Opinion ID: 1805230
Heading Depth: 1
Heading Rank: 3

Heading: Bodily Injury and Property Damage

Text: ¶ 14. Under the Bodily Injury and Property Damage section of the policy, Farmland agreed to pay those sums that the insured becomes legally obligated to pay as damages, including punitive and exemplary damages, because of bodily injury or property damage to which this insurance applies... The bodily injury or property damage must be caused by an occurrence ... We will have the right and the duty to defend any suit seeking those damages. ¶ 15. Bodily injury is defined as bodily injury, sickness or disease sustained by a person, including death resulting from any of these at any time. The Scruggses argue that the policy protects them under the policy since Farmland contracted to pay those sums that the insured becomes legally obligated to pay as damages, including punitive and exemplary damages, because of bodily injury or property damage to which this insurance applies. ¶ 16. Yet the policy flatly states that [t]he bodily injury or property damage must be caused by an occurrence. (emphasis added). The contract itself defined that term, along with 66 others. The word occurrence is defined as an accident, including continuous or repeated exposure to substantially the same general conditions. The word accident is bolded in the definition, as are many other words throughout the policy, indicating that they are also defined. [1] In turn, the word [a]ccident means a sudden unforeseen or unintended event. ¶ 17. Thus, if there were no occurrence, the policy does not cover the situation. In Omnibank a bank had allegedly wrongfully force-placed collateral protection insurance on several of its customers. 812 So.2d at 198. When the customers sued, the bank's insurer refused coverage, and the bank filed suit claiming that the insurer had a duty to defend. Id. The insurer refused coverage because the actions of the bank were intentional, and the occurrence[s] covered in the insurance were defined simply as an accident. Id. at 200. We determined that [a]n accident by its very nature, produces unexpected and unintended results ... [and so] [i]t follows that bodily injury or property damage, expected or intended from the standpoint of the insured, cannot be the result of an accident. Id. (emphases added). ¶ 18. The same common sense reasoning applies here. All of Monsanto's claims are styled as willful or intentional, with the last, unjust enrichment, based upon alleged profits from those intentional torts. Monsanto specifically asked for treble damages (allowable under 35 U.S.C. § 284) for patent infringement because of the knowing, willful, deliberate and conscious infringement of the patent rights at issue. And there is no doubt that conversion is an intentional tort. The entire complaint is carefully worded with repeated references to the Scruggses' intentional conduct. ¶ 19. A liability insurance company has an absolute duty to defend a complaint which contains allegations covered by the language of the policy, but it has absolutely no duty to defend those claims which fall outside the coverage of the policy. Sennett v. U.S. Fidelity & Guar. Co., 757 So.2d 206, 212 (Miss.2000) (quoting Moeller v. Am. Guar. & Liability Ins. Co., 707 So.2d 1062, 1069 (Miss.1996)); see also Jackson, Mississippi Insurance § 10:3 (The general rule in Mississippi and elsewhere is that a liability insurer has the duty to defend claims falling within coverage under the policy). To determine if a duty to defend exists one turns to the allegations of the complaint. Sennett, 757 So.2d at 212 (quoting Delta Pride Catfish, Inc. v. Home Ins. Co., 697 So.2d 400, 403 (Miss.1997)). [2] ¶ 20. From the face of Monsanto's complaint, only intentional torts are alleged. In addition, the Scruggses' pattern of conduct has been one of intentional acts. Indeed, it took a preliminary injunction by a federal court to stop the Scruggses from using or selling the seeds. See Monsanto Co. v. Scruggs, 249 F.Supp.2d 746 (N.D.Miss.2001) . The Scruggses never disputed that the conduct was intentional, only that the effects were unintended; in fact, they dispute there was any harm at all. They offer that Monsanto's claim of patent infringement and damage to trade reputation is utter nonsense, [since] the farmers saving Roundup Ready soybeans and replanting them in future years is no more harmful to Monsanto's slogans, brand names and trade reputation th [an] the used car salesman damages Ford Motor Co. by selling used Fords. ¶ 21. That analogy does not fit the facts at hand. There is nothing illegal about selling used cars, but the cars must not be stolen. The seeds at issue are like a stolen Ford, for at the hearing for the preliminary injunction in federal court Scruggs also admitted that [he and the other defendants] never entered into a commercial license for authorized use of the plaintiffs' patented biotechnology. Scruggs, 249 F.Supp.2d at 751. In the federal court the Scruggses also contended in part that the Monsanto patents were invalid, that there was patent misuse, and that there were antitrust violations. Id. at 752-54. The district court dismissed these claims as a charade. Id. at 754. ¶ 22. The Scruggses may not like the consequences of their intentional actions and may dispute the law that protects Monsanto against their actions, but that does not mean their liability insurer must be made a party to such an action. The reasonable and unambiguous insurance contract between the Scruggses and Farmland excludes all intentional acts. Therefore, there is no coverage under the Bodily Injury and Property Damage Liability section of the policy. ¶ 23. Moreover, if the allegations of the complaint had not been intentional in nature, a policy exclusion may have applied. Section III(A)(1)(b)(12) of the policy specifically excludes genetically modified seed from policy coverage. The section reads [t]his insurance does not apply ... [t]o bodily injury or property damage arising out of ... the production, distribution, delivery or sale of genetically altered or genetically engineered seed if such injury or damage arises out of such genetic engineering or genetic alteration. (emphasis added). The Monsanto seed is certainly genetically modified, and in part this action arose because the Scruggses were selling the seed in violation of Monsanto's patent. This further undermines their claims for coverage since there is a specific exclusion on point. ¶ 24. Furthermore, as a matter of public policy, people and businesses cannot purchase insurance coverage for illegal activities. Delta Pride Catfish, Inc. v. Home Ins. Co., 697 So.2d 400, 405 (Miss.1997). For we do not allow corporations or persons `to insure themselves against acts prohibited by law.' Id. ( quoting Graham Resources, Inc. v. Lexington Ins. Co., 625 So.2d 716, 721 (La.Ct.App.1993) ). In Graham, the Louisiana Court of Appeals refused to allow an insurer to protect itself against the illegal act of securities fraud; the illegal act of patent infringement is likewise unprotected by coverage. ¶ 25. There are therefore three reasons why coverage must be denied; first, the plain face of Monsanto's complaint does not trigger the policy's coverage and duty to defend; secondly, the torts complained of were intentional; and last, public policy compels us to refuse coverage for intentional and illegal actions.