This opinion will be unpublished and

may not be cited except as provided by

Minn. Stat. § 480A.08, subd. 3 (2002).






Charles Murrer,


Prudential Property and Casualty
Insurance Company, a subsidiary
of the Prudential Insurance of America,


Filed April 15, 2003

Reversed and remanded

Stoneburner, Judge


St. Louis County District Court

File No. C902600372


Gerald Von Korff, Rinke-Noonan, Box 1497, St. Cloud, MN 56302-1497 (for appellant)


Douglas R. Archibald, Megan L. Deering, Terhaar, Archibald, Pfefferle & Griebel, L.L.P., Suite 220, 300 First Avenue North, Minneapolis, MN 55401 (for respondent)


            Considered and decided by Klaphake, Presiding Judge, Lansing, Judge, and Stoneburner, Judge.

U N P U B L I S H E D  O P I N I O N



Appellant Charles Murrer challenges the district court’s grant of summary judgment to respondent Prudential Property and Casualty Insurance Company, dismissing Murrer’s claim that Prudential breached his homeowner’s insurance contract by failing to provide a defense or coverage for negligence claims brought against Murrer.  Murrer argues that the district court erred by determining (1) that the insurance policy did not cover a negligent misrepresentation claim against Murrer because there was no “occurrence” as defined by the policy to trigger coverage and (2) that the intentional-act exclusion in the policy applied to a negligence cross-claim against appellant.  We reverse.        



            Appellant Charles Murrer is insured by respondent Prudential Property and Casualty Insurance Company under a homeowner’s policy.  Murrer sold a house that he owned to Ted Henderson, who was insured by American Family Insurance.  A gas dryer had been disconnected and removed from the home.  When the dryer was removed, the gas line that supplied propane to the dryer was not capped, rather the entire propane gas supply to the house was turned off. 

            After moving in, Henderson discovered that he could not light the pilot light in the gas stove.  He called repairman Cliff Wiebke, who discovered that the gas supply was turned off.  Apparently, Wiebke opened the gas valve without checking to see if the gas line supplied gas to any appliance other than the stove.  The gas flowed not only to the stove, but also out of the uncapped gas line.  An explosion resulted, damaging the house. 

            American Family Insurance paid its insured, Henderson, and then brought a subrogation action against Murrer, Wiebke, and others.  American Family asserted that Murrer negligently sold the house without disclosing the uncapped gas line and that this negligent failure to disclose caused the explosion.  Wiebke cross-claimed against Murrer, claiming that Murrer negligently failed to cap the gas line and negligently failed to warn others of the uncapped line.

            Murrer repeatedly tendered defense of the lawsuit to Prudential.  The Prudential policy provides that if a claim is made or a suit is brought against the insured for damages because of property damage caused by an occurrence to which the coverage applies, Prudential will pay for damages for which the insured is legally liable and will provide a defense at the company’s expense even if the suit is groundless, false, or fraudulent.  Prudential repeatedly denied any duty to indemnify or defend, contending that (1) the general-liability provision of Murrer’s insurance policy does not cover the American Family claim because, under the policy, a negligent misrepresentation is not an occurrence that would trigger coverage and (2) the cross-claim is not covered because it is excluded by the policy’s exclusion for suits resulting from the insured’s intentional act.

Murrer settled the claims and sued Prudential for breach of contract for failing to defend and indemnify Murrer for the claims against him.  Both Prudential and Murrer moved for summary judgment.  The district court granted summary judgment in favor of Prudential on the grounds that the policy language unambiguously states that a negligent misrepresentation is not an occurrence and that coverage for the cross-claim was also excluded under the intentional-act exclusion.  This appeal followed.



When reviewing an appeal from a grant of summary judgment, this court determines whether there are any genuine issues of material fact and whether the district court erred in applying the law.  State by Cooper v. French, 460 N.W.2d 2, 4 (Minn. 1990).  In this case, the parties agree that there are no material fact issues.  District courts can properly determine the construction and interpretation of insurance policies on summary judgment, and appellate courts will review the district court’s decision de novo.  Reinsurance Ass’n of Minnesota v. Timmer, 641 N.W.2d 302, 307 (Minn. App. 2002), review denied (Minn. May 14, 2002).  Appellate courts apply general principles of contract interpretation when construing insurance policies.  Id.  A reviewing court gives the language its usual meaning if an insurance contract is clear and unambiguous.  Am. Family Ins. Co. v. Walser, 628 N.W.2d 605, 609 (Minn. 2001).  Neither party argues that the policy is ambiguous.

