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IN THE COURT OF APPEALS OF IOWA No. 9-419 / 08-0944 Filed December 17, 2009 SCOTTSDALE INSURANCE COMPANY, Plaintiff-Appellee, vs. ATTORNEYS PROCESS & INVESTIGATION SERVICES, INC., Defendant-Appellant. ________________________________________________________________ Appeal from the Iowa District Court for Tama County, Denver D. Dillard, Judge.

Defendant appeals the district courts grant of summary judgment to plaintiff in this declaratory judgment action concerning insurance coverage. AFFIRMED IN PART, REVERSED IN PART, AND REMANDED. Steven L. Nelson of Davis, Brown, Koehn, Shors & Roberts, Des Moines, for appellant. John Grier of the Grier Law Firm, Marshalltown, and Merrill C. Swartz of the Swartz Law Firm, Marshalltown, for appellee.

Heard by Vaitheswaran, P.J., Mansfield, J., and Miller, S.J.*
*Senior judge assigned by order pursuant to Iowa Code section 602.9206 (2009).

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MILLER, S.J. Attorneys Process & Investigation Services, Inc. (APIS), appeals the district courts grant of summary judgment to Scottsdale Insurance Company on its petition seeking a declaratory judgment that an insurance policy it had issued to APIS provided no coverage for acts alleged in a lawsuit filed by the Sac & Fox Tribe of the Mississippi in Iowa (Tribe) against APIS in tribal court. APIS also appeals the district courts dismissal of its counterclaims against Scottsdale. We affirm in part, reverse in part, and remand to the district court for further proceedings. I. Background Facts & Proceedings

The Tribe operates the Meskwaki Bingo Casino Hotel near Tama, Iowa. A dispute arose between two factions in the Tribe --an Elected Tribal Council and an Appointed Tribal Council. On March 26, 2003, the Appointed Tribal Council seized control of the Casino, over the objection of the Elected Tribal Council. At that time the Elected Tribal Council was recognized by the United States Department of the Interior as the leadership body of the Tribe. On June 16, 2003, APIS entered into a written agreement with Alexander Walker, Jr., a member of the Elected Tribal Council, for the purpose of investigation, security, and law enforcement consulting services. On October 1, 2003, employees of APIS entered the Tribes community center and Casino and remained on the premises for less than twenty-four hours.

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The Appointed Tribal Council was later lawfully elected and was recognized by the federal government as the governing council of the Tribe. The new governing body created a tribal court. On August 3, 2005, the Tribe filed a tort action against APIS in the tribal court. The petition alleged: (1) APIS took unauthorized possession of

$1,022,171; (2) APIS intentionally entered and remained on th e Tribes property; (3) APIS intentionally damaged and destroyed property worth at least $7035; (4) APIS improperly obtained and exercised control over confidential property; (5) APIS employees committed unlawful assault, battery, and false imprisonment against Tribal members and employees. The petition raised claims of trespass to land, trespass to chattel, conversion, and misappropriation of trade secrets. The Tribe sought compensatory damages or reimbursement, and punitive damages. APIS had a commercial general liability policy with Scottsdale Insurance Company, including personal and advertising injury coverage and errors and omissions coverage. APIS claimed there was coverage under the policy for the claims made against it by the Tribe, including a duty to defend. Scottsdale filed a petition for declaratory judgment in Iowa district court on April 2, 2007, seeking a declaration that there was no coverage under the policy for the Tribes claims against APIS. In general, Scottsdale claimed there was no coverage because: (1) the policy does not cover wrongful entry; (2) the policy does not cover misappropriation of trade secrets; (3) the complaint does not seek damages as defined in the policy; and (4) the acts described in the complaint were intentional acts. Specific to the general liability coverage, Scottsdale

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claimed the complaint failed to allege an "occurrence" resulting in "bodily injury" or "property damage," as defined by the policy. Scottsdale also asserted there was no coverage under the personal and advertising part of the policy because the complaint did not meet the definitions in the policy and the conduct in the complaint was specifically excluded by the policy. As to the errors and omissions coverage, Scottsdale claimed the complaint alleged only intentional conduct, which was excluded. Scottsdale also asserted the exclusions for errors and

omissions coverage included dishonest, fraudulent, or criminal conduct. APIS filed a counterclaim against Scottsdale, raising claims of breach of contract, breach of implied contract, estoppel, and bad faith. Scottsdale raised an affirmative defense to the counterclaims that "[n]o damages have ever been determined in the underlying action, as that action is still in litigation and by reason thereof, the counterclaim Plaintiff presents no justiciable issue for this court." Scottsdale filed a motion for summary judgment, asserting that under the terms of the insurance policy it did not have a duty to defend or indemnify APIS. APIS resisted the motion for summary judgment, and filed a trial court brief to support its resistance. Scottsdale replied to the resistance filed by APIS. The district court issued a ruling on April 14, 2008, granting Scottsdales motion for summary judgment. The court noted it would apply Iowa law, and not tribal law, which had not been pled or proved. The court found, "The allegations of fact all stem from allegedly intentional actions taken by APIS." The court stated that under the definition of "occurrence" there is no coverage for

