Allen v. Continental Western Insurance Co., 2014 Mo. LEXIS 148

Franklin Quick Cash sued Continental Western to recover defense costs after Continental refused to defend in a wrongful repossession suit.
Franklin sought defense under a commercial general liability policy covering property damage from an accident but excluding “expected or intended” injury.
Whipple filed the underlying suit against Franklin, alleging wrongful repossession of a 1998 Plymouth Voyager; initial claims were for conversion, later amended to include negligence.
Whipple amended to add two negligence counts; those claims incorporated the conversion allegations, including Franklin’s alleged intent to exercise control.
Continental Western denied defense, stating Whipple’s claims were excluded as intentional; Franklin defended without insurer involvement.
Circuit court ruled Continental owed a defense and granted Franklin summary judgment for costs; the court of appeals transferred the case for review.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Duty to defend standard in policy	Franklin argues there was a potential coverage at outset.	Continental Western argues no potential coverage due to intent exclusion.	No duty to defend; exclusion barred coverage at outset.
Effect of “expected or intended injury” exclusion	Whipple’s damages could be accidental.	Injury expected or intended; exclusion applies.	Exclusion unambiguously bars coverage; no defense duty.
What facts trigger defense duty	Facts beyond petition may create coverage potential.	Outset facts, not later facts, control duty to defend.	Only at outset facts determine duty; later facts do not create coverage.
Policy interpretation standard	Policy should be construed in favor of insured.	Policy language unambiguous; enforce as written.	Policy language unambiguous; enforcement resolves issue.
Whether loss of use qualifies as property damage	Loss of Voyager could be property damage.	Even if loss is property damage, exclusion applies due to intent.	Not reached; exclusion already bars coverage.

Zipkin v. Freeman, 436 S.W.2d 753 (Mo. banc 1968) (duty to defend extends to potential coverage at outset)
Marshall’s U.S. Auto Supply v. Md. Cas. Co., 189 S.W.2d 529 (Mo. 1945) (insurer not bound by statements in pleadings when no coverage at outset)
McCormack Baron Mgmt. Servs., Inc. v. American Guar. & Liab. Ins. Co., 989 S.W.2d 168 (Mo. banc 1999) (duty to indemnify/defend distinguished; standard for defense duty)
HIAR Holding, L.L.C. v. Columbia Cas. Co., 411 S.W.3d 258 (Mo. banc 2013) (insurer must intend to injure for exclusion to apply; policy loss using ‘loss of use’)
Am. Family Mut. Ins. Co. v. Pacchetti, 808 S.W.2d 369 (Mo. banc 1991) (insured must expect or intend acts causing injury and the injury itself)
Landers Auto. Grp. No. One, Inc. v. Continental W. Ins. Co., 621 F.3d 810 (8th Cir. 2010) (identical exclusion prevented coverage for wrongful repossession)
Columbia Mut. Ins. Co. v. Schauf, 967 S.W.2d 74 (Mo. banc 1998) (illustrates purpose of CGL policy and protection limits)