Mutual of Enumclaw v. Wilcox, 19403

• Decision Date: 03 December 1992
• Docket Number: No. 19403,19403
• Citation: 123 Idaho 4,843 P.2d 154
• Parties: MUTUAL OF ENUMCLAW, Plaintiff-Appellant-Cross Respondent, v. Shirley Mae WILCOX, Defendant-Respondent, and JOHN DOES A THROUGH R, Intervenors-Respondents-Cross Appellants. Idaho Falls, September 1992 Term
• Court: Idaho Supreme Court

Page 154

843 P.2d 154

123 Idaho 4

MUTUAL OF ENUMCLAW, Plaintiff-Appellant-Cross Respondent, v. Shirley Mae WILCOX, Defendant-Respondent and JOHN DOES A THROUGH R, Intervenors-Respondents-Cross Appellants.

No. 19403.

Supreme Court of Idaho,

Idaho Falls, September 1992 Term.

Dec. 3, 1992.

Benoit, Alexander, Sinclair, Doerr, Harwood & High, Twin Falls, for plaintiff-appellant. J. Walter Sinclair argued.

Wright Law Offices, P.A., Idaho Falls, for defendant-respondent Wilcox. Jon J. Shindurling argued.

Weinpel, Woolf & Combo, Idaho Falls, for intervenors-respondents Does. William R. Combo argued.

McDEVITT, Justice.

BACKGROUND AND PRIOR PROCEEDINGS

A. The Underlying Action.

On August 18, 1989, twelve anonymous plaintiffs filed suit against Shirley Mae Wilcox ("Wilcox"), her ex-husband, the state of Idaho, and ten unnamed employees of the state of Idaho. In the complaint As to Wilcox, plaintiffs alleged that she "was negligent in one or more of the following:"

[123 Idaho 5] plaintiffs alleged that the Wilcoxes were employed by the state of Idaho at the Child Development Center and provided respite or foster care through the state of Idaho. In addition, plaintiffs alleged that "the minor Plaintiffs suffered incidences of repeated sexual exploitation, sexual molestation, and sexual abuse between May, 1980, and May, 1987, at the said Child Development Center and at the home of Defendants Jay Wilcox and Shirley Wilcox...." Further, plaintiffs alleged that "the adult Plaintiffs were never informed by representatives of the Defendant, State of Idaho, nor by its Department of Health & Welfare, nor by any of its employees at its Child Development Center, of the sexual exploitation, sexual molestation, and sexual abuse of the minor Plaintiffs."

a. In failing to report to the law enforcement authorities, the sexual abuse, exploitation and molestation which occurred at her home by Defendant, Jay Wilcox, which duty to report is set out in Idaho Code § 16-1619, Idaho Code;

b. In failing to report to her husband's employer the tendencies and sexual molestation of other children by her husband, Defendant Jay Wilcox.

c. In failing to warn or provide adequate safety for the minor Plaintiffs herein, who were brought to her home by her husband, Defendant Jay Wilcox, knowing the sexual propensities of her husband, Defendant Jay Wilcox.

Plaintiffs prayed for their economic and non-economic losses against Wilcox, reasonable attorney fees, and costs and disbursements.

B. The Declaratory Action.

On June 25, 1990, Enumclaw filed a complaint for declaratory judgment. In the complaint, Enumclaw alleged that it was not liable under the policy of insurance issued to Wilcox with respect to the claims made against her by the twelve anonymous plaintiffs. Specifically, Enumclaw stated that it denied liability because "it appears that the basis of the claims against Shirley Wilcox, are not an accident or 'occurrence' as set out in the terms of the insurance policy...." Enumclaw attached an insurance policy to its complaint, which it alleged was "in effect during all times relevant to the matters contained in this complaint."

On July 9, 1990, Enumclaw filed an amended complaint for declaratory judgment. In the amended complaint, Enumclaw added that the insurance policy did not provide coverage pursuant to an exclusion relating to intentional conduct, because Wilcox's ex-husband's acts were intentional and Wilcox's failure to report was also intentional.

On February 14, 1991, Wilcox filed an answer to the first amended complaint for declaratory judgment. In her answer, Wilcox alleged that the complaint failed to state a claim upon which relief could be granted, that there was not an actual controversy between the parties, that the exclusions cited by Enumclaw were irrelevant, that Enumclaw is estopped from withdrawing because she relied on a letter from Enumclaw which stated that Enumclaw would defend her, and that Enumclaw has waived its right to withdraw defense or coverage.

