Court Opinion

ID: 9001937
Source: CourtListenerOpinion
Date Created: 2022-11-27 13:14:30.438353+00
Date Added: 2024-06-11T17:11:12.827799
License: Public Domain

BRIGHT, Senior Circuit Judge,
dissenting.
I dissent.
St. Paul’s policy covers damages unintentionally caused by an intentional act of the policyholder.1 St. Paul’s counsel in essence conceded this point at oral argument. The policy language states that it covers “damages for a covered bodily injury or property damage claim resulting from an accidental event.” Joint Appendix at 156. An “[ajccidental event means any event that results in bodily injury or property damage that the protected person didn’t expect or intend to happen.” Id. Bodily injury includes mental harm, mental anguish or mental illness. Id. at 164.
In my view, the only question on coverage with which I disagree with the majority relates to whether alleged damages suffered by Jerry Harmon due to emotional distress were a “natural and probable consequence,” National Farmers Union Property & Cas. Co. v. Kovash, 452 N.W.2d 307, 311 (N.D.1990), of First National’s actions. If they were, no coverage exists. If not, the policy covers that aspect of the litigation against the insured and the insurer should have offered a defense to the lawsuit.
In Kovash, the case relied on by the majority, the defendant-policyholder trespassed on the plaintiff’s land and erected a section line of fence. Id. The plaintiff sought injunctive relief to remove the fence. Because the policyholder intended both his actions and the consequences of his actions, the insurance policy did not provide coverage. Id. In this case, however, First National did not intend to harm Jerry Harmon when it denied him the line of credit and dishonored his checks. As the majority notes, First National knew that Harmon would be upset by its actions. However, to recover damages for intentional infliction of emotional distress, a plain*147tiff must prove that defendant (1) engaged in extreme and outrageous conduct that was (2) intentional or reckless that (3) caused severe emotional distress. Muchow v. Lindblad, 435 N.W.2d 918, 924 (N.D. 1989).
This court in Interco, Inc. v. Mission Ins. Co., 808 F.2d 682 (8th Cir.1987), recognized the difference between conduct that may intentionally upset someone and conduct that inflicts severe emotional distress.2 In Interco, the plaintiff claimed wrongful discharge against the defendant policyholder. The plaintiff also alleged intentional infliction of emotional distress because his supervisor had orally fired him in front of a co-worker. The insurance company refused to cover the policyholder because it had acted intentionally in firing the plaintiff. Judge Wollman, writing for the court, rejected the insurance company’s argument as to the emotional distress claim, reasoning:
Although we can agree with the district court that the event that formed the basis of a portion of Egol’s lawsuit against Interco — Sibley’s precipitous firing of Egol — was not unexpected or unintended, that is not the end of the matter. Granted that Sibley’s firing Egol in the presence of one of Egol’s colleagues may have been a boorish act, one hardly calculated to find favor with the professional school of feel-good management techniques, still and all it cannot be equated with the discharging of a firearm or the swinging of a machete. That Egol has the temperament of an opera singer may have made Sibley’s handling of the termination all the more insensitive, but it does not follow that Sibley expected or intended that his act of terminating Egol should cause the physical and emotional damages Egol allegedly suffered as a result of that act.
Id. at 686 (emphasis added).
If, as a matter of law, severe emotional distress is not an expected result when an employer verbally terminates an employee in front of a co-worker, then at least a dispute of fact exists as to that issue when a bank takes actions which it knows will put someone out of business. Although First National knew it would upset Harmon by denying him credit and dishonoring his checks, nothing in the record establishes as a matter of law that Harmon’s alleged severe emotional distress was a probable consequence of the bank’s actions. I would reverse and remand for a trial on that issue. Thus, I must respectfully dissent.

. The district court erred in its interpretation of the policy. It read St. Paul’s policy, which covers damages caused by “accidental events,” as only covering damages caused by "events,” and not damages resulting from "acts" by the policyholder, regardless of whether the damages were intended or expected.
The district court attempted to distinguish events from acts by using a definition of "event" which stated: ”[A]n act is the product of the will whereas an event is an occurrence which takes place independent of the will, such as an earthquake or flood.” Black’s Law Dictionary 555 (6th ed.1990). However, Black's Law’s primary definition for "event” is ”[t]he consequence of anything.” Id. at 554-55. Thus, an event may occur independently of human action, but that does not mean that an event may not also be the consequence of an act.
The policy recognizes that an event may be caused by an intentional act of the policyholder, for it defines an "accidental event" as "any event that results in bodily injury or property damage that the protected person didn’t expect or intend to happen." Joint Appendix at 156 (emphasis added).

. This court interpreted Missouri law, which closely resembles North Dakota law. In Missouri, an insurance company need not cover a policyholder when the policyholder committed an intentional act from which injury could be expected. Id. at 686 (citing Hanover Ins. Co. v. Newcomer, 585 S.W.2d 285 (Mo. Ct.App.1979)).