944 N.W.2d 655
Iowa2020Background
- Stephen Booher, a seasonal loading assistant at Adventureland, was fatally injured on the Raging River ride after being knocked onto an operating conveyor and struck against a concrete wall; plaintiffs sued the ride operator Stuart Glen for gross negligence under Iowa Code § 85.20(2).
- T.H.E. Insurance issued a Commercial General Liability (CGL) policy and an excess policy listing Adventureland as insured; it brought a state declaratory judgment action seeking a ruling it had no duty to defend or indemnify Glen; the federal wrongful-death suit was stayed pending that ruling.
- The district court initially denied cross-motions for summary judgment but on reconsideration granted summary judgment to T.H.E., holding the alleged gross-negligence conduct was not an "accident/occurrence" under Section I and was excluded as "expected or intended" from the insured's standpoint.
- Plaintiffs appealed, arguing (1) gross negligence under § 85.20 is not equivalent to intentional conduct and can fall within an "accident," and (2) Section II (who is an insured), plus a Multi-Plex endorsement that removed a bodily-injury exclusion, supplies coverage independent of Section I.
- The Iowa Supreme Court reversed the district court in part and remanded: it held that some acts meeting the statutory gross-negligence standard could nonetheless be accidental for coverage purposes (so summary judgment denying coverage was improper), but Section II does not expand insured risks beyond the insuring clause in Section I—both sections must be satisfied for coverage.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether a coemployee gross-negligence claim qualifies as an "occurrence"/"accident" under Section I | Gross negligence is not intentional; allegations could show lack of intent and that injury was not "highly likely," so coverage is possible | Gross negligence (knowledge injury is probable + conscious indifference) is inconsistent with "accident" and falls within the "expected or intended" exclusion | Reversed district court—some acts of gross negligence can be accidental; coverage cannot be foreclosed as a matter of law on summary judgment |
| Whether Section II (and the Multi-Plex endorsement) creates coverage independent of Section I | Section II (who is an insured) and the endorsement labeled "Additional Coverage" extend coverage to employee acts within scope of employment, including bodily injury to coemployees | Section II only identifies who is an insured; it does not define covered risks—Section I's insuring clause still controls | Held for insurer: Section II does not provide additional risk coverage beyond Section I; both sections must be satisfied |
| Whether relational/consequential damages (loss of consortium, lost earnings, punitive damages) are covered | Such damages fall within Section I’s covered "damages" if bodily injury/occurrence is shown; no Section II exclusion bars them | If there is no "occurrence" under Section I, those damages are not covered | Court rejected summary denial of coverage for these damages; coverage depends on whether an "occurrence" is shown |
| Whether insurer had a duty to defend as a matter of law | Duty to defend arises if underlying allegations potentially or arguably fall within policy coverage | No duty because the gross-negligence allegations necessarily fall outside "occurrence" and within the "expected or intended" exclusion | Duty to defend cannot be resolved for summary judgment here; triable factual scenarios remain |
Key Cases Cited
- Swanson v. McGraw, 447 N.W.2d 541 (Iowa 1989) (defines elements of gross negligence under § 85.20)
- Thompson v. Bohlken, 312 N.W.2d 501 (Iowa 1981) (en banc) (wantonness and gross negligence standard explained)
- Weber v. IMT Ins., 462 N.W.2d 283 (Iowa 1990) ("expected" means substantial probability/substantially certain in insurance exclusion context)
- First Newton Nat’l Bank v. Gen. Cas. Co. of Wis., 426 N.W.2d 618 (Iowa 1988) ("accident" defined as unexpected and unintended occurrence)
- McAndrews v. Farm Bureau Mut. Ins., 349 N.W.2d 117 (Iowa 1984) (coverage inquiry turns on potential liability under pleaded facts)
- Nat’l Sur. Corp. v. Westlake Inv., LLC, 880 N.W.2d 724 (Iowa 2016) (whether harm was "expected or intended" can be a jury question)
- United Fire & Cas. Co. v. Shelly Funeral Home, Inc., 642 N.W.2d 648 (Iowa 2002) ("occurrence" construed as "an accident")
- Thomas v. Progressive Cas. Ins., 749 N.W.2d 678 (Iowa 2008) (insurer contract interpretation principles)
- Boelman v. Grinnell Mut. Reins., 826 N.W.2d 494 (Iowa 2013) (ambiguities in adhesive insurance contracts construed against insurer)