Farmers Insurance Company, Inc. v. Buddy Suiter

FARMERS INSURANCE COMPANY, Inc. v. 
Buddy SUITER

CA 97-887                                          ___ S.W.2d ___

                  Court of Appeals of Arkansas
                           Division II
                Opinion delivered March 18, 1998


1.   Judgment -- summary judgment -- when proper. -- Summary judgment is an
     extreme remedy and is only proper when the pleadings and proof
     show that no genuine issue of material fact exists and that
     the moving party is entitled to judgment as a matter of law.

2.   Judgment -- summary judgment -- standard of review. -- Under the
     standard of review for appealing the grant of summary
     judgment, the appellate court need only decide if the granting
     of the summary judgment was appropriate based upon whether the
     evidentiary items presented by the moving party left a
     material question of fact unanswered. 

3.   Judgment -- summary judgment -- movant's burden. -- The moving party
     has the burden of sustaining the motion for summary judgment;
     all proof submitted must be viewed in a light most favorable
     to the party resisting the motion, and any doubts and
     inferences must be resolved against the moving party.

4.   Insurance -- insurer's duty to defend -- general rule. -- The general
     rule is that the pleadings against the insured determine the
     insurance company's duty to defend; the duty to defend is
     broader than the duty to pay damages, and the duty to defend
     arises if there is a possibility that the damage may fall
     within the policy coverage. 

5.   Insurance -- policy -- construction of language. -- The appellate court
     construes the language of an insurance policy in its clear,
     ordinary, and popular sense. 

6.   Insurance -- insurer's duty to defend -- harassing telephone calls --
     "plain ordinary person" test applied -- summary judgment reversed. --
     Where appellee intentionally made numerous anonymous telephone
     calls to the complaining party, the appellate court, applying
     the test in CNA Ins. Co. v. McGinnis, 282 Ark. 90, 666 S.W.2d 689 (1984), found it hard to say that a plain ordinary person
     would not expect and intend both emotional and physical
     distress to result from a continuing barrage of harassing
     telephone calls; for the appellee to declare that he did not
     intend to cause injury flew in the face of all reason, common
     sense, and experience; therefore, the court of appeals,
     holding that the trial court, which had found that appellant
     had a duty to defend under a homeowner's insurance policy,
     erred in granting appellee's motion for summary judgment and
     in denying appellant's motion for summary judgment, reversed
     and ordered the trial court to enter an order consistent with
     the appellate court's opinion.

     Appeal from Crittenden Circuit Court; David Burnett, Judge;
reversed.
     Huckabay, Munson, Rowlett & Tilley, P.A., by: Julia L.
Busfield, for appellant.
     No response.

