This opinion will be unpublished and

may not be cited except as provided by

Minn. Stat. § 480A.08, subd. 3 (2004).






Metropolitan Property and

Casualty Insurance Company

as successor-in-interest to

St. Paul Insurance Company,





Stephen Popovich,



David M. Nelson, et al.,



Filed March 22, 2005

Reversed and remanded; motion denied.
Klaphake, Judge


Washington County District Court

File No. C1-03-5965


William L. Davidson, Timothy J. O’Connor, Emily K. John, Lind, Jensen, Sullivan & Peterson, P.A., 150 South Fifth Street, Suite 1700, Minneapolis, MN  55402 (for respondent)


Dyanna L. Street, Fabyanske, Westra & Hart, P.A., 800 LaSalle Avenue, Suite 1900, Minneapolis, MN  55402 (for appellant)


            Considered and decided by Kalitowski, Presiding Judge, Klaphake, Judge, and Peterson, Judge.

U N P U B L I S H E D   O P I N I O N


            Respondent Metropolitan Property and Casualty Insurance Company brought this declaratory judgment action against its insured, appellant Stephen Popovich, seeking a determination of coverage and duty to defend issues in the underlying action, Nelson v. Popovich, No. 02-2923 (D. Minn.), which is now pending in federal district court.   Appellant challenges the district court’s grant of summary judgment to respondent, which was based on the policies’ exclusions from coverage for intentional acts.

            Because the district court incorrectly applied the standard for determining whether an act was intentional and thus excluded from coverage, we reverse and remand.


            Summary judgment is appropriate where, based on the pleadings, discovery and other documentation, there are no genuine issues of material fact and either party is entitled to judgment as a matter of law.  Minn. R. Civ. P. 56.03.   Construction of an insurance policy, including whether an insurer has a duty to defend, is a question of law reviewed de novo.  Auto-Owners Ins. Co. v. Todd, 547 N.W.2d 696, 698 (Minn. 1996).

            An insurer’s duty to defend its insured arises when any part of the claim against the insured is arguably within the scope afforded by the policy.  The duty to defend is broader in scope than the duty to indemnify.  An insurer seeking to escape its duty to defend has the burden of establishing that
all parts of the cause of action fall clearly outside the scope of the coverage.



            To determine if a claim is “arguably covered” by terms of a policy, the allegations of the complaint are compared to the wording of the policy.  Franklin v. W. Nat’l Mut. Ins. Co., 574 N.W.2d 405, 407 (Minn. 1998).   The burden is on the insurer to establish the applicability of an exclusion, which is strictly interpreted against the insurer.  Amos v. Campbell, 593 N.W.2d 263, 266 (Minn. App. 1999).  “Any ambiguity regarding coverage is resolved in favor of the insured.” Franklin, 574 N.W.2d at 407.

            The Minnesota Supreme Court has clarified that in order to find that an action is not covered because it is not an accident, or excluded because it is intentional, the actor must have specific intent to cause injury or loss, rather than just specific intent to do the action that causes the injury or loss.  Am. Family Ins. Co. v. Walser, 628 N.W.2d 605, 611-12 (Minn. 2001).  The district court here stated that it “reject[ed] the claims of [appellant] that the Court should focus upon whether the alleged damage was intended or expected.”  Thus the district court erred in basing its summary judgment on the conclusion that all of the allegations of the underlying complaint involved intentional activity by appellant and were therefore excluded from coverage, without discussing whether appellant intended harm to result from his conduct, the standard under Walser.

            We therefore reverse and remand for application of the Walser standard.  Although respondent argues that the business pursuits exclusions of the policies also support a denial of coverage, the district court did not base its decision on these exclusions, and we decline to address on appeal what the district court apparently did not consider below.  Given our decision here, we deny respondent’s motion to strike.

            Reversed and remanded; motion denied.