Opinion ID: 2130437
Heading Depth: 1
Heading Rank: 2

Heading: METROPOLITAN INS v DiCICCO

Text: The parties stipulated that the trial judge would decide the case upon the basis of the briefs and deposition transcripts. We adopt the facts as set forth by the trial court: There is little dispute as to what occurred on February 25, 1984. DiCicco and Gravenmier were residents of the same college residence hall. Gravenmier was in a hallway with his girlfriend and a Graham Williamson. They had discovered glue in Gravenmier's door lock and suspected DiCicco had committed the prank. They knocked and kicked at DiCicco's door, and when DiCicco came out there was a scuffle in the hall with first Williamson and then with Gravenmier. Both DiCicco and Gravenmier landed blows, the glass of a fire extinguisher cabinet was broken. Gravenmier and DiCicco separated and the fight came to an abrupt end. DiCicco returned to his room and Gravenmier started down the hall with his girlfriend and Williamson. Within a short time DiCicco came from his room again holding a folding hunting knife with the three-inch blade exposed. DiCicco called Gravenmier and his girlfriend offensive names and Gravenmier returned to respond. Gravenmier observed the knife, put his hands up and told DiCicco in effect that if he were dumb enough or brave enough to use it on Gravenmier's stomach. DiCicco commenced poking at Gravenmier's chest with his left hand repeating the admonition, don't mess with me. He backed Gravenmier against the wall. Gravenmier reacted by grabbing DiCicco by the throat, turning, and pushing DiCicco against the wall. Gravenmier then felt the knife being withdrawn from his stomach. DiCicco denies any intent to use the knife, claiming that he went to get the knife merely to scare away the other persons he considered to be a threat. No one observed him make a gesture of moving the knife as though to stab Gravenmier. The knife was held in his right hand and the poking was done with his left. DiCicco denies knowledge of in fact stabbing. Immediately following the stabbing, DiCicco looked shocked. Gravenmier obviously did not expect DiCicco would use the knife or he would not have engaged in his act of bravado. Subsequently Gravenmier commenced a tort action. Grand Traverse File 84-2119-NO. In that action Gravenmier makes allegations against DiCicco in Count I of negligence in the course of the dispute in that DiCicco inadvertently stabbed him. In Count II he alleges DiCicco intentionally inflicted the stab wound. There is no dispute that as of the date of the incident David DiCicco was an insured under a homeowner's insurance policy issued by Plaintiff, Metropolitan Property & Liability Insurance Company, to David DiCicco's parents. The prosecutor filed criminal assault charges against DiCicco, but eventually dismissed the charges. The plaintiff argues that the prosecutor dismissed the charges because Gravenmier withheld his cooperation, fearful that a criminal conviction would eliminate any possibility that DiCicco's insurer would pay damages awarded in a civil suit. Although plausible, there is no record support for this theory. Defendant Gravenmier filed a civil suit against DiCicco, and plaintiff Metropolitan has provided a defense for DiCicco in the civil suit under a homeowner's insurance policy issued to DiCicco's father. That case remains pending in Grand Traverse Circuit Court. Plaintiff filed the instant suit, seeking a declaration that the policy does not cover the stabbing incident between DiCicco and Gravenmier and, therefore, it does not have a duty to defend or indemnify DiCicco in the underlying tort action. The trial court granted summary disposition in favor of plaintiff. Defendant appealed, and the Court of Appeals reversed, remanding the case to the trial court to determine whether DiCicco intended to stab Gravenmier. This Court granted leave to appeal in consolidation with Allstate Ins Co v Freeman. [2]
