American Family Mut. Ins. Co. v. Purdy

Decision Date29 April 1992
Docket NumberNo. 17507,17507
Citation483 N.W.2d 197,61 USLW 3112
PartiesAMERICAN FAMILY MUTUAL INSURANCE COMPANY, Plaintiff and Appellant, v. Bradley Alan PURDY; D.L. and J.L., and D.L. as Guardian ad Litem of C.L. and A.L., Minors, Defendants and Appellees.
CourtSouth Dakota Supreme Court

Douglas M. Deibert, Cadwell, Sanford & Deibert, Sioux Falls, for plaintiff and appellant.

Donald P. Knudsen, Gunderson, Palmer, Goodsell & Nelson, Rapid City, for defendants and appellees.

Patrick K. Duffy, Rodney W. Schlauger, Bradley, McCullen, Butler, Foye & Simmons, Rapid City, for defendant and appellee Purdy.

SABERS, Justice.

Insurer (American Family) appeals a determination that it has a duty to defend and to pay for expected or intended injury arising from sexual contact. We reverse.


Bradley Purdy (Purdy) sexually molested A.L. on approximately fifteen occasions when A.L. was between 4 and 6 years of age. Purdy also sexually molested C.L., A.L.'s older brother, on three occasions. The molestation of both children consisted of Purdy fondling their genitals, there was no evidence of any oral or anal penetration.

These incidents occurred in Rapid City, South Dakota, during a time period when Purdy was a student at Brigham Young University in Provo, Utah. He also spent a period of time in Germany. However, Purdy considered himself a resident of his parents' household in Rapid City. Thus, Purdy meets the definition of "insured" under his parents' homeowner's policy.

A.L. described four of the incidents with Purdy. Three occurred in the children's home with Purdy shutting the bedroom door, sitting against it with A.L. between his legs and then rubbing A.L.'s genitals for about 10 minutes. Each of the four described incidents ended with Purdy asking A.L. if it felt good, to which A.L. responded "No." On the final described incident Purdy threatened A.L. not to tell his parents. Purdy followed a similar pattern with C.L. and on one occasion, although no apparent threats were made, Purdy asked C.L. if he were okay.

Purdy was criminally prosecuted for these acts in 1986. Purdy received a suspended imposition of sentence and satisfied the terms imposed by the court. The children's parents (Parents) filed this civil action in their own right and as guardians of the children against Purdy and his parents. 1 Parents alleged that Purdy "negligently and without the intent to harm, touched and fondled the [children] in an indecent manner."

American Family brought a declaratory judgment action claiming it had no duty to defend or indemnify Purdy for the claims contained in the complaint. American Family twice moved for summary judgment and both motions were denied. A court trial was held. The issue was whether the policy, which excluded coverage for any bodily injury which is either "expected or intended" by the insured, provided coverage and a duty to defend.

The testimony of psychologist Dr. Fred McCall-Perez, was offered to dispute the allegation that Purdy intended to harm the children as a result of his conduct. Dr. McCall-Perez testified that in his opinion, Purdy did not intend to injure nor expect his conduct to harm the children. This opinion was based upon his determination that Purdy has a very narcissistic or self-centered personality, that Purdy felt the history of his own abuse had not affected him in any adverse way, that Purdy's pedophile behavior was unconscious--similar to a bad habit, and that Purdy viewed his acts as an expression of love.

American Family offered the testimony of psychologist Dr. Michael McGrath to challenge the opinion of Dr. McCall-Perez. Dr. McGrath testified that there was insufficient foundation to determine Purdy's expectations or intent. However, Dr. McGrath testified that it was equally possible that Purdy expected or intended harm as it was that no expectation or intent of harm existed. The testimony of Purdy, A.L. and C.L. was received by deposition. The court found that not only did Purdy not expect or intend to harm the children, but that to Purdy, the fondling was a form of love and would benefit the children. 2 The court concluded that American Family was obligated to defend Purdy and to pay up to policy limits for any judgment rendered against him. American Family appeals, claiming the court erred in denying summary judgment and erred as a matter of law in concluding that the policy exclusion did not apply.


The question is whether the trial court erred or was clearly erroneous in determining that Purdy neither expected or intended harm from his sexual contacts with the children. The homeowner's policy, under which Purdy is an insured, contains a provision excluding coverage for "bodily injury or property damage ... which is expected or intended by any insured." When an insurer seeks to invoke a policy exclusion as a means of avoiding coverage, the insurer has the burden of proving that the exclusion applies. Western Cas. & Sur. Co. v. Anderson, 273 N.W.2d 203, 205 (S.D.1979). For the exclusion to apply in this case, it must be shown that Purdy expected or intended injury to the children--not merely the acts of molestation.