 “An insurer assumes two duties to its insured: the duty to defend and the duty to indemnify.”  St. Paul Fire & Marine Ins. Co. v. Nat’l Chiropractic Mut. Ins. Co., 496 N.W.2d 411, 415 (Minn. App. 1993), review denied (Minn. Apr. 29, 1993).  “The duty to defend arises when any part of the claim against the insured is arguably within the policy’s scope.”  Timmer, 641 N.W.2d at 307 (citation omitted).  The duty to defend is distinct from and broader in scope than the insurer’s duty to indemnify.  Franklin v. W. Nat’l Mut. Ins. Co., 574 N.W.2d 405, 406 (Minn. 1998).  If a complaint alleges numerous claims and any one of them would obligate the insurer to indemnify if liability is assessed, the insurer must provide a defense against all claims in the complaint.  Timmer, 641 N.W.2d at 307. 


In Minnesota, a negligent misrepresentation is not an occurrence for the purposes of a general-liability insurance policy.  Tschimperle v. Aetna Casualty & Surety Co., 529 N.W.2d 421, 424 (Minn. App. 1995), review denied (Minn. May 31, 1995).  And Prudential has explicitly excluded negligent misrepresentation from its definition of an occurrence.  The policy states:

“occurrence” means a loss or accident including continuous or repeated exposures to substantially the same harmful conditions, even though separated in time or spatial distance, which results during the policy period in:

a.         bodily injury; or

b.                  property damage.

Occurrence does not include negligent misrepresentations or omissions of any nature or kind in the sale of real or personal property.


Murrer argues that the explosion causing the property damage is the occurrence and that the alleged negligent misrepresentation is only a cause of the occurrence.  We agree.

The rule that a negligent misrepresentation does not constitute an occurrence for general liability purposes is applicable only when the negligent misrepresentation is the direct cause of the injury suffered.  See Tschimperle, 529 N.W.2d at 424 (indicating that misrepresentation of value of investment was itself event that caused damage, a poor investment).  We have previously held that if the cause of an occurrence is a misrepresentation, the occurrence itself may still trigger the duty of the insurer to defend and indemnify the insured.  Timmer, 641 N.W.2d at 313-15 (holding that misrepresentation of cattle as healthy in sale of cattle was cause of the occurrence, but that occurrence itself was transmission of disease to healthy herd).  That there is an accusation of negligent misrepresentation does not necessarily mean that the act of misrepresentation is the occurrence for purposes of triggering coverage.  And excluding negligent misrepresentation from the definition of “occurrence” is not the same as excluding coverage for negligent misrepresentations.  Unlike cases in which the negligent misrepresentation is both the cause and the event that gives rise to a claim for damages, the event causing the injury in this case was the explosion.  Any negligent misrepresentation by the appellant merely contributed to the explosion. 

Prudential argues that the event is both the explosion and the negligent misrepresentation, because but for Murrer’s act of misrepresentation, he and his insurer would not be implicated.  But as the court in Timmer stated, a “negligent misrepresentation may cause an ‘accident,’” and if neither expected nor intended, “[t]hat accident * * * is an ‘occurrence.’”  Timmer, 641 N.W.2d at 313.  Because the occurrence in this case is the explosion, not Murrer’s alleged negligent misrepresentation, the district court erred by construing the definition of occurrence to preclude coverage for American Family’s claim against Murrer.


            Even if the exclusion of negligent misrepresentation from the definition of occurrence could be construed to preclude coverage for American Family’s claim for negligent misrepresentation, Wiebke’s cross-claim for negligence triggered Prudential’s duty to defend and was not excluded by the intentional-acts exclusion.  The policy excludes coverage for damages that result from an act:

(1)              That is intended by an insured to cause harm; or

(2)              That an insured could reasonably expect to cause harm.

Even when the harm is of a different degree or type than actually intended or expected.  


The purpose of an intentional-acts exclusion is to exclude insurance coverage for wanton and malicious acts by an insured, and the intent to injure can be inferred as a matter of law based on the circumstances and nature of the insured’s actions.  Walser, 628 N.W.2d at 613. 

            [T]he inference of intent to injure as a matter of law arises when the insured acted in a calculated and remorseless manner or when the insured’s actions were such that the insured knew or should have known that a harm was substantially certain to result from the insured’s conduct.       * * * .  The mere fact that the harm was a “natural and probable consequence” of the insured’s actions is not enough to infer intent to injure.


Id. (citations omitted). 

            The cross-claim against Murrer alleges that he negligently failed to cap the gas line and negligently failed to warn others who might enter the premises that the dangerous open line existed.  The cross-claim makes allegations of negligence.  For the cross-claim to be proved, it need only be shown that Murrer reasonably should have known of the danger or reasonably should have capped the line.  We conclude that under the facts of this case, it cannot be said that Murrer knew or should have known that some harm was substantially certain to result.  See Walser, 628 N.W.2d at 614.  We hold that the district court erred by finding that the policy’s intentional-acts exclusion excluded coverage for the negligence alleged in the cross-claim against Murrer.              

            Reversed and remanded.