Initially, in determining whether a policy applies, we first must determine whether the policy is clear and unambiguous on its face. We look to the language of the policy and we construe any ambiguity in favor of the insured. Powers v DAIIE, 427 Mich 602, 624; 398 NW2d 411 (1986). [3] In the instant case, the policy sets forth the essential terms and phrases in bold-faced type under conspicuously marked sections entitled Coverages II, Definitions, and Exclusions applicable to section II (section headings are also in bold-faced type). [4] Raska v Farm Bureau Mutual Ins Co, 412 Mich 355, 363; 314 NW2d 440 (1982). The terms used are either clearly defined within the policy itself or given a meaning in accordance with their common usage. Fireman's Fund Ins Co v Ex-Cell-O Corp, 702 F Supp 1317, 1323, n 7 (ED Mich, 1988) (the omission of a definition of a term with a common meaning does not necessarily render an insurance policy ambiguous). Therefore, we conclude that the provisions in the Metropolitan policy are clear and unambiguous. [5] Jones v Farm Bureau Mutual Ins Co, 172 Mich App 24; 431 NW2d 242 (1988); American States Ins Co v Maryland Casualty Co, 587 F Supp 1549 (ED Mich, 1984). We cannot create an ambiguity where none exists. Edgar's Warehouse, Inc v United States Fidelity & Guaranty Co, 375 Mich 598; 134 NW2d 746 (1965); Patek v Aetna Life Ins Co, 362 Mich 292; 106 NW2d 828 (1961); Dimambro-Northend Associates v United Construction, Inc, 154 Mich App 306, 313; 397 NW2d 547 (1986); Farm Bureau Mutual Ins Co v Hoag, 136 Mich App 326, 332; 356 NW2d 630 (1984). Similarly, we reject the temptation to rewrite the plain and unambiguous meaning of the policy under the guise of interpretation. Rather, we enforce the terms of the contract as written. Eghotz v Creech, 365 Mich 527, 530; 113 NW2d 815 (1962); Stine v Continental Casualty Co, 419 Mich 89, 114; 349 NW2d 127 (1984); Dimambro-Northend Associates, supra at 312-313; Murphy v Seed-Roberts Agency, Inc, 79 Mich App 1, 7-9; 261 NW2d 198 (1977). Plaintiff argues that the Court of Appeals should have affirmed the trial court's summary disposition in its favor because the coverage section of DiCicco's homeowner's policy does not apply to the fighting incident between DiCicco and Gravenmier. This provision requires an occurrence. [6] However, neither the trial court nor the Court of Appeals appears to have determined whether the fighting incident constituted an occurrence within the meaning of the coverage provision of the policy. Plaintiff contends that the language of the insurance contract requires the determination of whether the fighting incident constituted an occurrence under the policy before addressing any applicable exclusionary provisions. See Frankenmuth Mutual Ins Co v Kompus, 135 Mich App 667; 354 NW2d 303 (1984); Western Casualty & Surety Group v Coloma Twp, 140 Mich App 516, 521; 364 NW2d 367 (1985); Allstate Ins Co v Cannon, 644 F Supp 31, 32-33 (ED Mich, 1986); Unigard Mutual Ins Co v Spokane School Dist, 20 Wash App 261; 579 P2d 1015 (1978); Grange Ins Ass'n v Authier, 45 Wash App 383; 725 P2d 642 (1986); Hins v Heer, 259 NW2d 38 (ND, 1977); American Home Assurance Co v Osbourn, 47 Md App 73; 422 A2d 8 (1980). Although some courts have addressed the exclusionary clause before determining whether coverage exists under a policy, [7] we agree with plaintiff that the proper construction of a contract requires that we first determine whether coverage exists, and then whether an exclusion precludes coverage. As the Maryland Court of Appeals observed in a case implicating the identical provisions involved in this case: Osbourn here contends that it was for the jury to determine whether the facts of this case as revealed by the evidence, fit within the exclusions of the policy. The jury declared that they did not. We disagree. It is plain that the court submitted to the jury an irrelevant issue. The exclusion was inapplicable for the reason that there was no language in Section II, Part I, the liability provision, which afforded coverage to the appellee in the first place under the facts alleged. [ American Home Assurance Co, 47 Md App 82.] Accordingly, we must determine first whether the fighting incident constituted an occurrence. Plaintiff places great reliance on Frankenmuth v Kompus, supra, for its position that the fighting incident did not constitute an occurrence. In Kompus, several insurance companies and individuals appealed orders declaring their respective duties to defend Dr. Kompus, the insured, in his underlying tort actions, alleging assault, malpractice, and other claims. These claims