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Farmers Automobile Insurance Association v. Michael C. Danner and Tracy Watson

February 23, 2012

FARMERS AUTOMOBILE INSURANCE ASSOCIATION,
PLAINTIFF-APPELLANT,
v.
MICHAEL C. DANNER AND TRACY WATSON,
DEFENDANTS-APPELLEES.



Appeal from Circuit Court of Vermilion County No. 07MR178 Honorable Derek J. Girton, Judge Presiding.

The opinion of the court was delivered by: Presiding Justice Turner

2012 IL App (4th) 110461

PRESIDING JUSTICE TURNER delivered the judgment of the court, with opinion.

Justice Knecht concurred in the judgment and opinion.

Justice Pope concurred in part and dissented in part, with opinion.

OPINION

¶ 1 In December 2007, plaintiff, Farmers Automobile Insurance Association (Farmers), filed a complaint for declaratory judgment maintaining it had no duty to defend defendants, Michael C. Danner and Tracy Watson, in the underlying lawsuit filed by defendant, David D. Winkler, because neither Danner's nor Watson's insurance policy provided coverage for the intentional acts alleged in Winkler's complaint. Thereafter, the parties filed cross-motions for summary judgment.

¶ 2 Following a May 2011 hearing, the Vermilion County circuit court denied Farmers' motion and granted Danner and Watson's motion, finding Farmers had a duty to defend Danner and Watson in the underlying lawsuit.

¶ 3 Farmers appeals, arguing the trial court erred in entering judgment for Danner and Watson where (1) the acts alleged in the underlying complaint were intentional and not negligent in nature, and (2) Watson's affirmative defense of self-defense was insufficient to trigger Farmers' obligation to defend her because the policy did not include a self-defense exception. We reverse and remand with directions.

¶ 4 I. BACKGROUND

¶ 5 In September 2007, Winkler filed a complaint in the underlying lawsuit (Vermilion County case No. 07-L-90) alleging two counts of battery. Specifically, Winkler alleged Danner and Watson committed a battery against Winkler after Winkler entered Danner's property to retrieve a baseball accidently hit onto Danner's property by Winkler's son.

¶ 6 Count I alleged when Winkler entered Danner's property, Danner got into his pickup truck, drove it at a high rate of speed, steered his truck off the lane, and struck Winkler. Winkler alleged "Danner intended that his actions harm Winkler." Count I further alleged Danner then exited the vehicle and struck Winkler three times with a golf club, breaking three of Winkler's ribs. Winkler attempted to subdue Danner by wrestling him to the ground.

¶ 7 Count II alleged while Winkler was struggling to subdue Danner, Watson came to the scene and kicked Winkler in the back and the ribs, causing one of Winkler's ribs to puncture his lung. Watson also allegedly struck Winkler about his body with her hands. Winkler alleged "Watson intended that her actions harm Winkler." Winkler sought compensatory damages in excess of $50,000.

¶ 8 Danner sought coverage from the lawsuit under the homeowners policy issued to him by Farmers. Similarly, Watson sought coverage under the homeowners policy issued by Farmers to her parents. However, Farmers refused to accept either Danner's or Watson's tender of defense, maintaining the two policies did not cover the intentional act of battery.

¶ 9 In December 2007, Farmers filed a complaint for declaratory judgment maintaining Farmers had no duty to defend because neither Danner's nor Watson's policy provided coverage for the intentional acts alleged in Winkler's complaint.

¶ 10 In June 2008, Farmers filed a motion for judgment on the pleadings, arguing it had no duty to defend Danner or Watson in the underlying lawsuit because (1) their actions were not accidental in nature and did not amount to an "occurrence" under the policies of insurance and (2) coverage for the actions as alleged in Winkler's complaint was barred by exclusions contained in the policies. Watson and Danner did not file a written response to the motion for judgment on the pleadings.

