Sentry Ins. Co. v. Miller, Civ. A. No. CV-95-A-264-N.
| Decision Date | 24 January 1996 |
| Docket Number | Civ. A. No. CV-95-A-264-N. |
| Citation | 914 F. Supp. 496 |
| Parties | SENTRY INSURANCE COMPANY, Plaintiff, v. Leonard MILLER, et al., Defendants. |
| Court | U.S. District Court — Middle District of Alabama |
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William G. Gantt, Eugene D. Martenson, Birmingham, AL, for plaintiff.
William R. Blanchard, James F. Hampton, Montgomery, AL, for defendants.
Before the court are cross motions for summary judgment in a declaratory judgment action filed by an insurance company seeking a determination of its rights and obligations under a homeowner's insurance policy. The parties agree that resolution of the cross motions for summary judgment will finally determine this case. For the reasons stated below, the court finds that summary judgment for each party is to be granted in part and denied in part. A separate order will enter judgment consistent with this opinion.
On January 6, 1995, Sharon Colella, the mother and next friend of five-year-old Courtney Brownell, filed suit against Leonard Miller in the Circuit Court of Montgomery County, Alabama. On April 10, 1995, an amendment was allowed to the complaint changing the designation of the Plaintiffs.1 (Brownell's lawsuit will be referred to as the "Liability Action.") The original and first amended complaints claimed assault and battery, harassment, invasion of privacy, intentional infliction of emotional distress, and outrage. The Liability Action's Second Amended Complaint (hereinafter "Complaint") subsequently added a claim for negligence.
Miller filed an insurance claim with Sentry Insurance Company ("Sentry") seeking personal liability coverage through his homeowner's insurance policy. On February 24, 1995, Sentry filed with this court its Complaint for Declaratory Relief, naming as defendants Colella (individually and as mother and next friend of Brownell) and Miller. Sentry seeks a declaration that Miller's homeowner's policy does not provide either insurance coverage or a defense for Miller for any of the claims in the Liability Action.
On June 21, 1995, Sentry filed its Motion for Final Summary Judgment. Colella and Miller filed their own motions for summary judgment on December 29, 1995, and January 2, 1996, respectively, seeking a declaration that Miller's insurance policy covers the claims in the Liability Action and entitles him to a defense.
In the claims for assault and battery, harassment, invasion of privacy, intentional infliction of emotional distress, and outrage, the Complaint alleges that at various times Miller wilfully exposed his penis to Brownell and caused her to touch and feel his penis for his own sexual gratification. Alternatively, in its negligence claim the Complaint alleges that
Sentry's homeowner's insurance policy, which insured Miller during the alleged encounters with Brownell, promises, (bold emphasis in original.) The policy defines "personal accident" as "an unexpected and unintended event that causes bodily injury or property damage during the policy period and arises out of your activities. ..." (bold emphasis in original.) An exclusion in the policy states, "We don't cover anyone for personal accidents ... arising out of ... sexual molestation, corporal punishment or physical or mental abuse, whether or not intentional...." (bold emphasis in original.)
Under Fed.R.Civ.P. 56(c), summary judgment is proper "if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." Celotex Corp. v. Catrett, 477 U.S. 317, 322, 106 S.Ct. 2548, 2552, 91 L.Ed.2d 265 (1986). The substantive law applicable to the case determines which facts are material. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 2510, 91 L.Ed.2d 202 (1986).
Although the parties submit numerous affidavits, deposition excerpts and exhibits in support of their motions for summary judgment, the court finds that coverage turns solely upon application of the policy provisions to the Complaint's allegations. Applying Alabama's rules for interpreting an insurance policy, the court determines that the policy does not cover the assault and battery, harassment, invasion of privacy, intentional infliction of emotional distress, and outrage claims, and does not provide a defense for them because these claims do not allege "personal accidents" as defined by the policy. The negligence claim does, however, allege "personal accidents" and therefore is covered, both for defense and indemnity, unless explicitly excluded elsewhere in the policy. Finding the exclusion proffered by Sentry inapplicable to the negligence claim on its face, the court holds that the policy provides a defense for this claim and would provide indemnity unless the proof at trial of the Liability Action establishes the policy's exclusion.
Initially, the court must consider the various materials filed in support of and in opposition to the motions for summary judgment to determine the material facts. As explained above, the substantive law applicable to the case determines which facts are material. Anderson, 477 U.S. at 248, 106 S.Ct. at 2510. All parties urge the court to apply Alabama law.
The court first looks to the Complaint to determine what claims are made against the insured. In Alabama, an insurance company's duty to defend its insured in a lawsuit arises when the complaint against the insured alleges a state of facts within policy coverage. United States Fidelity and Guaranty Co. v. Armstrong, 479 So.2d 1164, 1168 (Ala.1985). If the complaint against the insured implicates coverage, the insurer must defend its insured regardless of the insured's ultimate liability. Id. If the complaint's allegations on their face do not implicate policy coverage, then other facts outside the complaint may be taken into consideration in determining whether the complaint alleges a covered injury. Pacific Indemnity Co. v. Run-A-Ford Co., Inc., 276 Ala. 311, 161 So.2d 789 (1964).
While Alabama case law allows a court to go beyond the allegations in a complaint to find coverage, the cases reveal limited application of the rule. In Pacific Indemnity Co., the court went beyond a complaint's general allegation of negligence to determine that the alleged negligence arose through the use of an automobile, an express condition of coverage. 161 So.2d at 793-94. Similarly, in Alfa Mutual Ins. Co. v. Jones, 555 So.2d 77 (Ala. 1989), the court pierced a complaint alleging negligent supervision to determine that injury occurred while operating a go-cart, triggering an exclusion of coverage for injuries arising out of the insured's ownership of a motor vehicle.
These cases simply hold that a court may go outside the complaint to determine coverage when the determination cannot be made from the face of the complaint. No case cited to this court holds that coverage may be determined on the basis of evidence conflicting with a complaint's allegations. Such an inquiry would require a court in a declaratory judgment action to decide substantive issues pending in a previously filed legal action. This court is unwilling to engage in such decision making. Since the materials extrinsic to the Complaint either contradict its allegations or provide only surplusage, the court finds no reason to go beyond the Complaint's allegations. Thus, the court determines Miller's personal liability coverage by applying the policy provisions to the Complaint's allegations.
Alabama law provides three rules of interpretation relevant to determining Miller's personal liability coverage in this case.
First, insurance policy provisions should be given their ordinary, common meaning: "It is the duty of the courts to take the words of an insurance policy as they are found in it, and as persons with usual and ordinary understanding would construe them when used to express the purpose for which they were employed." Taber v. Nationwide Mutual Ins. Co., 447 So.2d 698, 700 (Ala. 1984) (quoting Green v. Merrill, 293 Ala. 628, 308 So.2d 702, 704 (1975)). The courts should give policy language Liggans R.V. Ctr. v. John Deere Ins. Co., 575 So.2d 567, 571 (Ala.1991) (quoting Appleman, Insurance Law and Practice, Rev.Vol. 13, § 7384 (1976)).
Second, when construing seemingly ambiguous policy language, courts should avoid a construction rendering the language redundant in the context of the whole policy: ...
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