Tibert v. Nodak Mutual Insurance Co.
2012 ND 81
N.D.2012Background
- Tiberts—Mark, Melvin, Sue, and William—sued Nodak Mutual Insurance for declaratory relief seeking indemnification and defense costs in relation to Minto Grain’s underlying lawsuit.
- Minto Grain sued Tiberts for civil conspiracy, interference with business and contract, nuisance, trespass, and abuse of process; Tiberts were found liable and paid $455,000 (William capped at $305,000) and judgment affirmed.
- Nodak denied both indemnity and defense; Tiberts pursued summary judgment; district court held the jury’s finding that Tiberts acted in concert barred coverage and found no duty to defend or indemnify.
- Policies included personal injury endorsements with intentional acts exclusions and umbrella policies; North Dakota statutes prohibit indemnification for willful acts or injuries.
- Issue concerns whether Nodak has a duty to defend in the Minto Grain action and whether Nodak has a duty to indemnify for damages awarded.
- Court holds Nodak has no duty to indemnify for Minto Grain’s damages but erred in ruling Nodak had no duty to defend; case remanded for proceedings.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Duty to indemnify is precluded by exclusions | Tiberts argue coverage exists under policies and exclusions do not apply. | Nodak asserts intentional acts exclusions and public policy bar indemnity. | No indemnity duty; exclusions/public policy preclude coverage. |
| Duty to defend in underlying action | Nodak had no duty to defend due to res judicata of ‘acting in concert’. | Nodak contends no defense obligation where coverage is barred. | Nodak had a duty to defend; district court erred in denying defense. |
| Res judicata effect on insurer obligations | Prior findings of acting in concert foreclose coverage and defense. | Res judicata should bar relitigation of intent conclusions. | Res judicata does not bar defense; insurer may owe duty to defend despite underlying verdict. |
Key Cases Cited
- Wisness v. Nodak Mut. Ins. Co., 806 N.W.2d 146 (N.D. 2011) (interpretation and strict construction of exclusions; contract meaning)
- Hins v. Heer, 259 N.W.2d 38 (N.D. 1977) (intent to injure; natural and probable consequences doctrine)
- Ohio Cas. Ins. Co. v. Horner, 583 N.W.2d 804 (N.D. 1998) (natural and probable consequences; public policy)
- Kinsey (Continental Cas. Co. v. Kinsey), 499 N.W.2d 574 (N.D. 1993) (illusory coverage remedy: insurer pays and seeks indemnity from insured)
- Mead v. Farmers Union Mut. Ins. Co., 613 N.W.2d 512 (N.D. 2000) (res judicata in duty to defend contexts)
- Heim, 559 N.W.2d 846 (N.D. 1997) (in concert/continuing pattern; scope of duty to defend under intertwined acts)
- Schultze v. Continental Ins. Co., 619 N.W.2d 510 (N.D. 2000) (duty to defend when allegations could support coverage)
- Prince v. Universal Underwriters Ins. Co., 143 N.W.2d 708 (N.D. 1966) (sovereign principles on insurer defense duties)