Opinion
No. 64515-3-I.
March 28, 2011. UNPUBLISHED OPINION
Appeal from a judgment of the Superior Court for King County, No. 09-2-22252-5, Cheryl B. Carey, J., entered October 23, 2009.
Reversed and remanded by unpublished opinion per Cox, J., concurred in by Grosse and Becker, JJ.
The undefined term "accident" in an insurance policy's insuring provision generally excludes deliberate acts. But where an additional, unexpected, independent and unforeseen event occurs that brings about a resulting injury, coverage exists absent other controlling policy provisions. Here, Kwing On Ng and Erica Ng (Erica), the insureds under a policy with State Farm Fire Casualty, directed the cutting of trees on their neighbors' property. They claim their neighbors misunderstood that the Ngs wanted to only trim the trees and expressly authorized the cutting, not just trimming, of the trees. Whether there was such a misunderstanding is a genuine issue of material fact. That is because it could be an additional, unexpected, independent and unforeseen event that brought about the property damage to the neighbors. We reverse and remand for further proceedings.
Safeco Ins. Co. of Amer. v. Butler, 118 Wn.2d 383, 401, 823 P.2d 499 (1992) (citing Detweiler v. J.C. Penney Cas. Ins. Co., 110 Wn.2d 99, 104, 751 P.2d 282 (1988)).
Id. (citing Detweiler, 110 Wn.2d at 104).
For clarity, we use the first names of the parties in this appeal.
Erica wanted to trim several of her neighbors' trees to improve the view from her family's home. She left a note for Son and Hyun Kwon, husband and wife, asking for their permission to "trim" one of their trees at her own expense. The note included Erica's phone number and asked the Kwons to contact her. Both the Ngs and the Kwons speak English as a second language.
In a phone message, Son responded that it was okay for Erica to "cut" the trees. Confused about whether Son wanted the trees trimmed or cut and removed, Erica called the Kwons. Hyun told her that Son said it was okay to cut the trees. Erica confirmed with Hyun that they wanted the trees cut and removed, not simply trimmed.
Based on these communications, Erica contracted with the tree cutter to fell the trees. The tree company could not remove the cuttings, so Erica called Son the morning of the felling to see if he wanted to keep the firewood. He stated that he did not want the firewood and Erica told him that she and her husband would remove the cuttings and finish cleaning up the Kwon property by the end of the week. After the trees were felled, Son called the Ngs. When their daughter answered the phone, he began to yell that he was going to sue them.
A couple of days later, Son contacted the police. The Ngs allege that Officer Scott Montgomery "told Erica he had confirmed with Mr. Kwon that Mr. Kwon had authorized the cutting." Erica subsequently e-mailed Officer Montgomery, asking for a copy of his police report. He responded that:
[Son] stated that when he was asked if it was okay to cut or trim the trees he stated that it was okay. I do not recall that he ever used the word cut even to me. He told me that when he was asked if it was okay he stated that it was okay. He never clarified to me[,] or you it sounds like[,] as to what he was okay with. That is the basis on why I did not file a case report on this incident. . . . I could only state that Mr. Kwon told me that he spoke with you on the phone and said that it was okay. What was okay was left up to interpretation by each of you.
Clerk's Papers at 99.
The Kwons commenced a lawsuit against the Ngs for timber trespass. The Ngs tendered defense of the lawsuit to State Farm, their homeowners' insurance carrier. State Farm accepted the defense under a reservation of rights and then commenced this action for declaratory judgment against the Ngs.
State Farm moved for summary judgment declaring that it has no duty to defend or indemnify the Ngs with respect to their lawsuit with the Kwons. It argued that there was no covered "occurrence" under the policy because Erica's intentional act of removing the Kwons' trees was not an "accident." The trial court granted the motion.
The Ngs appeal.
DUTY TO DEFEND
The Ngs argue that there is a genuine issue of material fact whether the property damage to the Kwons was an "accident" under the Ngs' homeowners' insurance policy. We agree.
A motion for summary judgment may be granted when there is no genuine issue as to any material fact and the moving party is entitled to a judgment as a matter of law. We review de novo a trial court's order granting summary judgment, taking all facts and inferences in the light most favorable to the nonmoving party.
CR 56(c).
Estate of Haselwood v. Bremerton Ice Arena, Inc., 166 Wn.2d 489, 497, 210 P.3d 308 (2009) (citingBiggers v. City of Bainbridge Island, 162 Wn.2d 683, 693, 169 P.3d 14 (2007)).
The rule regarding the duty to defend is broader than the duty to indemnify. "The duty to defend `arises when a complaint against the insured, construed liberally, alleges facts which could, if proven, impose liability upon the insured within the policy's coverage.'" An insurer is only relieved of its duty to defend if the claim alleged in the complaint is clearly not covered by the policy. "[T]he duty to defend is triggered if the insurance policy conceivably covers the allegations in the complaint, whereas the duty to indemnify exists only if the policy actually covers the insured's liability."