It surely is not the act of the insured which must be expected or intended for the [exclusion] to take effect.

Tri-State Co. of Minnesota v. Bollinger, 476 N.W.2d 697, 701 (S.D.1991) (emphasis original).

The majority of jurisdictions that have addressed this issue have held that through the very nature of acts of criminal sexual contact or rape, injury is either inherent or the intent to injure will be inferred as a matter of law. 3 In Western Nat. Assur. Co. v. Hecker, 43 Wash.App. 816, 719 P.2d 954, 960 (1986), the court held "that an act of forcible oral intercourse is an act of such a character that an intent to cause injury can be inferred as a matter of law." (emphasis original). The exclusion in the perpetrator's homeowner's policy stated that coverage would not extend to "liability ... caused intentionally by ... any insured." Id. 719 P.2d at 957. In Rodriquez by Brennan v. Williams, 42 Wash.App. 633, 713 P.2d 135 (1986) two cases were consolidated for appeal. Both cases dealt with father/stepfather's sexual contact with his child/stepchild. The court held that "[a]cts of this nature are of such a character that an intention to inflict injury can be inferred as a matter of law." Id. 713 P.2d at 138. Both policies in Rodriquez excluded coverage for injury "expected or intended." Id. at 137.

In CNA Ins. Co. v. McGinnis, 282 Ark. 90, 666 S.W.2d 689 (1984), the insured/stepfather sexually assaulted and abused his stepdaughter. The court, in holding that the exclusion applied stated "that for a stepfather in such a situation 'to claim that he did not intend to cause injury, flies in the face of all reason, common sense and experience.' " Id. 666 S.W.2d at 691. In Vermont Mut. Ins. Co. v. Malcolm, 128 N.H. 521, 517 A.2d 800 (1986), the court held that the sexual assault committed by the insured on an 11-year old boy was not an "occurrence" within the policy and therefore not covered. 4 In reaching this conclusion, the court stated:

The assaults were inherently injurious in the most obvious sense that they could not be performed upon a boy without appalling effects on his mind as well as forbidden contacts with his body. This common understanding of the nature of such acts is beyond reasonable dispute and consistent with the legislative classifications of the acts within the most serious category of sex offenses[.]

Id. 517 A.2d at 802-3 (citations omitted).

In Linebaugh v. Berdish, 144 Mich.App. 750, 376 N.W.2d 400 (1985), the court held that:

[E]ngaging in sexual penetration with an underage female would be an ... (intentional act) and the intent to injure or harm can be inferred as a matter of law from the alleged sexual penetration of said child. Thus, the exclusion in the insurance policy applies to the facts in the instant case.

Id. 376 N.W.2d at 405. The homeowner's policy in Linebaugh contained the exclusion for "injury ... intentionally caused by ... the Insured." Id. at 402. In Fireman's Fund Ins. Co. v. Hill, 314 N.W.2d 834 (Minn.1982), the court held that criminal sexual contact by the insured with a foster child "was such that an intention to inflict injury can be inferred as a matter of law." Id. at 835. Therefore, the Hill court held that the policy provision excluding "bodily injury ... which is either expected or intended from the standpoint of the insured" applied. Id.

Generally, the matter of coverage should be determined on a case by case basis as a question of fact after a consideration of all competent evidence by the fact finder. The classic statement of the fact finding process appears in Shook v. Tinny, 122 Ill.App.3d 741, 78 Ill.Dec. 58, 461 N.E.2d 642 (1984), as follows:

The circumstances under which the act in question was done usually serve to manifest to a greater degree the intent of the actor and may overcome his declaration as to his intention, but he has the right to testify to his intention and to have the circumstances surrounding the act considered in connection with his testimony.

Id. 78 Ill.Dec. at 62, 461 N.E.2d at 646 (quoting People v. Biella, 374 Ill. 87, 28 N.E.2d 111, 112 (1940)). However, the majority view in criminal sexual contact cases is to infer, as a matter of law, that harm was expected or intended. We find the majority position persuasive.

Purdy claims that the recent case of Tri-State, is dispositive in this case. Purdy claims that this policy language and Tri-State establish that the court must determine whether the injury, rather than the act, was expected or intended from the standpoint of the insured. Although Purdy is correct under this policy language, this issue is determined from all the acts and conduct of the insured and not simply from his after the fact statements as to his...

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