Allstate Ins. Co. v. Shockley

• Decision Date: 19 November 1991
• Docket Number: No. IP 90-1595-C.,IP 90-1595-C.
• Citation: 793 F. Supp. 852
• Parties: ALLSTATE INSURANCE COMPANY, Plaintiff, v. Norman C. SHOCKLEY, Edith Edna Shockley, DeWayne DesJarlais, Karen DesJarlais, Jennifer Kay DesJarlais, Joseph Keith DesJarlais, and Jacob Kyle DesJarlais, Defendants.
• Court: U.S. District Court — Southern District of Indiana

793 F. Supp. 852

ALLSTATE INSURANCE COMPANY, Plaintiff, v. Norman C. SHOCKLEY, Edith Edna Shockley, DeWayne DesJarlais, Karen DesJarlais, Jennifer Kay DesJarlais, Joseph Keith DesJarlais, and Jacob Kyle DesJarlais, Defendants.

No. IP 90-1595-C.

United States District Court, S.D. Indiana, Indianapolis Division.

November 19, 1991.

John W. Hammel, Yarling Robinson Hammel & Lamb, Indianapolis, Ind., for plaintiff.

L. Craig Turner, Boberschmidt Miller O'Bryan & Turner, Indianapolis, Ind., for defendant Norman C. Shockley.

Michael T. Conway, Allen Baratz Conway & Hammerle, Indianapolis, Ind., for defendant Edith Edna Shockley.

Frederick W. Crow, Young & Young, Indianapolis, Ind., for defendants DeWayne DesJarlais and Karen DesJarlais.

ORDER ON MOTION FOR SUMMARY JUDGMENT

McKINNEY, District Judge.

This cause comes before the Court on the motion of plaintiff Allstate Insurance Company ("Allstate") for summary judgment, pursuant to Rule 56 of the Federal Rules of Civil Procedure. All the defendants have responded to the motion, and Allstate has timely replied, so the issues are ready for resolution. For the reasons discussed below, the Court now GRANTS Allstate's motion.

I. FACTUAL AND PROCEDURAL BACKGROUND

The key facts in this case are undisputed. Allstate is a corporation duly organized and existing under the laws of the State of Illinois, with its principal place of business in Northbrook, Illinois. Defendant Norman C. Shockley ("Norman") is a citizen and permanent resident of Indiana, and is presently incarcerated at the Indiana State Farm in Greencastle, Indiana. Defendant Edith Edna Shockley ("Edith"), Norman's mother, is a citizen and resident of Indianapolis, Indiana. The remaining defendants—DeWayne DesJarlais ("DeWayne"), his wife Karen DesJarlais ("Karen"), and their children Jennifer Kay DesJarlais ("Jennifer")¹, Joseph Keith DesJarlais ("Joseph"), and Jacob Kyle DesJarlais ("Jacob")—all are Indiana citizens residing in Indianapolis. DeWayne is Edith's nephew and Norman's cousin, which makes Edith the great aunt of Jennifer, Joseph, and Jacob. The amount in controversy, exclusive of interest and costs, exceeds $50,000.

Allstate issued Edith a homeowners' insurance policy, which was in effect during the period of April 28, 1987 to April 28, 1988, for her residence at 3465 East Sixth Avenue in Indianapolis. This policy provided, among other things, coverage for liability and medical expenses in Part II, Coverage X ("Family Liability Protection") and Coverage Y ("Guest Medical Protection"). Allstate agreed under terms of the liability coverage to pay all sums which an "insured person" became legally obligated to pay because of "bodily injury" or property damage, to the extent that such claims were covered by the policy. In addition, Allstate agreed to defend an insured person against claims which were covered by the policy, and maintained the right to settle or compromise such claims.

The policy contained the following definitions:

3. "Insured person" — means you and, if a resident of your household:

a) any relative; and

b) any dependant person in your care....

4. "Bodily injury" — means bodily injury, sickness or disease, including required care, loss of services and resulting death.

The policy also contained several pertinent exclusions. Liability coverage did not reach "any bodily injury or property damage which may reasonably be expected to result from the intentional or criminal acts of an insured person or which are in fact intended by an insured person," nor did it cover "bodily injury to an insured person or property damage to property owned by an insured person." Medical expense coverage did not apply to "any bodily injury which may reasonably be expected to result from the intentional or criminal acts of an insured person or which are in fact intended by an insured person," nor to "bodily injury to any insured person or regular resident of the insured premises."