     Sam Bird, Judge. 
     Farmers Insurance Company, Inc., appeals from a decision of
the Crittenden County Circuit Court, which granted a partial
summary judgment to appellee, Buddy Suiter, finding that appellant
had a duty to defend appellee under a policy of homeownerþs
insurance.  We reverse.
     On June 5, 1992, Vera Simonetti filed a complaint against
appellee Suiter alleging that appellee had placed numerous
anonymous telephone calls to her for the purpose of harassing,
threatening, and frightening her, and seeking damages for causing
humiliation, mental anguish, and emotional and physical distress.
At the time of the alleged telephone calls, appellee was the
insured under a policy of homeownerþs insurance issued by
appellant. By virtue of that insurance policy, the appellant
initially hired the Blytheville law firm of Reid, Burge, Prevallet
& Coleman (hereinafter Reid law firm) to provide appellee with a
defense to Simonettiþs claims, but reserved the right to terminate
its defense if it determined that, under the policy, no coverage
existed to Simonettiþs claims.  Appellant later contended that,
based upon the allegations of Simonettiþs complaint, no possibility
of coverage existed for those claims and it had no duty to defend
appellee against Simonettiþs claims or to pay any judgment that
might be rendered against appellee.  Thereafter, Reid law firm
attempted to withdraw as attorneys for appellee, alleging that
appellant had no duty to defend.  The court at first entered an
order that permitted the withdrawal, but it later set aside that
order after learning that Simonetti had filed an amended complaint
alleging that even though appelleeþs conduct in making the
telephone calls was intentional, appellee þmay not have intended
the results,þ and that in the alternative, Simonettiþs damages were
þnegligently inflicted, should the jury find that they were not
intentionally inflicted.þ
       On May 20, 1993, appellee filed a third-party complaint
against appellant seeking to establish that his homeownerþs policy
provided coverage for Simonettiþs claims and that appellant had a
duty to defend him against those claims.  Appellant denied that
its policy imposed upon it a duty to provide either.  On July 7,
1996, appellant filed a motion for summary judgment on the third-
party complaint, arguing that based upon the definition of the word
þoccurrenceþ contained in the policy and the language of the policy
stating that it provided no coverage for intentional acts, it had
neither a duty to defend nor a duty to pay damages.  Appellee
responded that there were questions of fact as to whether the
policy provided coverage, and he also filed a motion for partial
summary judgment on the issue of appellantþs duty to defend.  The
court entered an order granting appelleeþs motion for partial
summary judgment and denying the appellantþs motion for summary
judgment.  The court severed the issues of the duty to defend and
the duty to pay damages, ordering that appellant had a duty to
provide a defense, but holding in abeyance the issue of appellantþs
duty to pay damages until the resolution of Simonettiþs claim
against appellee.  The court ordered that appelleeþs own personal
attorney be paid by the appellant.
     On October 14, 1995, a jury returned a verdict in favor of
Simonetti and against appellee and awarded compensatory damages of
$1,000 and punitive damages of $10,000.  On November 18, 1996, the
appellant renewed its motion for summary judgment, contending that
there was no duty to pay damages in the amount of the judgment
against appellee, and for reconsideration of the courtþs order
granting partial summary judgment in favor of appellee on the issue
of whether appellant had a duty to defend. On April 28, 1997, the
court granted the appellantþs summary judgment motion on the issue
of duty to pay damages but denied the appellantþs motion for
reconsideration of his previous order finding that appellant owed
a duty to defend. 
     Appellant filed its notice of appeal from the April 28 order,
alleging that the court erred in finding that the appellant had a
duty to defend because the insurance policy did not cover
intentional torts.  Further, appellant contends that þThis
amendment to [the] complaint occurred after it was apparent there
was no coverage and would be no defense and was clearly intended to
attempt to trigger coverage.þ 
     It is a well-settled rule that summary judgment is an extreme
remedy and is only proper when the pleadings and proof show that no
genuine issue of material fact exists and that the moving party is
entitled to judgment as a matter of law.  Ark. R. Civ. P. 56;
Talley v. MFA Mutual Ins. Co., 273 Ark. 269, 620 S.W.2d 260 (1981).
The standard of review for appealing the grant of summary judgment
is well-established: this court need only decide if the granting of
the summary judgment was appropriate based upon whether the
evidentiary items presented by the moving party left a material
question of fact unanswered.  The moving party has the burden of
sustaining the motion for summary judgment.  All proof submitted
must be viewed in a light most favorable to the party resisting the
motion, and any doubts and inferences must be resolved against the
moving party.  Sublett v. Hipps, 330 Ark. 58, 952 S.W.2d 140
(1997).  See also Milam v. Bank of Cabot, 327 Ark. 256, 937 S.W.2d 653 (1997);  Renfro v. Adkins, 323 Ark. 288, 914 S.W.2d 306 (1996). 