arose from Dr. Kompus' alleged homosexual activity with several patients. Dr. Kompus was convicted of third-degree criminal sexual assault. The Kompus Court found that Dr. Kompus' actions were not accidental and, thus, did not satisfy the policy's definition of occurrence. In Kompus, the policy defined an occurrence as an accident, and the Court of Appeals interpreted accident with reference to an insurance policy involving a general liability section identical to that in the present case: An `accident,' within the meaning of policies of accident insurance, may be anything that begins to be, that happens, or that is a result which is not anticipated and is unforeseen and unexpected by the person injured or affected thereby  that is, takes place without the insured's foresight or expectation and without design or intentional causation on his part. In other words, an accident is an undesigned contingency, a casualty, a happening by chance, something out of the usual course of things, unusual, fortuitous, not anticipated, and not naturally to be expected. [ Kompus, supra at 678, quoting Guerdon Industries, Inc, supra at 18-19; Allstate Ins Co v Cannon, supra at 32.] The Kompus Court found this definition to be in harmony with the word's common usage. See also American States Ins v Maryland Casualty Co, supra . [8] However, the Court of Appeals in the present case distinguished Kompus on the ground that  Kompus merely held that a psychiatrist's homosexual acts on his patients were intentional as a matter of law. Consequently, the Court reasoned, it was unnecessary to reach the exclusion provision of the insured's policy since the psychiatrist's acts were not occurrences as that term was defined in the policy. According to the Court of Appeals, [t]he same conclusion cannot be reached in the present case ... [because] a homosexual act can never be unintentional; a stabbing can be. We disagree. If we adopted the Court of Appeals interpretation of Kompus, then we would effectively restrict the definition of accident to unintentional. [9] This we decline to do. Rather, we find that the last sentence of the Kompus definition accurately summarizes those events which constitute an accident: an accident is an undesigned contingency, a casualty, a happening by chance, something out of the usual course of things, unusual, fortuitous, not anticipated, and not naturally to be expected. Accordingly, we find that ascertaining the insured's intent may determine whether the insured's actions constituted an accident, but it does not necessarily follow that an insured must act unintentionally for an act to be an occurrence. [10] We also find Allstate Ins Co v Cannon, supra , particularly instructive when characterizing an event as an occurrence under the present policy language. In Cannon, Allstate brought an action for declaratory judgment that it did not have a duty to defend or indemnify its insured under a homeowner's policy with the same language involved in this case. Plaintiffs in the underlying action, Louise L. Jackson and Ernestine Dennis, sued Kenneth Cannon (the insured) for the shooting death of Larry James and the wounding of David Dennis by defendant Lance Rutland with a rifle which he obtained from defendant Eddie Gaines. Gaines gave the rifle to Cannon because Rutland wanted the gun for protection. A verbal street fight ensued between Rutland and James. After Cannon broke up the fight, he and Rutland went to Cannon's home. Cannon handed the loaded rifle to Rutland knowing Rutland was angry. Rutland returned to the scene of the fight and fired two warning shots and a third in self-defense. Although Rutland said he never aimed the rifle at anyone, he killed James and wounded Dennis, a bystander. Rutland pleaded guilty to second-degree murder. United States District Court Judge Avern Cohn held: [S]ummary judgment in favor of Allstate is appropriate in this case. The operative act is Cannon's handing a loaded rifle to Rutland. Indeed, Cannon had custody of the rifle on behalf of Rutland. Cannon also purchased ammunition for the rifle.... Rutland had been in a fight and was angry. He left the scene of the fight to get the rifle. Cannon knew that. Cannon also knew Rutland was returning to the scene of the fight with the rifle. It is fatuous to