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Country Mutual Insurance Co. v. Lund

United States District Court, D. Oregon

July 14, 2014


Andrew D. Glascock, Jennifer A. Durham, HIEFIELD FOSTER & GLASCOCK, LLP, Portland, Oregon, Attorneys for Plaintiff.

William J. Macke, WILLIAM J. MACKE & ASSOCIATES, Portland, Oregon, Attorney for Defendant Jonathan Lund.


MARCO A. HERNANDEZ, District Judge.

In this action, Plaintiff Country Mutual Insurance Company seeks a judgment declaring that it has no duty to defend its insured Defendant Jonathan Lund in a separate civil action ("the Underlying Action"), and that it has no duty to indemnify any of the Defendants for any adverse judgment against them in the Underlying Action. Lund moves to dismiss the claims against him, or alternatively, moves to stay the claims pending resolution of the Underlying Action. Because I agree with Lund that Plaintiff has a duty to defend him in the Underlying Action, I grant the motion to dismiss that claim. Although I also agree with Lund that the indemnification claim should not be resolved now, I stay rather than dismiss the claim.


The Underlying Action is a civil case brought by Sue Ellen Dennis individually and on behalf of the estate of her deceased husband Donald Dennis. That case is assigned to me and has been assigned case number 03:14-cv-00593-HZ. The Amended Complaint in that case names the City of Portland, Portland Police Officer Dionisio Morales, and Lund as Defendants. There, Sue Ellen Dennis alleges that Lund invited Donald Dennis to Lund's home on April 14, 2012, and served both himself and Lund alcohol until both men became extremely intoxicated. Underlying Action Am. Compl. at ¶ 8. The two men began to physically fight. Id . Morales arrived at the home and tasered Donald Dennis, leaving him incapacitated and unable to protect himself. Id. at ¶ 9. Lund then got on top of Donald Dennis, smashed his head into the floor at least three times, and punched him in the head at least three times. Id . Donald Dennis was unconscious. Id. at ¶ 11. He was taken to a hospital and diagnosed with broken facial bones and brain trauma. Id . He may have suffered a stroke. Id . He never regained consciousness and died on April 19, 2012. Id.

Based on these facts, Sue Ellen Dennis brings three claims against the City and Morales, and a fourth claim against Lund for "Wrongful Death, Negligence, Assault and Battery." In that claim, after generally repeating the allegations contained in the earlier paragraphs of the Amended Complaint, id. at ¶ 24 (alleging, among other facts, that "Lund carelessly, recklessly and intentionally began to physically fight with Mr. Dennis"), she further alleges that as a "direct and proximate cause of defendant Lund's negligence, assault and battery of Mr. Dennis[, ] [Mr. Dennis] suffered death, brain injury, broken bones, a stroke, permanent physical injury, physical injury, pain and suffering, emotional trauma, and economic loss." Id. at ¶ 25. Sue Ellen Dennis asserts that Lund "had a duty not to over-serve Dennis alcohol and not to smash Dennis's head into the ground and punch him in the head while he was incapacitated." Id. at ¶ 26. She further asserts that Lund breached this duty. Id . According to Sue Ellen Dennis, it was foreseeable, and a reasonable person would be aware, that over-serving a guest would lead to injury and that "intoxicated fighting [with] an incapacitated guest after over-serving him alcohol and smashing his head into the ground and punching him in the head would cause injury and grave injury." Id . She then alleges that Lund breached his duty of reasonable care. Id.


In its First Amended Complaint in the instant case, Plaintiff alleges that at all relevant times, Plaintiff insured Lund under a homeowner's insurance policy ("the Policy"). First. Am. Compl. at ¶ 8. Sue Ellen Dennis made a claim under the Policy for the wrongful death of Donald Dennis. Id. at ¶ 9. In responding to the claim, Plaintiff reserved its right to decline coverage for both a defense of the claim and indemnification of the claim. Id. at ¶ 13. As indicated above, Plaintiff seeks a judicial declaration that it has no duty to defend Lund in the Underlying Action and no duty to indemnify any of the Defendants for any adverse judgment in the Underlying Action. Id. at ¶¶ 15-23.

I. Duty to Defend

To determine if an insurer has a duty to defend, a court looks only to the facts in the complaint to evaluate whether "the complaint could, without amendment, impose liability for conduct covered by the policy." Ledford v. Gutoski , 319 Or. 397, 399-400, 877 P.2d 80, 82 (1994). "[I]f the complaint provides any basis for which the insurer provides coverage, " an insurer is obligated to defend. Id. at 400, 877 P.2d at 83. Further, "[a]n insurer should be able to determine from the face of the complaint whether to accept or reject the tender of the defense of the action." Id., 877 P.2d at 82. As such, a court's review is limited to the four corners of the complaint and the insurance policy. Bresee Homes, Inc. v. Farmers Ins. Exch. , 353 Or. 112, 116, 293 P.3d 1036, 1039 (2012) (court looks at "two documents to determine whether an insurer has a duty to defend against an action against its insured: the insurance policy and the complaint in the action against the insured."). "Any ambiguity in the complaint with respect to whether the allegations could be covered is resolved in favor of the insured." Ledford , 319 Or. at 400, 877 P.2d at 84.

The Policy provides insurance coverage, including a defense, for an "occurrence, " which is defined as an "accident, ... which results, during the policy period, in: (1) Bodily injury; or (2) "Properly damage." First Am. Compl. at ¶ 17. "Bodily injury" is defined as "physical injury to a person." Id . The Policy also contains exclusions for "expected or intended injuries, " and "criminal acts" which the Policy further defines. Id. at ¶¶ 18, 19.

Lund argues that Plaintiff's duty to defend claim must be dismissed because the Amended Complaint in the Underlying Action alleges that Lund's negligence caused Donald Dennis's death. He argues that although the Underlying Action also alleges assault and battery claims against Lund, a reasonable person could, on the facts alleged, determine that Lund was negligent in becoming intoxicated and fighting Donald Dennis. Further, he contends that the intoxication could reasonably negate an intent element of a battery claim or intent to commit a crime. Because a reasonable person could interpret the allegations against him in the Underlying Action to include covered matters, Plaintiff owes him a duty to defend.

I agree. While it may be that a jury agrees with Plaintiff that Lund's actions were not "accidental, " but were intentional or criminal, the Amended Complaint in the Underlying Action clearly alleges negligence as an alternative claim to assault and battery. The facts alleged could support the negligence theory. The law is clear that even if the complaint contains allegations of conduct or damage excluded by an insurance policy, the insurer owes a duty to defend if the complaint also contains allegations for which there is coverage or which can be interpreted to fall within coverage. Paxton-Mitchell Co. v. Royal Indem. Co. , 279 Or. 607, 611, 569 P.2d 581, 584 (1977) ("If the complaint contains some allegations of conduct or damage excluded from the ...

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