B.B. v. Continental Ins. Co.

• Decision Date: 23 February 1994
• Docket Number: No. 93-1660,93-1660
• Citation: 8 F.3d 1288
• Parties: B.B., * Appellant, v. CONTINENTAL INSURANCE COMPANY, Appellee.
• Court: U.S. Court of Appeals — Eighth Circuit

Page 1288

8 F.3d 1288

B.B., ^* Appellant, v. CONTINENTAL INSURANCE COMPANY, Appellee.

No. 93-1660.

United States Court of Appeals Eighth Circuit.

Submitted Sept. 15, 1993.

Decided Nov. 4, 1993.

Rehearing Denied Feb. 23, 1994.

Greggory D. Groves, Springfield, MO, argued (F. William Joyner and Greggory D. Groves, on the brief), for appellant.

James J. Cramer, Overland Park, KS, argued (Barry W. McCormick and James J. Cramer, on the brief), for appellee.

Before MAGILL, Circuit Judge, LAY, Senior Circuit Judge, and HANSEN, Circuit Judge.

MAGILL, Circuit Judge.

B.B. appeals the district court's ¹ order granting summary judgment to Continental Insurance Company (Continental) and denying B.B.'s motion for summary judgment. B.B. contends that the district court mistakenly concluded that the sexual molestation of B.B. by P.F. was not an "accident" and therefore not an "occurrence" covered by P.F.'s parents' homeowner's insurance policy. B.B. argues that the molestation was an "occurrence" because the injuries resulting from the molestation were "neither intended nor expected" from the standpoint of P.F. Because we believe that the Missouri Supreme Court would join the now unanimous rule of over thirty states that have considered this issue and adopt the inferred-intent standard in cases of sexual molestation of a minor, we affirm the district court.

I. BACKGROUND

The facts that give rise to this dispute occurred from 1979 through 1981 when B.B., a male minor, was eight and nine years of age. B.B.'s parents periodically enlisted the aid of P.F., also a male minor, who was fourteen and fifteen years of age at the time, to babysit B.B. While babysitting B.B., P.F. sexually molested him by performing fellatio on B.B. and causing B.B. to perform fellatio on P.F.

After B.B. reached the age of majority, he filed suit against P.F. in the Circuit Court of Howell County, Missouri. The Howell County litigation proceeded to trial, and that court, serving as trier of fact, rendered judgment in favor of B.B. against P.F. in the amount of $125,000 plus costs.

At the time of the sexual molestation, Continental insured P.F.'s parents under a homeowner's insurance policy. Because P.F. was a member of his parents' household at all times when the sexual molestation occurred, the Continental policy also covered P.F. B.B. claims that the Continental policy insures P.F. for the damage he caused to B.B. After receiving judgment against P.F., B.B. brought this present lawsuit as a judgment creditor against P.F.'s insurer, Continental. See Mo.Rev.Stat. § 379.200 (1986).

Continental removed this case to the United States District Court for the Western District of Missouri on the basis of diversity of citizenship. Both B.B. and Continental filed motions for summary judgment in the district court. B.B. argued that P.F.'s acts of sexual molestation were "occurrences" as defined in the Continental policy, and therefore the Continental policy insured P.F. for the damage caused by these "occurrences." Continental argued that under its policy, the term "occurrence" did not include coverage for intentional acts of sexual molestation. The district court granted Continental's motion for summary judgment and denied B.B.'s motion for summary judgment. The district court held that the Continental policy did not cover the damage that resulted from acts of sexual molestation by an insured because the insurance policy only provided coverage for occurrences that were "accidents." The district court stated that P.F.'s conduct was intentional and therefore could not qualify as an accident. B.B. now appeals the district court's decision.

II. DISCUSSION

The sole issue on appeal is whether P.F.'s acts of sexual molestation constitute "occurrences" covered under the Continental policy. The Continental policy states in pertinent part:

Section II--LIABILITY.

A. LIABILITY TO OTHERS.

The company will pay on behalf of the insured all sums which the insured shall become legally obligated to pay as damages because of bodily injury or property damage, to which Section II applies caused by an occurrence. (emphasis in original).

The policy defines the underlined word "occurrence" in a separate definition section:

"occurrence" means an accident, including continuous or repeated exposure to conditions, which results in bodily injury or property damage neither expected nor intended from the standpoint of the insured. (emphasis added).

This underlined language in the definition of occurrence controls the issues in this case.

