No. 82-379
I N THE SUPREME COURT OF T H E STATE OF MONTANA
1983
MILLERS MUTUAL INSURANCE COMPANY,
plaintiff and Respondent,
vs.
ANTHONY STRAINER,
Defendant and A p p e l l a n t .
Appeal from: D i s t r i c t Court of the F i r s t J u d i c i a l D i s t r i c t ,
I n and f o r t h e County o f Lewis and C l a r k
H o n o r a b l e Gordon R. B e n n e t t , J u d g e p r e s i d i n g .
Counsel of Recodrd:
For Appellant:
J a c q u e s , G a l l a g h e r & Murphy, H e l e n a , Montana
Leo J . G a l l a g h e r a r g u e d , H e l e n a , Montana
For Respondent:
K e l l e r , Reynolds, Drake, Sternhagen & Johnson, Helena,
Montana
P . K e i t h K e l l e r a r g u e d , H e l e n a , Montana
F o r Amicus C u r i a e :
Utick, Grosfield & Uda, Helena, Montana
Submitted: March 8 , 1 9 8 3
Decided: May 1 9 , 1 9 8 3
Filed: MAY 19 1983
Mr. Justice Frank R. Morrison, Jr. delivered the Opinion of
the Court.
This is an appeal from a declaratory judgment entered by
the District Court of the First Judicial District, State of
Montana, determining that Millers Mutual Insurance Company
(Respondent) had no liability for coverage or defense to
Anthony Strainer (Appellant). We vacate the judgment of the
District Court.
On December 16, 1981, respondent brought a declaratory
judgment action against appellant to determine the parties'
rights, liabilities and duties under a homeowner's policy
issued by respondent to appellant. Previously appellant had
been named as a co-defendant with ASARCO, Inc., in a personal
injury action brought by one Alfred Elwell. Respondent
sought a declaration that it was not required to provide
coverage or afford defense of the action because the
allegations underlying the third party action were outside
the scope of coverage of the issued policy.
On October 18, 1979, in the ASARCO plant in East Helena,
Alfred Elwell was allegedly injured when he was the object of
a practical joke played by Strainer, a co-employee. Workers
at the ASARCO plant are required to wear respirators in a
portion of the plant. Due to complaints by the workers that
the respirators were leaking, the respirators were being
checked by means of a test which pumped air through a glass
tube filled with a solid chemical. The forced air produced
smoke which was then directed into the faces of the workers
wearing respirators. After the tests were completed and
without knowledge on the part of Elwell, the appellant
removed a filter tube in Elwell's respirator and, according
to the agreed facts, Strainer then:
". . . squirted a puff of the smoke into the
respirator's air chamber. Mr. Strainer knew the
dust caused people to cough, but did not know the
chemical contents of the glass tube, stanic
oxychoride, was [sic] dangerous and did not know
the smoke would cause any injury other than
momentary discomfort as a result of coughing and
inserted the smoke solely as a practical joke."
Elwell inhaled the smoke and allegedly was seriously
injured. On October 15, 1981, Elwell filed suit against
ASARCO and appellant, claiming they were liable to him for
his injuries. ASARCO subsequently moved for and was granted
a summary judgment based upon the exclusive remedy afforded
by workers' compensation. However, the action against
appellant was premised upon an intentional act and therefore
fell outside the exclusive remedy provisions of workers'
compensation.
The issue presented here is whether an intentional act
sufficient to remove a case from the exclusive remedy
provisions of the Worker's Compensation Act is the kind of
intentional act which denies coverage in a third party action
based upon the "intentional act" exclusions of an insurance
policy. If the intentional act contemplated by workers'
compensation law is the same type of intentional act
contemplated by the insurance policy exclusion, then the
appellant must fail.
Respondent presents a second but related issue.
Respondent contends that Elwell's complaint, in Paragraph VI,
alleges that the appellant Strainer intended Elwell's
injuries and that irrespective of what the stipulated facts
show, there can be no coverage where the complaint invokes
the policy exclusion.
Paragraph V of Elwell's complaint alleged, in pertinent
part, that the appellant Strainer "maliciously, wilfully, and
intentionally . . . squirted hydrogen chloride gas, or other
comparble acid and abrasive gases, into [Elwell's] respirator
hoses, causing [Elwell] to go into convulsions and to he
permanently and seriously injured."
Paragraph VI of the complaint alleged:
"That [Elwell' s] serious and totally and
permanently disabling injuries were the proximate
result of [Strainer's] malicious, wilfull, and
intentional acts; that [Strainer] is, despite his
position as safety officer at ASARCO Inc.'s East
Helena Smelter, known on the job as a 'clownf and
'practical jokerf, which was known to Defendant
ASARCO, Inc. both before and after the incident
herein complained of, and ASARCO, Inc. failed both
before and after this incident to take any measures
to prevent [Strainer], its employee and agent, from
causing injury to others; that since the incident
complained of, ASARCO, Inc. has further ratified
and approved the conduct of [Strainer] complained
(Emphasis supplied)
It was upon Paragraph VI, and specifically the
emphasized language, that the trial court based its
conclusion that the policy involved excluded coverage for
damages or for defense of the third party action. The
insurance policy provided for coverage for all damages
appellant became legally obligated to pay "because of bodily
injury or property damage .. . caused by an occurrence," but
specifically excluded coverage for "bodily injury or property
damage which is either expected or intended from the
standpoint of the insured."
