No. 14411 

IN THE SUPREME COURT OF THE STATE OF MONTANA 

1979 

NORTHWESTERN NATIONAL CASUALTY 

COMPANY, a corporation, 

Plaintiff and Respondent, 

BERNHARDT W. PHALEN, WILLIAM PHALEN 

and THU DUC VO, 

Defendants and Appellants. 

Appeal from: District Court of the Fifth Judicial District, 

Honorable Frank E. Blair, Judge presiding. 

Counsel of Record: 

For Appellants: 

Torger S. Oaas argued, Lewistown, Montana 

John Jardine, Whitehall, Montana 

For Respondent: 

Keller, Reynolds and Drake, Helena, Montana 

Glen L. Drake argued, Helena, Montana 

Thomas Johnson argued, Helena, Montana 

Submitted: February 9, 1979 

Decided: JUN 1 8 1979 

Filed: jliN 18 
Mr. Justice John C. Sheehy delivered the Opinion of the Court. 

This appeal is from a summary judgment entered in favor 

of Northwestern National Casualty Company in the District 

Court, Fifth Judicial District, Jefferson County, determining 

that no insurance coverage existed under a policy issued by 

the insurance company in an incident involving the defendant. 

Northwestern had issued for a consideration a homeowner's 

policy to Bernhardt W. and Josephine Phalen for a one year term 

beginning November 3, 1976. The policy provided public liability 

insurance to the limit of $50,000 for each "occurrence" during 

its term. Defendant William Phalen is the son of Bernhardt and 

Josephine Phalen, a resident of their household, under the age 

of twenty-one years and as such an "insured" under the policy. 

An "occurrence" is defined in the policy as an accident 

which results in bodily injury or property damage. The policy 

excludes from public liability coverage bosily injury which "is 

either expected or intended from the standpoint of the insured". 

On January 29, 1977, William Phalen was involved in an 

altercation with Thu Duc Vo near the Windsor Bar near Boulder, 

Montana. Two weeks before, the same two persons had been involved 

in another altercation in which Thu Duc Vo hit William Phalen 

over the head with a beer bottle. On January 29, a Sunday, at 

1:30 a.m., William Phalen walked into the Windsor Bar and saw 

Thu Duc Vo in the company of a young woman. At closing time, 

when everyone was leaving the bar, William Phalen went out with 

Vo and his woman companion. In a deposition, William Phalen 

described what happened then: 

"Q. What happened after you left the bar? 

A. He was walking on the street. I walked 

down the street, and I started talking to 

him, and I had my arm around [the young woman] , and Thu was there. I kind of had my arm around 

him, too, just talking to him. We were having 

a verbal disagreement. He grabbed my arm, twisted 
it, wanted me to release, and I hit him once. 

Then, I was going t o h i t him again, and I 

grabbed his coat, and he slipped out from me. 

He ran around his car, and he ran back towards 

the bar, and Harry Johnson tripped him up, and 

he fell off the curb and hit the pavement. 

"Q. O.K., and you testify you hit him only 

once. A. Yes. 

"Q. Then would you pick up your story from 

there please? A. Yeah, well, I was going t o h i t 

him twice, but when I went to swing, he 

jumped away and I grabbed his coat, and 

he run away from me. I had ahold of 

his coat, and he ran away from me and ran 

around his car, and then he ran right past me 

again and that is when Harry Johnson tripped 

him up. 

"Q. Now, were you chasing him or was someone 

restraining you or what? A. [The young 

woman] was restraining me, but I started after 

him; I made a few steps toward him, I guess. 

"Q. So, he was at least running because 

he was anticipating you chasing him; is that 

correct? A. Yes, sir. 

"Q. And while he was running, Harry Johnson 

apparently tripped him? A. Yes. 

"Q. What happened after he was tripped, then? 

A. Well, he hit the pavement pretty hard. 

I was--I looked at him, you know, and pretty 

soon all these women just came hollering and 

running so we decided we better get out of 

there, and so we went down to my house. 

"Q. I believe you testified before that 

the way--you felt it was sort of an accident, 

the extent of his injuries was-- 

"(Objected to as a leading question; trying to 

lead the witness.) 

"Q. Go ahead and answer. A. Will you 

ask me again? 