B.B. argues that the Missouri Supreme Court, applying Missouri law, has interpreted the "intended or expected" language of homeowners' insurance policies to exclude coverage when the insurer demonstrates "not only that the insured intended the acts causing the injury, but that injury was intended or expected from these acts." American Family Mut. Ins. Co. v. Pacchetti, 808 S.W.2d 369, 371 (Mo.1991). B.B. argues that in order for Continental to deny coverage, it must demonstrate that (1) P.F. intended to sexually molest B.B., and (2) P.F. subjectively intended to harm or injure B.B. See id. B.B. further argues that Continental cannot meet this burden, as a matter of law, because the state court in the underlying action between B.B. and P.F. made findings of fact that B.B. claims are binding on Continental. The court found that although P.F. intentionally molested B.B., he subjectively did not intend to injure or harm B.B. ² Appellant's Br. at 13. B.B. concludes that under Missouri law the sexual molestation by P.F. was an "occurrence" covered by the Continental policy. Appellant's Br. at 16.

Our task is to determine how the Missouri Supreme Court would interpret the "neither intended nor expected" language of Continental's insurance policy in the context of the sexual molestation of a minor. Specifically, we must determine whether the Missouri Supreme Court would adopt the inferred-intent standard in cases of sexual molestation of a minor to impute an intent to harm or cause injury regardless of the actor's actual subjective intent.

A. Standard of Review

In this case we review both the grant and denial of summary judgment by the district court. Summary judgment is proper "if there is no genuine issue as to any material fact and ... the moving party is entitled to judgment as a matter of law." Fed.R.Civ.P. 56(c). We review the district court's summary judgment determinations under the de novo standard. First S. Ins. Co. v. Jim Lynch Enter., 932 F.2d 717, 719 (8th Cir.1991). Moreover, we can affirm the district court "regardless of an incorrect analysis if the same result may be reached on theories other than those employed by the trial court." Kuehn v. Garcia, 608 F.2d 1143, 1146 (8th Cir.1979), cert. denied, 445 U.S. 943, 100 S.Ct. 1340, 63 L.Ed.2d 777 (1980). ³

B. Missouri Law

Both parties correctly point out that Missouri law governs the substantive issues in this case because jurisdiction is based on diversity of citizenship. This court must apply the substantive law of Missouri, the forum in which the district court sits. See Omaha Indem. Co. v. Royal Am. Managers, Inc., 755 F.Supp. 1451, 1459 (W.D.Mo.1991). The decisions of the Missouri Supreme Court as to state law are binding on this court. See Garnac Grain Co. v. Blackley, 932 F.2d 1563, 1570 (8th Cir.1991). If the Missouri Supreme Court has not addressed the issue before this court, we "must determine what the highest state court would probably hold were it called upon to decide the issue." Gilstrap v. Amtrak, 998 F.2d 559, 560 (8th Cir.1993). "In making this determination, a federal court may consider relevant state precedents, analogous decisions, considered dicta, scholarly works, and any other reliable data tending convincingly to show how the highest court in the state would decide the issue." Id. (internal quotes omitted). Decisions of Missouri's intermediate appellate courts are not binding on this court, but they are persuasive authority, and this court must follow them when they are the best evidence of Missouri law. Aetna Casualty & Sur. Co. v. General Dynamics Corp., 968 F.2d 707, 712-13 (8th Cir.1992).

1. Missouri Supreme Court

The Missouri Supreme Court has held that in order for an insurer to deny coverage under an exclusion for actions "intended or expected" by the insured, the insurer must demonstrate both that the insured acted intentionally and that the insured subjectively intended to harm or cause injury. Pacchetti, 808 S.W.2d at 371. B.B. argues that Pacchetti controls the inquiry in this case. ⁴ We disagree.

In American Family Mutual Insurance v. Pacchetti, the Missouri Supreme Court, in a general liability insurance case, determined that the subjective intent of the insured governs whether the insured intended to harm or cause injury. Id. at 371. In Pacchetti, an insured minor provided Pacchetti with cocaine. Id. ⁵ Pacchetti died from an overdose of the cocaine, and his parents brought a wrongful death action against the insured. Id. The Missouri Supreme Court held that a homeowner's insurance policy that excluded coverage for acts "expected or intended by the insured" did not bar coverage because the issue of whether the insured "expected or intended" injury was a question of fact that had been resolved by the trial court. Id. at 371-72. The Pacchetti court rejected arguments that the insurer could demonstrate intent to harm simply because cocaine was an inherently harmful substance. Id. The court concluded that the evidence supported the trial court's finding that the insured did not intend to harm Pacchetti. Id. at 372.

In the context of general liability insurance cases, the subjective standard adopted by the Pacchetti court is not uncommon among other state courts. See Wiley v. State Farm Fire & Casualty Co., 995 F.2d 457, 461 (3d Cir.1993). In the context of sexual molestation of a minor, however, the states that have considered the issue...