Opinion ID: 888318
Heading Depth: 2
Heading Rank: 2

Heading: Facts Alleged in MFH's Complaint

Text: ¶9 The Plaintiffs alleged the following injuries in their federal complaint: [Plaintiffs] have been denied an increase in the accessible housing stock [in Missoula]. . . . Plaintiffs have suffered injury to their ability to carry out the purpose of Montana Fair Housing to find and to make available decent, affordable and accessible rental housing for persons regardless of disability. . . . Plaintiff Bob Liston has suffered injury to his ability to perform his job. . . . Plaintiff MFH [has] suffer[ed] economic losses in staff pay, in the inability to undertake other efforts to end unlawful housing practices, in lost opportunities to pursue funding, and in other diversion of resources. . . . The complaint sought declaratory and injunctive relief, as well as damages, to compensate for these alleged harms. ¶10 The duty to defend is triggered when a complaint alleges facts that, if proven, would result in coverage. Farmers Union Mut. Ins. Co. v. Staples, 2004 MT 108, ¶ 21, 321 Mont. 99, ¶ 21, 90 P.3d 381, ¶ 21. None of the injuries alleged by MFH on the face of the complaint come within the policy definition of bodily injury. Each injury alleged by MFH stems from the Twites' design and construction of the housing complexes. The Twites' alleged failure to comply with the requirements of the FHA and the MHRA is not an accident that meets the definition of occurrence under the CGL policy. Even if we assume that every allegation in MFH's complaint were true, no fact alleged on the face of this complaint would bring it within the coverage of the CGL policy. In short, no duty to defend is triggered by the allegations on the face of this complaint. ¶11 The Twites, however, argue that Security National should have looked beyond the four corners of the complaint in assessing whether or not it had a duty to defend. The Twites claim that during discovery, information was revealed which triggered Security National's duty to defend. In response to the Twites' requests for admission, the Plaintiffs refused to admit that they had not suffered personal injury: Request for Admission No. 18: Please admit Plaintiffs did not suffer personal injury, including emotional distress, because of these Defendants [sic] actions, errors or omissions. MFH Answer: Admit to the extent the organization cannot sustain such personal injury but deny to the extent Montana Fair Housing [sic] sustained diversion of resources and frustration of its organizational goals and purposes. Liston Answer: Deny. Additionally, in response to the Twites' interrogatories, Liston stated he was seeking damages for the compensable emotional harm he suffered, based on the emotional impact to him as a result of the denial of his rights to access the subject property and the violation of his fundamental rights in that regard. Emotional injury, the Twites argue, is a form of bodily injury under Montana law in some circumstances. ¶12 We do not reach the question of whether Security National had a duty to look beyond the four corners of the complaint in assessing its duty to defend. Even assuming that a duty to defend could arise from facts uncovered during discovery, the facts alleged above still do not come with the policy's coverage. ¶13 Even if we assume that Liston did suffer compensable emotional harm and that emotional harm could qualify as bodily injury under the policy's definition, the alleged emotional harm did not arise from a covered occurrence. As discussed above, the scope of the insurer's duty to defend is defined by the language of the policy. Grimsrud, ¶ 34. The Twites' policy only covers bodily injuries that arise from an accident, including continuous or repeated exposure to substantially the same general harmful conditions. The Plaintiffs allege that their injuries occurred as a result of the design and construction of the housing unitsnot as a result of an accident. Liston's alleged injury, regardless of whether it constitutes bodily injury did not result from a covered occurrence. Therefore, Liston's claim fell outside the policy's coverage. ¶14 The Twites rely heavily on Staples for the proposition that the insurer has a duty to defend the claim unless it has been unequivocally demonstrated that the claim falls outside of the policy's coverage. In Staples, we held: Unless there exists an unequivocal demonstration that the claim against the insured does not fall within the policy coverage, the insurer has a duty to defend. In other words, if there is any dispute as to the facts relevant to coverage, those factual disputes must be resolved in favor of coverage. Staples, ¶ 24 (internal citation omitted). There is a crucial difference between Staples and the instant case: in Staples, the facts allegedly giving rise to coverage were disputed. Here, there is no factual dispute. ¶15 Courts must liberally construe the allegations of a complaint in favor of finding an obligation to defend. Staples, ¶ 22. Where a claim falls unequivocally outside the policy's coverage, however, there is nothing for the court to construe, and no reason to impose a duty to defend. See e.g. Hogenson, ¶ 20 (the insured failed to file his claim within the mandatory six month period, thus no coverage existed); Farmers Union Mut. Ins. Co. v. Rumph, 2007 MT 249, ¶ 25, 339 Mont. 251, ¶ 25, 170 P.3d 934, ¶ 25 (facts alleged in the complaint did not fall within the insured's GCL policy; facts not alleged in the complaint were disregarded); New Hampshire Ins. Group v. Strecker, 244 Mont. 478, 481, 798 P.2d 130, 131 (1990) (molestation was not a covered occurrence); Graber v. State Farm, 244 Mont. 265, 270, 797 P.2d 215-17 (1990) (complaint alleging trademark and copyright violations did not meet policy's definition of occurrence). ¶16 In the instant case, the facts alleged in the complaint and during discovery were unequivocally outside the policy's coverage. MFH did not present any facts on the face of the complaint or in discovery, which, if true, would result in coverage. Thus, the District Court did not err in concluding that the allegations made in MFH's complaint unequivocally fell outside the policy's coverage.