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intentional acts. The court found there was no coverage for property damage "intended from the standpoint of the insured." The court additionally found "the torts alleged to have been committed by APIS specifically are not covered under the terms of the policy." The court concluded Scottsdale had no duty to defend or indemnify APIS. After granting summary judgment to Scottsdale, the court dismissed APISs counterclaims as a matter of law. APIS filed a motion pursuant to Iowa Rule of Civil Procedure 1.904(2). The district court denied the motion, noting "all of the issues were addressed in the Ruling." APIS appealed. II. Standard of Review

We review the district courts ruling on a motion for summary judgment for the correction of errors of law. Thomas v. Progressive Cas. Ins. Co., 749 N.W.2d 678, 681 (Iowa 2008). Summary judgment is appropriate only when there are no genuine issues of material fact and the moving party is entitled to judgment as a matter of law. Iowa R. Civ. P. 1.981(3); Kistler v. City of Perry, 719 N.W.2d 804, 805 (Iowa 2006). A court should view the record in the light most favorable to the non-moving party. Kern v. Palmer Coll. of Chiropractic, 757 N.W.2d 651, 657 (Iowa 2008). Construction of an insurance policy--the process of determining its legal effect--is a question of law for the court. Interpretation--the process of determining the meaning of words used--is also a question of law for the court unless it depends on extrinsic evidence or a choice among reasonable inferences to be drawn. Grinnell Mut. Reins. Co. v. Jungling, 654 N.W.2d 530, 536 (Iowa 2002). When, as here, neither party offers extrinsic evidence as to the meaning of relevant

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language of an insurance policy, the process of interpretation is for the court to determine as a matter of law. N.W.2d 821, 823-24 (Iowa 1987). III. Facts that May be Considered See Cairns v. Grinnell Mut. Reins. Co., 398

As a preliminary matter, we note what may be a disagreement between the parties concerning what facts a court may consider in resolving a coverage dispute such as the one before us. APIS asserts that a court may look to the insurance policy, the petition in the underlying lawsuit (here the complaint against APIS filed by the Tribe in the tribal court), and any other admissible and relevant facts in the record. Scottsdale at least appears to urge a narrower scope, stating at points in its brief that "coverage depends . . . on the facts alleged in the underlying complaint," "a courts focus should be on the conduct alleged in the complaint," "[w]hat governs coverage . . . are the allegations of fact made in the complaint against APIS," and "APISs . . . affidavits . . . do not aid its quest for coverage." Central Bearings Co. v. Wolverine Insurance Co., 179 N.W.2d 443 (Iowa 1970), was an action by the plaintiff against its insurer alleging breach of an insurance policy by failing to defend and indemnify the plaintiff in a lawsuit against the plaintiff. In discussing whether the district court had erred in granting summary judgment in favor of the plaintiff the court stated, in part: [I]f, after construing both the policy in question, the pleadings of the injured party and any other admissible and relevant facts in the record, it appears the claim made is not covered by the indemnity insurance contract issued, the insurer has no duty to defend or indemnify.

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Central Bearings, 179 N.W.2d at 445 (emphasis added). In the later case of McAndrews v. Farm Bureau Mutual Insurance Co., 349 N.W.2d 117 (Iowa 1984), the court cited, quoted, and emphasized the aboveemphasized language from Central Bearings, and did so just after stating that although the facts to be considered have traditionally been those alleged in the petition in the suit against the insured . . . [t]he scope of the inquiry . . . must sometimes be expanded beyond the petition, especially under "notice pleading" petitions which often give few facts upon which to assess an insurers duty to defend. Id. at 119 (emphasis added). The language of these cases indicates that when determining a coverage dispute the court may consider not only the facts alleged in the underlying complaint and the language of the insurance policy, but may also consider at least such other facts as are established by the record to be undisputed. In Smithway Motor Express, Inc. v. Liberty Mutual Insurance Co., 484 N.W.2d 192 (Iowa 1992), the court affirmed the district courts grant of summary judgment to the insured and against the insurer on a coverage question. In doing so it stated, in part: "Under the record, the known facts are limited to the

insurance policy and the employees petition. No further facts were supplied by affidavit or otherwise." Smithway Motor, 484 N.W.2d at 194 (emphasis added). The emphasized language appears to indicate that when considering, in the context of a request for summary judgment, the issue of whether insurance coverage exists, the court may consider all relevant and admissible undisputed facts.