Woo v. Fireman's Fund Ins. Co., 161 Wn.2d 43, 52, 164 P.3d 454 (2007) (citing Hayden v. Mut. of Enumclaw Ins. Co., 141 Wn.2d 55, 64, 1 P.3d 1167 (2000)).
Truck Ins. Exch. v. Vanport Homes, Inc., 147 Wn.2d 751, 760, 58 P.3d 276 (2002) (quoting Unigard Ins. Co. v. Leven, 97 Wn. App. 417, 425, 983 P.2d 1155 (1999)).
Woo, 161 Wn.2d at 53 (citing Truck Ins. Exch., 147 Wn.2d at 760).
Id.
Courts construe insurance policies as contracts. The court must examine the policy as a whole in determining the meaning of a particular term. A trial court must enforce the policy as written if the language is clear and unambiguous and may not create an ambiguity where none exists. "If terms are defined in a policy, then the term should be interpreted in accordance with that policy definition." If policy terms are not defined, then they are to be given their "plain, ordinary, and popular" meaning.
Australia Unlimited, Inc., v. Hartford Cas. Ins. Co., 147 Wn. App. 758, 765, 198 P.3d 514 (2008).
Polygon Northwest Co. v. Am. Nat. Fire Ins. Co., 143 Wn. App. 753, 785, 189 P.3d 777 (2008).
Quadrant Corp. v. Am. States Ins. Co., 154 Wn.2d 165, 171, 110 P.3d 733 (2005).
Kitsap County v. Allstate Ins. Co., 136 Wn.2d 567, 576, 964 P.2d 1173 (1998).
Id. (citing Boeing Co. v. Aetna Cas. Sur. Co., 113 Wn.2d 869, 877, 784 P.2d 507 (1990)).
The interpretation of an insurance contract is a matter of law. The court reviews questions of law de novo.
State Farm Gen. Ins. Co. v. Emerson, 102 Wn.2d 477, 480, 687 P.2d 1139 (1984).
Mains Farm Homeowners Ass'n v. Worthington, 121 Wn.2d 810, 813, 854 P.2d 1072 (1993).
Here, the Ngs' insurance policy provides coverage for personal liability:
If a claim is made or a suit is brought against an insured for damages because of bodily injury or property damage to which this coverage applies, caused by an occurrence , we will:
1. pay up to our limit of liability for the damages for which the insured is legally liable; and
2. provide a defense at our expense by counsel of our choice. We may make any investigation and settle any claim or suit that we decide is appropriate. Our obligation to defend any claim or suit ends when the amount we pay for damages, to effect settlement or satisfy a judgment resulting from the occurrence, equals our limit of liability.
Clerk's Papers at 55 (emphasis added).
The term "occurrence" is defined as:
an accident , including exposure to conditions, which results in:
a. bodily injury; or
b. property damage;
during the policy period. Repeated or continuous exposure to the same general conditions is considered to be one occurrence.
Clerk's Papers at 42 (emphasis added).
The term "accident" is not defined in this policy.
Washington courts have historically held that an action or happening is an accident "only if both the means and the result were `unforeseen, involuntary, unexpected and unusual.'" This means/result definition is used "to deny coverage as a matter of law where the insured intentionally inflicts harm and, thus, coverage is against public policy." But where there is an additional, unexpected, independent or unforeseen happening that results in the injury, there may still be an accident. "Accident" is an objective term, so the insured's perspective is irrelevant. Washington courts have considered what constitutes such an unexpected happening in several cases.
Allstate Ins. Co. v. Bauer, 96 Wn. App. 11, 16, 977 P.2d 617 (1999) (emphasis added) (citing Grange Ins. Co. v. Brosseau, 113 Wn.2d 91, 96, 776 P.2d 123 (1989)).
State Farm Fire Cas. Co. v. Ham Rye, LLC, 142 Wn. App. 6, 15, 174 P.3d 1175 (2007) (citingRoller v. Stonewall Ins. Co., 115 Wn.2d 679, 684-85, 801 P.2d 207 (1990), overruled in part on other grounds byButzberger v. Foster, 151 Wn.2d 396, 408, 89 P.3d 689 (2004)).
Detweiler, 110 Wn.2d at 104.
Roller, 115 Wn.2d at 685.