argue that the injuries from the shootings were accidents as defined by the Michigan Supreme Court. While D. Dennis's wounding may have been accidental, certainly the discharge of the rifle was not an accident. [ Allstate Ins Co v Cannon, supra at 33.] Although we find Cannon and Kompus analogous to the case at bar, and we agree that they represent examples of situations in which there was no occurrence under the present policy language, the claimed incident in the instant case is not clear cut enough to allow us to make a similar determination. Under the analyses we advance today, we conclude that the present coverage provision [11] must be broadly construed. [12] Therefore, we hold that the claimed incident constituted an occurrence under the policy. Thus, we turn next to the exclusionary clause in the plaintiff's policy. That provision reads: [The policy does not cover] BODILY INJURY OR PROPERTY DAMAGE WHICH IS EITHER EXPECTED OR INTENDED FROM THE STANDPOINT OF THE INSURED. There is precedential authority in this jurisdiction which holds that under an exclusion excepting coverage for injury ... caused intentionally by or at the direction of the insured, an insured must subjectively intend both his act and the resulting injury in order to avoid its duty to defend and indemnify. Morrill v Gallagher, 370 Mich 578, 583; 122 NW2d 687 (1963). Putman v Zeluff, 372 Mich 553; 127 NW2d 374 (1964). See also Transamerica Ins Co v Anderson, 159 Mich App 441; 407 NW2d 27 (1987); Turner v Burch, 156 Mich App 303; 401 NW2d 355 (1986); Linebaugh v Berdish, 144 Mich App 750; 376 NW2d 400 (1985); Farm Bureau Mutual Ins Co v Rademacher, 135 Mich App 200; 351 NW2d 914 (1984); Kermans v Pendleton, 62 Mich App 576, 580; 233 NW2d 658 (1975); Vermont Mutual Ins Co v Dalzell, 52 Mich App 686; 218 NW2d 52 (1974); Connecticut Indemnity Co v Nestor, 4 Mich App 578; 145 NW2d 399 (1966). Drawing on this authority, defendants argue that the Court of Appeals erred and that we should construe the current exclusionary clause as narrowly as the caused intentionally exclusion. Thus, DiCicco would have us interpret the addition of the word expected to the exclusion as superfluous, thereby requiring plaintiff to prove DiCicco acted intentionally and intended to injure Gravenmier. Whereas, plaintiff urges that we construe the addition of expected according to its plain and unambiguous meaning and find, therefore, that the exclusion applies to expected, as well as intended, injuries. We are convinced that the exclusion in the present case differs from the caused intentionally exclusion and, as the plaintiff persuasively argues, that the exclusion does not require a determination of whether DiCicco intended to stab Gravenmier. Rather, as plaintiff contends, the express language of the exclusion only requires a determination of whether bodily injury... is ... either expected or intended. We agree and we so hold. Although other jurisdictions have not reached a uniform conclusion on this issue, [13] we agree with plaintiff that the addition of the word expected expands the meaning of the caused intentionally language. We are persuaded that the present policy exclusion represents an attempt by insurers to avoid the harsh results of Morrill and similar cases nationwide. Aetna Casualty & Surety Co v Freyer, 89 Ill App 3d 617; 44 Ill Dec 791; 411 NE2d 1157 (1980). Accordingly, `[n]o word in a contract should be rejected as surplusage if it serves some reasonable purpose.' Ex-Cell-O Corp, supra, pp 1325-1326; Geerdes v St Paul Fire & Marine Ins Co, 128 Mich App 730, 734; 341 NW2d 195 (1983); Draper v Nelson, 254 Mich 380, 383; 236 NW 808 (1931). See also Associated Truck Lines v Baer, 346 Mich 106, 110; 77 NW2d 384 (1956). In our opinion, under a literal reading of the exclusion, the addition of expected serves the purpose of excluding coverage for expected, in addition to intentional, injuries. In fact, the Court of Appeals has distinguished between intended and expected injuries in cases involving the caused intentionally and the expected or intended exclusions. State Farm Fire & Casualty Co v Jenkins, 147 Mich App 462; 382 NW2d 796 (1985); Linebaugh v Berdish, supra ; State Farm Fire & Casualty Co v Groshek, 161 Mich App 703; 411 NW2d 480 (1987); Allstate v Freeman, supra; Aetna