                                                              FILED
                                                         SEPTEMBER 19, 2019
                                                       In the Office of the Clerk of Court
                                                      WA State Court of Appeals, Division III




           IN THE COURT OF APPEALS OF THE STATE OF WASHINGTON
                              DIVISION THREE

GRANGE INSURANCE                            )         No. 36195-1-III
ASSOCIATION, a Washington                   )
corporation,                                )
                                            )
                    Respondent,             )
                                            )
      v.                                    )         UNPUBLISHED OPINION
                                            )
MIELKE BROTHERS, INC., a                    )
Washington corporation, and DOUGLAS         )
MIELKE, an individual,                      )
                                            )
                    Appellants.             )

      PENNELL, J. — Mielke Brothers, Inc. and Douglas Mielke appeal a summary

judgment order declaring Grange Insurance Association has no duty to defend or

indemnify against a minority shareholder lawsuit. Because the lawsuit in question does

not seek damages for which bodily injury, property damage, or personal and advertising

injury coverages apply, we affirm.
No. 36195-1-III
Grange Ins. Ass’n v. Mielke Bros., Inc.


                                           FACTS

       Mielke Brothers, Inc. is a Washington corporation located in Lincoln County.

Douglas Mielke is the corporation’s president and chairman of its board of directors.

Mielke Brothers owns crop and pasture land, farming equipment, farming buildings, and

residential homes. The primary purpose of the corporation is to acquire, improve and

develop properties, and conduct agricultural operations. The shareholders of Mielke

Brothers include numerous members of the Mielke family. All current shareholders serve

on the corporation’s board of directors.

       A minority of Mielke Brothers’ shareholders filed suit in 2017, alleging oppressive

actions by the corporation through Douglas Mielke and a majority of the shareholders.

For example, the suit alleged that minority shareholder-employees were barred from

accessing land necessary for employment. In addition, the minority shareholders claimed

the corporation changed its rules regarding shareholder tenants; some tenants were going

to be charged rent for residential property while other tenants could reside rent-free. Other

alleged mismanagement included refusal to make payments on debt owed to one of the

minority shareholders, failure to pay wages, cancelling crop leases related to minority

shareholder income, and refusal to allow minority participation at board meetings.




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No. 36195-1-III
Grange Ins. Ass’n v. Mielke Bros., Inc.


       Grange has provided farm insurance to Mielke Brothers since 2013. The Grange

policy includes a provision for farming and personal liability insurance. Of relevance

here, the policy includes liability coverage for “bodily injury and property damage,”

(Coverage H), Clerk’s Papers (CP) at 109, and “personal and advertising injury”

(Coverage I). Id. at 115.

       Coverage for bodily injury and property damage (Coverage H) is limited to

damage caused by an “occurrence” that takes place during the policy’s coverage period.

Id. at 109. An “occurrence” is defined as “an accident, including continuous or repeated

exposure to substantially the same general harmful conditions.” Id. at 125.

       Coverage for personal and advertising injury (Coverage I) includes damage for an

injury, including consequential bodily injury, arising out of “[t]he 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.” Id.

       The aforementioned coverage provisions oblige Grange to defend against a lawsuit

seeking damages for “bodily injury,” “property damage,” or “personal and advertising

injury” to which coverage applies. Id. at 109, 115-16.




                                             3
No. 36195-1-III
Grange Ins. Ass’n v. Mielke Bros., Inc.


       Grange initially defended Mielke Brothers and Douglas Mielke in the minority

shareholders’ lawsuit under a reservation of rights. Grange then filed a declaratory

judgment action in Spokane County Superior Court. The superior court granted Grange

declaratory relief from further responsibility to defend or indemnity under the terms of the

policy. Mielke Brothers and Douglas Mielke appeal.

                                       ANALYSIS

       Liability insurance generally obliges an insurer to defend an insured against claims

for covered damages. See St. Paul Fire & Marine Ins. Co. v. Onvia, Inc., 165 Wn.2d 122,

129, 196 P.3d 664 (2008). This duty to defend is broad, applying not only to covered

losses, but also to ones that are potentially covered. Am. Best Food, Inc. v. Alea London,

Ltd., 168 Wn.2d 398, 404, 229 P.3d 693 (2010). Doubts about coverage are to be resolved

in favor of the duty to defend. Woo v. Fireman’s Fund Ins. Co., 161 Wn.2d 43, 52-53, 64,

164 P.3d 454 (2007). De novo review applies to a trial court’s summary judgment

determination regarding an insurance company’s duty to defend. Id. at 52.

       Mielke Brothers claims that its liability coverage for bodily injury and property

damage (Coverage H) and personal and advertising injury (Coverage I) apply to the

claims in the minority shareholder complaint and, as a result, Grange has a duty to defend.

We disagree.


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No. 36195-1-III
Grange Ins. Ass’n v. Mielke Bros., Inc.


       The coverage for bodily injury and property damage (Coverage H) is limited in

scope to an “occurrence” that happens during the policy period. CP at 109. An occurrence

is defined as an “accident.” Id. at 125. The shareholder complaint does not allege

damages attributable to an accident. It alleges Mielke Brothers engaged in purposefully

oppressive conduct. Such an intentional act with foreseeable consequences does not

quality for coverage under the bodily injury and property damage provision (Coverage H).

See Safeco Ins. Co. of Am. v. Butler, 118 Wn.2d 383, 401, 823 P.2d 499 (1992); State

Farm Fire & Cas. Co. v. Parrella, 134 Wn. App. 536, 541, 141 P.3d 643 (2006).

       Mielke Brothers argues that coverage for personal and advertising injury

(Coverage I) applies because the complaint includes claims for wrongful eviction. We

disagree with this characterization of the complaint. A unilateral change of lease terms

(i.e., requiring rent where none was demanded before) is not an eviction. Kitsap County v.

Allstate Ins. Co., 136 Wn.2d 567, 593, 964 P.2d 1173 (1998) (eviction requires physical

ouster). In addition, although there is an allegation that a minority shareholder has been

wrongfully excluded from farming areas, Grange’s policy only applies to evictions from a

place of private occupancy, not an exclusion from the workplace. See id. at 590 (Private

occupancy contemplates one that is secluded from the sight, presence or intrusion of

others.).


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No. 36195-1-III
Grange Ins. Ass 'n v. Mielke Bros., Inc.


                                      CONCLUSION

       Because the insurance agreement clearly does not afford coverage for the damage

claims asserted against Mielke Brothers and Douglas Mielke, the trial court properly

granted Grange's request for declaratory relief. This matter is affirmed.

       A majority of the panel has determined this opinion will not be printed in the

Washington Appellate Reports, but it will be filed for public record pursuant to

RCW 2.06.040.




                                           Pennell, J.

WE CONCUR:




Lawrence-Berrey, C.J."                     Fearing, J.




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