Armed Forces Insurance Exchange v. Transamerica Insurance Co.9/16/1998
APPEAL FROM THE FIRST CIRCUIT COURT
BURNS, C.J., ACOBA, J., AND CIRCUIT JUDGE DEL ROSARIO IN PLACE OF WATANABE, J., RECUSED
OPINION OF THE COURT BY ACOBA, J.
We hold herein that the exclusion for activities arising out of business pursuits as applied to personal liability coverage in the homeowner's insurance policy issued by Defendant-Appellee TIG (TIG) refers to "activities which are conducted on a regular basis for the purposes of earning income, profit, and as a means of livelihood." 9 L. Russ & T. Segalla, Couch on Insurance, ยง 128:13, at 17-18 (3d ed. 1997) (footnote omitted) [hereinafter Couch]. We conclude that the question of whether "a given activity constitutes a business pursuit . . . is determined by the facts of the individual case[.]" Id. at 128-19 (internal quotation marks omitted). We also conclude that the question of whether an exception for "activities usual to non-business pursuits" applies to the business pursuit exclusion must be determined on a case-by-case basis.
We hold, further, that the business pursuit exclusion in TIG's insurance policy applied and the exception to that exclusion did not apply to the factual allegations in the complaint filed by Intervenors-Appellants Jane Does One through Eleven (collectively Appellants) for personal injuries against Defendant Bernard Sagawa (Sagawa). Therefore, we determine there was no duty on TIG's part to defend or indemnify its insured, Sagawa, from the claims in Appellants' complaint.
I.
A.
On or about March 18, 1995, Appellants named Sagawa and the Hawaii Housing Authority (HHA) as defendants in a personal injury action filed in the first circuit court (the court) and designated as "Jane Does One through Eleven v. Sagawa, et al.," Civil No. 95-0890-03 (the underlying action). In their first cause of action, Appellants alleged that Sagawa entered their respective homes under the pretext of conducting a housing inspection and, while in their homes, committed various forms of sexual harassment and assault against them, and inflicted intentional and negligent emotional distress on them. Appellants maintained that at the time of the alleged incidents, Sagawa was an employee of HHA and "acting under color of law and under the authority of when he entered each [Appellant's] home." In addition, Appellants claimed that Sagawa's conduct was "motivated by malice or otherwise represented an abuse of his office."
Thus, HHA, Appellants alleged, was liable for the conduct of Sagawa under theories of negligence, respondeat superior, and vicarious liability. Finally, Appellants asserted as other causes of action against both Sagawa and HHA, civil rights violations and invasion of privacy.
B.
Subsequently, on April 9, 1996, Armed Forces Insurance Exchange (Armed Forces), the carrier on one of Sagawa's homeowner's insurance policies, filed a complaint for declaratory judgment against Sagawa and his other homeowner's insurance policy carriers, TIG, Commercial Union Insurance Company of Hawaii, Inc. (Commercial Union), Bishop Insurance of Hawaii, Inc. (Bishop Insurance), Pacific Insurance Company, Ltd. (Pacific Insurance), and the liability insurer for HHA, Acceptance Insurance Company (Acceptance Insurance). Armed Forces maintained that, under the terms of the homeowner's policy it issued to Sagawa, it did not owe a duty to defend and/or indemnify Sagawa in Appellants' underlying action.
Armed Forces further alleged that TIG, along with Commercial Union, Bishop Insurance, and Pacific Insurance, provided Sagawa with homeowner's insurance coverage during the relevant period and owed a duty to defend Sagawa.<
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