Casualty & Surety Co v Sprague, 163 Mich App 650, 654; 415 NW2d 230 (1987). As the Jenkins Court stated in the context of the identical exclusion: We believe, where a policy excludes coverage for intended or expected injuries, a distinction should be drawn between the terms intentional and expected. In order to avoid liability for an expected injury, it must be shown that the injury was the natural, foreseeable, expected, and anticipated result of an intentional act. [ Jenkins, supra at 467-468. [14] Emphasis added.] In this respect, we agree with those courts which have held that [f]or 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. City of Carter Lake v Aetna Casualty & Surety Co, 604 F2d 1052, 1058-1059 (CA 8, 1979). [15] We also reject defendant's contention that the standard we adopt today will preclude coverage for negligent acts by the insured. As the City of Carter Lake court stated, supra at 1059, n 4: The difference between reasonably foreseeable and substantial probability is the degree of expectability. A result is reasonably foreseeable if there are indications which would lead a reasonably prudent man to know that the particular results could follow from his acts. Substantial probability is more than this. The indications must be strong enough to alert a reasonably prudent man not only to the possibility of the results occurring but the indications also must be sufficient to forewarn him that the results are highly likely to occur. Moreover, we note that our decision today is in accord with those Court of Appeals decisions which have held that plaintiff must show: (1) the insured acted intentionally, and (2) the insured intended or expected injury to result from those acts. State Farm v Jenkins, supra; Yother v McCrimmon, 147 Mich App 130; 383 NW2d 126. (1985); Wright, supra ; Group Ins Co of Michigan v Morelli, 111 Mich App 510; 314 NW2d 672 (1981). [16] We find that the above-cited cases support the proposition that if the court determines that the insured acted intentionally, then the expected or intended language is satisfied by a finding that injury resulted as the natural, foreseeable, expected, and anticipated consequence of those intentional acts. However, we disagree with defendants that these cases or the policy language requires a determination of the insured's intent to act. Accordingly, we agree with the trial court that the insurer need not prove that the insured acted intentionally under the exclusion. [17] Finally, defendants also contend that we must determine the insured's expectations or intentions from his subjective viewpoint because the exclusion states expectation from the standpoint of the insured. Basically, they would have us construe the exclusionary language so as to require an insurer to prove that the insured said, yes I expected or intended injury to result from my intentional act. Unfortunately, a majority of this Court agrees with defendants on this issue. However, in our opinion, plaintiff persuasively argues that we should adopt an objective standard. As one court recognized: Probing one's state of mind is an elusive task at best. Supplanting an objective standard with a subjective standard for determining whether the act or conduct of an insured is intentional or expected or intended for purposes of assessing coverage would emasculate apposite policy provisions by making it impossible to preclude coverage for intentional acts or conduct absent admissions by insureds of a specific intent to harm or injure. Human nature augers against any viable expectation of such admissions. [ Truck Ins Exchange v Pickering, 642 SW2d 113, 116 (Mo App, 1982).] In deciding this issue, we take into account that under the caused intentionally exclusion, numerous Court of Appeals panels have avoided potentially absurd results by not requiring a literal finding of an insured's subjective intentions. For example, some Court of Appeals panels have held that, under the intent to injure requirement of the caused intentionally exclusion, intended tortious acts and unintended tortious results [is a distinction] without a difference.... Linebaugh v Berdish, supra at 756. Moreover, some panels have stated that the finding of an intentional act necessarily encompasses the corollary finding that