Allstate Ins. Co. v. Patterson, 93-C-898J.

• Decision Date: 08 March 1995
• Docket Number: No. 93-C-898J.,93-C-898J.
• Citation: 904 F. Supp. 1270
• Parties: ALLSTATE INSURANCE COMPANY, an Illinois corporation, Plaintiff, v. Brenda PATTERSON, individually and as natural mother and general guardian of Jens Martin Dietz, Jr., a minor, and Tadd Dietz, a minor; Jens Martin Dietz, Jr.; Tadd Dietz; Clifford Forney; Leila Forney; Beverlee McLaughlin; Richard Forney; Robert Forney; and Ray McLaughlin, Defendants. Brenda PATTERSON, individually and as natural mother and general guardian of Jens Martin Dietz, Jr., a minor, and Tadd Dietz, a minor, Jens Martin Dietz, Jr., by and through his natural mother and general guardian, Brenda Patterson; and Tadd Dietz, by and through his natural mother and general guardian, Brenda Patterson, Counterclaim Plaintiffs, v. ALLSTATE INSURANCE COMPANY, an Illinois corporation, Counterclaim Defendant.
• Court: U.S. District Court — District of Utah

904 F. Supp. 1270

ALLSTATE INSURANCE COMPANY, an Illinois corporation, Plaintiff, v. Brenda PATTERSON, individually and as natural mother and general guardian of Jens Martin Dietz, Jr., a minor, and Tadd Dietz, a minor; Jens Martin Dietz, Jr.; Tadd Dietz; Clifford Forney; Leila Forney; Beverlee McLaughlin; Richard Forney; Robert Forney; and Ray McLaughlin, Defendants.

Brenda PATTERSON, individually and as natural mother and general guardian of Jens Martin Dietz, Jr., a minor, and Tadd Dietz, a minor, Jens Martin Dietz, Jr., by and through his natural mother and general guardian, Brenda Patterson; and Tadd Dietz, by and through his natural mother and general guardian, Brenda Patterson, Counterclaim Plaintiffs, v. ALLSTATE INSURANCE COMPANY, an Illinois corporation, Counterclaim Defendant.

No. 93-C-898J.

United States District Court, D. Utah, Central Division.

March 8, 1995.

COPYRIGHT MATERIAL OMITTED

Gary L. Johnson, Robert G. Wright, Richards, Brandt, Miller & Nelson, Salt Lake City, Utah, for plaintiff.

Peter C. Collins and Douglas C. Tingey, Winder & Haslam, Salt Lake City, Utah, for defendants Brenda Patterson, Jens Martin Dietz, Jr., and Tadd Dietz.

David J. Holdsworth, Romney & Condie, Salt Lake City, Utah, for defendants Beverlee McLaughlin and Ray McLaughlin.

MEMORANDUM OPINION AND ORDER

JENKINS, District Judge.

This is a declaratory judgment action to determine coverage under certain homeowners insurance policies. The plaintiff, Allstate Insurance Company, issued homeowners policies to defendant Beverlee McLaughlin and to defendants Clifford and Lila Forney.¹ In 1993 defendant Brenda Patterson and her sons, Jens Martin Dietz, Jr., and Tadd Dietz, sued Beverlee McLaughlin and her son, Ray, and the Forneys and their sons, Richard and Robert, in a Utah state court alleging that the McLaughlin and Forney boys had sexually abused the Dietz boys from about May 1989 until August 1991. The McLaughlin and Forney boys were between twelve and sixteen years old at the time, and the Dietz boys were between five and eight years old at the time. The second amended complaint in the state-court action asserts claims against the McLaughlin and Forney parents for negligent supervision and claims against the McLaughlin and Forney boys for battery, false imprisonment and intentional infliction of emotional distress, as well as "general claims," in which the plaintiffs allege that the McLaughlin and Forney boys, "without the intention of causing bodily injury and in violation of their duties of care to plaintiffs, engaged in inappropriate sexual contact with" the Dietz boys. See The Patterson and Dietz Defendants' Memorandum in Opposition to Allstate's Motion for Summary Judgment and in Support of Their Own Motion for Partial Summary Judgment hereinafter Patterson Memo. (dkt. no. 47), ex. 3, at 5, ¶ 16. See also id. at 3, ¶ 11 (alleging that the Dietz boys "were subjected to inappropriate sexual contacts initiated by" the McLaughlin and Forney boys).²

Allstate brought this diversity action seeking a declaratory judgment that it has no duty to defend or indemnify its insureds, the McLaughlins and Forneys, in the state-court action. Allstate moved for summary judgment. The Patterson and Dietz defendants filed a cross-motion for partial summary judgment, seeking a judgment that Allstate has a duty to defend and indemnify with respect to their claims against the adult defendants (Beverlee McLaughlin and Clifford and Lila Forney) in the state-court action.³

The court first heard arguments on Allstate's motion for summary judgment in April 1994. Following the initial argument, the parties asked the court to stay its ruling on the motion until the parties had completed certain discovery. In September 1994 the parties submitted supplemental memoranda summarizing the facts developed through discovery. The court heard additional arguments on the parties' motions for summary judgment in December 1994, after which the parties submitted supplemental memoranda on the legal issue of whether the claims in the state-court action arose out of an "accident" as that term is used in the policies. Now, for the reasons discussed below, the court enters this memorandum opinion and order denying Allstate's motion for summary judgment and granting in part and denying in part the Patterson and Dietz defendants' motion for partial summary judgment.

