In Allen v. Cont’l W. Ins. Co., 2013 WL 1803476 (Mo. Ct. App. April 30, 2013), the Missouri Court of Appeals found that a Commercial General Liability (“CGL”) insurer had no duty to defend its insureds, a title loan company and its agents, against allegations of conversion and negligence on account of their purported wrongful repossession of a vehicle.
Missouri law requires an insurer to defend its insured where the facts alleged against it evidence a claim that is potentially covered. An insurer can disclaim that duty by proving there is no possibility of cover under its policy. The Allen court ultimately determined that Continental Western Insurance Company (“Continental Western”) did not owe a defense to its insureds.
In analyzing whether Continental Western’s CGL policy provided cover for the conversion claims, the court was required to consider whether the tort of conversion constituted an “occurrence” giving rise to “property damage.” The policy defined “occurrence” to mean an “accident,” which the Missouri courts have interpreted to mean: “an event that takes place without one’s foresight or expectation; an undesigned, sudden and unexpected event.”
The court found the intentional nature of the tort of conversion was at odds with the definition of “accident.” Where an intentional and affirmative act was calculated to deprive the vehicle’s owner of use and possession, it could not be construed as an accident. There was no “occurrence,” and no duty to defend the conversion allegations arose. Similarly, the court found that the negligence claims also were premised upon intentional conduct and, accordingly, the insurer was under no duty to defend them.
The court found that the insurer was also entitled to rely on the exclusion barring coverage for “property damage” that was expected or intended from the standpoint of the insured. Because the intentional acts of the insureds resulted in injuries that were the natural and probable consequence of their act, both the injuries and the act were found to be intentional. In so finding, the court distinguished between injuries that are caused by negligence and injuries that are caused by deliberate acts initiated by negligence. The acts in question, being more akin to the latter category, were barred by the exclusion.