Co-Operative Ins. Cos. v. Woodward
| Citation | 2012 VT 22 |
| Decision Date | 22 March 2012 |
| Docket Number | No. 2011-158,2011-158 |
| Court | United States State Supreme Court of Vermont |
| Parties | Co-operative Insurance Companies v. Denise Woodward, James Bennett, Individually, and as Administrator for the Estate of Brooke Bennett |
NOTICE: This opinion is subject to motions for reargument under V.R.A.P. 40 as well as formal revision before publication in the Vermont Reports. Readers are requested to notify the Reporter of Decisions, Vermont Supreme Court, 109 State Street, Montpelier, Vermont 05609-0801 of any errors in order that corrections may be made before this opinion goes to press.
Supreme Court
On Appeal from Superior Court, Orange Unit, Civil Division
Robin Ober Cooley of Pierson Wadhams Quinn Yates & Coffrin, Burlington, for Plaintiff-Appellee.
Paul J. Perkins of Plante & Hanley, P.C., White River Junction, for Defendant-Appellant James Bennett.
PRESENT: Reiber, C.J., Dooley, Johnson, Skoglund and Burgess, JJ.
¶ 1. REIBER, C.J. James Bennett, the father of Brooke Bennett and the administrator of her estate, appeals the trial court's declaration of no coverage for the claims made in the lawsuit filed against homeowner Denise Woodward for negligent supervision and damages arising out of the abduction, assault, and death of his daughter, Brooke. Homeowner was formerly married to Brooke's uncle, Michael Jacques, who is alleged to have kidnapped, sexually assaulted, and murdered Brooke. Homeowner's insurer brought a declaratory judgment action asking the trial court to hold that its policy does not cover these claims. The trial court decided the case on summary judgment, holding that the insurance policy excludes coverage and father now appeals. We affirm.
¶ 2. On June 25, 2008, uncle allegedly kidnapped, sexually assaulted, and murdered Brooke Bennett. Father's complaint against homeowner alleges uncle acted "with the intention to commit violent and devious harm, personal injury, and criminal acts to said minor child." The complaint alleges that uncle had a "propensity for acting in a depraved, predatory, and harmful manner towards women" and that homeowner knew or should have known that her husband had a history of predatory behavior towards minor children and women, and was a threat to Brooke.
¶ 3. At the time of Brooke's death, uncle was married to homeowner. Both uncle and homeowner were the named insureds on a homeowners' insurance policy issued by insurer for the period August 2007 to August 2008. The policy's personal liability coverage provision is as follows:
Coverage L—Personal Liability. "We" pay, up to "our" "limit", all sums for which an "insured" is liable by law because of "bodily injury" or "property damage" caused by an "occurrence" to which this coverage applies. "We" will defend a suit seeking damages if the suit resulted from "bodily injury" or "property damage" not excluded under this coverage.
¶ 4. The policy defined "bodily injury" as "bodily harm to a person and includes sickness, disease, or death." The policy specifically excluded from the definition "bodily harm, sickness, disease, or death that arises out of . . . sexual molestation of any person." "Occurrence" was defined as "an accident, including repeated exposures to similar conditions, that results in ‘bodily injury' or ‘property damage' during the policy period." The definition of "insured" included the following sentence: "Each of the above is a separate ‘insured', but this does not increase ‘our' ‘limit'."
¶ 5. The policy also contained the following intentional-acts exclusion provision that applied to personal liability coverage:
¶ 6. The trial court granted summary judgment for insurer, concluding that insurer owed no duty of defense or indemnification in the underlying suit in part because the policy bars coverage for intentional acts by "an insured" that are not "occurrences." The court rejected father's argument that the separate insureds, or severability, clause provides coverage for homeowner because the complaint alleges that uncle committed intentional acts.
¶ 7. On appeal, father reiterates his argument that uncle's alleged intentional acts do not preclude coverage for homeowner because the policy contains a severability clause. He first contends that there was an "occurrence" because, under the purported severability language, father focuses on homeowner's negligent actions exclusive of uncle's intentional ones. His principal argument is that the clause creates ambiguity when read together with the intentional-acts exclusion, and he invites the Court to construe ambiguity against the drafter-insurer and create coverage. Insurer contends that uncle's alleged intentional acts caused Brooke's death, there was no "occurrence," and the intentional-acts exclusion bars coverage. Insurer also claims that the policy does not contain a severability clause, and that even if it does, the clause does not create ambiguity.