I. PROCEDURAL MOTIONS

As a preliminary matter, Allstate has filed a motion to strike the Patterson and Dietz defendants' motion for partial summary judgment on the grounds that it is untimely. The McLaughlins recognized that the time for filing a motion for summary judgment had passed and filed a motion for leave to file their own motion for partial summary judgment.

Technically, the Patterson and Dietz defendants' motion for partial summary judgment and the McLaughlins' proposed motion for partial summary judgment are untimely. The court entered a scheduling order on January 12, 1994, requiring all motions to be filed by March 1, 1994. The Patterson and Dietz defendants did not file their motion for partial summary judgment until April 1994, and the McLaughlins did not seek leave to file their own motion for partial summary judgment until June 1994. However, although the motion filing deadline was never extended, the parties recognized that relevant discovery was not completed by March 1, 1994. In fact, the parties asked the court to defer ruling on their motions until certain depositions were completed. See Stipulation and Motion Regarding Reservation on Ruling (dkt. no. 59). Those depositions were not completed until August 1994, and the parties did not submit the relevant deposition testimony to the court until September 1994.

Moreover, the defendants' proposed cross-motions raise one of the same issues as Allstate's motion for summary judgment, namely, whether Allstate has a duty to defend and indemnify with respect to the negligent supervision claim against the adult defendants in the state-court action. The court can grant summary judgment to a non-moving party if the relevant facts are undisputed and the party is entitled to a judgment as a matter of law. See, e.g., Dickeson v. Quarberg, 844 F.2d 1435, 1444 n. 8 (10th Cir.1988); 10A Charles Alan Wright, Arthur R. Miller & Mary Kay Kane, Federal Practice and Procedure § 2720 at 27-35 (2d ed. 1983 & Supp.1994), and cases cited therein. If the defendants are entitled to a judgment as a matter of law, the court should not prolong this action simply because the defendants were technically tardy in filing their motions. Therefore, the court will deny Allstate's motion to strike and allow the McLaughlin defendants to move for partial summary judgment to the same extent and on the same grounds as the Patterson and Dietz defendants.⁴

II. THE ALLSTATE POLICIES

There are actually three policies involved in this case — one issued to the McLaughlins and two to the Forneys. See Complaint exs. A-C. The McLaughlin policy (exhibit A to Allstate's Complaint) began in September 1987. The first Forney policy (exhibit B) covered the period from July 9, 1984, to July 9, 1989. The second Forney policy (exhibit C) began July 9, 1989. The McLaughlin and second Forney policies are identical in all relevant respects. The insuring provision of those policies states: "Subject to the terms, limitations and conditions of this policy, Allstate will pay damages which an insured person becomes legally obligated to pay because of bodily injury or property damage arising from an accident and covered by this part of the policy."⁵ Complaint exs. A & C, at 23 (underlining added). The first Forney policy says that "Allstate will pay all sums arising from an accidental loss which an insured person becomes legally obligated to pay as damages because of bodily injury or property damage covered by this part of the policy." Complaint ex. B, at 23 (underlining added). The court does not deem this difference in language significant for purposes of the pending motions.

The Allstate policy further provides that, if an insured person is sued for covered damages, Allstate "will provide a defense with counsel of our choice, even if the allegations are groundless, false or fraudulent." Complaint exs. A-C, at 23.

The Allstate policy excludes coverage for intentional or criminal acts. The intentional act exclusion in the McLaughlin and second Forney policies states:

We do not cover bodily injury or property damage resulting from:

a) An act or omission intended or expected to cause bodily injury or property damage. This exclusion applies even if the bodily injury or property damage is of a different kind or degree, or is sustained by a different person or property, than that intended or expected; or

b) An act or omission committed by an insured person while insane or while lacking the mental capacity to control his or her conduct or while unable to form any intent to cause bodily injury or property damage. This exclusion applies only if a reasonable person would expect some bodily injury or property damage to result from the act or omission.

Complaint exs. A & C, at 23-24.

The criminal act exclusion in these policies reads:

We do not cover bodily injury or property damage resulting from:

a) A criminal act or omission; or

b) An act or omission which is criminal in nature and committed by an insured person who lacked the mental capacity to appreciate the criminal nature or wrongfulness of the act or omission or to conform his or her conduct to the requirements of the law or to form the necessary intent under the law.

This exclusion applies regardless of whether the insured person is actually charged with, or convicted of, a crime.

Id. at 24.

The first Forney policy combines the intentional and criminal act exclusions. The relevant exclusion in that policy reads: "We do not cover any bodily injury or property damage which may reasonably be expected to result from the...