Eichhorn. That being the case, there is a genuine question whether Eichhornwas engaged in a business pursuit, characterized by continuity and a profit motive. This question should have been decided by the jury, and not by the trial court upon a motion for summary judqment

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Mr. Justice John C. Sheehy and Mr. Justice Fra.nk R. hlorrison, Jr. join in the dissent of Mr. Justice William E. Hunt, Sr.



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