Congregation of Rodef Shalom v. American Motorists Ins. Co.

• Decision Date: 06 April 1979
• Court: California Court of Appeals Court of Appeals
• Parties: CONGREGATION OF RODEF SHOLOM OF MARIN, a corporation, Plaintiff and Appellant, v. AMERICAN MOTORISTS INSURANCE CO., Defendant and Respondent. Civ. 42834.

Page 348

154 Cal.Rptr. 348

91 Cal.App.3d 690

CONGREGATION OF RODEF SHOLOM OF MARIN, a corporation, Plaintiff and Appellant, v. AMERICAN MOTORISTS INSURANCE CO., Defendant and Respondent.

Civ. 42834.

Court of Appeal, First District, Division 3, California.

April 6, 1979.

Rehearing Denied May 4, 1979.

Hearing Denied May 30, 1979.

David McCarville, James L. English, San Francisco, for plaintiff and appellant.

Dunn & McDonald, James T. McDonald, San Francisco, Michael J. Murray, Eureka, for defendant and respondent.

SCOTT, Acting Presiding Justice.

When Steven H. was 16 years old, he set a fire in a wastebasket in a classroom at the appellant Congregation of Rodef Sholom (Congregation) synagogue in Marin County, causing property damage in the amount of $48,770.01. The Congregation filed suit for damages and judgment for the full amount was entered.

At the time of the fire Steven, residing in his parents' household, was an additional insured under a comprehensive homeowner's personal liability insurance policy issued to his parents by respondent American Motorists Insurance Company. American denied coverage for the damage to the Congregation based upon an exclusionary clause in its policy, which provided: "Exclusions: (c) To injury, sickness, disease, death or destruction caused intentionally by or at the direction of the insured."

The Congregation then brought the instant action, seeking to establish that American was liable under the policy to satisfy the judgment against Steven notwithstanding the exclusionary clause. The essence of the Congregation's argument at trial was that the exclusionary clause was inapplicable because Steven did not have the requisite mental capacity to intentionally cause damage.

The issues on appeal are 1) the adequacy of the court's instruction to the jury on the question of whether Steven "intentionally" caused property damage to the premises of the Congregation, and 2) whether the court erred in failing to give an instruction that respondent insurance carrier had the burden of proof as to the applicability of the exclusionary clause. We conclude that the court erred in both particulars, requiring a reversal of the judgment.

Prior and subsequent to the fire Steven was under the care of a psychiatrist, William Lamers. Lamers testified that Steven was suffering from a mental disease diagnosed as "adolescent adjustment reaction." Steven admitted to Lamers the setting of the synagogue fire as well as several other building fires. Steven told Lamers that when he was in the synagogue classroom, it reminded him of classrooms where he had been bullied, shoved, and teased by classmates, and that the feeling of having been rejected and bullied was so strong in him that he had an overwhelming desire to start a fire. Steven testified to the same effect at trial.

Lamers also testified that at the time of the fire Steven could distinguish between right and wrong, and could form a rational intent to do the act of starting a fire. However, Lamers also testified that when Steven set the fire, he was "impelled by an impulse which he did not have the power to resist." Lamers was of the opinion that Steven exhibited paranoid tendencies of delusions and auditory hallucinations. He concluded that Steven had a schizoid personality caused by mental disease which existed on the date Steven started the synagogue fire.

Conflicting testimony was presented by clinical psychologist Wendell R. Wilkin, who was of the opinion that Steven was capable of knowing and understanding the nature and quality of his act, and that he had the capability of understanding that his act was wrong in a moral sense. He was of the further opinion that Steven's behavior in setting the fire represented a pattern of behavior which would make it contrary to an impulsive kind of act. He described Steven's conduct as characterized by systematic planning, a certain amount of caution which prevented him from being detected, and a certain amount of shrewdness and wariness.

The trial court construed the intentional injury exclusion as inapplicable only when the insured did not understand the nature and quality of his act, or was incapable of distinguishing between right and wrong. In effect, the trial court concluded that only when the insured's conduct was such that he could be deemed legally insane for criminal responsibility purposes according to the M'Naghten test, would that conduct be not intentional as the word was used in the exclusionary clause.

The court concluded, and the Congregation concedes, that the evidence submitted at trial failed to establish that Steven was legally insane according to the M'Naghten definition of insanity at the time he set the fire at the synagogue. ¹

The court refused appellant's proposed instruction that the burden of proof as to the applicability of the exclusionary clause was on the insurer.

In instructing the jury, the court defined intent as "A determination to act in a certain way, an intended object," and then gave the jury a single special interrogatory: "At the time the fire was set by Steven Wilson Hall, did he intentionally cause property damage to the premises of the Congregation of Rodef Sholom beyond the point of origin of the fire." The jury answered the interrogatory affirmatively, and judgment was entered for respondent American.

Initially, we observe that Meyer v. Pacific Employers Ins. Co. (1965) 233 Cal.App.2d 321, 327, 43 Cal.Rptr. 542, 547, makes clear the "fact that an act which causes an injury is intentional does not take the consequence of that act outside the coverage of a policy which excludes damage unless caused by accident for if the consequence that is the damage or injury is not intentional and is unexpected it is accidental in character." As the court properly instructed, it is the intent to cause damage beyond the point of origin of the fire which is the intent that makes the exclusion applicable, and whether Steven had that intent was the question to be decided by the jury.

What was inadequate in the court's instruction was guidance to the jury as to how they were to determine if Steven acted "intentionally."

In Clemmer v. Hartford Insurance Co. (1978) 22 Cal.3d 865, 151 Cal.Rptr. 285, 587 P.2d 1098, a Dr. Lovelace killed his employer, Dr. Clemmer, and was convicted of second degree murder after withdrawing a plea of not guilty by reason of insanity. Clemmer's widow obtained a default judgment against Lovelace for wrongful death. The widow then brought an action against Hartford, insurer of Lovelace on a comprehensive personal liability policy. Hartford denied coverage based on an exclusionary clause and Insurance Code section 533, which provides that an insurer is not liable for a loss caused by the willful act of the insured. ² The Supreme Court rejected Hartford's contention that the plaintiffs were estopped by Lovelace's criminal conviction from denying the willfulness of his act in killing Clemmer in a subsequent action against his insurer. The court concluded the plaintiffs' interest in litigating Lovelace's willfulness differed from the interest of Lovelace in litigating that issue at his criminal trial; thus collateral estoppel was not justified, despite his withdrawal of his plea of insanity at that criminal trial.

The clear implication of the decision in Clemmer is that the mental capacity of an insured is a litigable issue when an insurance company denies personal liability coverage for damage resulting from the willful act of the insured, on the ground that Insurance Code section 533 precludes such coverage. The court held that the trial court did not err in giving the following instruction (at p. 886, 151 Cal.Rptr. at p. 297, 587 P.2d at p. 1110):

"If you find by a preponderance of the evidence that Dr. Lovelace had the mental capacity to intend to shoot and harm Dr. Clemmer when he caused his death, as well as the mental...