Quigley v. Travelers Property Cas. Ins. Co., 1:08-CV-01302 OWW DLB.

Decision Date27 May 2009
Docket NumberNo. 1:08-CV-01302 OWW DLB.,1:08-CV-01302 OWW DLB.
Citation630 F.Supp.2d 1204
CourtU.S. District Court — Eastern District of California
PartiesJack QUIGLEY, Plaintiff, v. TRAVELERS PROPERTY CASUALTY INSURANCE COMPANY, and Does 1 through 25, inclusive, Defendants.

James H. Wilkins, Wilkins Drolshagen and Czeshinski, Fresno, CA, for Plaintiff.

G. Edward Rudloff, Jr., Edward Patrick Murphy, Susanna Kendall Farber, Rudloff Wood & Barrows LLP, Emeryville, CA, for Defendants.

MEMORANDUM DECISION RE CROSS MOTIONS FOR PARTIAL SUMMARY JUDGMENT/ADJUDICATION (DOCS. 11 & 36)

OLIVER W. WANGER, District Judge.

I. INTRODUCTION

Plaintiff Jack Quigley ("Plaintiff") has sued Defendant Travelers Property Casualty Insurance Company ("Defendant") for (1) breach of contract, and (2) breach of the implied covenant of good faith and fair dealing arising out of Defendants' refusal to defend Plaintiff in an underlying state civil suit. Before the court for decision are cross-motions for partial summary judgment/ summary adjudication on the duty to defend. Docs. 11 & 36.

II. BACKGROUND

At all relevant times, Plaintiff held a homeowners insurance policy issued by Defendant (the "Policy"). Plaintiff's Statement of Undisputed Material Facts ("PUMF"), Doc. 13 at #1. The Policy, which was in effect January 15, 2003 through January 15, 2004, provides in pertinent part:

If a claim is made or suit is brought against any insured for damages because of bodily injury or property damage caused by an occurrence to which this coverage applies, even if the claim or suit is false we will:

a. Pay up to our limit of liability for the damages for which an insured is legally liable. Damages include prejudgment interest awarded against an insured; and

b. provide a defense at our expense by counsel of our choice, even if the suit is groundless, false or fraudulent. We may investigate and settle any claim or suit that we decide is appropriate. Our duty to settle or defend ends when the amount we pay for damages resulting from the occurrence equals our limit of liability.

Doc. 22 at pp 47-48 of 76. (emphasis omitted). The Policy defines "occurrence" as "an accident, including continuous or repeated exposure to substantially the same generally harmful conditions which result, during the policy period, in: a. bodily injury; or b. property damage." Doc. 22 at 33 of 76. No definition of "accident" is provided.

The Policy also contains certain exclusions including:

Coverage E—Personal Liability and Coverage F—Medical Payments to Others do not apply to bodily injury or property damage:

a. which is expected or intended by any insured ...

* * *

k. [a]rising out of sexual molestation, corporal punishment or physical or mental abuse ....

Doc. 22 at 48, 49 of 76.

On August 13, 2004, Plaintiff was charged in the Superior Court of California, County of Fresno with two felony counts of continuing sexual molestation and abuse, and one felony count of committing a lewd act upon a child. Criminal Complaint, People v. Jack Barry Quigley, No. 03907697-7, Doc. 43, Attachment A.1 The alleged victim was Plaintiff's step-granddaughter, who was eight years old at the time of the alleged abuse. She accused Plaintiff of repeatedly sexually molesting her. Decl. of Karen Plumlee, Doc. 24-2, at ¶ 8. The criminal action resulted in a hung jury. Defendant's Statement of Undisputed Facts ("DSUF"), Doc. 38 at #11. Subsequently, Plaintiff entered a no contest plea to one count of annoying or molesting a child under the age of eighteen, Cal. Penal. Code 647.6(a). Id. at # 12; Doc. 43, Ex. B.2 As a result, Plaintiff was required to and did register as a sex offender. Id.

In April 2008, Jane Doe filed a complaint ("Underlying Complaint" or "Underlying Action")3 in Fresno County Superior Court against Plaintiff, asserting three causes of action: (1) battery; (2) sexual battery; and (3) intentional infliction of emotional distress ("IIED"). Doc. 14-2. The Underlying Complaint contains no factual preamble. Id. at 1. The Battery cause of action states, in pertinent part:

3. On or about 2002 continuing until October 2003, Defendant, JACK QUIGLEY intentionally and recklessly did acts which resulted in harmful and offensive contact with the Plaintiff's person, including but not limited to: making suggestive and sexual advances, touching Plaintiff in a sexual and offensive manner, and engaging in sexual copulation and other acts of carnal knowledge with Plaintiff, JANE DOE 1.