On March 6, 1991, Enumclaw filed a motion for summary judgment. Along with the motion for summary judgment, Mark Canterbury, a Personal Lines Senior Underwriter who has access to all insurance policies issued by Enumclaw, filed an affidavit which stated that an attached homeowner's insurance policy (the "Enumclaw Policy") was in effect between Enumclaw and Wilcox from February 1, 1971 to March 7, 1985. In addition, J. Walter Sinclair, an attorney for Enumclaw, filed an affidavit stating that he attended the January 22, 1991 deposition of Wilcox. Sinclair attached "relevant excerpts" of the transcript of the deposition to his affidavit. Among other things, the attached excerpts revealed that Wilcox stated that her ex-husband told her in July of 1978 "[t]hat he had touched him inappropriately one time." Further, after telling Wilcox, he told the On March 7, 1991, the intervenors ¹ filed an answer to plaintiff's amended complaint. In addition to the defenses raised by Wilcox, the intervenors added that Enumclaw's claim was barred by the statute of limitations and laches and that the insurance policy should be construed against Enumclaw.

[123 Idaho 6] Mormon bishop. In addition, after being excommunicated from the Mormon church, the Wilcoxes provided respite care to children in their home.

On April 2, 1991, Roger B. Wright, an attorney for Wilcox, filed an affidavit in which he stated that he attended the January 22, 1991, deposition of Wilcox. Wright attached "relevant excerpts" of the transcript of the deposition to his affidavit. Among other things, the excerpts revealed that Wilcox did not believe her ex-husband was continuing to engage in inappropriate touching with her son after her ex-husband had been excommunicated from the Mormon church.

On April 10, 1991, Wilcox filed an affidavit in which she stated that the insurance policies attached to the initial complaint and Mark Canterbury's affidavit did not appear to be the same as the policy that she had in her possession. Wilcox attached a copy of her original insurance policy (the "Wilcox Policy"), the "only policy [she knew] to have been in effect during the period relevant to Plaintiff's complaint."

On April 11, 1991, the intervenors filed a motion for summary judgment. Wilcox joined the intervenors' motion on April 12, 1991.

On May 7, 1991, Joyce Grager filed an affidavit. In her affidavit, she stated that she has been employed by Enumclaw for the past fifteen years and was in charge of a program at Enumclaw in which the language of homeowners' insurance policies was simplified in 1983. Further, she stated that when each homeowner's policy came up for renewal on or after November 1, 1983, the new "simplified" policies were automatically sent to the insured.

Argument on the cross-motions for summary judgment was heard on May 8, 1991. The district court issued its memorandum decision on June 5, 1991, its order denying Enumclaw's motion and granting the Wilcox/intervenor motion for summary judgment on June 9, 1991, and summary judgment dated June 10, 1991.

In its memorandum decision, the district court stated that "the first question to be resolved is which of the two Enumclaw homeowner's policies ... were in effect at the times in question." The court noted that "for purposes of Enumclaw's motion for summary judgment, Enumclaw admits that [Wilcox's] policy is the applicable policy for the period of May, 1980 through May, 1987. Based upon that admission, the court will rule upon Enumclaw's motion for summary judgment based upon the provisions and language contained in [the Wilcox] [P]olicy." However, since Enumclaw did not concede the applicability of the Wilcox Policy with respect to the Wilcox/intervenor motion for summary judgment, the district court stated that "there is a genuine issue of material fact as to which policy is applicable from and after November, 1983." Since the court found that there was a factual dispute, it reasoned that it would have to deny the Wilcox/intervenor motion unless there was no "substantial and material difference" between the Enumclaw Policy and the Wilcox Policy.

The district court first addressed Enumclaw's motion for summary judgment. As to the contention that Wilcox's conduct did not constitute an "occurrence," which the Wilcox Policy defines as "an accident ...," the court noted that the Wilcox Policy did not define the term "accident," and, thus, the term is "unclear, and therefore ambiguous from the language of the policy itself...." Since an ambiguity in an insurance contract must be resolved in favor of the insured, the district court reasoned, the court adopted the broad definition of "accident" given in Penley v. Gulf Ins. Co., 414 P.2d 305, 308 (Okla.1966), which the district The second question was whether Wilcox's "alleged misconduct in the underlying case was intentional. If it was, then [the Wilcox] [P]olicy provides no liability coverage. On the other hand, if it was not, then coverage exists." In this regard, the district court specifically distinguished between Wilcox's conduct and her ex-husband's conduct--"it is her acts or omissions, and not those of her husband, which must be scrutinized in order to determine whether they constitute an 'accident' within the meaning of [the Wilcox] [P]olicy." (Emphasis added.) The court stated that "[w]hile it may be that [Wilcox] intentionally decided not to report or warn of her husband's misconduct, that decision constituted nothing more than a mistake or an error in judgment. There is no evidence whatsoever to suggest that she intentionally harmed anyone." Thus, the district court found that Wilcox's conduct constituted an "occurrence" within the meaning of the Wilcox Policy.

[123 Idaho 7] court stated as: "an injury is the result of an 'accident' if it is not caused by intentional conduct."

The district court then addressed the policy exclusions relating to the wilful violation of a law or...