For Elwell to bring a third party action, and not be
barred by the exclusive remedy of workers' compensation, he
must fall within the provisions of section 39-71-41.3, MCA,
which provides as follows:
"Liability of fellow employee for intentional and
malicious acts or omissions--additional cause of
action. If an employee receives an injury while
performing the duties of his employment and - the
injury or injuries so received & the employee are
caused & the inteytional and malicious - - act or
omission - - servant or employee - - employer,
of a of his
then the employee
- - . . .
shall, in addition to the
right to receive compensation under the Workersf
Compensation Act, have a right to prosecute any
cause of action he may have for damages against the
servants or employees of his employer causing the
injury. " (Emphasis added)
The underlined language must be compared to the language
of exclusion in the insurance policy. As previously noted
the policy excluded coverage for "bodily injury or property
damage which is either expected or intended from the
standpoint of the insured. " The language of section
39-71-413, MCA, refers to an intentional act without regard
to intending the results of the act. The exclusion in the
insurance policy does not exclude intentional acts but only
excludes bodily injury which is intended.
Respondent relies upon Enberg v. Anaconda Company
(1971), 158 Mont. 135, 489 P.2d 1036 and Great Western Sugar
Co. v. District Court (1980), Mon t . , 610 P.2d 717,
37 St.Rep. 874, for the proposition that section 39-71-413,
MCA, requires intentional injury before a third party action
may be brought. However, these two cases did not turn on the
distinction between intentional act and intentional injury.
Rather this Court determined that the conduct in question
fell short of the type of intentional conduct necessary to
create the third party action. In Great Western Sugar this
Court concluded:
" . . .the 'intentional harm' which removes an
employer from the protection of the exclusivity of
the Workers' Compensation Act is such harm as is
maliciously and specifically directed at an
employee, or class of employees, out of which such
specific intentional harm the employee receives
injuries as a proximate result. Any incident
involving a lesser degree of intent or general
degree of negligence not pointed specifically and
directly at the injured employee is barred by the
exclusivity clause as a basis for recovery against
the employer outside the Workers' Compensation
Act." Great Western Sugar, supra, 610 P.2d at 720,
37 St.Rep. at 877.
The above quoted language is more supportive of
appellant's position than it is of respondent's. However, we
find the case of Northwestern National Casualty vs. Phalen
(1979), 182 Mont. 448, 597 P.2d 720, to be more nearly on
point. In the Phalen case the plaintiff alleged in Count I,
that the insured and one Harry Johnson wilfully, maliciously
and wrongfully assaulted him, and in Count 11, alleged that
the insured "negligently, carelessly, and wrongfully
assault[edl [him], and . . . negligently and carelessly
cause[d] [him] personal injuries." The court interpreted the
provision which excluded from coverage bodily injury which
"is either expected or intended from the standpoint of the
insured." The court held that where the results of the
insured's intentional acts are unexpected or unintended, the
policy would provide coverage.
Phalen clearly established that intentional acts are not
excluded under an insurance policy unless the intentional act
results in injuries which would be expected or intended. A
person may act intentionally without intending or expecting
the consequences of that act.
Respondent argues that for one to act malicously one
must necessarily intend the consequences of the act.
Respondent relies upon Boyer v. Kloepfer (1976), 170 Mont.
472, 554 P.2d 1116, wherein this Court equated malice with an
intent to injure. However, the general definition of malice
is more expansive. In Cashin v. Northern Pac. R. Co.,
(1934), 96 Mont. 92, 28 P.2d 862, this Court defined malice
as "a wish to vex, annoy or injure another person, - an
or
intent to do a wrongful act." (Emphasis supplied) The
Montana Supreme Court has also implied malice where the
intentional acts of a defendant were committed without
justifiable excuse, privilege or defense. Poeppel v. Fisher
(1977), 175 Mont. 136, 572 P.2d 912. We hold that malice can
be found where acts are intentional though the consequences
are not.
Respondent contends that Elwell's complaint pleads
intentional injury and such an allegation is dispositive of
this appeal. We do not agree.
The language of the complaint is ambiguous. Paragraph V
pleads that Strainer acted maliciously. Para.graph VI of the
complaint, hereinbefore quoted, contains language which can
be interpreted to mean that Strainer intended Elwell's
injuries. However, the language found in Paragraph VI is
belied by the stipulated facts. In the declaratory judgment
action which forms the basis of this appeal the agreed facts
show that the appellant Strainer intended only that Elwell
would experience some coughing and discomfort and knew
nothing of the dire consequences which allegedly followed.
Under these circumstances facts admitted by the respondent
insurance company foreclose application of the policy
exclusion which only excludes expected or intended bodily
injury.
In summary, we hold that section 39-71-413, of the
Workers' Compensation Act, permits the filing of a third
party action where acts of an employee are intentional
irrespective of whether the results of that act were
intended. The agreed facts here stated form the basis for
such a third party action. These same facts are - excluded
not
by insurance policy language referring to "bodily injury or
property damage which is either expected or intended."
We remand to the District Court with directions to enter
declaratory judgment in favor of appellant affording both
coverage and a defense to appellant under the terms of the
subject policy.
We concur: