Opinion
No. 2-680 / 02-0088
Filed February 12, 2003
Appeal from the Iowa District Court for Butler County, Paul W. Riffel, Judge.
Defendants appeal from the district court's grant of summary judgment. AFFIRMED IN PART, REVERSED IN PART, AND REMANDED.
Gary Papenheim, Parkersburg, for appellants.
Rand Wonio and Gregory Guiney of Lane Waterman, Davenport, for appellee.
Gary Boveia, Waverly, for intervenor.
Considered by Huitink, P.J., and Zimmer and Miller, JJ.
I. Background Facts and Proceedings.
Dick Schurman was injured in a fight with Russ Simon at Russ's Sportsman Lounge on November 22, 1999. As a result, Simon was charged with willful injury. Simon subsequently pleaded guilty to the lesser offense of assault causing bodily injury. Simon's written guilty plea states:
I am knowingly and intelligently pleading guilty to the lesser included offense of Assault Causing Bodily Injury . . . on the basis of United States v. Alford. The defendant [Simon] stipulates that the Minutes of Testimony attached to the Trial Information would be sufficient to establish guilt beyond a reasonable doubt if this case proceeded to trial.
A judgment of conviction and sentencing orders were entered in accordance with Simon's plea.
Schurman sued Russ, Inc., d/b/a Russ's Sportsman Lounge, and Simon for personal injury and punitive damages resulting from the November 22, 1999, fight with Simon. Schurman claimed Russ, Inc. was liable for the damages claimed because it failed to protect him from injury while on its premises as a business invitee. Russ, Inc. and Simon denied liability, claiming Simon used reasonable force to protect himself and others from Schurman.
American Economy, Russ, Inc.'s liability insurer, filed this action requesting the court to declare that it had no obligation to defend or indemnify Russ, Inc. American cited the following policy provisions excluding coverage for the damages claimed:
1. Insuring Agreement
a. We will pay those sums that the insured becomes legally obligated to pay as damages because of "bodily injury" or "property damage" to which this insurance applies. We will have the right and duty to defend the insured against any "suit" seeking those damages. However, we will have no duty to defend the insured against any "suit" seeking damages for "bodily injury" or "property damage" to which this insurance does not apply. . . . No other obligation or liability to pay sums or perform acts or services is covered unless explicitly provided for under SUPPLEMENTARY PAYMENTS — COVERAGES A AND B.
b. This insurance applies to "bodily injury" and "property damage" only if:
(1) The "bodily injury" or "property damage" is caused by an "occurrence" that takes place in the "coverage territory;"
. . . .
2. Exclusions
This insurance does not apply to:
a. Expected or Intended Injury
"Bodily injury" or "property damage" expected or intended from the standpoint of the insured. This exclusion does not apply to "bodily injury" resulting from the use of reasonable force to protect persons or property.
. . . .
2. Exclusions
This insurance does not apply to:
a. "Personal Injury" . . .
. . . .
(3) Arising out of the willful violation of a penal statute or ordinance committed by or with the consent of the insured;
. . . .
1. Insuring Agreement
a. We will pay medical expenses as described below for "bodily injury" caused by an accident;
. . . .
2. Exclusions
We will not pay expenses for "bodily injury":
a. To any insured.
. . . .
g. Excluded under Coverage A.
. . . .
SECTION II — WHO IS AN INSURED
1. If you are designated in the Declarations as:
. . . .
d. An organization other than a partnership, joint venture or limited liability company, you are an insured. Your "executive officers" and directors are insureds, but only with respect to their duties as your officers or directors. Your stockholders are also insureds, but only with respect to their liability as stockholders.
2. Each of the following is also an insured:
d. Your "employees", other than either your "executive officers" (if you are an organization other than a partnership, joint venture or limited liability company) or your managers (if you are a limited liability company), but only for acts within the scope of their employment by you or while performing duties related to the conduct of your business.
. . . .
12. "Occurrence" means an accident, including continuous or repeated exposure to substantially the same general harmful conditions.
American alleged that Simon's intentional assault of Schurman was not within the scope of Simon's duties as an officer, manager, or employee of Russ, Inc. and did not fall within the policy definition of an "occurrence." American also alleged that Simon's conduct was specifically excluded under the policy's expected or intended injury clause. American further alleged that the policy specifically limited personal liability to bodily injury and property damage and punitive or exemplary damages were not covered by the policy. Lastly, American alleged it was not liable for invitee premises liability coverage because the damages claimed were caused by Simon's conduct rather than a dangerous condition on Russ, Inc.'s premises.
In response to American's request for declaratory relief, Russ, Inc. and Simon denied entering a guilty plea to assault causing bodily injury without justification and otherwise denied Simon's conduct implicated the exclusionary policy provisions American cited in its petition for declaratory relief. In a petition to intervene in the declaratory judgment action, Schurman alleged that Russ, Inc.'s covered liability included his premises liability claim because Simon's presence on Russ, Inc.'s premises constituted a dangerous condition.
American moved for summary judgment claiming Simon's guilty plea and undisputed evidence that he repeatedly struck Schurman were sufficient to establish as a matter of law that Simon intentionally injured Schurman. Because Simon's injuries were intentional, American argued the policy provisions earlier referred to excluded coverage for Russ, Inc.'s or Simon's liability to Schurman for the damages claimed.
Simon resisted American's motion, citing the "reasonable force necessary to protect persons or property" clause of the expected or intended injury exclusion. He argued his affidavit claiming Schurman struck him and his concern for the safety of others generated a fact issue precluding summary judgment. Schurman also resisted, citing the factual issues inherent in his premises liability theory.