"Q. I believe you testified before that 

this--the way he got hurt and the extent 

of his injuries was accidental? A. Accidental 

to me because I don't feel like I hurt him." 

Subsequently, William Phalen was charged in the District 

Court, Jefferson County, with felony aggravated assault. In the 

affidavit of the county attorney for leave to file the information 

it is recited that Thu Duc Vo attempted to run away but that 
Harry Johnson tripped him, who then fell to the pavement and 

lost consciousness. The witnesses further stated to the 

county attorney that Thu Duc Vo was bleeding from the head and 

mouth and appeared to be choking on his own blood and having 

difficulty breathing. 

The injuries suffered by Thu Duc Vo were substantial. 

The main fractures he sustained are to the zygoma and its 

attachment to the maxillary bone along the lower rim of the 

left orbit under his eye. He lost his left central incisor 

tooth and had swelling along the lower left side of his jaw 

and a laceration two millimeters long over the left corner of 

his mouth. He underwent surgery to realign the displaced 

fractured bones. He was treated by Dr. William Simic, of 

Helena, whose testimony showed: 

"Q. Let me go back for a minute, Doctor. 

I want to clear up something. When I 

asked you about the amount of trauma 

to the face, is it possible that one 

blow to the face from a fist could cause 

that type of break? A. It would be 

possible, if I might qualify this-- 

"Q. Yes. A. It could be possible 

to have a fracture like this result 

from one blow. I would not think that 

the overall injury pattern to the face 

was the result of one blow. By that, 

I mean the injury to the eye, the cheek, 

the teeth, and of course, the fracture 

itself. 

"Q. Let me phrase it this way, Doctor. 

It isn't likely that one blow to the 

cheek would cause this type of injury? 

Is that a fair statement? A. No, that's 

highly unlikely." 

When Vo was tripped by Johnson, he fell flat on his face 

in the street. Later, it was found that the lower orbital rim 

of Vo's left eye was displaced internally fifteen millimeters. 

In discussing this Dr. Simic testified: 

"Q. Could this type of displacement be 

caused by falling down and hitting your 

face on a hard object like a pavement or 

cement or something like that? Is it possible? 
A. This particular fracture could. We will 

sometimes see this. The injury picture as a 

whole, I would think not. 

"Q. But was there some peculiar thing about 

this type of fracture that would indicate that 

it could have been caused by falling down? A. 

No. No, what I meant was that the other injuries 

to the eyelid, the laceration of the cheek, along 

with this, would indicate that it was more than a 

simple fall of the cheek area." 

William Phalen was represented in the criminal proceedings 

against him by attorney John H. Jardine. In what appears to 

be the result of a plea bargain, Phalen entered a plea of guilty 

to the charge of aggravated assault, and was given a three year 

sentence deferred subject (1) to the usual parole rules; 

(2) that he pay Jefferson County the sum of $500 for the cost 

of the proceedings; and, (3) that he make restitution to Vo 

of one-half of Vo's medical and dental expenses to the limit 

of $900, and to the extent that such expenses were not covered 

by insurance. Judgment on Phalen's guilty plea was entered 

July 21, 1977. 

In the meantime, Vo had commenced a civil action against 

William Phalen and Harold Johnson for the injuries which he 

sustained in the incident. On May 6, 1977, he amended his 

complaint to provide two counts. In count I, he charged the 

willful, malicious and wrongful assault upon him by the defendants; 

and in count 11, he charged the defendants as follows: 

"On or about January 29, 1977 upon and 

about property known as the Windsor Bar in 

the city of Boulder, county of Jefferson, 

state of Montana defendant did then and 

there negligently, carelessly, and wrongfully 

assault, strike, beat and bruise plaintiff, and 

did negligently and carelessly cause plaintiff 

personal injuries hereinafter more particularly 

described, all without cause or provocation 

on the part of the plaintiff." 
Attorney Jardine also represented William Phalen in 

connection with the civil action brought by Vo. On or about 

June 14, 1977, the attorney called Jalmer 0. Carlson, claims 

manager for Northwestern, and advised him of the Vo suit 

against Phalen, and indicated the policy coverage might 

attach. Carlson asked about the status of the civil litigation. 