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Other cases also indicate, either expressly or by implication, that undisputed facts beyond the underlying complaint and insurance policy may be considered in deciding a coverage question in the context of deciding a motion for summary judgment. See, e.g., Employers Mut. Cas. Co. v. Cedar Rapids Television Co., 552 N.W.2d 639, 642 (Iowa 1996) ("In determining whether there is a duty to defend we look ,,first and primarily to the petition for the "facts at the outset of the case."") (emphasis added); Newton Nat'l Bank v. Gen. Cas. Co., 426 N.W.2d 618, 623 (Iowa 1988) ("We look first and primarily to the petition for the ,,facts at the outset of the case. When necessary we expand our scope of inquiry to any other admissible and relevant facts in the record.") (citations omitted); First Nat'l Bank v. Fidelity & Deposit Co., 545 N.W.2d 332, 335 (Iowa Ct. App. 1996) (same); Kartridg Pak Co. v. Travelers Indem. Co. , 425 N.W.2d 687, 688 (Iowa Ct. App. 1988) (holding that in order to determine whether there is coverage under an insurance policy a court looks not only to the petition against the insured, but also to "all other admissible and relevant facts in the record"). We conclude that in determining whether summary judgment was appropriate in this case the district court could, and we can on appeal, consider not only the allegations of the Tribes complaint against APIS and the contents of APISs policy with Scottsdale, but also all other relevant and admissible facts that the summary judgment record shows to be undisputed.

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IV.

Commercial General Liability Coverage

APIS asserts there is a duty to indemnify and a duty to defend under its insurance policy with Scottsdale, which provides that there is coverage for "bodily injury" and "property damage" only if the ",,bodily injury or ,,property damage is caused by an ,,occurrence that takes place in the ,,coverage territory." If there is no fact question, and the only conflict concerns the legal consequences flowing from the undisputed facts, such as in the construction and interpretation of an insurance policy, summary judgment is appropriate. Grinnell Mut. Reins. Co., 654 N.W.2d at 535. In determining the meaning of an insurance contract, the intent of the parties is controlling, and unless the language is ambiguous, this is determined by the terms of the policy. Id. at 536. We interpret ambiguous policy provisions in favor of the insured because insurance policies are in the nature of adhesion contracts. Id. An insurer has the burden to define any limitations or exclusions in clear and explicit terms. AMCO Ins. Co. v. Haht, 490 N.W.2d 843, 845 (Iowa 1992). Words undefined in a policy are given their ordinary meaning, rather than a technical interpretation only a specialist would understand. Indus. v. Ins. Co. of N. Am., 475 N.W.2d 607, 619 (Iowa 1991). Scottsdale claims there was not an "occurrence" under the terms of the policy. The term "occurrence" is defined in the policy as "an accident, including continuous or repeated exposure to substantially the same general harmful A.Y. McDonald

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conditions." The arguments on appeal relate only to whether there has been an "occurrence" under the terms of the policy.1 An accident is defined as "an event which, under the circumstances, is unusual and unexpected." Weber v. IMT Ins. Co., 462 N.W.2d 283, 287 (Iowa 1990). In defining "occurrence," the Iowa Supreme Court has stated, "[a]n

accident, happening, event, or exposure to conditions is an unexpected and unintended ,,occurrence so long as the insured does not expect to inten d both it and some injury." West Bend Mut. Ins. Co. v. Iowa Iron Works, Inc., 503 N.W.2d 596, 601 (Iowa 1993) (quoting First Newton Nat'l Bank, 426 N.W.2d at 625). We affirm the district courts finding there was no "occurrence," as that term is defined in the insurance policy. The petition filed by the Tribe does not seek damages based on an accident, or an event that was unexpected and unintended. The petition alleges APIS "intentionally entered and remained in the Tribes Community Center (which houses the Tribes executive offices and records) and the Casino." The petition also alleges APIS "intentionally damaged and destroyed tribal property." We conclude the court did not err in determining there was no duty to indemnify under the commercial general liability portion of the insurance policy because the Tribes petition does not make a claim for "bodily injury" or "property damage" caused by an "occurrence."2

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In its motion for summary judgment, Scottsdale claimed the allegations against APIS were not for "property damage" under the policy. The district court did not address this issue. We also do not address the issue of whether the complaint against APIS alleged "property damage" as the term is defined in the insurance policy because that issue has not been raised on appeal. 2 The insurance policy excludes, "Bodily injury or ,,property damage expected or intended from the standpoint of the insured." Based on our finding there was no

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V.

