Allstate Ins. Co. v. Burrough

• Decision Date: 11 January 1996
• Docket Number: No. 95-2162.,95-2162.
• Citation: 914 F. Supp. 308
• Parties: ALLSTATE INSURANCE COMPANY, Plaintiff, v. Mark BURROUGH and Garnette Bell, Individually and as Next Friend of Kenyatta Williams, Defendants.
• Court: U.S. District Court — Western District of Arkansas

914 F. Supp. 308

ALLSTATE INSURANCE COMPANY, Plaintiff, v. Mark BURROUGH and Garnette Bell, Individually and as Next Friend of Kenyatta Williams, Defendants.

No. 95-2162.

United States District Court, W.D. Arkansas, Fort Smith Division.

January 11, 1996.

Joe Benson, Fayetteville, AR, for Plaintiff.

Bill D. Reynolds, Nolan, Caddell & Reynolds, Fort Smith, AR, for defendant Garnette Bell.

MEMORANDUM OPINION

H. FRANKLIN WATERS, Chief Judge.

Plaintiff Allstate Insurance Company ("Allstate") has filed this action seeking a declaration that it has no duty to defend or to provide coverage to its insured, Mark Burrough. The parties have stipulated to a record and upon careful review of the record, the court is prepared to rule.

I. BACKGROUND

Defendant Mark Burrough is covered by an Allstate homeowner's insurance policy that obligates Allstate to pay any "damages which an insured person becomes legally obligated to pay because of bodily injury or property damage arising from an occurrence to which this policy applies." Also, "if an insured person is sued for these damages, Allstate will provide a defense with counsel of our choice, even if the allegations are groundless, false or fraudulent."

The basis of potential damages liability against defendant is a lawsuit filed against him by Garnette Bell for injuries that defendant allegedly caused to her son, Kenyatta Williams. The lawsuit arose out of an accidental shooting. On October 22, 1993, Kenyatta Williams was on foot in the parking lot of Harvest Foods in Fort Smith, Arkansas. Two friends of defendant, Christopher Beck and Jeremiah Hauser, were in the same parking lot in a car when Christopher Beck pulled a .22 caliber handgun from the floorboard of the car and "flashed" it towards Kenyatta Williams. The gun accidentally discharged, striking Kenyatta Williams in the Adam's apple, severing his spinal cord, and leaving him a quadriplegic.

Christopher Beck, who was approximately 16 years old at the time of the shooting, received the handgun from Jeremiah Hauser. Jeremiah Hauser, who was approximately 16 at the time of the shooting, had obtained the gun from defendant, who was approximately 14 at the time of the shooting and had taken the gun from his grandfather's residence.

Kenyatta Williams' mother, Garnette Bell filed an action in the Circuit Court of Sebastian County, Arkansas, case number CIV 94-787(III) on behalf of herself and her son, naming Christopher Beck and Jeremiah Hauser as defendants. In her complaint, Bell seeks damages and alleges that Christopher Beck negligently and recklessly shot Kenyatta Williams and that this conduct proximately caused damage to her and her son. She also alleges that Jeremiah Hauser and defendant acted negligently and recklessly in providing Christopher Beck with a gun and that this conduct proximately caused damage to her and her son. Allstate has filed this action seeking a declaration that its homeowner's policy does not provide coverage for defendant's acts.

II. RELEVANT POLICY PROVISIONS

While Allstate admits that defendant was an insured under the policy at the time of Kenyatta Williams' shooting, it contends that coverage is excluded under a criminal acts exclusion which provides as follows:

Losses We Do Not Cover Under Coverage X:

1. We do not cover any bodily injury or property damage intended by, or which may reasonably be expected to result from the intentional or criminal acts or omissions of, any insured person. This exclusion applies even if:

(a) such insured person lacks the mental capacity to govern his or her conduct;

* * * * * *

(c) such bodily injury or property damage is sustained by a different person than intended or reasonably expected; ...

This exclusion applies regardless of whether or not such insured person is actually charged with, or convicted of a crime.

(Policy, Coverage X, Exclusion 1) (emphasis omitted).

More specifically, Allstate contends that "Burrough's furnishing the .22 caliber handgun to Christopher Beck, a minor, is a criminal offense" under Ark.Code Ann. § 5-73-109 and that, therefore, coverage under the policy is excluded.

A person commits the offense of furnishing a deadly weapon to a minor when he sells, barters, leases, gives, rents, or otherwise furnishes a firearm or other deadly weapon to a minor without the consent of a parent, guardian or other person responsible for general supervision of his welfare.

Ark.Code Ann. § 5-73-109(a) (Michie 1993). A minor is defined as "any person under eighteen (18) years of age." Id. § 5-73-101(2) (Michie 1993).¹

III. DUTY TO DEFEND

As a general matter, the duty to defend is determined by comparing the allegations in the underlying complaint to the scope of the coverage provided by the insurance policy. Insurance Co. of North Am. v. Forrest City Country Club, 36 Ark.App. 124, 125, 819 S.W.2d 296 (1991). If injury or damage within the policy coverage could result from the underlying suit, the duty to defend arises. Home Indemnity Co. v. City of Marianna, 291 Ark. 610, 727 S.W.2d 375 (1987). If no possibility of coverage exists, there is no duty to defend.