     The general rule is that the pleadings against the insured
determine the insurance companyþs duty to defend.  Madden v.
Continental Cas. Co., 53 Ark. App. 250, 922 S.W.2d 731 (1996). The
duty to defend is broader than the duty to pay damages, and the
duty to defend arises if there is a possibility that the damage may
fall within the policy coverage. Id.  This court construes the
language of an insurance policy in its clear, ordinary, and popular
sense.  Tri-State Ins. Co. v. Sing, 41 Ark. App. 142, 850 S.W.2d 6
(1993). 
     Simonetti first alleged that the appellee intentionally made
harassing phone calls with the intent to cause her to suffer
humiliation, mental anguish, and emotional and physical distress. 
Further, she alleged þsuch calls were made with knowledge that
Simonetti would become emotionally and physically distressed and
with the intent to harass, disturb, annoy, and molest Simonetti. 
Such calls were made with a wanton and reckless disregard of the
consequences to Simonetti.þ  She later amended her complaint to
state that appellee intended to make the calls but may not have
intended the results that the calls produced. 
     The language of the policy in question reads:  þWe shall pay
all damages from an occurrence which the insured is legally liable
to pay because of bodily injury or property damage covered by this
policy.þ  Occurrence is defined in the policy as þa sudden event,
including repeated or continuous exposure to the same conditions,
resulting in bodily injury or property damage neither expected nor
intended by the insured.þ
     This issue has been presented to the courts before; however,
the factual basis has been different.  In Talley v. MFA Mutual Ins.
Co., supra, three teenagers were attending a party when a fight
ensued.  One of the teenagers, who had been drinking, left the
party and procured a shotgun.  He came back and shot out the
windows of one of the cars in the driveway.  Then he drove around
the block, and during that time, the two other teenagers came
outside and hid behind the cars.  The teenager with the shotgun
fired again, hitting the others, but claiming that he did not know
they were outside and, because it was at night, he could not see
them hiding behind the cars.  The supreme court held that the trial
court erred in granting summary judgment because "a fact issue
exists as to whether he intended to hit or injure [the victims]. 
Many acts are intentional in one sense or another; however,
unintentional results often flow from intentional acts.þ  Id. at
274, 620 S.W.2d  at 263.  The court distinguished unintentional acts
from intentional acts and stated, þwe see no violation of public
policy in allowing recovery in circumstances in which it is shown
that results were accidental or unintended.þ  Id.  The court also
held that the trial court had erred in granting summary judgment
against the insureds, the parents of the teenager firing the shots,
because the result of the act was not expected or intended when
looked at from the standpoint of the insureds.  Id.
     In CNA Ins. Co. v. McGinnis, 282 Ark. 90, 666 S.W.2d 689
(1984), the court reversed a court of appeals decision that
affirmed a ruling by the trial court that there was coverage under
a homeownerþs insurance policy where even though the acts of sexual
assaults and abuse inflicted by a man against his stepdaughter were
intentional, the results of such abuse were not intentional.  The
court wrote that the test is þwhat a plain ordinary person would
expect and intend to result from a mature manþs deliberately
debauching his six-year-old stepdaughter and continuing to do so
for years,þ and concluded that þit flies in the face of all reason,
common sense, and experienceþ for the perpetrator to claim that he
did not intend by his actions to cause injury to the child.  Id. at
93, 666 S.W.2d  at 691. 
     Talley and McGinnis are clearly distinguishable from each
other.  In Talley v. MFA Mutual Ins. Co., supra, the supreme court
upheld a trial courtþs determination that there was a fact question
as to whether the injury to the two teenagers was the unintentional
result of an intentional act where the teenager firing the shots
contended that he could not see that the victims were outside since
it was dark and they were hiding behind the car.  However, in CNA
Ins. Co. v. McGinnis, supra, the insured clearly intended the
results of his actions.  He was cognizant of what he was doing and
could not have reasonably believed that no harm would occur.  
     We find the case at bar to be controlled by CNA Ins. Co. v
McGinnis, supra.  The appellee in this case intentionally made
numerous anonymous telephone calls to Simonetti.  Like the supreme
court in McGinnis, we find it hard to say that a plain ordinary
person would not expect and intend both emotional and physical
distress to result from a continuing barrage of harassing telephone
calls.  For the appellee to declare that he did not intend to cause
injury þflies in the face of all reason, common sense and
experience.þ  CNA Ins. Co. v. McGinnis, supra.  Therefore, we find
that the trial court erred in granting appelleeþs motion for
summary judgment and in denying appellantþs motion for summary
judgment.  We reverse and order the trial court to enter an order
consistent with this opinion.
     Reversed.
     Meads and Roaf, JJ., agree.