Fire Insurance Exchange v. Weitzel

Fire Insurance Exchange v. Weitzel, 2016 MT 113 (May 17, 2016) (McKinnon, J.) (5-0, rev’d)

Issue: Whether the district court erred by concluding Fire Insurance Exchange (FIE) had a duty to defend Weitzel under the terms of the insurance policy.

Short Answer: Yes.

Reversed and remanded for entry of judgment in FIE’s favor

Facts: The estate of Ronny Groff brought suit against Jake Weitzel, alleging that Weitzel gained the trust of Groff, an elderly man, and then absconded with Groff’s property and assets over a number of years. Groff’s children hired Weitzel in 2010 to provide in-home care services to Groff and his wife, who died in 2011. Weitzel provided services until Ronny died in July 2013.

The estate’s complaint alleges that after Ronny’s wife died, Weitzel began to wrongfully exert control over Ronny and exploit him to her financial gain.  The complaint alleged 19 separate causes of action, but none allege bodily injury to Ronny and none allege false imprisonment.

Weitzel tendered this litigation to his homeowner’s insurer, FIE. Weitzel’s policies with FIE provided coverage for personal injury, bodily injury, and property damage, all defined terms.

FIE undertook the defense under a reservation of rights. FIE then filed suit for declaratory judgment regarding whether it had a duty to defend Weitzel.

Procedural Posture & Holding: On cross-motions for summary judgment, the district court denied FIE’s motion and granted Weitzel’s motion, holding FIE had a duty to defend because the complaint triggered coverage under the personal injury endorsement, and could be construed as stating a claim for false imprisonment. FIE appeals and the Supreme Court reverses.

Reasoning: The parties agree that no coverage is triggered under the property damage endorsement. Regarding personal injury, the endorsement provides coverage for ten causes of action, including false imprisonment. The complaint does not plead false imprisonment or expressly incorporate the elements of that tort. Even under the most liberal standards, the complaint does not state a claim for false imprisonment. Moreover, the Court has never held that an insurer’s duty to defend may be triggered by speculating about extrinsic facts and unpled claims.

Regarding bodily injury, the complaint does not allege that Ronny died as a result of Weitzel’s action, or that Weitzel physically abused Ronny. Instead, the complaint alleges only economic loss.