In interpreting the policy, traditional rules of insurance policy construction apply. Ritter v. United States Fid. & Guar. Co., 573 F.2d 539 (8th Cir.1978). A policy is to be interpreted and construed like any other contract according to general contract principles to determine the mutual intent of the parties. Enterprise Tools, Inc. v. Export-Import Bank of U.S., 799 F.2d 437 (8th Cir.1986), cert. denied, 480 U.S. 931, 107 S.Ct. 1569, 94 L.Ed.2d 761 (1987). However, due to the reality that insurance contracts are contracts of adhesion, the courts have developed some special rules of construction, the most important of which is the rule that when a policy provision is ambiguous, the court must resolve that ambiguity in favor of the insured. Deal v. Farm Bureau Mut. Ins. Co. of Ark., 48 Ark.App. 48, 889 S.W.2d 774 (1994).

The determination of ambiguity rests with the court. Deal, supra. However, this does not provide the court with license to rewrite the policy, or to import an ambiguity that does not exist, or to force an unnatural or perverted meaning from plain words under the guise of construction. Looney v. Allstate Ins. Co, 392 F.2d 401 (8th Cir.1968). Ambiguity exists only if the insurance policy provision is susceptible to more than one reasonable interpretation. Keller v. Safeco Ins. Co. of Am., 317 Ark. 308, 877 S.W.2d 90 (1994).

In interpreting a policy, the terms used must be interpreted in their "plain, ordinary and popular sense," rather than their legal or technical meaning. Southern Farm Bureau Cas. Ins. Co. v. Williams, 260 Ark. 659, 662, 543 S.W.2d 467 (1976).

IV. DISCUSSION

a. Criminal acts by juveniles

Defendants first argue that since Mark Burrough was a juvenile at the time of his alleged criminal offense, he cannot be branded as having committed a criminal act. According to defendants, Mark Burrough can be only adjudicated a delinquent, which would be a civil proceeding. At least one federal court has accepted this argument and has found that a criminal acts exclusion does not apply to the acts of a minor. Allstate Ins. Co. v. Lewis, 732 F.Supp. 1112 (D.Colo. 1990).

This court disagrees. It does not matter that Mark Burrough could not be prosecuted as an adult for his crime. See Ark.Code Ann. § 9-27-318(b)(1) (Michie 1993). Since he undoubtedly provided a handgun to a minor, he has engaged in conduct that is prohibited as a criminal act under Ark.Code Ann. § 5-73-109. The criminal acts exclusion applies so long as the insured engages in conduct which is described as criminal in the penal code, "regardless of whether or not such insured person is actually charged with, or convicted of a crime." (Policy, Coverage X, Exclusion 1) (emphasis omitted). Moreover, the "exclusion applies even if: a) such insured person lacks the mental capacity to govern his or her conduct." (Policy, Coverage X, Exclusion 1) (emphasis omitted). This court believes that if the policy does not cover mental incompetents for their criminal acts for which they cannot be prosecuted, then it does not cover minors for their criminal acts for which they cannot be prosecuted.

Other courts have applied the provision to criminal acts by minors as well. See Allstate Ins. Co. v. Green, 831 F.2d 145, 147 (6th Cir.1987) ("Under this language it is clear that if young 14 year old Robertson had raped the girl himself, his act would have been an intentional or criminal act"); Allstate Ins. Co. v. Dillard, 859 F.Supp. 1501 (M.D.Ga.1994) (13 year old intentionally pointing or aiming a gun at another without legal justification), aff'd, 70 F.3d 1285 (11th Cir.1995).

b. Public Policy

Defendants argue that § 5-73-109 does not contain any requirement of a culpable mental state, and that it would be contrary to public policy to exclude coverage for such strict liability crimes. This argument is rejected.

The express language of the policy includes all criminal acts, no matter what the mental state required for their commission. An insurer may contract with its insured upon whatever terms the parties may agree upon which are not contrary to statute or public policy. Shelter General Ins. Co. v. Williams, 315 Ark. 409, 867 S.W.2d 457 (1993). The public policy of this state is found in its constitution and statutes. Guaranty Nat'l Ins. v. Denver Roller, Inc., 313 Ark. 128, 854 S.W.2d 312 (1993). The court has not found any relevant constitutional or statutory provision that embodies a public policy against excluding coverage for injuries resulting from criminal acts, whether or not there is a mens rea requirement.

Other courts have also considered this exact same policy exclusion and have held that an insurance policy does not violate public policy by excluding coverage for unintentional criminal acts. See Allstate Ins. Co. v. Brown, 16 F.3d 222, 225 (7th Cir.1994) (class D felony of...