In McKinnon v. Republic National Life Insurance Co., the court of appeals considered whether the insured's death was an accident, as required for recovery under his life insurance policies, even though he deliberately jumped off the State Route 520 bridge. The insured's life insurance policies covered accidental bodily injury, but not suicide. According to the evidence presented to the court, just before the insured jumped off the bridge, he was darting through traffic and looked as though he was being chased. When he jumped, he was 20 feet above the water and the water was about 10 feet deep. A witness described that the insured eventually came to the surface, and although he tried to swim, his dog-paddling was ineffective and he drowned. The insured was known to "swim fairly well." The appellate court held that, based upon these circumstances, there was a genuine issue of material fact whether there was an unusual, unexpected, or unforeseen event that made the insured unable to swim after deliberately jumping off the bridge. Therefore, although the insured's action was deliberate, the court could not hold, as a matter of law, that his bodily injury was not "accidental" as required by the insurance policies.
25 Wn. App. 854, 610 P.2d 944 (1980).
Id. at 855-57.
Id. at 856.
Id.
Id.
Id.
Id. at 855.
Id. at 859-60.
Id. at 860.
In Detweiler v. J.C. Penney Casualty Insurance Co., the insured attempted to foil the theft of his truck by shooting at its tires. He fired several shots at close range as the truck was driving by him. Bullet fragments ricocheted from the steel underpinnings of the truck into his eye, face and neck. He brought a declaratory judgment action against the insurance company, seeking a declaration that he was entitled to coverage for his injuries. Both the insured and the insurance company moved for summary judgment on the coverage issue and the trial court granted summary judgment for the insured. The insurance company appealed, arguing that the insured's injuries were not the result of an "accident" because he intended to fire the gun. The Washington Supreme Court reversed, reasoning that
110 Wn.2d 99, 751 P.2d 282 (1988).
Id. at 101.
Id.
Id.
Id.
Id. at 102.
Id. at 102-09.
[a]lthough the result of claimant's action (being struck by metal fragments in the neck, face and eye and sustaining injuries therefrom) was doubtless unintended, the means (shooting bullets from a gun at a nearby steel target) were obviously intended. It is thus arguable that claimant's injuries were a natural consequence of his actions and that no "additional unexpected, independent, and unforeseen happening" occurred to bring them about.
Id. at 108.
The court held that there were genuine issues of material fact whether the insured's injuries resulted from an "accident" because of additional unforeseen factors. Reasonable minds could disagree whether the speed of the truck, the distance between the insured and the truck, and the angle of fire were additional, unexpected, independent and unforeseen happenings that resulted in injury.
Id.
Id.
That analysis is consistent with the result in Safeco Insurance Co. of America v. Butler. There, the trial court granted summary judgment to the insurer on the issue of coverage in a declaratory judgment action. The insured chased a car full of teenagers he suspected of blowing up his mailbox. Once the chase ended, the insured fired several shots at the car. One of the shots ricocheted off the car and seriously injured an occupant. The insured claimed that, while he intended to fire the gun, he did not intend to injure anyone. He also argued that the ricochet was an additional, unexpected, independent and unforeseen happening. The supreme court held that no reasonable person could conclude that the insured was unaware of the possibility that a bullet might ricochet and injure someone in the car. Therefore, there was no "accident" and summary judgment was appropriate.
118 Wn.2d 383, 823 P.2d 499 (1992).
Id. at 385.
Id. at 386.
Id.
Id. at 386, 400.
Id. at 400.
Id. at 401.
Id.
Id.
In Nationwide Mutual Insurance Co. v. Hayles, Inc., the court of appeals considered whether the intentional act of turning on an irrigation system precluded coverage for loss of a rotted onion crop damaged by the water. The policy language at issue defined an occurrence as an "accident" but provided no definition of that term. The court explained that an action need not be strictly "an unconscious, nonvolitional act" to be an accident. Rather, "[t]o prove that an intentional act was not an accident, the insurer must show that is was deliberate, meaning done with awareness of the implications or consequences of the act." The court held that "[r]easonable minds could conclude only that no one under these circumstances would have anticipated that turning on the water could rot the onions." Because the result was not reasonably foreseeable, the deliberate action was an "accident" covered under the policy.
136 Wn. App. 531, 150 P.3d 589 (2007).
Id. at 536.
Id. at 537.
Id. at 538.
Id.
Id. at 539.
Id.
Here, the means of the Kwons' injuries was the intentional directive by the Ngs to have the trees cut down by the tree cutter. The result was also expected — the cutting and removal of trees from the Kwons' property. Thus, the question is whether this record shows any genuine issue of material fact.
We hold that there is a genuine issue of material fact. The Ngs argue that the Kwons' misunderstanding about whether the Ngs wanted to trim or cut and remove the trees was an additional unexpected, independent, and unforeseen happening. Taking the evidence in the light most favorable to the Ngs, Hyun confirmed during the telephone conversation with Erica that Son wanted the trees cut and removed, not just trimmed. A reasonable person in Erica's position might not have been aware of or foreseen that the Kwons did not actually want her to cut and remove the trees. Thus, the misunderstanding may be the type of additional, unexpected, independent or unforeseen happening that produced the property damage in this case. Therefore, a genuine issue of material fact exists and summary judgment was improper.
