State Farm Fire & Cas. Co. v. Ezrin

• Citation: 764 F. Supp. 153
• Decision Date: 10 April 1991
• Docket Number: No. C 89-4575 RFP.,C 89-4575 RFP.
• Court: U.S. District Court — Northern District of California
• Parties: STATE FARM FIRE & CASUALTY COMPANY, an Illinois corporation, Plaintiff, v. Thomas EZRIN, Jennifer Mason, Bryan Freedman, and Edmund Fisher, Defendants.

764 F. Supp. 153

STATE FARM FIRE & CASUALTY COMPANY, an Illinois corporation, Plaintiff, v. Thomas EZRIN, Jennifer Mason, Bryan Freedman, and Edmund Fisher, Defendants.

No. C 89-4575 RFP.

United States District Court, N.D. California.

April 10, 1991.

Fred M. Feller, York, Buresh & Kaplan, Berkeley, Cal., for plaintiff.

Clark G. Leslie, Law Offices of Clark G. Leslie, San Mateo, Cal., William Ahern, Ahern, Mooney & Rodriguez, Castro Valley, Cal., for defendants.

ORDER

PECKHAM, District Judge.

In this suit, State Farm Fire & Casualty Company ("State Farm") seeks a declaration that it has no duty to indemnify the insured, Thomas Ezrin, for damages arising from an alleged sexual assault. In its motion for summary judgment, State Farm contends that Ezrin's conduct was intentional and thus excluded by the terms of the policy and by California Insurance Code § 533. For the reasons outlined below, State Farm's motion for summary judgment is granted.

I. BACKGROUND

This litigation arises out of events that occurred on the night and early morning of October 4-5, 1985. That night, Jennifer Mason, a seventeen-year-old high school student, had attended a party given by the Tau Kappa Epsilon fraternity at the University of California. She was given alcoholic punch and became drunk. After leaving the party, Mason became lost on the streets of Berkeley. She then encountered two university students, Thomas Ezrin and Bryan Freedman. Ezrin and Freedman offered to help Mason and asked her to accompany them to their fraternity, Zeta Beta Tau. Once inside, it is alleged by Mason that she was sexually assaulted and battered by Ezrin, Freedman, and Edmund Fisher, another member of the fraternity.

On April 15, 1986, Mason and her parents filed a complaint against Ezrin and others in the Superior Court for Alameda County based on the above-described incident. After a second amendment was filed on December 30, 1987, the complaint alleged that Ezrin and others assaulted and battered and sexually assaulted and battered Mason against her will. The complaint also alleged that defendants' conduct was done with intent to cause or with reckless disregard of the probability of causing emotional distress to her and her parents. Finally, the complaint alleged that defendants had breached their duty of care to Mason to provide a safe premises.

At the time of the incident, Ezrin was an insured under the terms of his parents' State Farm homeowners' insurance policy. Pursuant to the provisions of the policy, State Farm agreed to pay for Ezrin's defense in the underlying California Superior Court action, but reserved the right to deny coverage for Ezrin's acts on the ground that coverage is precluded by the terms of the policy and by state law.

State Farm brings this action for a declaration that it is not liable to indemnify Ezrin for any losses sustained in connection with the October 5, 1985 incident. To date, Ezrin has not made any claim against State Farm for coverage.

II. DISCUSSION¹

We are presented with issues concerning the interpretation of an exclusionary clause of an insurance contract and of California Insurance Code section 533. The insurance policy, in relevant part, provides:

COVERAGE L — PERSONAL LIABILITY

If a claim is made or a suit brought against an insured for damages because of bodily injury or property damage to which this coverage applies, we will:

1. pay up to our limit of liability for the damages for which the insured is legally liable;

* * * * * *

Coverage L and M do not apply to:

a. bodily injury or property damage which is expected or intended by an insured....

The interpretation of the terms of an insurance policy, like other contracts, presents a question of law for the court. Parsons v. Bristol Development Co., 62 Cal.2d 861, 44 Cal.Rptr. 767, 402 P.2d 839 (1965).

Section 533 provides:

An insurer is not liable for a loss caused by the willful act of the insured; but he is not exonerated by the negligence of the insured, or of the insured's agents or others.

This clause applies to all insurance contracts in California and is "equivalent to an exclusionary clause in the contract itself." Morton v. Safeco Ins. Co., 905 F.2d 1208, 1210 (9th Cir.1990) (quoting Evans v. Pacific Indemnity Co., 49 Cal.App.3d 537, 540, 122 Cal.Rptr. 680 (1975)). Although there is some dispute as to whether the policy exclusion and section 533 are coextensive, compare James M. v. Sebesten, 221 Cal. App.3d 451, 270 Cal.Rptr. 99, 105 (1990) (section 533 is broader than policy exclusion) with State Farm Fire & Cas. Co. v. Estate of Jenner, 874 F.2d 604, 606 (9th Cir.1989) (section 533 and policy exclusion are identical), it is agreed that the two exclusions both exclude coverage for certain types of intentional acts. Morton v. Safeco Ins. Co., 905 F.2d 1208, 1210-11 (9th Cir.1990).