4. Because of Defendant's position of authority and Plaintiff's minority, Plaintiff was unable to, and did not, consent to the aforementioned acts.

5. As a direct, legal and proximate result of the acts of Defendants, and each of them, as aforesaid, Plaintiff, JANE DOE 1, sustained serious, and permanent injuries to her person, all to her damage in an amount to be shown according to proof and within the jurisdiction of the Superior Court.

6. As a direct, legal and proximate result of the aforesaid battery of Defendants, and each of them, Plaintiff was compelled to and did employ the services of hospitals, physicians and surgeons, nurses, and the like, to care for and treat her, and did incur hospital, medical, professional and incidental expenses, and Plaintiff is informed and believes, and upon such information and belief alleges, that she will necessarily by reason of her injuries, incur additional like expenses for an indefinite period of time in the future, all to Plaintiff's damage in a sum to be shown according to proof.

7. Plaintiff is informed and believes that the aforesaid acts directed toward the Plaintiff were carried out with a conscious disregard of Plaintiff's right to be free from such tortious and criminal behavior, such as to constitute oppression, fraud or malice pursuant to California Civil Code Section 3294, entitling Plaintiff to punitive damages in an amount appropriate to punish and set an example of said Defendant, Jack Quigley.

Doc. 14-2.

During the course of discovery in the Underlying Action, the alleged victim responded to special interrogatories asking:

Please identify each and every "act", including a detailed description of the act and the date the act was performed, which resulted in "harmful and offensive contact" with the victim as alleged in the [first cause of action for Battery].

Doc. 63 at p. 6 of 31.

The victim responded as follows:

Sexual Molestation

Sometime in the latter part of 2002, before her 8th birthday, at various times, Jack Quigley began sexually molesting Jane Doe. Such acts included performing oral sex on Jane Doe; the forcing of Jane Doe to perform oral sex on Jack Quigley. This sexual molestation occurred on approximately 12 different occasions and at three different locations. One of the locations was at [] Beal's Quarter Horses in Clovis, California. Another location was at [] North Riverbend Avenue in Sanger, California. The third location was at [] East Woodhaven in Fresno, California[.] Jane Doe alleges on multiple occasions at the location at Beal's Quarter Horses, Jack Quigley took off Jane Doe's Pants and underwear where he proceeded to rub and pour baby powder onto Jane Doe's pelvic area. On most of these occasions, if not all, Jack Quigley "licked" Jane Doe's vaginal area—telling her to just lay there and "relax." At the Riverbend location, when Jane Doe would spend the night there with her cousins, Jack Quigley would come into the bedroom where Jane Doe was sleeping—she doesn't remember at what time during the night but she knows that she usually was asleep. Jack Quigley would lift her from the bed and take her to the couch. He would usually have his pants down to his legs. He always wore "tidy whites" (white briefs). He would pull out his penis from the front opening and put it in her mouth. Jane Doe specifically remembers that one time, Jack Quigley ejaculated on the side of her face (she still thinks that he was peeing) and she remembers that it went down the side of her neck. On some of these occasions, Jack Quigley would rub his penis on the side of Jane Doe's face until he ejaculated. On a few occasions, (Jane Doe does not remember which) during the daytime when her maternal grandmother, Connie, was at work, Jack Quigley would have Jane Doe perform oral sex on him.

Negligence

At one of the locations . . . at Beal's Quarter Horses in Clovis, California, Jack Quigley, on several different occasions, rubbed Neosporin onto Jane Doe's private areas which resulted in severe urinary tract infection. Jane Doe was required to take substantial amounts of antibiotics, incurred medical expenses and experience[d] substantial pain and suffering due to the negligent acts of Jack Quigley.

On July 15, 2008, Plaintiff's wife notified Defendant of the Underlying Action. DSUF at # 6. She also mailed to Travelers a chronology of the sequence of events leading up to the criminal charges and criminal trial against Plaintiff she prepared, entitled the "Unjust Justice System." DSUF # 7; see also Decl. of James Wilkins in Opp'n to Defendant's Mot. for Sum. J., Doc. 45, Att. A. The first page of this document suggests that, at least initially, the victim's mother confronted Plaintiff and his wife about putting baby powder and Neosporin on the victim to prevent 20 and correct skin irritation associated with horseback riding, the application of which apparently led to the victim contracting a bladder infection. Id. No mention was made at this time of allegations of sexual molestation. There is no evidence in the record that clearly explains how these allegations evolved into the criminal case, in which the victim eventually accused Plaintiff of sexually molesting her on repeated occasions.

Defendant denied coverage and refused to defend Plaintiff in the Underlying Action, concluding that Plaintiff's policy did not cover the claims alleged in the Underlying Complaint, because: (a) they were not "accidental" in nature, and therefore did not qualify as an "occurr...

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