Attorney Jardine testified that it was his impression that 

"he [Carlson] told me to go ahead with the defense and that 

Northwestern would take care of that", although nobody said 

that specifically. Carlson, in his testimony, denies hiring 

the attorney to look after Northwestern's interest. However, Carlson did on June 27, 1977, send by certified mail a 

letter to all of the insureds as follows: 

"Dear Mr. Phelan [sic]: 

"This letter is to inform you that the 

Northwestern National Casualty Company 

is reserving the rights afforded both 

you and the company under policy no. 

NHO 44 80 42 in regard to an incident 

which took place on February 18, 1977 

involving injuries to Thu Duc Vo. We 

are making this reservation so that the 

investigation may continue, that possible 

compromise settlements might be made and 

that any eventual litigation can be accomodated 

without prejudice to the rights of either 

party to the policy. 

"This reservation of rights is being served 

because the above mentioned incident does 

not appear to meet the policy definition of 

occurance [sic] and for other reasons. 

"The service of this notice does not deprive 

you of any rights you may have against this 

company. 

This action for declaratory judgment was not filed 

until September 16, 1977 because attorney Jardine wanted 

some time to see if he could "work something out". 
In this action, cross-motions for summary judgment were 

made by the parties and on May 3, 1978, the District Court 

entered its declaratory judgment that there is no coverage 

for William Phalen under the Northwestern policy of insurance, 

arising out of the incident,and that Northwestern had no 

duty to defend the action brought by Thu Duc Vo against 

Phalen. 

Phalen, the insured under Northwestern's policy, took 

no active part in the proceedings before the District Court 

nor in this appeal. Thu Duc Vo, as appellant, contends that 

the grant of summary judgment to Northwestern was improper. 

We agree with appellant Vo, as we determine that there is a 

fact question upon which coverage under Northwestern's 

policy may depend. 

THE POLICY COVERAGE 

We note that in no provision of Northwestern's policy, 

does the word "assault" appear, nor "intentionally inflicted", 

nor "committed by or at the direction of the insured". 

Accordingly, cases construing policies with those types of 

provisions do not reflect what the state of the law is or 

should be under the coverage extended in Northwestern's 

policy. 

The policy in this case extends personal liability 

coverage to the insureds for damages caused by an "occurrence". 

The policy defines an occurrence as an accident resulting in 

bodily injury or property damage, excluding only bodily 

injury or property damage, which is either expected - or 

intended -- from the standpoint of -- the insured. 

In Grand River Lime Company v. Ohio Casualty Company, 

(19721, 32 Ohio App. 2d 178, 289 N.E.2d 360, it was held 

that the term "occurrence" is a broader term than "accident" 

where occurrence is defined in a policy as meaning an incident 

in which property damage is neither expected nor intended 
from the viewpoint of the insured. There is no reason why 

the same meaning should not be applied where personal 

injury damages are involved instead of property damages. 

The word "occurrence" instead of the word "accident" in the 

insuring clause means that the word "occurrence" is in fact 

broader than the word "accident" and is so intended by the 

insurer. In such case, the intent of the policy is to 

insure the acts or omissions of the insured, including his 

intentional acts, excluding only those in which the resulting 

injury is either expected or intended from the insured's 

standpoint. 

It is clear therefore, that the insured here would be 

debarred from coverage in those cases where his deliberate 

acts or assaults resulted in injuries which would be expect- 

-- ed or intended by -- him to result from his deliberate acts. 

But what about coverage where the results of his acts (even 

though deliberate) are unexpected or not intended by the 

insured? The answer under such a policy provision is that 

(1) the event is an occurrence; (2) since it results in 

bodily injury it is an accident under the definition of the 

policy, and (3) since it is unintended or unexpected, it is 

within the coverage of the policy. 

Such a construction of the insurance policy is not 

strained or forced, but rather is an interpretation of the 

plain, ordinary and popular meaning of the words used by the 

insurer in defining the coverage extended. It should be 

interpreted in that sense. Conlon v. Northern Life Insurance 

Company (1939), 108 Mont. 473, 92 P.2d 284. Exclusions and 

words of limitations must be strictly construed against the 

insurer. Kansas City Fire and Marine Insurance Company v. 

