Grinnell Mutual Reinsurance Co. v. Thompson

KAPSNER, Justice,

concurring in the result.

[¶ 20] I concur with the result reached by the majority. However, I would reach that result in reliance on the intentional act exclusion of the policy. The exclusion is express, unambiguous, and in accord with the legislative policy of this State.

[¶ 21] The policy exclusion provides:

A. We do not provide Liability Coverage for any “insured”:
1. Who intentionally causes “bodily injury” or “property damage”.

The Thompsons do not assert the collision was unintentional.

[¶ 22] This Court has not directly addressed whether motor vehicle liability policies may deny coverage for intentional acts. In Auto. Club Ins. Co. v. Hoffert, 195 N.W.2d 542, 545-46 (N.D.1972), the insurer argued it could deny coverage under a motor vehicle liability policy for an accident in which the insured intentionally caused the accident. However, this Court determined the accident at issue was not intentional and therefore did not reach the issue of whether the insurer could deny coverage for intentional acts. Id. at 546.

[¶ 23] Both the dissent and the majority fail to mention two pertinent statutes. Section 26.1-32-04, ' N.D.C.C., provides: “An insurer is not liable for a loss caused by the willful act of the insured.... ” “This law is an express statement of public policy that an insured cannot be indemnified for losses caused by his own willful conduct.” Cont’l Cas. Co. v. Kinsey, 499 N.W.2d 574, 580 (N.D.1993) (dealing with professional liability insurance). See also Hins v. Heer, 259 N.W.2d 38, 40 (N.D. 1977) (in reference to N.D.C.C. § 26.1-32-04, stating: “[T]he North Dakota Legislature has expressly enacted into law public policy stating that an insured cannot be indemnified for losses caused by his own willful acts.”) (dealing with homeowner’s insurance). In addition, N.D.C.C. § 9-08-02 states: “All contracts which have for their object, directly or indirectly, the exempting of anyone from responsibility for that person’s own fraud or willful injury to the person or property of another ... whether willful or negligent, are against the policy of the law.”

[¶ 24] Together, N.D.C.C. §§ 9-08-02 and 26.1-32-04 “manifest a public policy of discouraging persons from committing fraud or other willful acts that cause injury to others.” Cont’l Cas. Co., 499 N.W.2d at 581. Accord Capitol Indem. Corp. v. Evolution, Inc., 293 F.Supp.2d 1067, 1074 (D.N.D.2003) (under North Dakota law, “public policy precludes an insured from being indemnified for losses caused by the insured’s intentional or willful conduct”) (citing N.D.C.C. §§ 9-08-02, 26.1-32-04). “These statutes foster that public policy by prohibiting contracts which would exempt a person from being held responsible for the consequences of his wrongful intentional conduct (Section 9-08-02, N.D.C.C.) and by precluding insurers from indemnifying insureds for losses caused by the insured’s willful acts (Section 26.1-32-04, N.D.C.C.).” Cont’l Cas. Co., at 581. See also Haser v. Maryland Cas. Co., 78 N.D. 893, 53 N.W.2d 508, 512 (1952) (holding automobile liability insurance policy does not cover taxicab driver who raped a passenger because public policy does not allow a person “to insure against liability arising directly against the insured from his willful wrong”).

[¶ 25] The dissent argues N.D.C.C. § 39-16.1-ll(2)(b) requires motor vehicle *535liability policies cover intentional acts because the statute states such policies must insure against loss from liability “arising out of the ownership, maintenance, or use of such motor vehicles.... ” (Emphasis added). Because “use” covers both intentional and inadvertent accidents, the dissent argues, the financial responsibility laws prohibit Grinnell Mutual from denying coverage for intentional acts. In addition, the dissent claims in passing the financial responsibility laws, the Legislature intended to protect the innocent victims of motor vehicle accidents. As support, the dissent quotes Hughes v. State Farm Mut. Auto. Ins. Co., 236 N.W.2d 870, 882 (N.D. 1975), which states: “The basic purpose for the Legislature’s enactment of financial responsibility laws was to protect innocent victims of motor vehicle accidents from financial disaster.” In Hughes, at 882, this Court cited page 93 of the 1967 Report of the North Dakota Legislative Research Committee, which stated: “Financial responsibility laws have as their objective the compensation of innocent victims of traffic accidents. Thus, they are more concerned with the solution of economic problems created by traffic accidents than with the prevention of traffic accidents.”1

[¶ 26] The report prepared by the legislative research committee does not make any additional reference to innocent victims. Further, the two sentences in a report do not negate the express provisions of the statute itself. The financial responsibility laws provide a vehicle owner’s “policy of liability insurance” must:

insure the person named therein and any other person, as insured, using such motor vehicle or motor vehicles with the express or implied permission of such named insured, against loss from the liability imposed by law for damages arising out of the ownership, maintenance, or use of such motor vehicles....

