Court Opinion

ID: 9720566
Source: CourtListenerOpinion
Date Created: 2023-08-26 08:36:17.772795+00
Date Added: 2024-06-11T18:24:19.328712
License: Public Domain

Brodkey, J.,
dissenting.
I must respectfully dissent from the majority opinion. Not only do I feel that it has applied incorrect legal principles, but I feel the result is highly inequitable.
I start my discussion with the very recent case of Pachucki v. Republic Ins. Co., 278 N. W. 2d 898, decided May 30, 1979, by the Supreme Court of Wisconsin. The homeowner’s policy in that case provided that the policy did not apply to bodily injury or property damage which is either expected or intended from the standpoint of the insured. In its opinion the court outlined three general rules that have emerged with respect to the construction of an intentional tort exclusion, as follows: “(1) The minority view follows the classic tort doctrine of looking to the natural and probable consequences of the insured’s act; (2) The majority view is that the insured must have intended the act and to cause some kind of bodily injury; (3) A third view is that the insured must have had the specific intent to cause the type of injury suffered.” The same rule would apply to property damage.
Which view has Nebraska adopted? I believe that Nebraska has clearly adopted the majority rule. In State Farm Fire & Cas. Co. v. Muth, 190 Neb. 248, 207 N. W. 2d 364 (1973), which case involved a homeowner’s insurance policy containing an exclusion for ‘‘bodily injury . . . which is either expected or intended from the standpoint of the insured,” although admittedly factually dissimilar from the instant case, this court clearly stated: ‘‘We hold on the basis of the authorities which we hereinafter cite that, under the language of the exclusion in question, an injury is either expected or intended if the in*534sured acted with the specific intent to cause harm to a third party. It seems to us to be immaterial whether the injury which results was specifically intended, i.e., the exclusion would apply even though the injury is different from that intended or anticipated.” (Emphasis supplied.) This to me clearly indicates the adoption of the majority rule referred to above. State Farm Fire & Cas. Co. v. Muth, supra, has never been overruled by this court, and still remains the law of this state. Foxley & Co. v. United States Fidelity & Guaranty Co., 203 Neb. 165, 277 N. W. 2d 686 (1979), cited in the majority opinion, was a division opinion, not an opinion of the full court, and involved a mistake of law rather than a mistake of fact. However that may be, the fact remains that although the court mentioned Muth in passing, it did not specifically overrule Muth. The specific holding in Foxley is set out in the opinion as follows: “While we are aware of cases to the contrary, we hold that a policy undertaking to pay damages because of injury to or destruction of property caused by accident does not cover damages caused by the trespass of the policyholder upon the land of another when the damage is the natural result of the intentional act of the policyholder.”
In this case, the record is clear that Millard Warehouse did not build the pad or the warehouse with the specific intention of causing harm to the Tetricks or any other person. Not only did the president of the corporation, Mr. Larsen, not harbor any such intention, as he testified, but on the contrary he had been assured by a competent expert, and on the basis of his own experience with the Creek extending over a long period of years, that the threatened flood danger was exaggerated and practically nonexistent, and could safely be disregarded. There is also evidence in the record establishing there have been no floods despite the fact that there have been very heavy downpours of rain in the intervening years. *535Nor is it likely that Millard Warehouse would have intentionally risked its very large investment in its physical facilities, or the 10 million dollars in customers’ property stored on its premises, by intentionally and knowingly increasing the danger of loss or damage which would be caused by the flooding of its premises. Under the majority rule, above cited, it is clear that Millard Warehouse did not intend damage to anyone; and hence the policy exclusion is not applicable, and the insurance companies should be required to defend the lawsuit brought by the Tet-ricks. We might add that the authorities cited by the majority are clearly distinguishable from the instant case for the reason that in none of the cases cited by the majority had the insured ever received expert or professional advice, contrary to the claims of the government agencies involved, that it was safe to proceed with the course of action planned, as was true in this case.
As a further basis for reversing the judgment of the District Court, the majority opinion makes two other points. They cite the general rule adopted in Nebraska to the effect that the duty of an insurance company to defend an action must at the outset be judged by the allegations contained in the pleadings filed by the third party against the insured. They point out that the Tetricks’ lawsuit specifically alleges that the construction of the warehouse and pad by Millard Warehouse constitutes a “public nuisance, ” and they cite authorities in support of the rule that an allegation of a “nuisance” by itself does not allege an accident, none of which cases are, however, Nebraska cases. We point out, however, that there is a split of authority in the country on the question, and there are also many decisions holding to the contrary. See, Annotation, Allegations in third person’s action against insured as determining liability insurer’s duty to defend, 50 A.L.R. 2d 458; Annotation, Injury from nuisance maintained by in*536sured as within coverage of public liability policy, 98 A.L.R. 2d 1047.
In White v. Smith, 440 S. W. 2d 497 (Mo. App., 1969), the court stated: “Instant plaintiffs’ suit was ‘for nuisance.’ An actionable nuisance may be ‘ “anything wrongfully done or permitted, which injures or annoys another in the enjoyment of his legal rights.” ’ ‘[N]uisance is a condition, and not an act or failure to act of the person responsible for the condition.’ 66 C.J.S. Nuisances § 11a, 1.c. 752. It does not rest or depend upon the degree of care used, but upon the degree of danger existing with the best of care. So, in determining liability for the maintenance of a nuisance, whether defendant was negligent and what his intention, design or motiff may have been alike became immaterial.”
Also, in Grand River Co. v. Ohio Cas. Ins. Co., 32 Ohio App. 2d 178, 289 N. E. 2d 360 (1972), the court stated: “The amended petition in the Lake County case contains two causes of action, each founded upon different theories of liability. The first cause of action contains allegations of nuisance and trespass. It is alleged that Grand River was guilty in the following respects. * * * [i]n allowing said industrial wastes to be emitted in large quantities from their stacks and to settle on the person, houses, automobiles, and other chattels of the plaintiff, constitute a continuing nuisance and trespass in the following particulars, to wit: * * *.
“The allegations as made in the second gause of action assert the knowledge and willful intent of the defendant. Such allegations are not based upon nuisance, trespass or negligence as such are to be found in the first cause of action.
“We hold, and the plaintiff concedes, that the defense of the second cause of action could not be required under the definition of ‘occurrence’ as contained within the policy. Such allegations would not constitute a claim for damages ‘neither expected *537nor intended from the standpoint of the insured.’
“However, allegations of knowledge and intent do not appear in the first cause of action, and could well come within the meaning of ‘occurrence’ as contained within the policy.” See, also, Wolk v. Royal Indemnity Co., 27 Misc. 2d 478, 210 N.Y.S. 2d 677 (1961). I am of the opinion that the duty of an insurance company to defend under its policy should not rest upon a narrow interpretation of perhaps loosely used words in a petition, words chosen by a third party suing the insured, but should be controlled by the actual facts of the case; and the nature of the Tetricks’ claim is such as to require the defendant insurance companies to defend.
I also note that the Tetricks’ case is still pending trial; and that as plaintiffs therein, the Tetricks may still have the opportunity, and may well decide, to amend or add allegations to their petition, with the result that defendants might be obligated to render a defense to Millard Warehouse.
I would sustain the judgment of the District Court, and would also, as did that court, allow attorney’s fees for plaintiff’s attorney in the amount it determined after a separate hearing thereon, without, however, allowance of interest on said attorney’s fees.
Fahrnbruch, District Judge, joins in this dissent.