Opinion ID: 398287
Heading Depth: 1
Heading Rank: 1

Heading: The Instruction's Definition of Expected

Text: 12 The insurance policy between the parties specifically excluded coverage for damages which were expected or intended from the standpoint of the insured. At trial the appellant asserted that any damages suffered by claimants were expected and therefore excludable from coverage under the policy. The district court instructed the jury on the meaning of the term expected and then submitted that issue to the jury. 2 13 The appellant's first assignment of error is that the district court's instruction to the jury incorrectly defined the meaning of the term expected as it was used in the exclusionary clause of the policy. 14 Essentially, the district court instructed the jury that damages were unexpected, and thus covered by the insurance policy, even if the insured acted negligently. 3 The issue before us is how the term expected should have been defined. 15 We have neither been directed to nor independently discovered any Minnesota cases which directly control the issue presented here. The Minnesota cases which have dealt with the phrase expected or intended have concentrated on the meaning of the word intended, indicating injury is intended from the standpoint of the insured if a reason for the insured's act is to inflict injury or where the character of the act is such that an intention to inflict injury can be inferred as a matter of law. Woida v. North Star Mutual Insurance Co., 306 N.W.2d 570, 573 (Minn.1981); Continental Western Insurance Co. v. Toal, supra, 244 N.W.2d at 125; Caspersen v. Webber, 298 Minn. 93, 213 N.W.2d 327, 330 (1973); Iowa Kemper Insurance Co. v. Stone, supra, at 887. Many of these cases dealt with a factual incidence of assault and battery. None of them specifically defines the term expected. 16 In arguing that the district court's definition of the term expected was correct, the appellee relies primarily on the three Minnesota cases of Ohio Casualty Insurance Co. v. Terrace Enterprises, Inc., 260 N.W.2d 450 (Minn.1978); Johnson v. Aid Insurance Co. 287 N.W.2d 663 (Minn.1980); and Bituminous Casualty Corp. v. Bartlett, 307 Minn. 72, 240 N.W.2d 310 (1976). All three of these cases considered an insurance policy clause excluding expected or intended damages. However, they do not provide conclusive guidance. 17 In Ohio Casualty Insurance Co. v. Terrace Enterprises, Inc., supra, the insured was warned that certain soil conditions might result in damage to a construction project. In light of this warning the insured took various precautions to prevent the damage. These precautions failed and the damage did indeed result. The court found that the insured's conduct in this case was perhaps negligent, but not reckless or intentional, and thus was not expected for purposes of the exclusionary clause. Id. at 452-53. The court did not go so far as to specifically hold the negligent acts of an insured cannot, as a matter of law, result in damages which are expected. It is unclear whether the court concluded that the insured acted negligently and the court did not define the meaning of the term expected. 18 The cases of Johnson v. Aid Insurance Co., supra, and Bituminous Casualty Corp. v. Bartlett, supra, are clearly different from the case at bar. The Minnesota Supreme Court held in those cases that an insured's willful and knowing violations of a construction contract's specifications and expected standards of workmanship did result in damages which were expected. Both of these cases involved knowing and willful actions, issues not present in this case. 19 Again, although the court held the particular actions involved in those cases fell within the parameters of expected damages, no effort was made to define the parameters of the term expected as used in insurance policy exclusionary clauses. 20 Since it is not the task of this Court to formulate the legal mind of the state, but merely to ascertain and apply it, Village of Brooten v. Cudahy Packing Co., 291 F.2d 284, 288 (8th Cir. 1961), we have the usual problem of endeavoring to determine what the Supreme Court of Minnesota would, on the facts presented to us, declare the law of the state to be. 21 We are guided by certain broad principles of Minnesota law which govern the construction of insurance policies. Generally, unambiguous words and terms used in insurance policies are to be given their natural and ordinary meaning taken in their popular sense, giving effect to the purposes of the document as a whole. Boedigheimer v. Taylor, 287 Minn. 323, 178 N.W.2d 610, 613 (1970). If ambiguous words or terms appear in the policy, their meaning should be resolved in favor of the insured. Bituminous Casualty Corp. v. Bartlett, supra, 240 N.W.2d at 312. 22 We find the district court's instruction that if the damage to the automobiles resulted from the negligence of the insured then the damages could not be expected is an incorrect definition of the term expected. 23 We have considered the definition of the term expected under Iowa law. City of Carter Lake v. Aetna Casualty and Surety Co., 604 F.2d 1052 (8th Cir. 1979). There we rejected the argument that a result is expected merely because it is reasonably foreseeable. 24 The reasonable expectation of an insured in securing a comprehensive general liability policy is that it will cover some negligent acts. This is consistent with Minnesota's interpretation of such policies. 4 However, it does not follow that because some negligent acts are covered by such policies, all negligent acts are covered. 5 There may be instances when, although the insured was negligent in his actions, he knew or should have known that resulting damage was expected. To mandate that damages cannot be expected if the actor is negligent results in a meaning of the term expected that is too narrow. As we held in City of Carter Lake :For the purposes of an exclusionary clause in an insurance policy the word expected denotes that the actor knew or should have known that there was a substantial probability that certain consequences will result from his actions ... The results cease to be expected and coverage is present as the probability that the consequences will follow decreases and becomes less than a substantial probability. 25 At 604 F.2d 1058-59. 26 We went on to note the difference between reasonably foreseeable and substantially probable is one of degree of expectability. A result is reasonably foreseeable if there are indications which would lead a prudent man to conclude that particular results could follow from his actions. A result is substantially probable if the indications are strong enough to lead the prudent man to conclude that not only is there a possibility of the results occurring, but they are highly likely to occur. Minnesota courts have noted that this is the usual way to interpret the meaning of the term expected. 6 27 Since the instruction given required the jury to find in favor of the appellee if he were negligent, even though he may have expected the damages, we find its effect to be prejudicial. 28 From our review of the record we cannot conclude, as a matter of law, that the appellee expected the damages to occur. This issue involves the resolution of questions of fact. We must therefore remand this action for a new trial.