The United States Court of Appeals for the Tenth Circuit recently held that an employee who allegedly beat a fellow employee with a shovel was not entitled to coverage under the employer’s insurance policy because the incident was not a covered “occurrence,” despite assertion in the answer that the employee had acted in self-defense. Heart Mountain Irrigation District v. Argonaut Insurance Co., No. 08-8018 (10th Cir. Oct. 2, 2008).
James Flowers, a Heart Mountain Irrigation District (“Heart Mountain”) employee, allegedly struck a fellow employee with a shovel while the two men were working. Heart Mountain’s insurer refused to defend Mr. Flowers in the suit brought by the injured employee. Heart Mountain commenced a declaratory judgment action. The insurer subsequently moved to dismiss Heart Mountain’s declaratory judgment action, arguing that its policy did not apply because the underlying complaint did not allege an “occurrence” and because the policy excludes coverage for bodily injury “expected or intended from the standpoint of the insured.”
Heart Mountain argued that the underlying tort action fell within the policy’s coverage because Mr. Flowers’ conduct potentially fell within the definition of “accident.” Heart Mountain also contended that the policy’s “expected or intended injury exclusion” did not bar coverage because that exclusion contained an exception for bodily injury “resulting from the use of reasonable force to protect persons.” Because Mr. Flowers raised “self-defense” in his response to the underlying suit, Heart Mountain argued that the courts should look not only to the underlying complaint but also to Mr. Flowers’ answer to determine whether the insurer had a duty to defend under the policy.
Rejecting the insured’s argument, the District Court held that Mr. Flowers’ conduct was not an “accident” and, therefore, not an occurrence within the policy’s coverage. The District Court also held that coverage was barred under the policy’s expected or intended injury exclusion and that the exception was not triggered by the insured’s claim of self-defense because it was not alleged in the underlying complaint. The Court of Appeals affirmed.
Notably, the Court of Appeals did not reach the issue of whether the “reasonable force to protect persons” exception applied. The Court recognized that, unlike typical coverage provisions which turn on the nature of the claims asserted in the underlying complaint, the exception arguably turns on the substance of the insured’s defense to the suit. However, because Wisconsin law restricts coverage determinations to the allegations of the underlying complaint, which did not allege an “occurrence,” analysis of whether the exception applied was unnecessary.