Opinion ID: 2130437
Heading Depth: 1
Heading Rank: 8

Heading: facts

Text: I accept the statement of facts set forth in the lead opinion in Allstate v Freeman. [3] There are additional facts relating to Marshall's claim for coverage, however, that deserve mention. After the defendant, Mary Kelly, filed the original amended complaint for damages arising from Marshall's negligence on September 26, 1984, a second amended complaint was filed on March 15, 1985, which alleged in pertinent part: That the defendant Marshall Freeman carelessly and negligently placed, allowed and/or permitted an illegal and unregistered pistol, fully loaded with bullets, to be assessable [sic] to his wife and defendant Alonda Freeman in their household, knowing said weapon was illegally purchased and possessed, unlawfully non-registered, fully loaded and that his wife and defendant Alonda Freeman had no training or skills in how to use said firearm; all harm caused plaintiff having been reasonably foreseeable by defendant Marshall Freeman having carelessly exercised unreasonable care in placing said illegal weapon in his household. These pleadings adequately allege that Marshall Freeman violated a separate duty of care in allowing his wife to have access to a loaded firearm despite her lack of training or skills in how to use that dangerous instrumentality. II THE ISSUE The issue is whether Allstate has a duty to defend Marshall against the allegations that he negligently entrusted the firearm to Alonda, or otherwise was negligent in supervising the firearm, which she intentionally used to injure Mary Kelly. The question presented requires this Court to determine the proper interpretation of an insurance contract which provides, in relevant part: LOSSES WE COVER: We will pay all sums arising from the same loss which an insured person becomes legally obligated to pay as damages because of bodily injury or property damage covered by this part of the policy. We may investigate or settle any claim or suit for covered damages against an insured person. If an insured person is sued for these damages, we will provide a defense with counsel of our choice, even if the allegations are not true. We are not obligated to pay any claim or judgment or defend any suit if we have already exhausted the limit of liability by paying judgments or settlements. EXCLUSIONS  LOSSES WE DO NOT COVER 1. We do not cover any bodily injury or property damage which may reasonably be expected to result from the intentional or criminal acts of an insured person or which is in fact intended by an insured person. The lead opinion correctly states the two issues raised by Marshall Freeman under this policy language. Marshall has claimed: First, that Allstate has a separate and distinct duty to cover each insured under the policy, and, therefore, its duty to defend depends solely upon his conduct. [S]econd, that the policy language, an insured, is ambiguous and, therefore, must be construed in favor of the insured.[ [4] ] III PROCEDURAL HISTORY AND ANALYSES OF COURTS BELOW The trial court analyzed the defendants' negligence claim against Marshall as derivative of the claim against Alonda. In granting the plaintiff's motion for summary disposition, the trial court found no duty to defend for the following reason: [T]he claim itself, damages for Kelly's injury, was what triggered the exclusionary clause. Because the injury could reasonably be expected to result from Alonda Freeman's intentional act, regardless of intent to injure ... the injury was not covered even if Marshall Freeman was negligent in leaving the weapon in the Freeman home. [160 Mich App 349, 352; 408 NW2d 153 (1987), summarizing the trial court's reasoning.] The Court of Appeals affirmed, in a two to one decision. Judge HOOD, writing for the majority, found that the plain language of the exclusionary clause makes Allstate's duty to defend Marshall on the claim of negligent entrustment solely derivative of the duty to defend Alonda. Id. at 357. The majority relied upon a rule for interpreting intentional acts exclusionary clauses that was stated in general terms, rather than being rooted in the language of the exclusionary clause of the Allstate policy: [W]here an insurance policy exclusion precludes coverage for the particular injury, then it also excludes coverage for negligent entrustment of the instrumentality that caused the injury. In other words, we look to the underlying cause of the injury to determine coverage and not to the specific theory of liability alleged in the complaint. Illinois Employers Ins of Wausau v Dragovich, 139 Mich App 502, 507; 362 NW2d 767 (1984); Shepard Marine Construction Co v Maryland Casualty Co, 73 Mich App 62, 65; 250 NW2d 541 (1976) ... Michigan Mutual Ins Co v Sunstrum, 111 Mich App 98; 315 NW2d 154 (1981), lv den 414 Mich 890 (1982). [ Id. at 357-358.] Judge Theiler, in his dissenting opinion, found the term an insured to be ambiguous. [5] We granted leave to decide, inter alia, the validity of Marshall's claim that he is entitled to be defended against the claim of negligent entrustment. 430 Mich 857 (1988). IV METHOD OF CONTRACT INTERPRETATION The lead opinion has stated a method of interpreting the insurance contract clause at issue that is the prevailing law, but yet does not apply those very same principles. Thus, it is useful to state those established rules of insurance contract interpretation at the outset because they ought to be adhered to in deciding this case. First, the lead opinion concludes that the exclusion focuses on bodily injury, yet it accepts that this is rendered ambiguous if an insured can be read to mean both the named insured and any insureds. [6] Second, we agree in the abstract on the rules of construction that must guide our interpretation of the policy exclusion at issue here. [7] Third, the lead opinion accepts that the principles of insurance contract construction applied by this Court in the context of an automobile accident policy, see Powers v DAIIE, 427 Mich 602, 623-631; 398 NW2d 411 (1986), also apply in the present case. See also Raska v Farm Bureau Mutual Ins Co, 412 Mich 355, 363; 314 NW2d 440 (1982). [8] Finally, we are in agreement on the following specific rules of construction under which we must interpret the Allstate intentional acts exclusion. These principles are that (1) exclusions are strictly construed against the insurer, because (2) the policy must make clear the exclusion, and, as a consequence, (3) the insurer must accept a liberal interpretation that favors the insured where it could have employed a plainer and more generous use of words that would have removed the ambiguity. [9] V. ANALYSIS: DOES THE ALLSTATE POLICY CLEARLY EXCLUDE COVERAGE FOR NEGLIGENT ENTRUSTMENT BY AN INNOCENT COINSURED SPOUSE?