¶ 8. We review a grant of summary judgment de novo and apply the same standard as the trial court. Bradford Oil Co., Inc. v. Stonington Ins. Co., 2011 VT 108, ¶ 5, ___ Vt. ___, ___ A.3d ___. The trial court's judgment will be upheld if there are no genuine issues of material fact and the moving party is entitled to judgment as a matter of law. Id.; see also V.R.C.P. 56(c)(3). Furthermore, interpretation of an insurance policy, like other contracts, is a question of law. N. Sec. Ins. Co., Inc. v. Doherty, 2009 VT 27, ¶ 7, 186 Vt. 598, 987 A.2d 253. Our review is therefore nondeferential and plenary. Id.
¶ 9. We give effect to the plain meaning of the terms of the policy. Id. ¶ 8. Disputed terms are to be "read according to their plain, ordinary and popular meaning." Id. (quotation omitted). If we find ambiguity, we construe the language in favor of coverage, which promotes the "protective purpose" of effectuating the parties' intent that the insured be, in fact, insured. Id. Our guiding principle requires us to "review the language of an insurance contract from the perspective of what a reasonably prudent person applying for insurance would have understood it to mean." Towns v. Vt. Mut. Ins. Co., 169 Vt. 545, 546, 726 A.2d 65, 67 (1999) (mem.).
¶ 10. Insurers have a duty to defend when the claim against the insured "might be of the type covered by the policy." Garneau v. Curtis & Bedell, Inc., 158 Vt. 363, 366, 610 A.2d 132, 134 (1992). In determining whether there is a duty to defend, we compare the language of the policy to the language of the complaint. Id. at 366, 610 A.2d at 133-34. The most expansive duty under insurance liability policies is the insurer's duty to defend, but there is no duty to defend when there is no possible factual or legal basis on which the insurer might be required to indemnify. Id. at 366, 610 A.2d at 134. Thus, father's claims in the complaint control the analysis.1
¶ 11. "If a claim is made or a suit is brought against an insured for damages because of bodily injury that is caused by an occurrence, there is coverage under the policy, unless an exclusion applies." N. Sec. Ins. Co. v. Perron, 172 Vt. 204, 210, 777 A.2d 151, 155 (2001). Because the definition of "occurrence" and the intentional-acts exclusion are so interrelated, we consider those issues collectively. See id. at 210 n.4, 777 A.2d at 155 n.4 ().
¶ 12. The policy provides that an "occurrence" is "an accident, including repeated exposures to similar conditions, that results in ‘bodily injury' or ‘property damage' during the policy period." The policy does not define "accident," but we have previously explained that its plain meaning is "an event that is undesigned and unforeseen" or an "unexpected happening." Serecky v. Nat'l Grange Mut. Ins., 2004 VT 63, ¶ 17, 177 Vt. 58, 857 A.2d 775 (quotations omitted). The central question in determining whether an act constitutes an "occurrence" is whether the actor intended or expected harm to result from the alleged intentional acts. Id. ¶ 19. This is typically a factual question, though "[s]ome actions . . . are so likely to result in injury that, as a matter of law, the court will find that the injury did not result from an accident regardless of the actor's subjective intent or expectations." Perron, 172 at 214, 777 A.2d at 158. Indeed, we may "conclusively presume intent to harm as a matter of law based on the nature and character of the insured's alleged acts." Id. In such cases, "the intent to act is the equivalent of the intent to harm." Serecky, 2004 VT 63, ¶ 24. We have applied this rule in a number of different factual scenarios, including cases of an adult's sexual abuse of a minor. See Allstate Ins. Co. v. Vose, 2004 VT 121, ¶ 19, 177 Vt. 412, 869 A.2d 97 (collecting cases).
¶ 13. We look to the underlying complaint to determine whether there was an "accident" and therefore an "occurrence." Id. ¶ 15.2 The complaint alleges that uncle lured Brooke to his residence "with the intention to commit violent and devious harm, personal injury, and criminal acts." Uncle then allegedly "drugged, sexually assaulted, and murdered Brooke." We presume intent to harm based on uncle's alleged acts—kidnapping, drugging, sexually assaulting, and killing Brooke. These alleged acts are inherently harmful and so certain to cause injury that we must conclude as a matter of law that uncle had intent to harm. It would "fl[y] in the face of all reason, common sense and experience" to hold otherwise. Serecky, 2004...
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Co–Operative Ins. Cos. v. Woodward
...A.3d 892012 VT 22CO–OPERATIVE INSURANCE COMPANIESv.Denise WOODWARD, James Bennett, Individually, and as Administrator for the Estate of Brooke Bennett.No. 11–158.Supreme Court of Vermont.March 30, [45 A.3d 91]Robin Ober Cooley of Pierson Wadhams Quinn Yates & Coffrin, Burlington, for Plaint......