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Johnson v. AMICA
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MAINE SUPREME JUDICIAL COURT					Reporter of Decisions
Decision:	1999 ME 106
Docket:	Cum-99-49
  on Briefs:	June 17, 1999	
Decided:	July 8, 1999


	[¶1]  Steven G. Johnson and Roselle F. Johnson appeal from the
judgment entered in the Superior Court (Cumberland County, Mills, J.) in
favor of Amica Mutual Insurance Company in the Johnsons' suit alleging a
duty to defend and indemnify them in connection with a third-party action
brought against them.  The Johnsons' contentions lack merit.  We affirm the
	[¶2]  The parties dispute the scope of coverage provided under a
homeowners insurance policy that Amica issued to the Johnsons.  Vincent
Herzog brought a suit against the Johnsons during the policy period, alleging
that they converted bank account funds and reimbursement payments. 
Amica refused to defend and indemnify the Johnsons in the Herzog suit,
based on the policy's coverage provisions and exclusion provisions.  The
Johnsons brought suit against Amica seeking, inter alia, a declaratory
judgment that Amica had the duty to defend and indemnify them in the
Herzog suit.  Amica moved for a summary judgment on the basis that it had
no duty to defend or indemnify the Johnsons under the policy.  On the day
after the court heard oral argument from the parties on Amica's motion,
Amica submitted a letter and copies of three cases supporting its position
that the alleged conversion was "strictly an economic loss" that did not
qualify as "property damage" under the policy.  The Johnsons filed a written
objection to Amica's post-hearing submission on the grounds that: (1) the
submission was "an affront to the finality of the pleading steps outlined in
Rule 7"; and (2) the cases were "of doubtful relevance."  The court
acknowledged receipt of Amica's submission and the Johnsons' objection
thereto, and offered the Johnsons an opportunity to respond.  The Johnsons
declined to respond and, instead, asked the trial justice to: (1) strike the
new cases from the record; (2) recuse herself; and (3) refer the matter to
another judge.  The trial justice denied the Johnsons' request that she
recuse herself, and entered a judgment in favor of Amica.  This appeal
	[¶3]  Although the Johnsons claim they are entitled to a defense and
indemnification, their claim has no basis, either in law or in fact.  The
relevant coverage provision provides: "If a . . . suit is brought against any
insured for damages because of . . . bodily injury or property damage caused
by an occurrence to which this coverage applies, we will . . . [p]ay up to our
limit of liability for the damages for which the insured is legally liable . . . and
. . . [p]rovide a defense at our expense by counsel of our choice . . . ."  The
policy defines the term "occurrence" as an "accident . . . which results,
during the policy period, in [b]odily injury [or] [p]roperty damage."  The
policy defines the term "property damage" as "physical injury to,
destruction of, or loss of use of tangible property."
	[¶4]  Contrary to the Johnsons' contention, the allegedly converted
bank account funds constitute intangible, rather than tangible, property. 
According to BLACK'S LAW DICTIONARY 809, 1456 (6th ed. 1990): (1)
"tangible property" is property with "physical form and substance" that
"may be felt or touched, and is necessarily corporeal, although it may be
either real or personal"; and (2) "intangible property" is property that has
"no intrinsic and marketable value, but is merely the representative or
evidence of value, such as certificates of stock, bonds, promissory notes,
copyrights, and franchises."  Bank account funds are not "tangible
property," because they have no physical presence.  Rather, bank account
funds are "intangible property," because they have no intrinsic value and
merely represent, or are evidence of, value.  Other courts have similarly
concluded that bank account funds constitute intangible property.  See, e.g.,
Allstate Ins. Co. v. Russo, 829 F. Supp. 24, 27 (D. R.I. 1993) ("Bank deposits
create a debtor-creditor relationship between the bank and the depositor.  A
deposit, therefore, is not held in specie in the bank's vaults for the
depositor, but rather is an intangible chose in action.") (citations omitted);
Travelers Indem. Co. v. State, 680 P.2d 1255, 1257 (Ariz. Ct. App. 1984)
("The deposit of funds [in a bank] creates a debtor-creditor relationship
between the bank and the depositor.  A credit is a chose in action, and a
chose in action is intangible property.") (citations omitted); Cartwright v.
