Opinion ID: 895106
Heading Depth: 2
Heading Rank: 2

Heading: The Policy's Express Terms Decide This Case

Text: Since insurance policies are contracts, we construe them using ordinary rules of contract interpretation. [8] Our cardinal concern is determining the parties' intent as reflected in the terms of the policy itself. [9] Accordingly, we give policy language its plain, ordinary meaning unless something else in the policy shows the parties intended a different, technical meaning. [10] Nationwide contends that when Gibbons fled police, he voided coverage under the policy's intentional-injury exclusion, which withholds coverage for: Property damage or bodily injury caused intentionally by or at the direction of an insured, including willful acts the result of which the insured knows or ought to know will follow from the insured's conduct.
We have not construed this precise policy language before. [11] At the outset, however, we emphasize this critical point: intentionally as used in the exclusion speaks to the resulting damage or injury, not to the actions that led to it. That is, the language is effect-focused and not cause-focused, voiding coverage when the resulting injury was intentional, not merely when the insured's conduct was intentional. A contrary reading of the exclusion that reckless acts absent deliberate injury are sufficient to forfeit coveragewould render insurance coverage illusory for many of the things for which insureds commonly purchase insurance. [12] For example, Texas mandates liability coverage for drivers, [13] but if ordinary Texans are unprotected from those who intentionally speed or run red lights, but intend no harm to others by doing so, then Texas is replete with noncoverage notwithstanding its mandatory-coverage requirement. As one leading commentator puts it, coverage can still exist when the injury was unintended, even if the act which gave rise to the injury was intentional. [14] We construed similar language in State Farm Fire & Casualty Co. v. S.S. [15] In that case, a summary-judgment appeal, the plaintiff in an underlying suit claimed she contracted a sexually transmitted disease from the insured. [16] The insured's homeowner's policy contained an intentional-injury exclusion applicable to bodily injury or property damage caused intentionally by or at the direction of the Insured. [17] The insurer contested coverage based on this exclusion. [18] In deciding what intentionally meant in the exclusion, we drew guidance from the Restatement (Second) of Torts and a leading treatise. [19] Reading the exclusion under these authorities, we reasoned that an insured intends to cause harm if he intends or desires the consequences of his act or believes the consequences are substantially certain to occur. [20] Accordingly, we held that although the insured intentionally had sexual relations with the plaintiff without informing her of his condition, this conduct did not establish as a matter of law that he intended to give her an STD or knew that transmission was substantially certain to follow. [21] A similar analysis applies to the Nationwide policy, which, like the policy in S.S., excludes coverage where the injury is caused intentionally by the insured. The evidence at trial does not indicate, as the jury charge puts it, that the property damage or bodily injury to the Tanners was caused intentionally, much less indicate such intent as a matter of law. On the contrary, Gibbons slammed on his brakes hard enough to skid before impact, showing he actively tried to avoid the collision. The insured in S.S. only hoped to avoid causing harm while Gibbons actually, if belatedly, tried to avoid causing harm. Nor does the evidence establish as a matter of law that Gibbons believed his conduct was substantially certain to injure the Tanners. While leading police on a protracted high-speed chase is not merely reckless but reprehensible, we cannot say on this record that no reasonable juror could resist finding that injury to others was unavoidable. In fact, the chase could have ended in any number of ways: with Gibbons rolling his vehicle, with Gibbons hitting a fixed object, with officers using preventive techniques to stop Gibbons' vehicle, or even with officers discontinuing the pursuit, rather than with Gibbons crashing into the Tanners. Nationwide therefore did not establish as a matter of law that the Tanners' injuries were caused intentionally under the exclusion.
Nationwide's policy exclusion has additional language excluding coverage for willful acts the result of which the insured knows or ought to know will follow. Insofar as this passage also focuses on whether the insured intended the injurious result, the language reinforces the view that the dispositive inquiry is whether the insured intended to inflict damage or injury. To forfeit coverage, the insured must intend to harm, not merely intend to act. This part of Nationwide's exclusion also denies coverage if the insured ought to know that injury will result. This language might be read as stating an alternative objective test, [22] excluding coverage not only where the insured subjectively knew that injury would follow, but also where a reasonable person would know that injury would follow. However, this objective ground for denying coverage does not alter the unequivocal will follow language that completes the sentence. The clause requires that the insured ought to know%  that the resulting injury  wil follow, not might follow or will likely follow or anything else. Will is used to express inevitability. [23] Tracking precisely the language of the exclusion, the jury chargeto which Nationwide did not objectasked whether the property damage or bodily injury to the Tanners was caused intentionally by or at the direction of [Gibbons], including willful acts the result of which [Gibbons] knows or ought to know would follow from his conduct. Under the evidence presented at trial, a reasonable and fair-minded jury would not be compelled to find, under an objective standard, that a reasonable person would know that injury to third parties would result from Gibbons' conduct. Such a jury finding was no more required by the evidence than a finding, under a subjective standard, that Gibbons personally knew that such injury would result. Hence, we part company with the dissent on the effect of the ought to know language of the exclusion, and cannot say a reasonable jury in this case would necessarily find that Gibbons ought to have known that injury would result from his conduct, as indisputably reckless as it was. Put simply, the injury was not so inevitable that we can say as a matter of law it was intended. Nationwide relies on Nationwide Mutual Insurance Co. v. Finkley, [24] an Ohio intermediate appeals court decision that construed the same policy exclusion and concluded no coverage. We find Finkley unpersuasive as it misapplies the policy exclusion. Although Finkley describes a Texas-like standard that would bar coverage where the insured's conduct is substantially certain to result in injury, [25] Finkley actually applies a different standard, opining that [a]ny reasonable person would know, or should know, that such actions [of the driver] would probably lead to serious injury. [26] In our view, this reading departs from the controlling policy language. The exclusion does not apply whenever a reasonable person would or should know that his actions would probably lead to injury; the policy imposes a stricter test, that the driver ought to know that injury will follow from his conduct. We understand the appeal of a broader exclusion that would withhold coverage for, as Nationwide's predecessor policy put it, willful acts which can be reasonably expected to result in damage or injury. But Nationwide replaced that test with the more restrictive version that controls today's case. We must construe the policy as written, not as we might have written it nor as Nationwide once wrote it. Given the clarity of the exclusion and the jury charge, which mirrors the exclusion virtually verbatim, we cannot conclude jurors disregarded the policy and the evidence in reaching their verdict, much less conclude they were obliged to reach the opposite result.