Personal and Advertising Coverage

APIS also claims there is a duty to indemnify and a duty to defend under the personal and advertising coverage portion of the Commercial General Liability Coverage provisions. Scottsdale argued the complaint filed by the Tribe against APIS did not include any claims that would trigger personal and advertising coverage. Scottsdale contends this issue was not preserved because it was not specifically addressed by the district court. The district court set forth the

applicable provisions of the personal and advertising coverage, and the arguments relating to those provisions. It is clear the district courts legal

conclusions encompassed the issues arising under the personal and advertising provisions. Additionally, in its resistance to APISs post-trial motion, Scottsdale asserted, "[t]he courts ruling thoroughly addresses all issues raised in the motion for summary judgment and finds in Plaintiffs favor on all counts." The district courts ruling on the post-trial motion also states "all of the issues were addressed in the Ruling." We conclude APISs issues relating to personal and advertising coverage were adequately preserved for our review. An insurer may extend liability coverage only to specific torts. Talen v. Employers Mut. Cas. Co., 703 N.W.2d 395, 402 (Iowa 2005). Under this type of coverage we look to the type of legal theory brought against the insured, to determine if it is covered under the policy. Id. Also, even if the theory of

"occurrence" under the terms of the policy, we do not address whether "bodily injury" and "property damage" coverage is excluded by this provision. Thus, we do not address whether the alleged property damages were expected or intended by APIS.

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recovery is not listed as being covered under the policy, there may still be coverage if the operative facts contain allegations expressly covered in the policy. See Employers Mut. Cas. Co., 552 N.W.2d at 642. The applicable portion of the definition of "personal and advertising injury" provides: "Personal and advertising injury" means injury, including consequential "bodily injury," arising out of one or more of the following offenses: ... c. The wrongful eviction from, wrongful entry into, or invasion of the right of private occupancy of a room, dwelling or premises that a person occupies, committed by or on behalf of its owner, landlord, or lessor. The complaint against APIS raises factual allegations that APIS "intentionally entered and remained at the Tribes Community Center (which houses the Tribes executive offices and records) and the Casi no."3 The petition does not allege APIS entered the community center and Casino "on behalf of its owner, landlord or lessor." The complaint specifically states, "Such entering and remaining was not authorized by the Tribe." The complaint against APIS do es not include an offense giving rise to personal and advertising injury under the terms of the policy.4

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One of the allegations contained in the claim for punitive damages is that APIS committed "assaults and batteries and false imprisonment on tribal members and employees." Additional offenses covered by the personal and advertising injury provisions are "False arrest, detention, and imprisonment." The claims, however, are not that the Tribe, the entity that brought the suit, was subjected to false arrest, detention, and imprisonment. The claims relate to Tribal members and employees, who are not parties to the suit. We conclude, therefore, there is no coverage for the claims for punitive damages based on assault and battery and false imprisonment. 4 Scottsdale also raised an argument that the community center and Casino were occupied by a person. The term "person" is not defined in the policy. We note that

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We affirm the district courts conclusion there was no duty to indemnify under the personal and advertising provisions of the policy for the claims made against APIS by the Tribe. VI. Errors and Omissions Coverage

APIS further contends there is coverage and a duty to defend under the errors and omissions coverage provisions of its insurance policy with Scottsdale. In the motion for summary judgment Scottsdale asserted there was no coverage under the errors and omissions coverage because the complaint alleges only intentional conduct, not negligent acts. Again, Scottsdale claims error was not preserved on this issue because it was not specifically addressed by the district court. For the same reasons

discussed above concerning the personal and advertising injury coverage, we conclude error was preserved on this issue as well. The term "error or omission" is defined in the insurance policy as "any negligent act, error or omission while performing any services normal to the business of the insured described in the Declarations." On the declarations page APISs business is listed as "Investigation." An "error" is a mistake or blunder. Employers Reins. Corp. v. Mut. Med. Plans, Inc., 504 N.W.2d 885, 888 (Iowa 1993). An "omission" means "apathy toward or neglect of duty." Id. Errors and

elsewhere the policy distinguishes between persons and organizations. See, e.g., "Any person or organization having proper temporary custody of your property," "Any other person or organization responsible for the conduct of such person," "Persons or organizations making claims or bringing ,,suits." Due to our conclusion, however, that there were no allegations APISs acts were committed by or on behalf of the owner, landlord, or lessor of the property, we do not specifically address whether the Tribe is a person for purposes of this provision in the insurance policy.

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omissions coverage does not apply to deliberate, as opposed to negligent, acts. Id. APIS contends that while the petition alleges it engaged in intentional acts, a fact finder addressing the merits of the complaint could find APIS negligently or mistakenly entered the Tribes property or damaged the Tribes property. APIS points out that it believed it had authority from a member of the Elected Tribal Council to engage in the acts which are the subject of the complaint. As APIS claims, there is the possibility it could be found negligent for failing to determine with complete precision which Tribal faction rightfully controlled the Tribe. See Restatement (Second) of Torts

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