CNA Ins. Co. v. McGinnis, 84-17

Decision Date26 March 1984
Docket NumberNo. 84-17,84-17
Citation666 S.W.2d 689,282 Ark. 90
PartiesCNA INSURANCE COMPANY, Appellant, v. James Ralph McGINNIS and Vicky Lynn Hills, Appellees.
CourtArkansas Supreme Court

Davis, Cox & Wright by Walter B. Cox, Fayetteville, for appellant.

Sexton, Nolan & Robb, P.A. and Jones, Gilbreath & Jones, Fort Smith, for appellees.

GEORGE ROSE SMITH, Justice.

In this case we granted a petition to review the decision of the Court of Appeals because that court had affirmed the chancellor's decree by a 3-3 tie vote. Rule 29(4). We find that the chancellor's decree was clearly erroneous and accordingly reverse the decision of the Court of Appeals, 10 Ark.App. 234, 663 S.W.2d 182.

Vicky Lynn Hills brought suit in federal court against her former stepfather, James Ralph McGinnis, for injuries received as a result of sexual assaults and abuse inflicted by McGinnis upon Vicky Lynn. McGinnis had a homeowner's insurance policy with the petitioner, CNA Insurance Company, which obligated CNA to defend personal injury suits against McGinnis and to pay any judgment against him, up to the $50,000 policy limit, with an exception excluding coverage for personal injury which is "expected or intended" by the insured. Relying upon that exception, CNA refused to defend the federal action and brought this suit in a state court for a decree declaring that CNA is not obligated under its policy to defend the action or to pay any judgment that may result. On cross motions for summary judgment the chancellor held that CNA is obligated under its policy, because although McGinnis's acts were intentional, he did not expect or intend any injury to the child. In reaching that conclusion both the chancellor and the affirming appellate judges relied upon our decision in Talley v. MFA Mutual Ins. Co., 273 Ark. 269, 620 S.W.2d 260 (1981), holding that under a similar exception the insurer was liable where an insured intentionally fired a shotgun in the direction of others but did not expect or intend to injure them.

Here CNA proved that McGinnis had had sexual relations with Vicky Lynn almost daily from the time she was six years old until she was sixteen. The relations stopped when McGinnis was arrested, convicted, and sent to the penitentiary. McGinnis had also had similar relations with Vicky Lynn's older twin sisters until they ran away from home and the family began to receive counseling as a group.

McGinnis admitted that he intended to do what he did. He said that the twins used his conduct as an "excuse" for running away from home. He felt that none of the three children experienced any harm or injury or ill effects from his activities with them. Dr. Stephens, a psychologist with experience in similar cases, testified that males who are involved in such activities do not expect or intend that the females will sustain any injury. He admitted that in most instances such a sexual relationship does lead to emotional problems on the part of the recipients of such abuse.

The language in an insurance policy is to be construed in its plain, ordinary, popular sense. State Farm Mutual Automobile Ins. Co. v. Belshe, 195 Ark. 460, 112 S.W.2d 954 (1938). This means that the policy exception excludes coverage for injuries which the average run of reasonable people would expect or intend to inflict by engaging in the conduct in question. Hence we said in the Talley case that there would be no coverage if the insured intended to shoot the injured plaintiffs, but if it was mere negligence on the insured's part there would be coverage.

In the present case McGinnis's repeated intentional acts were felonies, prohibited by the criminal law. McGinnis says that nevertheless he did not...

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    ...the intent of the insured by the objective reasonable person standard--not the insured's subjective intent. (CNA Ins. Co. v. McGinnis (1984) 282 Ark. 90, 666 S.W.2d 689, 690-691; Linebaugh v. Berdish (1985) 144 Mich.App. 750, 376 N.W.2d 400, 402-403.) McGinnis regarded testimony from the in......
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