Clark (D.C. Mont. 1963), 217 F.Supp. 231. We do not consider 

this provision to be ambiguous; the possibility of unintended 

bodily injury brings that result within the policy coverage, 

even though Phalen's actions may have been intentional. 

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In interpreting the policy thusly, we have given 

consideration to the cases cited by Northwestern in support 

of its position that no coverage exists here. Most of the 

cases cited by Northwestern relate to a policy provision 

which excluded acts or injuries caused "intentionally by or 

at the direction of the insured". On that basis, and on the 

factual basis on which those cases were decided, they can be 

distinguished from the case at bar. Some of those cases 

include the following: 

In Transamerica Insurance Company v. Cannon-Lowden 

Company (D.C. Mont. 1975), 400 F.Supp. 817, the jury found 

by special verdict that the insured had committed suicide 

when she drove her automobile at a speed in excess of 60 

miles per hour out of her lane of traffic and directly into 

the path of a tractor-trailer unit driven by another. The 

court felt that the risk of damages from the insured's acts 

were so certain that it could be said as a matter of law 

that the damage was intentional and expected. The exclusion 

in the policy related to bodily injury and property damage 

caused "intentionally by or at the direction of the insured." 

In Home Insurance Company v. Neilsen (Ind. 1975), 332 

N.E.2d 240, again the exclusionary clause excluded bodily 

injury caused "intentionally by or at the direction of the 

insured". In that case, the insured claimed he did not 

intend to inflict the injuries of which plaintiff complained, 

and that his actions were performed in self-defense. The 

decision of the court that coverage did not apply, turned on 

the court's construction of the word "intentionally" as used 

in the policy. 332 N.E.2d 242. 

In Caspersen v. Webber (Minn. 1973), 213 N.W.2d 327, 

the policy excluded "bodily injury . . . caused intentionally 

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by or at the direction of the insured." The insured pushed 

a hatcheck girl, who struck her back against a metal message 

rack attached to the wall. The insured stated he had no 

intention to harm her. The jury found that the insured had 

assaulted the hatcheck girl, and that he was negligent, and 

awarded general and punitive damages. The trial court 

refused judgment against the insurance company, saying the 

injuries were the direct result of the assault so that no 

coverage applied. The appellate court reversed, saying that 

the insurer is liable when the act is intended but the 

resulting injury is not. 213 N.W.2d at 230. 

More to the point are cases which have construed policies 

which contained language excluding coverage for bodily 

injuries "either expected or intended from the standpoint of 

the insured." In determining the effect of this exclusionary 

clause, we note that it is a relatively recent provision 

used by insurers in this type of coverage. 79 A.L.R.3d 1125. 

On its face, the clause requires a two-fold test to determine 

coverage: (1) was the injury intended, or (2) was the 

injury to be expected by the insured? In Farmers Automobile 

Insurance Association v. Medina (Ill. 1975), 329 N.E.2d 430, 

it appears a minor boy intentionally flipped matches upon a 

gasoline spot directly below a parked automobile. The gasoline 

ignited and burned the automobile. In considering the 

clause identical to the one at bar, the Illinois court said: 

"In examining the various court decisions 

both in this state and from other jurisdictions, 

we find that the courts have considered this 

exclusionary clause, and a most comparable 

one, which reads as follows: 

"'To injury . . . caused intentionally 

by or at the direction of the insured.' 
"It is to be noted that the exclusionary 

clause in the case before us contains the 

expression or word 'expected'. -- The term 

'expected' has -- been judicially construed 

- to mean a high degree -- of certainty. (Citing 

~ass In several cases which have considered 

exclusionary clauses containing the term 

'expected' in addition to the term 'intended' 

the court's have failed to find that the 

addition of the term 'expected' affected the 

outcome of the case. (Citing cases.) It is 

possible to envision situations in which the 

inclusion of the term 'expected' in an insurance 

exclusionary clause could alter the outcome 

of a suit which required interpretation of the 

clause, however, in view of the result we reach 

herein, we find that further discussion of the 

distinctions between the terms 'intended' and 

'expected' is unnecessary." 329 N.E.2d at 432. 

(Emphasis added. ) 

The Illinois court, in Medina, relying on the New Jersey 

case of Lyons v. Hartford Insurance Group (N.J. 1973), 310 A.2d 

485, decided that the general rule is that coverage exists under 

an exclusion clause identical or similar to this one for the 

unintended results of an intentional act but not for damages 

assessed because of an injury which was intended to be inflicted. 