Deposit Guar. Nat'l Bank, 675 So. 2d 847, 847-48 (Miss. 1996) (stating that
deposits into a bank account change form from tangible currency and
checks into intangible accounting credits, and "money on deposit in a bank
evidences a right of payment from the bank and is thus intangible in
nature"); Grochowski v. Larson (In re Estate of Larson), 538 N.W.2d 802,
803 (Wisc. Ct. App. 1995) ("A bank account is a contract between a
depositor and a financial institution for the deposit of funds. . . .  Since bank
deposits, checks, annuities and trust agreements are all agreements or
documents conferring rights to the management and payment of money or
assets, they fall within the definition of intangible personal property rather
than tangible personal property.").  Therefore, the allegedly converted bank
account funds do not qualify as "tangible property" within the meaning of
the policy.  
	[¶5]  The alleged conversion of reimbursement payments in this
case would have resulted in an intangible economic loss, rather than a "loss
of use of tangible property."  Granted, money (i.e., the currency itself) may
constitute tangible property.  See, e.g., Coulter v. Cigna Property & Cas. Cos.,
934 F. Supp. 1101, 1123 (N.D. Iowa 1996) ("[M]oney might be considered
'tangible property' in situations where money has actually been destroyed or
damaged."); Security State Bank of Kansas City v. Aetna Cas. & Sur. Co., 825
F. Supp. 944, 947 (D. Kan. 1993) ("The destruction of a stack of currency
could certainly be considered a destruction of tangible property.  The
moment it is destroyed[,] an irreversible loss of wealth has occurred.  The
destruction or loss of a check or other debt instrument is a different
matter."); Walker v. State Farm Fire & Cas. Co., 569 N.W.2d 542, 544 (Minn.
Ct. App. 1997) (distinguishing between loss of tangible currency and loss of
intangible economic value of promissory note).  Herzog's complaint merely
alleges economic injury, and does not allege any "bodily injury" or "physical
injury to, destruction of, or loss of use of tangible property," as the policy
defines those terms.  Herzog's complaint alleges that Steven Johnson
deprived him of his right to reimbursement by falsely attributing some of
Herzog's work to himself, and seeks damages to compensate him for his
resulting economic injury.  A right of payment is intangible in nature.  See
Cartwright, 675 So. 2d at 848.  Therefore, the allegedly converted payments
do not qualify as "tangible property," and the policy's coverage provision
does not apply to the allegations in Herzog's complaint.
	[¶6]  Even if the Herzog suit fell within the scope of the policy's
liability coverage, exclusion 1(b) applies.  That exclusion provides that the
coverage does not apply to "bodily injury or property damage . . . [a]rising out
of or in connection with a business engaged in by an insured."  Under the
policy, "'[b]usiness' includes trade, profession or occupation."  Clearly, any
alleged bodily injury or property damage arose out of and in connection with
the Johnsons' trade, profession, or occupation.  Therefore, exclusion 1(b)
specifically precludes coverage for defense and indemnification in the
Herzog suit.
	[¶7]  The general allegations in Herzog's complaint give rise to no
set of facts that would establish coverage under the policy.  See Maine Mut.
Fire Ins. Co. v. Gervais, 1998 ME 197, ¶ 7, 715 A.2d 938, 940.  The Herzog
suit did not fall within the scope of the liability coverage and, even if it did,
the policy's exclusion provision 1(b) explicitly precludes coverage. 
Therefore, Amica has no duty to defend the Johnsons in the Herzog suit,
and the trial court did not err in granting a summary judgment in favor of
	[¶8]  Without citing any relevant or binding precedent, the Johnsons
also contend that the trial court erred in considering Amica's post-hearing
submission of case law.  Although the Johnsons refer vaguely to Maine Rules
of Civil Procedure 7 and 15(d) in support of their argument, they fail to
point to any specific language that would preclude Amica from submitting
cases after a hearing on motions for a summary judgment.  It is solely within
the court's discretion to decide whether to accept and review additional
authorities provided after oral argument.  In most circumstances, no reply to
such a submission is even necessary since the authorities submitted are
likely to have been discussed at argument.  At most, the opposing party may
be given an opportunity to respond.  The court did exactly that here.