In November 1987, DeWayne and Karen moved with their children from Indianapolis to California, where they moved in with Karen's mother. After some three weeks, it became apparent that Karen's mother and the DesJarlais children could not get along, so DeWayne and Karen were forced to make other arrangements. In mid-December 1987, DeWayne and Karen contacted Edith, who agreed to take care of Jennifer (age five at the time), Joseph (age two), and Jacob (less than one year old) until DeWayne and Karen could find employment, sell their home in Indianapolis, and buy a new home in California. With the exception of these general parameters, there was no predetermined length of time for the children's stay with Edith.

According to her agreement with DeWayne and Karen, Edith was to take physical custody of the Jennifer, Joseph, and Jacob, look after them, care for them, feed them, make sure they had medical attention, and perform "general parenting duties." DeWayne and Karen agreed to pay Edith a sum of money each week to defray the cost of the children's food, clothing, diapers, and medical care, and to compensate Edith for her care of the children. They also authorized Edith to obtain medical care or treatment for the children, if needed.

Shortly after talking with DeWayne and Karen, Edith flew to California and took the children back with her to Indianapolis. Edith paid her own fare to and from California, and also paid the children's fares to Indianapolis. DeWayne and Karen did not reimburse Edith for this expense. Jennifer, Joseph, and Jacob lived with Edith in her household, under her sole care and in her physical custody, for approximately eight weeks, from mid-December 1987 until February 10, 1988.

On February 10, Jennifer appeared to be ill, and Edith took her to Wishard Memorial Hospital for treatment. As a result of her examination there, Jennifer was removed from Edith's care and was transferred to the Marion County Children's Guardian Home. Within a few days, Joseph and Jacob were also removed from Edith's care by other relatives of DeWayne and Karen. Beginning on February 10, and over the next few days, DeWayne and Karen were informed that Jennifer had been molested and sexually abused. As a result, they returned to Indianapolis on February 14 or 15, 1988, reacquiring physical custody of the children and returning to their house in Indianapolis.

The incident with Jennifer prompted an investigation that culminated in Norman Shockley's arrest in December 1988, on charges that he molested Jennifer while she lived with Edith. After further investigation, Norman was arrested again in March 1989, on charges that he had also molested Joseph and Jacob during the same period. At a hearing on June 14, 1989, Norman pled guilty to seven counts of child molestation. The court accepted Norman's pleas, determining that they were made knowingly, intelligently, and voluntarily, and found that the facts alleged in each count of child molestation were true. On July 19, 1989, the court found Norman guilty but mentally ill on each count and sentenced him to eight years in prison. On November 14, 1989, DeWayne and Karen initiated an action for damages against Edith in Marion County Superior Court, Marion County, Indiana, alleging that Edith's negligent supervision led to Norman's molestation of their children. The DesJarlaises later added Norman as a defendant.

Allstate initiated the present declaratory judgment action on July 16, 1990. Allstate seeks a declaration from this Court that it is not liable under the homeowner's policy issued to Edith either to provide a defense for Edith and/or Norman, or to satisfy any judgment that might be levied against them, in any civil action arising from Norman's molestation of the DesJarlais children from December 1987 to February 10, 1988. In support of its position, Allstate makes the following assertions: (1) that Jennifer, Joseph, and Jacob were "insured persons" as defined in the policy, because they were relatives of Edith and were residents of her household, so that her policy does not cover any injuries to them; (2) that the molestations committed by Norman constituted "intentional or criminal acts" by an insured person, which are excluded from coverage; (3) that the molestations are not "bodily injuries" as defined by the policy, so that they are not covered; and (4) that Edith's coverage under the policy was cut off, because she failed to notify Allstate in a timely manner of the DesJarlaises's potential claims against her.

On June 14, 1991, Allstate moved for summary judgment, relying on the first two grounds enumerated in its complaint. The defendants, in separate responses, have conceded that any claims by the DesJarlaises against Norman cannot lead to recovery under Edith's policy, due to the intentional or criminal act exclusion. The defendants, however, deny that Jennifer, Joseph, and Jacob were residents of Edith's household at any time.

II. SUMMARY JUDGMENT STANDARD

Motions for summary judgment are governed by Rule 56(c) of the Federal Rules of Civil Procedure. Rule 56(c) provides in relevant part:

The judgment sought shall be rendered forthwith 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.

When the standard embraced in Rule 56(c) is met, summary judgment is mandatory. Celotex Corp. v. Catrett, 477 U.S. 317, 322-23, 106 S.Ct. 2548, 2552-53, 91 L.Ed.2d 265 (1986); Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248-50, 106 S.Ct. 2505, 2510-11, 91 L.Ed.2d 202 (1986). As stated in Celotex, summary judgment is not a disfavored procedural shortcut, but rather is an intregal part of the Federal Rules as a whole, which are designed to secure the just, speedy, and inexpensive determination of every action. Celotex, 477 U.S. at 327, 106 S.Ct. at 2554. Decisions of the Seventh...