N.D.C.C. § 39-16.1-ll(2)(b). (Emphasis added). By the express statutory language not all “use” is covered, only use with the express or implied permission of the named insured is covered.

[¶ 27] While it is undoubtedly true the financial responsibility laws exist to protect innocent victims, it is also manifestly clear they were not intended to protect all innocent victims. Some, but not all. Innocent victims who are injured, even killed, by drivers who are driving without permission, are expressly excluded from the protections of N.D.C.C. § 39-16.1-ll(2)(b). Thus, the dissent’s theory of the legislative intent in enacting this statute is overstated. In light of N.D.C.C. § 26.1-32-04, is it so incongruous to say that the person who uses a vehicle to intentionally inflict injury or damage will receive no greater coverage than the person who uses a vehicle without permission?

[¶ 28] Other than a single sentence in a legislative report, the dissent quotes no other legislative history to support the dissent’s sweeping statement of legislative policy and I have found none. That single statement must be weighed against the express language of a statute which authorizes the intentional act exclusion:

Willful act exonerates insurer, negligence does not. An insurer is not liable for a loss caused by the willful act of the *536insured, but the insurer is not exonerated by the negligence of the insured or of the insured’s agents or others.

N.D.C.C. § 26.1-32-04.

[¶ 29] I acknowledge that other courts have interpreted their financial responsibility laws to cover intentional acts. However, the dissent fails to note that some jurisdictions, although a minority, have held insurers may exclude intentional acts. See State Farm Mut. Auto. Ins. Co. v. Wertz, 540 N.W.2d 636, 639-40 (S.D.1995) (holding public policy precludes insurance coverage for intentional acts despite financial responsibility laws requiring coverage for damages caused by “accidents ... arising out of the ownership, maintenance, or use of a vehicle ... ”); Williams v. Diggs, 593 So.2d 385, 387 (La.Ct.App.1991) (holding motor vehicle insurer could deny coverage for intentional acts despite statute requiring insurance for damages arising out of the ownership, maintenance, or use of the vehicle “in view of the strong policy against allowing persons to insure themselves against liability for injuries they intentionally inflict”); Utica Mut. Ins. Co. v. Travelers Indem. Co., 223 Va. 145, 286 S.E.2d 225, 226 (1982) (holding motor vehicle insurer was not required to provide coverage for injuries caused by an intentional act because Virginia law only requires coverage for losses “caused by accident”); and Snyder v. Nelson, 278 Or. 409, 564 P.2d 681, 684 (1977) (holding motor vehicle liability insurer could deny coverage for intentional acts despite statute requiring coverage for “accidents ... arising out of the ownership, operation, maintenance or use of a vehicle” because “it is against public policy for a tortfeasor to insure against liability for intentionally inflicted injury or damage”).

[¶ 30] If I were a legislator, I might be persuaded the policy the dissent would announce is a good policy, but in light of N.D.C.C. § 26.1-32-04, until our legislative assembly articulates that policy, I am bound by the plain language of our statutes.

[¶ 31] Section 26.1-32-04, N.D.C.C., provides: “An insurer is not liable for a loss caused by the willful act of the insured....” Section 39-16.1-ll(2)(b), N.D.C.C., states motor vehicle liability policies must “insure ... against loss from the liability imposed by law for damages arising out of the ownership, maintenance, or use of such motor vehicles.... ” As N.D.C.C. § 39-16.1-ll(2)(b) does not distinguish between intentional and inadvertent acts, while N.D.C.C. § 26.1-32-04 explicitly provides an insurer is not liable for loss caused by willful acts, this Court can give effect to both statutes by holding motor vehicle liability policies may deny coverage for intentional acts.

[¶ 32] The intentional act exclusion of the Grinnell policy does not violate the legislative policy of this State. I, therefore, concur in the result reached by the majority.

[¶ 33] CAROL RONNING KAPSNER

. The single statement quoted by the dissent is not part of a broad policy statement actually made by the Legislature but rather part of a short explanation of why the legislative research committee was recommending to the Legislature dividing “chapter 39-16 of the North Dakota Century Code in two so that the laws relating to the requirements for establishing proof of financial responsibility for the future, and for establishing security following an accident are no longer commingled.” Report of the North Dakota Legislative Research Committee 94 (1967).