No clear rule has yet emerged from those cases which have 

specifically considered and turned on this particular exclusionary 

clause. In State Farm Fire and Casualty Company v. Muth (Neb. 

1973), 207 N.W.2d 364, in an action for declaratory judgment 

between the insurer, insured and judgment creditor of the insured, 

it appeared that the insured, a minor, had fired a b.b. gun from 

an automobile toward the judgment creditor and the pellet struck 

the judgment creditor in the eye, causing loss of sight. 

The trial judge in the declaratory judgment action found that 

when the minor caused the gun to discharge in the direction of 

the judgment creditor, the minor did not intend or expect to 

do bodily injury to him; therefore, it found the minor was 

negligent and the exclusion did not apply. In interpreting 

the exclusionary language, the Nebraska court said that bodily 
injury is excluded "if the insured acted with a specific 

intent to cause harm to a third party". 207 N.W.2d 366. 

Other cases involving the same exclusionary clause 

include Armstrong v. Security Insurance Group (Ala. 1973), 

288 So.2d 134, where the husband and wife were the named 

insureds as the operators of a sandwich shop, and it was 

held that the clause excluded coverage for the husband who 

shot a patron but did not exclude coverage for the wife who 

was standing nearby. 

In Terito v. McAndrew (Louis. 1971), 246 So.2d 235, it 

was held that the owner of a hotel bar, who knocked the 

patron from a barstool "to shut his mouth" and who had 

fallen on the patron after he fell off a barstool so that 

the patron's knee was injured, did not have coverage under 

this clause. In Commercial Union Insurance Company v. City 

of Montpelier (Vt. 1976), 353 A.2d 344, it was held that the 

insurer owed the City a defense where police officers were 

charged with assaults upon the plaintiff, again with the 

same clause. 

After examination of the cases, and the exclusion 

itself, we would interpret the clause to mean that it precludes 

coverage for bodily injuries or damages, though not specifically 

intended by the insured, if the resulting harm was within 

the expectation or intention of the insured from his standpoint. 

That statement more precisely fits the language of the 

coverage provided by the insurer. Out of that interpretation 

a question of fact exists in this case as to whether coverage 

should apply in view of the alleged accompanying and concurrently 

negligent acts of Harry Johnson which may have exacerbated 

the injuries Vo received. 

--- THE FACT ISSUE 

From the medical testimony, it appears that the massive 

injuries to Vo's face could have resulted from the fall to the 

pavement, or from the single blow that Phalen admits 

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he struck, or from a combination of both. Dr. Simic did not 

believe that a single blow would cause the injuries which 

extended from the lower orbital rim of the left eye where a 

fifteen millimeter displacement occurred, to the left corner 

of Vo's cheek, where his lip was lacerated. The part of 

Vo's injuries, if any, which resulted from the fall to the 

street, were proximately caused, apparently, by the fact 

that Phalen was chasing Vo when Vo was tripped by Johnson 

and the fall to the street ensued. Even if Phalen's act of 

chasing is deemed to be intentional, the intervening act of 

Johnson in tripping Vo and the resulting injuries may not 

have been expected or - intended by Phalen. At least a fact 

issue as to that element of the claim exists. A situation 

is presented where Phalen's act of chasing could be considered 

by a jury to be concurrently negligent with the negligence 

of Johnson in tripping Vo. Where one defendant's negligence 

is a contributing proximate cause of injury, and neither 

defendant is responsible for the other, each defendant is 

liable, provided the injury would not have been sustained 

but for his negligence. Marinkovich v. Tierney (1932), 93 

Mont. 72, 17 P.2d 93; Bensley v. Miles City (1932), 91 Mont. 

561, 9 P.2d 168. Where several causes producing injury are 

concurrent and each is an efficient cause without which the 

injury would not have occurred, the injury may be attributed 

to all or any of the causes, and recovery may be had against 

either or all of the responsible persons, though one of them 

was more culpable and the duty owed by them to the injured 

person was not the same. See Daly v. Swift and Company 

(1931), 90 Mont. 52, 300 P. 265. 

