Mitchell v. Allstate Insurance Co.
2011 ME 133
| Me. | 2011Background
- Mitchell, a Matinicus Island lobster fisherman, was sued by Ames in a wide group action including a conversion claim against Mitchell.
- Ames alleged Mitchell participated in a group that destroyed or converted Ames’s lobster traps and gear.
- Mitchell carried Allstate Deluxe Homeowners Policy with Coverage X; policy covers bodily injury or property damage from an occurrence and includes a defense duty.
- Policy excludes bodily injury or property damage intended or reasonably expected to result from insured acts, regardless of criminal intent or capacity.
- Allstate declined to defend after service; Mitchell incurred about $13,626 in fees and defense costs, and defended himself successfully.
- Mitchell sued Allstate for breach of contract to recover defense costs; the Superior Court granted summary judgment for Allstate, concluding the exclusion barred coverage; Mitchell appealed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Did Ames's conversion claim potentially fall within policy coverage? | Mitchell argues there was potential coverage for property damage despite the exclusion. | Allstate argues the conversion claim falls within the intentional acts exclusion and is not covered. | Yes; the claim could involve property damage not excluded, so defense duty exists. |
| Does conversion can involve covered property damage without intent to damage? | Conversion could involve damage to Ames’s property even without Mitchell’s intent to damage. | Exclusion applies when intentional acts or reasonably expected damage are involved. | Conversion could plausibly involve covered property damage without intentional damage, triggering defense. |
| Is the insurer's duty to defend broader than its duty to indemnify? | Duty to defend is broad and extends when any potential for coverage exists. | Duty to defend is limited by policy exclusions and determinations of coverage. | The duty to defend is broad; ambiguity resolved in Mitchell’s favor; insurer must defend if any potential coverage exists. |
Key Cases Cited
- York Ins. Group of Me. v. Lambert, 740 A.2d 984 (Me. 1999) (duty to defend broader than indemnity)
- Union Mut. Fire Ins. Co. v. Inhabitants of Topsham, 441 A.2d 1012 (Me. 1982) (duty to defend; strict construction of exclusions)
- Penney v. Capitol City Transfer, Inc., 707 A.2d 387 (Me. 1998) (duty to defend when potential coverage exists)
- Hall v. Patriot Mut. Ins. Co., 942 A.2d 663 (Me. 2007) (ambiguity resolved against insurer)
- Me. Mut. Fire Ins. Co. v. Gervais, 715 A.2d 938 (Me. 1998) (insurer's duty to defend analyzed against underlying complaint)
- Bradford v. Dumond, 675 A.2d 957 (Me. 1996) (elements of conversion; possession and control)