¶ 11 During the October 21, 2008, hearing on Farmers' motion for judgment on the pleadings, Danner and Watson asserted they had raised counterclaims and affirmative defenses involving self-defense. Danner and Watson argued the exclusion for intentional acts did not apply when reasonable force was used by the insured to protect persons and property. (There was some confusion over whether the policies contained an exception from exclusion for acts in self-defense.) Danner and Watson also asked the trial court to reserve ruling on the recently added negligence counts contained in the amended complaint in the underlying lawsuit. (Just prior to the hearing on Farmers' motion for judgment on the pleadings, Winkler amended his complaint in the underlying action and alleged two additional negligence counts. From the transcript of the hearing, it appears the amended complaint had not yet made it into the court file.)

¶ 12 Count III of Winkler's complaint alleged that, when Winkler entered Danner's property, Danner got into his pickup truck, and "in a fit of great rage" drove it at a high rate of speed. It further alleged "Danner's truck veered off the lane." Danner "failed to regain control of his truck" and struck Winkler. Winkler alleged "Danner owed a duty to Winkler and others present to exercise ordinary care in the operation of his truck" and as a "direct and proximate result of Danner's negligence" Winkler was injured by "Danner's failure to exercise ordinary care in the operation of his truck."

¶ 13 Count IV alleged Watson "attempted to stop the altercation, and indiscriminately hit and kicked at Winkler and Danner, striking Winkler." Winkler alleged Watson "acted negligently" when she kicked Winkler in the torso, puncturing his lung. Winkler further alleged his injuries were "a direct and proximate result of Watson's negligence."

¶ 14 Farmers admitted receipt of Winkler's amended complaint the previous day but asked the trial court to consider only the pleadings that were a matter of record as of the date of the hearing. The court did not consider the new amendments to the complaint in the underlying lawsuit.

¶ 15 At the conclusion of the hearing, the trial court, addressing only counts I and II, found the complaint alleged intentional acts, which were not covered. However, it denied Farmers' motion for judgment on the pleadings because it found the language of the policy required Farmers to "provide a defense *** even if it's determined the suit is groundless, false, or fraudulent."

¶ 16 In September 2009, this court reversed the trial court's judgment, finding the court "erred by reading the duty-to-defend language to impose a duty to defend any groundless, false, or fraudulent suit regardless of whether the bodily injury was caused by an 'occurrence to which this coverage applies.' " Farmers Automobile Insurance Ass'n v. Danner, 394 Ill. App. 3d 403, 411, 924 N.E.2d 1053, 1060 (2009). We remanded the cause to the trial court to reconsider in light of the current state of the pleadings in the underlying lawsuit.

¶ 17 In December 2009, Farmers filed an amended complaint for declaratory judgment, again arguing Danner and Watson were not entitled to coverage for the claims asserted against them in the underlying lawsuit.

¶ 18 In January 2010, Winkler stipulated he would be bound by the judgment in this case and was dismissed as a party in this case.

¶ 19 In October 2010, Danner and Watson filed a motion for summary judgment, arguing in addition to the underlying complaint, the trial court may also consider the other pleadings in the case in determining whether the insurer has a duty to defend. Danner and Watson maintained the court should therefore also consider the allegations contained in their affirmative defenses and counterclaims, which alleged Winkler committed a battery by initiating an attack against them. Danner and Watson also contended whether their acts were intentional, negligent, or in self-defense were questions for the ultimate trier of fact to determine and could not be determined in a declaratory judgment action.

¶ 20 In November 2010, Farmers filed a cross-motion for summary judgment, arguing the amended complaint alleged intentional acts of assault and battery, which are excluded from the coverage under the terms of the policy, and Winkler's characterization of the acts as negligent was just an attempt to trigger Farmers' duty to defend.

¶ 21 In January 2011, Danner and Watson filed their response to Farmers' cross-motion for summary judgment, arguing Farmers erroneously maintained the trial court may only consider the underlying complaint and the insurance policy. They argued instead under the supreme court's ruling in Pekin Insurance Co. v. Wilson (Wilson II), 237 Ill. 2d 446, 930 N.E.2d 1011 (2010), the trial court may consider ...


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