Allstate Ins. Co. v. Mugavero

• Decision Date: 20 February 1992
• Citation: 581 N.Y.S.2d 142,589 N.E.2d 365,79 N.Y.2d 153
• Parties: , 589 N.E.2d 365, 60 USLW 2553 ALLSTATE INSURANCE COMPANY, Appellant, v. Edward MUGAVERO et al., Respondents.
• Court: New York Court of Appeals Court of Appeals

Page 142

581 N.Y.S.2d 142

79 N.Y.2d 153, 589 N.E.2d 365, 60 USLW 2553

ALLSTATE INSURANCE COMPANY, Appellant, v. Edward MUGAVERO et al., Respondents.

Court of Appeals of New York.

Feb. 20, 1992.

[79 N.Y.2d 154] [589 N.E.2d 366] Joseph L. Forstadt and Mitchell C. Shapiro, New York City, for appellant.

[79 N.Y.2d 155] Mitchell Gittin, Hauppauge, for Edward Mugavero et al., respondents.

Ira M. Hariton and Robert J. Zysk, Bay Shore, for Ellen B. et al., respondents.

[79 N.Y.2d 156] Peter G. Eikenberry, New York City, and Jeffrey Anne Tatum, San Francisco, Cal., of the California bar, admitted pro hac vice, for American Ins. Ass'n et al., amici curiae.

OPINION OF THE COURT

HANCOCK, Judge.

Defendant Edward Mugavero has been sued for the physical and emotional injuries sustained by a six-year-old girl and a nine-year-old boy upon whom he committed acts of sodomy and sexual abuse while the children were in the care of his wife as baby-sitter. His wife, defendant Ann Mugavero, has been sued for her negligence in permitting these acts. The Mugaveros have demanded that their homeowner's insurance carrier, plaintiff Allstate, afford them a defense and indemnify them from whatever damages may be recovered in the lawsuit. Allstate maintains that there is no coverage. It has brought the instant declaratory judgment action to resolve the dispute. The decisive question is whether the damages sought fall within the policy exclusion for bodily injury "intentionally caused by an insured person". Supreme Court and the Appellate Division have held that the acts alleged are not excluded. For reasons which follow, we disagree and hold that there is no coverage.

I

The lawsuit against the Mugaveros was brought by defendant Ellen B., individually and on behalf of her children, the infant defendants Christian, age nine at the time of the last occurrence alleged, and Theresa, then age six. In her complaint, Ellen B. pleaded three causes of action against defendant Edward Mugavero. In the first, she alleged that, at various times from 1979 through April 1984, defendant Mugavero "with force and violence, and against the consent of the infant [plaintiffs] intentionally and without provocation, assaulted, sodomized and sexually abused" her children, causing them to "suffer * * * greatly in mind and body"; in the second, that Mugavero committed these intentional actions "without intending the resultant serious injuries"; and in the third, that he committed such acts of assault, sodomy and sexual abuse "negligently and carelessly, and with wanton disregard of others". A fourth cause of action against defendant Ann Mugavero is based on her negligence in caring for the children. Ellen B.'s verified complaint and her sworn bill of particulars describe forcible acts of sexual abuse allegedly practiced on Christian and Theresa by Edward Mugavero, including acts of anal and oral sodomy.

In Allstate's declaratory judgment action, the Mugaveros moved for summary judgment. They argued that because Ellen B.'s complaint against them contained allegations of negligence and of unintended injuries from intentional conduct, the policy exclusion for "bodily injury * * * intentionally caused" did not apply. Under the established rule that an insurer's duty to defend is broader than its duty to indemnify, they contended that Allstate was obligated to provide them with a defense.

Allstate cross-moved for summary judgment based, among other things, on the verified pleadings in the underlying damage action and on the sworn depositions of Christian and Theresa depicting in graphic detail acts of sexual child molestation. Allstate maintained that an intent to injure was inferable as a matter of law from the very nature of the actions and that Mugavero's alleged conduct, therefore, fell within the policy exclusion for conduct intentionally causing harm. In opposition to Allstate's motion, the Mugaveros submitted an affidavit of their attorney stating that "Edward Mugavero has consistently denied the allegations of the infant plaintiffs" and that the "sodomy and sexual abuse indictment against [him] was dismissed on motion of the District Attorney as a result of plea negotiations which resulted in a guilty plea to an unrelated and far less serious crime". The Mugaveros submitted no proof in evidentiary form by affidavit or otherwise relating to the alleged acts of sexual abuse.

Ellen B. joined the Mugaveros in seeking summary judgment. To support her contention that Edward Mugavero did not intend to harm the children through his intentional actions, she annexed a copy of a statement made by Edward Mugavero to the police upon his arrest for sexual assault stating, inter alia, that he was "comforting the children when he was hugging them".