State Farm argues that Detweiler cannot support the Ngs' argument because the variables that resulted in the genuine issues of material fact in that case are not present here. While this case and Detweiler are factually distinguishable, that does not preclude application ofDetweiler's legal principles here. As inDetweiler, there is a genuine issue of material fact whether an unexpected happening resulted in the Ngs' intentional actions being an accident. Therefore, State Farm's argument is not persuasive.
Similarly, State Farm's attempt to distinguish Hayles is not persuasive. State Farm argues it is distinguishable because here "the appellant insureds deliberately had the trees cut down." But, in Hayles, the insured deliberately turned on the water. The question is not simply whether the Ngs' actions were deliberate. Rather, it is whether, taking the evidence in a light most favorable to the Ngs, there was an objectively unexpected event that resulted in the property damage. Here, there are genuine issues of material fact whether there was a misunderstanding that was an unforeseen event. Therefore, State Farm's claim of material distinctions between the cases is not persuasive.
State Farm argues that the Ngs cannot "transform a deliberate act into an accident" by pleading negligence. It citesGrange Insurance Co. v. Brosseau andAllstate Insurance Co. v. Bauer as support. It also argues that the Ngs intentional act of removing the trees is not an accident under the policy, as in Overton v. Consolidated Insurance Co., simply because legal liability was unexpected. But, the question before this court is whether there was an additional, unexpected, independent or unforeseen event that resulted in property damage to the Kwons. Based upon the record, there is a genuine issue of material fact whether such an event occurred. Negligence and the expectation of legal liability are both irrelevant to this determination.
113 Wn.2d 91, 776 P.2d 123 (1989).
96 Wn. App. 11, 977 P.2d 617 (1999).
145 Wn.2d 417, 38 P.3d 322 (2002).
State Farm argues that "property damage" under the policy is limited to the physical damage to the trees and cannot include any other property damage. The policy defines property damage as "physical damage to or destruction of tangible property, including loss of use of this property."
First, even assuming the policy limits property damage in this way, the means/result analysis must still be applied to determine if the property damage to the trees was caused by an additional, unexpected, independent or unforeseen event. Second, property damage, as defined by the policy, is not necessarily limited to the cutting of trees. It could include the damage to the trees, as well as damage to the real property caused by felling the trees. Furthermore, the pleadings in the underlying action do not limit this court from considering a broader definition of such damage when determining the insurer's duty to defend. In their complaint for timber trespass, the Kwons allege that felling the trees caused damage to their landscaping and destroyed their backyard's privacy. In addition to asking for damages related to the destruction of the timber, they also asked for "[s]uch other and further relief as the court deems proper." Liberally construing this complaint, we may consider property damage other than the damage to the trees in assessing State Farm's duty to defend the Ngs.
Both parties cite authority from other jurisdictions analyzing whether an intentional act can be an "accident" for the purpose of insurance coverage. We need not go to other jurisdictions to address this question of Washington law. In any event, as the Eleventh Circuit Court of Appeals has noted "[t]here is no consensus in other jurisdictions as to whether intentional conduct premised on erroneous information is an `accident. . . .'" For example, while in Tennessee and New Hampshire there is coverage, in Georgia, New York, and Texas there is not.
Mindis Metals, Inc., v. Transp. Ins. Co., 209 F.3d 1296, 1297 (11th Cir. 2000).
See Standard Constr. Co., Inc., v. Maryland Cas. Co., 359 F.3d 846, 850 (6th Cir. 2004) (interpreting Tennessee law); Lumber Ins. Co., Inc. v. Allen, 820 F. Supp. 33, 34-35 (D. NH 1993) (interpreting New Hampshire law); Mindis Metals, 209 F.3d at 1297 (interpreting Georgia law); People v. Helinski, 203 A.D.2d 659, 660-61, 610 N.Y.S.2d 376 (1994); Argonaut Southwest Ins. Co. v. Maupin, 500 S.W.2d 633, 635 (1973) (interpreting Texas law).
ATTORNEY FEES
The Ngs argue that they are entitled to attorney fees on appeal. The award of fees at this point of this declaratory judgment action is premature.
In a duty to defend action, an insured is entitled to fees on appeal, pursuant to Olympic Steamship and other cases where the insurer "compels the insured to assume the burden of legal action, to obtain the full benefit of his insurance contract."
Woo, 161 Wn.2d at 70-71 (citing Olympic Steamship Co., Inc., v. Centennial Ins. Co., 117 Wn.2d 37, 53, 811 P.2d 673 (1991)).
Here, neither the duty to defend nor the duty to indemnify has, as yet, been established. Those duties can only be determined by further proceedings below. If the Ngs prevail, the trial court will be in a position to determine whether and to what extent an award of fees, including fees incurred in this appeal, should be made.
We reverse and remand for further proceedings.
WE CONCUR.