The precise contours of the exclusion for intentional and willful acts are hotly disputed by the parties. Defendant contends that to exclude coverage, State Farm must prove not only that Ezrin intended his actions, but that he acted with a "preconceived design to inflict injury." Def's Mem. at 3 (quoting Clemmer v. Hartford Ins. Co., 22 Cal.3d 865, 887, 151 Cal.Rptr. 285, 587 P.2d 1098 (1978)). State Farm, in turn, argues that it need not demonstrate a preconceived design because, in a case of sexual assault, we may infer a "specific intent to injure as a matter of law." Pl's Mem. at 8 (quoting Fire Ins. Exch. v. Abbott, 204 Cal.App.3d 1012, 1026, 251 Cal. Rptr. 620 (1988)).

A. The Specific Intent to Injure

The California Supreme Court first addressed the meaning of the term "willful" in Clemmer v. Hartford Ins. Co., 22 Cal.3d 865, 151 Cal.Rptr. 285, 587 P.2d 1098 (1978). In that case, the Court appeared to describe the test for willfulness as having two components:

even an act which is `intentional' or `willful' within the meaning of traditional tort principles will not exonerate the insurer from liability under Insurance Code section 533 unless it is done with a preconceived design to inflict injury.

Id. at 887, 151 Cal.Rptr. 285, 587 P.2d 1098. Subsequent appellate court decisions focused on whether the insurer had shown — in addition to an intent to perform the act — the existence of a preconceived design to inflict injury. E.g., California Shoppers, Inc. v. Royal Globe Ins. Co., 175 Cal.App.3d 1, 221 Cal.Rptr. 171 (1985). In short, the courts had held that the test for willfulness consisted of two co-equal elements: the intent to perform the act and the intent to inflict injury.

In J.C. Penney Casualty Ins. Co. v. M.K., 52 Cal.3d 1009, 278 Cal.Rptr. 64, 804 P.2d 689 (1991), the Supreme Court retreated from the two-pronged test. J.C. Penney arose from the sexual molestation of a five-year-old girl by the insured. In the main action, the mother and child filed a suit for damages against the insured based on theories of negligence and negligent infliction of emotional distress. Id. at 1015, 278 Cal.Rptr. 64, 804 P.2d 689. The insurance company, J.C. Penney, then sought a declaration that it had no duty to indemnify the insured because child molestation was a willful act as a matter of law within the meaning of section 533. Id. at 1016, 278 Cal.Rptr. 64, 804 P.2d 689. The trial court agreed that sexual molestation was excludable as a matter of law. Id. The Court of Appeal, however, relied on the language in Clemmer that the insurer had to show a "preconceived design to inflict injury" and thus reversed the trial court. The appellate court would have permitted the introduction of the insured's psychiatric evidence that the molestation was a "misguided show of affection," and thus held that an issue of fact had been raised as to the insured's intent to injure. Id. 52 Cal.3d at 1017, 278 Cal.Rptr. 64, 804 P.2d 689. The Supreme Court reversed, holding that sexual molestation was a "willful" act as a matter of law.

The Court discussed extensively the insured's argument that "the intent to molest is not enough ... the insurer must also show that the molester had a `preconceived design to inflict injury' on the child." Id. at 1023, 278 Cal.Rptr. 64, 804 P.2d 689. Although the Court acknowledged the language from Clemmer, it emphasized that the inquiry in that case had been limited to "the unresolved mental capacity of the insured," and that there was "no holding by the Supreme Court in Clemmer that intent to injure, standing alone, was a dispositive issue." Id. (quoting J.C. Penney Casualty Ins. Co. v. M.K., 220 Cal.App.3d 484, 257 Cal.Rptr. 801, 811 (App.1989) (Nares, J., dissenting). Instead, the issue of a "preconceived design" was intended to encompass only the "insured's mental capacity to commit the wrongful act." 52 Cal.3d at 1023, 278 Cal.Rptr. 64, 804 P.2d 689.

The J.C. Penney Court thus shifted the inquiry from the insured's subjective intent to injure to the wrongfulness of the act. Following J.C. Penney, it is no longer necessary to analyze the subjective intent of the insured where the act is itself wrongful. Consequently, to prevail, State Farm must show that Ezrin intentionally committed a wrongful act.

B. The Wrongfulness of the Act

Resolution of this case turns on the inherent wrongfulness of the acts alleged in Mason's complaint. In the case of child molestation, the inquiry is quite simple.

Because the wrongful act of child molestation is itself the harm, section 533 does not require a showing of the insured's subjective intent to harm. Likewise, Clemmer does not require a showing by the insurer of its insured's `preconceived design to inflict harm' when the insured seeks coverage for an intentional and wrongful act if the harm is inherent in the act itself. Section 533 precludes coverage in this case because child molestation is always intentional, it is always wrongful, and it is always harmful.

Id. 52 Cal.3d at 1025, 278 Cal.Rptr. 64, 804 P.2d 689. However, J.C. Penney — and the cases on which it relied — address only the...