Supreme Court denied Allstate's cross motion, declared that Allstate was obligated to provide the Mugaveros with a defense, and held that the question of indemnification should be reserved until the trial of the action (see, Allstate Ins. Co. v Mugavero, 142 Misc.2d 361, 537 N.Y.S.2d 961). The court reasoned that an insurer could not be relieved of the duty to defend its insured under an intentional harm exclusion where the complaint against the insured contains a cause of action in negligence and one alleging that the acts, while intentional, were not intended to cause injury. It rejected Allstate's argument that intent to injure was inherent in the intentional acts of sexual abuse committed by Edward Mugavero.

In its affirmance with a divided court, the Appellate Division essentially followed the reasoning of Supreme Court (see, Allstate Ins. Co. v. Mugavero, 166 A.D.2d 474, 474-477, 561 N.Y.S.2d 35). Like Supreme Court, the majority relied on the statement in our decision in Public Serv. Mut. Ins. Co. v. Goldfarb, 53 N.Y.2d 392, 399, 442 N.Y.S.2d 422, 425 N.E.2d 810, to the effect that an insured may seek indemnity for unintentional injuries resulting from intentional acts. The dissenting Justice voted to grant summary judgment to Allstate, stating that there can be "no reasonable argument that the injuries resulting from the sexual abuse of children could be anything but intended" and noting that "[t]his idea has taken hold in almost all other jurisdictions that have dealt with this issue" (see, 166 A.D.2d 474, 477-492, 561 N.Y.S.2d 35, supra [Balletta, J., dissenting opn.]. Plaintiff Allstate appeals by leave of the Appellate Division. We now reverse.

II

The critical question is whether the harm that resulted to Ellen B.'s children from the sexual assaults allegedly committed on them by Edward Mugavero could have been other than harm "intentionally caused" within the meaning of the policy exclusion. For the answer, we look to the pleadings in Ellen B.'s action and limit our examination to the nature of the conduct of Edward Mugavero, as it is there described (see, Ruder & Finn v. Seaboard Sur. Co., 52 N.Y.2d 663, 669-670, 439 N.Y.S.2d 858, 422 N.E.2d 518; Lionel Freedman, Inc. v. Glens Falls Ins. Co., 27 N.Y.2d 364, 368, 318 N.Y.S.2d 303, 267 N.E.2d 93). Although Mugavero denies the allegations of the complaint, we must assume--for the purpose of determining coverage--that what is alleged actually happened. Allstate agrees that it is obligated by its policy to provide a defense unless it can "demonstrate that the allegations of the complaint cast that pleading solely and entirely within the policy exclusions, and, further, that the allegations, in toto, are subject to no other interpretation" (International Paper Co. v. Continental Cas. Co., 35 N.Y.2d 322, 325, 361 N.Y.S.2d 873, 320 N.E.2d 619).

The pleadings depict acts committed by an adult upon young children which, if proven, would constitute, among other crimes, sodomy in the first degree (Penal Law § 130.50[3], a class B felony, for engaging in deviate sexual intercourse ¹ with a child under the age of 11, and sexual abuse in the first degree (Penal Law § 130.65[3], a class D felony, for subjecting a child under the age of 11 to sexual contact. ² As noted, Edward Mugavero denies the actual occurrence of these acts. But neither he nor any other party contends that the sexual conduct described in the first and second causes of action, assuming that it did occur, could have been anything other than intentional. Rather defendants--adverting to the established rule that the duty to defend is broader than the duty to indemnify (see, Ruder & Finn v. Seaboard Sur. Co., supra, 52 N.Y.2d at 669, 439 N.Y.S.2d 858, 422 N.E.2d 518)--argue that Allstate must provide a defense because Ellen B.'s complaint alleges: (1) that the intentional actions resulted in unintended harm (the second cause of action) and (2) alternatively, that Mugavero's actions were the result of his negligence and carelessness (the third cause of action). We reject both contentions.

A

Defendants' argument that Allstate must defend for unintended injuries from intentional conduct focuses on the wording of the policy exclusion: "We do not cover bodily injury or property damage intentionally caused by an insured person" (emphasis added). Defendants emphasize that an act which is intentional (e.g., lending a car to an underaged, unlicensed driver [see, Messersmith v. American Fid. Co., 232 N.Y. 161, 133 N.E. 432] does not mean that the harm that ensues (the accident and resultant injuries) was intended. Clearly more than a causal connection between the intentional act and the resultant harm is required to prove that the harm was intended. Allstate acknowledges this but counters that in the exceptional case of an act of child molestation, cause and effect cannot be separated; that to do the act is necessarily to do the harm which is its consequence; and that since unquestionably the act is intended, so also is the harm. We think the argument finds support in logic and in the generally accepted conception of harm as being inherent in the act of sexually abusing a child.

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