	[¶9]  Even if the Johnsons could point to some error in the court's
action, the Johnsons are not entitled to any remedy.  The Johnsons ask us to
vacate the summary judgment and remand the case for a rehearing on the
very issue of law now before us (i.e., whether Amica has a duty to defend the
Johnsons in the Herzog suit).  The Johnsons maintain that both parties "are
entitled to a final decision on their motions [for a summary judgment] in the
Superior Court and to de novo review of that decision in [the Law Court]." 
The Johnsons contend that our de novo review of the issue of law is an
inadequate substitute for a de novo hearing in the Superior Court because
"[a]n initial decision on the merits in the Law Court would deny both parties
the right to appeal."  The Johnsons' contention is utterly devoid of merit
and demonstrates a fundamental misunderstanding of the nature of de novo
review, as well as an apparent disregard for the conservation of scarce
judicial resources.
	[¶10]  The Johnsons further contend that the trial court abused its
discretion in denying their motion to recuse, because they claim that the
justice reached her decision based on Amica's post-hearing argument and
"it is not reasonable to ask her to excise the evil thoughts from her mind
and reach a new decision on the merits uninfluenced by her previous action
and free of any conscious or subconscious need to validate her previous
action."  They erroneously assert that they are "entitled to recusal if any
reasonable person would be concerned about the impartiality of the Court."
	[¶11]  "Recusal is a matter within the broad discretion of the trial
court."  Estate of Dineen, 1998 ME 268, ¶ 8, 721 A.2d 185, 188. 
"Accordingly, we review the denial of a motion to recuse for an abuse of
discretion."  Id.  "[I]nformation gained or opinions formed by a trial judge
based on events or facts presented in the same or other judicial proceedings
do not constitute a basis for recusal except in the extraordinary
circumstances that demonstrate a deep-seated favoritism or antagonism that
would make fair judgment impossible."  Id. ¶ 9, 721 A.2d at 188 (quotations
omitted).  The Johnsons have failed to demonstrate, or even allege, a "deep-
seated favoritism or antagonism that would make fair judgment
impossible."{1}  Id. (quotations omitted).  The court did not abuse its broad
discretion in denying the motion to recuse.
	[¶12]  The Johnsons' post-hearing actions in the trial court display
disrespect for the court, and their appeal from the court's refusal to recuse
itself is an insult to the appellate process.  We cannot tolerate such abusive
consumption of the court system's limited resources by litigants who choose
to litigate baseless suits and to present meritless issues on appeal.  We,
therefore, impose sanctions on the Johnsons and their counsel in the
amount of $1,000 to be paid to the defendant as partial reimbursement for
its expenses in the defense of the Johnsons' actions. 
	The entry is:
Judgment affirmed with sanctions against the
plaintiffs and their counsel in the amount of $1,000.

Attorney for the plaintiffs: Ralph Dyer, Esq. 477 Congress St. Portland, Maine 04l0l Attorney for the defendant: Martica Douglas, Esq. Douglas, Denham, Rogers & Hood 103 Exchange St. P.O. Box 7108 Portland, Maine 04112-7108
FOOTNOTES******************************** {1} . Rather, the Johnsons claim to believe there is a "reasonable possibility that they will not receive a completely impartial hearing before Justice Mills." However, the mere belief that a judge might not be "completely impartial" is insufficient to warrant a recusal if the judge believes she can act with complete impartiality. See Maine Code of Jud. Conduct Canon 3(E); State v. Rameau, 685 A.2d 761, 763 (Me. 1996); Wood v. Wood, 602 A.2d 672, 674 (Me. 1992). "The possibility that a motion justice might be improperly influenced by evidence that had not been admitted during a previous trial, but would not be admissible in the present case[,] is a wholly inadequate ground for disqualification." Rameau, 685 A.2d at 763 (internal quotations omitted). "The motion justice need not disqualify herself if she believes she can act with complete impartiality and where there are no reasonable grounds for questioning her ability to do so." Wood, 602 A.2d at 674.