AMCO Insurance Co. v. Haht ( 1992 )

HARRIS, Justice.

An insurer brought this declaratory judgment action to test its contention that there is no coverage for liability in a wrongful death claim. The insured, an eleven-year-old child, deliberately struck another child with a thrown baseball after becoming irritated in a neighborhood game. According to the trial court’s findings the insured intended to hurt the second child, but not to cause him bodily injury. The question concerns an exclusion for liability for bodily injury expected or intended by the insured. The district court found that the exclusion did not apply and we agree.

Plaintiff AMCO Insurance Company issued Henry and Kathryn Haht a homeowners insurance policy. The Hahts’ son (Chris) was an insured under the policy. Chris reached his eleventh birthday nine days after the neighborhood baseball game in which the incident occurred.

There was ample evidence to support these trial court findings:

On June 9, 1988, Chris, his younger brother Travis, and two neighborhood friends, Matt Lottman and Mike Carri-gan, were playing “lob ball,” or “workup” in Chris’s backyard in Sutherland, Iowa. The game included someone pitching, someone batting, and the others fielding. After about an hour an argument developed (not surprisingly) over who should pitch. Matt, who had been in the field, wanted to pitch. Chris, who was batting, wanted Travis to pitch. Matt threw the baseball at Travis, who was pitching, hitting him in the leg. Some arguments and some pushing and shoving developed, but the game continued. After some period of time, Matt announced that because he could not pitch he was quitting and threw his glove to the ground. Chris, who happened to have the ball, threw it in Matt’s direction. The ball struck Matt in the temple and Matt tragically died as a result of the injuries he received.

Matt Lottman’s parents (defendants Lottman) have filed a petition ... seeking damages from Chris for the wrongful death of Matt....

AMCO issued [a] homeowners policy ... to Chris’s parents [for the period in question]. The Lottmans and Hahts contend the policy covers Chris and his alleged liability for the wrongful death of Matt. AMCO disagrees, contending the actions of Chris were intentional and hence excluded under the following language of the policy:

“COVERAGE E — Personal Liability and Coverage F — Medical Payments to Others do not apply to bodily injury or property damage:

a. which is expected or intended by the insured; ....”

The policy defines bodily injury as “bodily harm, sickness or disease, including required care, loss of services and death that results.” The policy defines occurrence as “an accident, including exposure to conditions, which results, during the policy period, in: a. bodily injury; _”

I. General principles are not disputed. Where insurance policies “are ambiguous, require interpretation, or are susceptible to two equally proper constructions, the court will adopt the construction most favorable to the insured.” Benzer v. Iowa Mut. Tornado Ins. Ass’n, 216 N.W.2d 385, 388 (Iowa 1974). This principle of construction is necessary because insurance policies are in the nature of adhesion contracts. A.Y. McDonald Indus. v. INA, 475 N.W.2d 607, 619 (Iowa 1991). Additionally, “[a]n insurer, having affirmatively expressed coverage through broad promises, assumes a duty to define any limitations or exclusionary clauses in clear and explicit terms.” Benzer, 216 N.W.2d at 388. Also, “[a] contract of insurance should be interpreted from a viewpoint of an ordinary [lay] person, not a specialist or expert.” Id. Therefore, “[w]hen words are left undefined in a policy [they will not be given] a technical meaning. Rather [they will be given] their ordinary meaning, one which a reasonable person would understand them to mean.” A.Y. McDonald, 475 N.W.2d at 619. Lastly, where parties disagree as to the meaning of terms, there is an objective test to determine whether the terms are ambiguous: “Is the language fairly susceptible to two interpretations?” Id.

II. By its terms the exclusion clause operates to prevent insurance coverage for an insured’s personal liability for bodily injury in two situations: (1) where the insured expected bodily injury; and (2) where the insured intended bodily injury. We first consider AMCO’s contention that the exclusion was triggered because Chris expected bodily injury.

We have defined the term “expected,” as used in exclusionary clauses of insurance policies. We said the term “denotes that the actor knew or should have known that there was a substantial probability that certain consequences will result from his actions.” Weber v. IMT Ins. Co., 462 N.W.2d 283, 287 (Iowa 1990). Substantial probability requires the indicators to be “strong enough to alert a reasonably prudent [person] not only to the possibility of the results occurring but the indications also must be sufficient to forewarn [that person] that the results are highly likely to occur.” Id.

There is no evidence Chris knew or should have known Matt’s death would result from the thrown ball. The tragic consequence here was, by all accounts, entirely unexpected. Chris plainly did not intend this tragic injury to Matt.

III. The much closer question is presented on AMCO’s claim that Chris intended bodily injury to Matt. We, like courts elsewhere, have explored what sort of intent will trigger an intentional injury exclusion. We adhere to the majority view, under which the exclusion is triggered where the insured intended both (1) to do the act which caused the injury, and (2) to cause some kind of bodily injury. Altena v. United Fire and Casualty Co., 422 N.W.2d 485, 488 (Iowa 1988). The intent to cause the injury may be either actual or inferred. Id. Intent may be inferred from the nature of the act and the accompanying reasonable foreseeability of harm. Id. In addition, “once intent to cause injury is found, it is immaterial that the actual injury caused is of a different character or magnitude than that intended.” Id.

AMCO thinks the facts here qualify for exclusion under our Altena holding. Chris and his parents defend against the exclusion clause by contending Chris's intent to “hurt” Matt, a mere matter of playground bickering, did not rise to the level of intent to bodily injure him, as contemplated in Altena. It was-on this point that Chris prevailed in district court and with the court of appeals majority.

We think Chris’s point is well taken. An eleven-year-old boy, animated by an obscure playground snit, lacks the same capacity to formulate an intent to injure that is possessed by an adult, or even a youth of more maturity. In this respect the present case differs from those from other jurisdictions, cited in support of AMCO. See Pachucki v. Republic Ins. Co., 89 Wis.2d 703, 278 N.W.2d 898 (1979) (a youth old enough to be employed in a print shop); Iowa Kemper Ins. Co. v. Stone, 269 N.W.2d 885 (Minn.1978) (a sixteen-year-old youth).

Chris and his parents can also rely on a direct defense on the basis of the wording of the policy, which differs from that in Altena. The exclusion in Altena was addressed to “any act committed by ... the insured with intent to cause personal injury.” Altena, 422 N.W.2d at 486. The exclusion involved here is not addressed to the insured’s act. Rather, AMCO’s exclusion is addressed to “bodily injury ... intended by the insured.” The target of this language is the injury specifically intended by the insured.

We in no way retreat from our holding in Altena; we merely hold it does not apply on this policy in these special circumstances. To apply Altena here would grossly overemphasize the vague, uncertain meanderings in the mind of an eleven-year-old child involved in a playground spat. The exclusion does not apply and the district court was correct in so holding.

DECISION OF COURT OF APPEALS AND JUDGMENT OF DISTRICT COURT AFFIRMED.

All Justices concur except SNELL, J., and McGIVERIN, C.J., and SCHULTZ, J., who dissent.