the insured intended the injury. Turner v Burch, supra . Similarly, several recent Court of Appeals decisions have achieved a similar result under the caused intentionally language by inferring the insured's intent to act from the very nature of his actions. Kermans v Pendleton ; Farm Bureau Ins Co v Rademacher, supra. Lastly, some panels have avoided such theoretical exercises and simply equated the caused intentionally language with the expected or intended exclusion. Transamerica Ins Co v Anderson; Linebaugh v Berdish, supra . We find these cases persuasive, but rather than engaging in their theoretical exercises or drawing questionable inferences to determine the insured's subjective expectation, we hold that the expected or intended exclusion must be determined on the basis of an objective standard. Shelter Mutual Ins Co v Parrish, 659 SW2d 315 (Mo App, 1983); Pickering, supra ; Fireman's Ins Co v Smith, 13 Ark App 250, 253-254; 683 SW2d 234 (1985); CNA Ins Co v McGinnis, 282 Ark 90, 93-94; 666 SW2d 689 (1984). [18] Under the facts of the instant case, we would conclude that the trial court properly granted plaintiff's motion for summary disposition. Summary disposition is appropriate when there is no genuine issue of material fact. MCR 2.116(C)(10). Neither party contends that DiCicco returned to his room after the brawl with Gravenmier ended. Rather, it is unrefuted that DiCicco obtained a folding hunting knife, he opened it, and returned to confront Gravenmier with a barrage of verbal attacks and threatening motions with the knife. We find it inconceivable that, under these facts, an objective person would not expect injury to result from his stabbing Gravenmier with a hunting knife. Therefore, we agree with the trial court that DiCicco must have expected serious injury to result. Even assuming that we agreed with the defendant and adopted a subjective standard of review of the exclusionary clause, nevertheless, we would conclude that the trial court properly granted plaintiff's motion for summary disposition. We have the complete record upon which the parties stipulated to the resolution of their declaratory action. Accordingly, we disagree with the dissent that we must remand the case to the trial court for a determination under a subjective analysis. In our opinion, the facts of the instant case would present the ideal circumstances in which a trial court should infer the insured's subjective intentions as a matter of law. The mere fact that the defendants denied their intentions or expectations does not surprise us, nor should it obligate plaintiff to defend in the underlying suit. Otherwise, an insured could simply obligate an insurer to defend by denying that he intended or expected injury to result. Rather, we would hold that defendant subjectively expected injury to result even though he denied any intent to injury. This Court has recognized the difficulty in determining an individual's subjective intentions: `Intent is a secret of the defendant's mind,' which he can disclose by his declarations or by his actions and `his actions sometimes speak louder than words.' People v Strong, 143 Mich App 442, 452; 337 NW2d 335 (1985). (Citations omitted; emphasis added.) We adopt this analysis because it accurately addresses the circumstances of the instant case. Although the defendant denies any intent to injure, his actions speak louder than those words. In the instant case, we note that determining the defendant's subjective expectations requires a lesser degree of proof than his subjective intentions. DiCicco never contested that he grabbed a folding hunting knife from his room, opened it, and returned to confront Gravenmier with a barrage of verbal attacks and threatening motions with the knife. [19] Contrary to Justice BOYLE's conclusion, we believe that to claim that DiCicco did not  expect or intend injury to result from his conduct, does in fact, `fl[y] in the face of all reason, common sense and experience.' BOYLE, J., post, p 720 (citing McGinnis, supra at 93). Therefore, even under these circumstances, we would hold that the defendant subjectively expected injury to result. Accordingly, we would reverse the decision of the Court of Appeals and reinstate the trial court's declaratory order in favor of Metropolitan.