Insurance Company Has No Duty To Defend For Water Law Violations.

The plaintiff owned a tract of land adjacent to a neighbor's tract.  The neighbor claimed their property would flood during heavy rains because the plaintiff constructed "an L-shaped field dike" that changed a natural drainage way, violated the reasonable use doctrine and caused the neighbor damages.  The plaintiff was insured under a policy with the defendant and the defendant denied coverage based on the "intentional act" exclusionary language which meant that there was no accident or "occurrence" under the policy.  The defendant also denied coverage under the "criminal act" exclusionary language on the basis that the plaintiff's conduct violated local watershed district rules.  The federal trial court granted summary judgment for the plaintiff in the action brought by the neighbor based on the statute of limitations.  The plaintiff then sought a declaratory judgment against the defendant that the defendant breached its duty to defend and should pay the plaintiff's legal fees of over $66,000.  The trial court granted summary judgment for the defendant and dismissed the case.  On appeal, the court affirmed.  The court held that the plaintiff intentionally violated the reasonable use rule with disregard for the high probability that injury would result to the neighbor's crops.  Thus, there was no "occurrence" under the policy that triggered coverage.  Estate of Norby, et al. v. Waseca Mutual Insurance Company, A14-1146, 2015 Minn. App. Unpub. LEXIS 461 (Minn. Ct. App. May 18, 2015).

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