This opinion will be unpublished and

may not be cited except as provided by

Minn. Stat. §480A.08, subd. 3 (1996).




Glenn Miller,



Frank Junghans, individual,


Liberty Mutual Insurance Company, etc.


Filed April 28, 1998


Schumacher, Judge

Concurring specially, Huspeni, Judge

Ramsey County District Court

File No. C0-95-12648

Patrick T. Tierney, Thomas E. McEllistrem, Collins, Buckley, Sauntry & Haugh, P.L.L.P., W-1100 First National Bank Building, St. Paul, MN 55101-1379 (for appellant)

Nancy L. Gores, Conley Law Office, 1660 South Highway 100, Suite 250, Minneapolis, MN 55416 (for respondent)

Considered and decided by Schumacher, Presiding Judge, Huspeni, Judge, and Shumaker, Judge.



Appellant Glenn Miller contends the district court erred when it interpreted an insurance policy issued by respondent Liberty Mutual Insurance Company. Liberty Mutual denied coverage based on the business pursuits and intentional acts exclusions. We affirm.


Miller and Frank Junghans are both fire investigators and members of the International Association of Arson Investigators (IAAI). Miller investigated two fires at the request of the Hennepin County Attorney's Office, concluding arson was involved in both. One of the investigations led to criminal charges against the homeowner. The homeowner hired Junghans as a defense expert. After the criminal case was dismissed, Junghans filed a complaint with the IAAI requesting an investigation into the professional conduct of Miller. Junghans alleged that Miller misrepresented technical facts, was biased, engaged in unethical conduct, and planted evidence of arson. Junghans claims that he sent the report because both he and Miller are IAAI members and the IAAI encourages high standards of professional conduct among its members.

Based on Junghan's complaint, the Hennepin County Attorney's Office commenced an investigation. Dennis Berry, Miller's supervisor, concluded that Miller had not acted unethically or criminally. Berry found Junghans's complaint to be without merit. Berry concluded that the evidence from the fire investigation suggested that Junghans should have known his complaint was untrue. The IAAI also investigated the report and found Junghans's complaint unsubstantiated.

Miller brought this civil action against Junghans, alleging defamation, defamation per se, and intentional infliction of emotional distress. Junghans's homeowner's insurer, Liberty Mutual, denied coverage under the policy. Miller and Junghans entered a Miller-Shugart agreement. Junghans stipulated to a judgment of $115,000.

Miller and Liberty Mutual, as garnishee in the action, filed cross-motions for summary judgment. The district court granted Liberty Mutual's motion on the business pursuits exclusion as well as the intentional acts exclusion. We affirm on the intentional act exclusion.


On review of summary judgment, this court must determine whether any genuine issues of material fact exist and whether the district court erred in its application of the law. Wartnick v. Moss & Barnett, 490 N.W.2d 108, 112 (Minn. 1992). The parties do not dispute the facts on appeal. In such a case, we need not defer to the district court's application of the law. Hubred v. Control Data Corp., 442 N.W.2d 308, 310 (Minn. 1989). The interpretation of an insurance policy is a question of law that the court decides de novo. Meister v. Western Nat'l Mut. Ins. Co., 479 N.W.2d 372, 376 (Minn. 1992).

We note as a preliminary matter that, by virtue of the Miller-Shugart agreement reached between the parties, the duty to defend is not at issue here, only the duty to indemnify. The duty to indemnify extends only to claims that are actually covered under the policy. Prahm v. Rupp Constr. Co., 277 N.W.2d 389, 390 (Minn. 1979).

Miller contends the district court erroneously denied coverage under the intentional act exclusion. The policy provides:

Personal liability * * * [does] not apply to "bodily injury" * * * which is expected or intended by the "insured."

When interpreting an insurance contract, the court must read the policy as a whole and give unambiguous language its plain and ordinary meaning. SCSC Corp. v. Allied Mut. Ins. Co., 536 N.W.2d 305, 311 (Minn. 1995).

Under Minnesota law, an intentional act exclusion applies only when the insured acts with the specific intent to cause the harm itself, not merely when the insured generally intended to act. R.W. v. T.F., 528 N.W.2d 869, 872 (Minn. 1995). Thus, the question here is not whether Junghans had intended to file the IAAI report, but whether he had intended to harm Miller by filing the report.

Miller alleged in the complaint that, in the report to the IAAI, Junghans accused him, among other things, of committing the criminal act of planting evidence to establish arson. That allegation clearly would be injurious to Miller's personal reputation as well as his reputation and livelihood as a fire investigator. The district court ruled:

[T]here can be no coverage for * * * any cause of action in [Miller's] complaint for damages for intentional tort by reason of the policy language [regarding intentional acts].

Implicit in this ruling is the court's conclusion that Junghans acted with intent to harm. From the facts as alleged, we conclude the district court properly inferred Junghan's intent to injure Miller and denied coverage under the intentional act exclusion. See id. (allowing court to infer intent for intentional act exclusion when nature and circumstances of insured's act were substantially certain to result in harm).