The trial court granted American's motion for summary judgment. The controlling portion of the court's ruling states:
In McAndrews v. Farm Bureau Mut. Ins. Co., 349 N.W.2d 117, 120 (Iowa 1984), the Court further held that in an action by a third party against an insured for assault and battery liability, the insurer did not have a duty to defend the insured who had deliberately struck the third party in light of the policy exclusion for intentional acts, even if the insured had acted in self-defense, since the act would still have been intentional.
The Court concludes that the intentional act exclusions of Plaintiff's policy issued to Russ, Inc. precludes coverage for the claimed damages resulting from Simon's physical altercation with Schurman on November 22, 1999. Simon's act was an intentional act in that he repeatedly struck Schurman in the head causing physical injuries. Simon entered an Alford plea of guilty to the crime of assault causing bodily injury in connection with the incident. Simon is not afforded coverage under the policy as a matter of law for any damage claims in connection with the incident.
With respect to Schurman's premises liability claim, the Court agrees with the Plaintiff that there is no basis under Iowa law whereby Russ, Inc. can be held liable under a premises liability theory for its owner and/or officer being a "dangerous condition" upon the premises that would require a warning to invitees. In order for Russ, Inc. to be held liable for Simon's act under said theory, there would have to be a finding that Simon owed Schurman a duty to warn him and negligently failed to warn him of the reasonable danger that Simon would intentionally assault Schurman without justification. The claim is without merit.
Judgment was accordingly entered granting American the declaratory relief requested, resulting in this appeal.
Simon and Russ, Inc. present the following issues on appeal:
(1) Does the self-defense provision of American Economy's intentional act exclusion preclude coverage for either Russ, Inc. or Simon?
(2) Does the fact that Simon elected to enter an Alford plea to a lesser-included offense rather than incur the uncertainty and expense of a trial preclude the use of a self-defense claim in a subsequent civil action?
(3) Would an ordinary layperson, examining American Economy's policy, expect there to be coverage for Russ, Inc. and Simon under it?
II. The Merits.
We review a summary judgment ruling for correction of errors of law. Shriver v. City of Okoboji, 567 N.W.2d 397, 400 (Iowa 1997). Summary judgment is appropriate when no genuine issue of material fact exists and the moving party is entitled to judgment as a matter of law. Id. We will review the record before the district court to determine whether an issue of material fact exists, and if not, whether the district court properly applied the law. Id. The record includes the pleadings, motion for summary judgment, resistance, affidavits, and exhibits. Porter v. Good Eavespouting, 505 N.W.2d 178, 182 (Iowa 1993). The facts are reviewed in the light most favorable to the nonmoving party. Shriver, 567 N.W.2d at 400. A factual dispute precludes summary judgment only when the dispute is over facts that would affect the outcome of the suit. Id. Howell v. Merritt Co., 585 N.W.2d 278, 280 (Iowa 1998).
We initially note that neither American's motion for summary judgment nor the trial court's resulting ruling is premised on the preclusive effect of Simon's guilty plea to assault causing bodily injury. See e.g., Teggatz v. Ringleb, 610 N.W.2d 527, 529 (Iowa 2000) (validly entered and accepted guilty plea precludes defendant from relitigating essential elements of the criminal offense in later civil case arising out of the same offense). Even if we were to conclude Simon's guilty plea is preclusive and therefore dispositive of the intentional act exclusion issue, we are no longer permitted to affirm on that basis. See State v. DeVoss, 648 N.W.2d 56, 63 (Iowa 2002) (we will not consider substantive or procedural issues for first time on appeal, even though such issue might be the only ground available to uphold district court ruling). The dispositive issue then as we see it is whether the undisputed evidence included in the summary judgment record, including Simon's guilty plea, is sufficient as a matter of law to affirm.
American correctly argues that repeated strikes and blows are intentional acts as a matter of law resulting in exclusion of coverage under applicable intentional act exclusions similar to that at issue here. American Family Mut. Ins. Co. v. DeGroot, 543 N.W.2d 870, 872 (Iowa 1996); Essex Ins. Co. v. Fieldhouse, Inc., 506 N.W.2d 772, 775 (Iowa 1993); AMCO Ins. Co. v. Haht, 490 N.W.2d 843, 845 (Iowa 1992); Altena v. United Fire Cas. Co., 422 N.W.2d 485, 490 (Iowa 1988); McAndrews v. Farm Bureau Mut. Ins. Co., 349 N.W.2d 117, 120 (Iowa 1984). Coverage has also been excluded under these circumstances even if the insured acted in self-defense. McAndrews, 349 N.W.2d at 120.
Our review of the cases upon which American relies indicates that none involved the savings self defense clause included in Russ, Inc.'s policy. In the absence of such a provision, we do not find the reasoning in McAndrews controls the outcome here. To hold otherwise would render the savings language of the policy meaningless under these circumstances.
In an affidavit filed with his resistance to American's motion for summary judgment Simon claims Schurman was the first aggressor and he struck or otherwise subdued Schurman to protect himself and others. We find these assertions and the evidence supporting them sufficient to generate a genuine issue of material fact precluding summary judgment. The trial court erred by concluding otherwise. We therefore reverse on this issue.
Like the trial court, we find Schurman's claims that Simon's presence constituted a "dangerous condition" on the premises insufficient as a matter of law to implicate Russ, Inc.'s duty to Schurman under any theory of premises liability. The duty implicated by Simon's allegation concerns the control of third-party conduct, not the physical condition of the premises or activities of the possessor. As such, it states something other than a premises liability claim. See Morgan v. Perlowski, 508 N.W.2d 724, 727 (Iowa 1993). We affirm on this issue.
Lastly, we decline to consider Russ, Inc.'s reasonable expectation argument because it was neither raised nor considered in the trial court. See DeVoss, 648 N.W.2d at 63.
The judgment of the district court is affirmed in part, reversed in part, and remanded for further proceedings in conformity with this opinion.