Profit Motive Key To Insurance Exclusionary Clause.

The defendants, a married couple, had a homeowners' insurance policy on their residence with one plaintiff and a dwelling policy with another plaintiff on a second property that they owned.  They kept cattle on a third tract (owned by the husband with his father) which included 150 acres and two barns.  The defendants purchased a bull to breed cows so that they could have calves suitable for team roping purposes.  Other calves were sold.  The husband team roped with friends once a month.  Cattle were sold annually with the sales reported on Schedule F and expenses claimed as deductions.  In 2011 and 2012, the defendants reported a loss on the cattle activity.  The defendants were sued by the estate of a third party that allegedly died from injuries sustained by the bull when it escaped its enclosure.  The plaintiffs sought a declaration that they have no duty to defend or indemnify the defendants.  Both policies contained an identical "business pursuits of the insured" exclusionary clause which excluded coverage for bodily injury "[a]rising out of or in connection with a 'business' engage in by an insured."  The court determined that the exclusionary language applied because, under state (OK) law, all that is necessary to make an activity a business is a profit motive.  Whether an actual profit is made is immaterial.  The evidence showed that profit did, at least in part, motivate the cattle operation.  A tax benefit was realized, Schedule F was filed indicating material participation in the activity, detailed financial records were maintained, and other persons were hired to assist with the activity.  Accordingly, the court determined that the plaintiffs did not owe a duty to defend or indemnify the defendants at to the third estate's claims against them.  Hanover American Insurance Co., et al. v. White, No. CIV-14-0726-HE, 2015 U.S. Dist. LEXIS 100766 (W.D. Okla. Aug. 3, 2015).