Miller argues, however, that the intentional act exclusion is not determinative of his case because he raised a claim and an issue of fact regarding negligent defamation.[1] His complaint alleges Junghans knowingly and maliciously, or with reckless disregard for the truth, made false allegations about Miller. Miller contends the phrase "reckless disregard" was sufficient to plead negligence. We disagree because negligence is distinct from reckless conduct. See Ohio Cas. Ins. Co. v. Terrace Enters. Inc., 260 N.W.2d 450, 452-53 (Minn. 1977) (allowing coverage of incident as an "occurrence" under insurance policy where insured's conduct may have been negligent, but was not reckless or intentional); Farmers Union Oil Co. v. Mutual Serv. Ins. Co., 422 N.W.2d 530, 533 (Minn. App. 1988) (denying coverage where insured acted recklessly, because it had sufficient knowledge to expect damage to occur).

Even if the words "reckless disregard" were sufficient to plead negligence, Miller's argument still fails. We read the substance of the complaint as a whole to determine whether it is grounded in negligence or intentional conduct. See Minn. R. Civ. P. 8.06 (court construes all pleadings to do substantial justice); Franklin v. Western Nat'l Mut. Ins. Co., 574 N.W.2d 405, 407 (Minn. 1998) (construing pleadings as a whole to determine basis of party's claim and find no duty to defend under policy); Consumers Grain Co. v. Wm. Lindeke Roller Mills, 153 Minn. 231, 233, 190 N.W. 65, 65 (1922) (court construes allegations of complaint from entire pleading); Basich v. Board of Pensions, 493 N.W.2d 293, 295 (Minn. App. 1992) (court construes pleadings liberally and focuses on substance rather than form).

Here, the pleadings taken as a whole show this action is grounded in Junghans's intent to injure Miller's reputation. From the allegations of acting "knowingly, maliciously and with reckless disregard for the truth," the court properly inferred Junghans's intent to injure.

Because we decide this case under the intentional act exclusion, we do not address Miller's other arguments.


HUSPENI, Judge (concurring specially)

I agree with the majority that the policy at issue in this case contains an intentional acts exclusion broad enough to relieve Liberty Mutual of any duty to indemnify Junghans.

I write separately only to address, as did the district court, an additional basis that supports denial of indemnification. This policy, a homeowner's liability one, contains not only an intentional acts exclusion; it contains a business pursuits exclusion as well. This latter provision excludes coverage for injury that

[a]ris[es] out of or in connection with a "business"[2] engaged in by an "insured." This exclusion applies but is not limited to an act or omission, regardless of its nature or circumstance, involving a service or duty rendered, promised, owed, or implied to be provided because of the nature of the "business."

Courts traditionally have been reluctant to deny coverage, especially in cases where both a personal and a business purpose are found to underlay the act which arguably gives rise to coverage. See Farmers Ins. Exchange v. Sipple, 255 N.W.2d 373, 374-75 (Minn. 1977) (holding business pursuits exclusion did not apply because assault by insured was not an act peculiar to insured's business activities); Milwaukee Mut. Ins. Co. v. City of Minneapolis, 307 Minn. 301, 307-08, 239 N.W.2d 472, 475-76 (1976) (holding business pursuits exclusion did not apply because handling of service revolver was incident to nonbusiness pursuits); Hennings v. State Farm Fire & Cas. Co., 438 N.W.2d 680, 684 (Minn. App. 1989) (holding business pursuits exclusion did not apply because outing, which led to injury, had dual purpose of business and pleasure), review denied (Minn. June 9, 1989); and Reinsurance Ass'n v. Patch, 383 N.W.2d 708, 712 (Minn. App. 1986) (holding business exclusion did not apply to claim arising out of injuries from improperly repaired bicycle because repairman merely fixed bikes out of his garage occasionally and did not earn a livelihood from that activity).

The broad language of the exclusionary clause in Liberty Mutual's policy, and the circumstances of the alleged defamatory act, both serve to distinguish this case from earlier cases in which coverage was found to exist. Both Junghans and Miller are members of IAAI. The report that Miller categorizes as defamatory arose out of a fire investigation in which both men had a degree of professional involvement. While there is nothing in the record to indicate that Junghans was required to report his concerns to IAAI, the record would support an inference that he may have felt ethically obligated to report what he believed to be inappropriate professional conduct of a fellow association member. The fact that IAAI found Junghans's report to be unsubstantiated does not, it seems to me, establish that in filing his complaint he acted for some purpose other than that of discharging his duties as a fire investigator.

Even the narrowest reading of the exclusionary clause and the broadest and most expansive application of existing case law cannot, I submit, support a determination that the business pursuits exclusion in Junghans's homeowner's policy is inapplicable.

[ ]1 We recognize that defamation may be proven with negligence in the case of private individual plaintiffs. Jadwin v. Minneapolis Star & Tribune, 367 N.W.2d 476, 491-92 (Minn. 1985). 2 The policy defines "business" to include "trade, profession or occupation."