A fact question exists as to whether Phalen in chasing 

or offering to chase Vo, would have expected - or intended 

that Johnson would trip him and crash him on his face to the 

pavement. If the trier found that Vo's injuries were unexpected 

by Phalen, certainly Northwestern's policy extended coverage 

for the incident. -13- 
If Phalen's chasing were a proximate cause of the eventual 

injuries, it would be the accompanying act of the concurrently 

negligent Johnson that brought about the unexpected and unintended 

result, a result which Phalen himself testified he did not 

intend. 

The proper place for the determination of this fact issue 

is in the original action brought by Vo against Phalen and Johnson. 

Whether Vo's injuries were expected or intended by Phalen can 

be determined in that case through the use of special interrogatories 

to the jury, or if the case is tried by a judge without a jury, 

through findings made by the court. 

WAIVER BY - NORTHWESTERN 

Thu Duc Vo also contends that Northwestern waived any right 

to dispute coverage by assuming the defense of the action on 

behalf of Phalen. Vo also contends that Northwestern's letter 

of June 27, 1977, is an inadequate reservation of rights under 

the case of Henry v. Johnson (Kan. 1963), 381 P.2d 538. 

In view of our determination that a fact issue exists 

which requires reversal, we do not need to determine at this time 

the question of such waiver, or whether Thu Duc Vo, as a claimant, 

can take advantage of a waiver by Northwestern to its insured 

Phalen. 

NORTHWESTERN'S DUTY -- TO DEFEND 

In its brief, Northwestern contends this Court should 

address the issue of the duty of Northwestern to defend Phalen 

in the action brought by Vo. Northwestern claims that because 

of its position that no coverage applies, there is no duty 

to defend Phalen under the policy under Reliance Insurance Company 

v. Fischer (1974), 164 Mont. 278, 531 P.2d 193. 

In Reliance, we stated that there was no obligation on the 

part of the insurance company to undertake the defense of the 

insured, if under the policy, the insurance company had no duty 

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to pay any judgment secured against the insured. In this 

case, the duty of Northwestern to pay a judgment on behalf 

of Phalen may not be determined until the original action 

has been completed. In the meantime, the pleadings themselves, 

particularly count 11, stated a cause which fits within the 

policy coverage and in that situation, Northwestern has a 

duty to extend a defense of Vo's action to Phalen. St. Paul 

Fire and Marine Insurance Company v. Thompson (1967), 150 

Mont. 182, 433 P.2d 795. 

Phalen's plea of guilty to felony assault is not conclusive 

either as to his policy coverage or the duty of Northwestern 

to defend him in a tort action. Teitelbaum Furs, Inc. v. 

Dominion Insurance Company (1962), 25 Cal. Rptr. 559, 375 

P.2d 439, 441; Brohawn v. Transamerica Insurance Company 

(Md. 1975), 347 A.2d 842, 848. The proper case for determining 

whether Phalen intended or expected the injuries Vo received 

is in the tort action, and not in the declaratory judgment 

action. (Brohawn, 347 A.2d at 848, 849.) 

Moreover, the duty to provide a defense is not affected 

by Phalen's showing little interest in either the tort 

action or the declaratory judgment suit. This court held in 

McLane v. Farmers Insurance Exchange (1967), 150 Mont. 116, 

432 P.2d 98, that the injured party's rights as a claimant 

vested at the time of the accident and could not be affected 

by nondefense of an action brought by the insurer to rescind 

the insurance policy. Here, Vo's rights can not be affected 

by the action or nonaction of persons over whom Vo has no 

control. See Peterson v. Western Casualty and Surety Company 

(Utah 1967), 425 P.2d 769. 

DISPOSITION 

The applicability of Northwestern's coverage cannot be 

determined until the factual issues concerning the intention 

and expectation of Phalen as to Vo's injuries is decided in 

the tort action. Therefore, summary judgment in favor of 

Northwestern in the declaratory judgment case at bar was 

-15- 
improper. Kemmer v. City of Bozeman (1971), 158 Mont. 354, 

492 P.2d 211; Duchesneau v. Silver Bow County (1971), 158 

Mont. 369, 492 P.2d 926. 

Reversed and remanded to the District Court with 

instructions to dismiss the declarator 

'J 

We Concur: