Safeco Ins. Co. of Am. v. Yount
| Decision Date | 03 November 2020 |
| Docket Number | Case No. 4:19-cv-00890-MTS |
| Parties | SAFECO INSURANCE COMPANY OF AMERICA, Plaintiff, v. JAMES YOUNT, et al., Defendants. |
| Court | U.S. District Court — Eastern District of Missouri |
Plaintiff Safeco Insurance Company of America ("Safeco") seeks a declaratory judgment from the Court finding that two policies it issued to Defendant James Yount do not provide coverage for damages stemming from the death of Defendant Deirdre Pickens's son. Because neither the homeowners nor the umbrella insurance policy Safeco issued to Yount covers the damages Pickens seeks in the underlying state-court action, the Court will grant Safeco's Motion for Judgment on the Pleadings, Doc. [31].
Defendant Deirdre Pickens's son died in August 2017 due to a fentanyl overdose at Defendants James, Paula, and Jesse Yount's home. Pickens filed a wrongful death action in Missouri state court against the Younts, making negligence, assault, and battery claims against them for her son's overdose (the "State Action"). Safeco provided insurance coverage to James and Paula Yount under a homeowners policy and an umbrella policy.1 James and Paula's son Jesse was also covered by the homeowners policy, but was explicitly excluded from any coverage underthe umbrella policy. Doc. [18-4] at 5. Each policy was effective during the time of the events forming the basis of the State Action. Safeco is currently defending Jesse Yount in the State Action,2 where Pickens made a demand on Safeco for payment of the insurance proceeds from the Policies.
Each of the policies contains exclusions from coverage for bodily injury that (1) is the foreseeable result of an act intended by any insured, (2) arises out of a criminal act committed by or with the knowledge of any insured, or (3) arises out of the use or possession of a controlled substance. Based on this unambiguous language, Safeco argues that it has no duty under the Policies to defend or indemnify the Younts because the claims Pickens makes in the State Action fall within the policy exclusions.
After Safeco filed this action in federal court, Pickens twice amended her State Action petition.3 While maintaining her original claims, the amended petitions added new claims that the Younts should have more promptly contacted emergency personnel and that they negligently undertook to rescue Pickens's son. Pickens4 urges that the new negligence claims are independent and distinct from the original claims related to the Younts' possession and distribution of fentanyl and therefore argues that the doctrine of concurrent proximate cause should apply.
Federal Rule of Civil Procedure 12(c) provides that "[a]fter the pleadings are closed . . . a party may move for judgment on the pleadings." Fed. R. Civ. P. 12(c). "A grant of judgment on the pleadings is appropriate 'where no material issue of fact remains to be resolved and the movantis entitled to judgment as a matter of law.'" Poehl v. Countrywide Home Loans, Inc., 528 F.3d 1093, 1096 (8th Cir. 2008) (quoting Faibisch v. Univ. of Minn., 304 F.3d 797, 803 (8th Cir. 2002); accord Ginsburg v. InBev NV/SA, 649 F. Supp. 2d 943, 946 (E.D. Mo. 2009) (citing Porous Media Corp. v. Pall Corp., 186 F.3d 1077, 1079 (8th Cir. 1999). The Court is required to "view all facts pleaded by the nonmoving party as true and grant all reasonable inferences in favor of that party." Poehl, 528 F.3d at 1096 (citing Syverson v. FirePond, Inc., 383 F.3d 745, 749 (8th Cir. 2004)). There are limitations on what the Court may consider in considering such a motion; it "generally must ignore materials outside the pleadings, but it may consider some materials that are part of the public record or do not contradict the complaint, as well as materials that are necessarily embraced by the pleadings." Ginsburg, 649 F. Supp. 2d at 946.
In her opposition to Plaintiff's Motion for Judgment on the Pleadings, Pickens does not appear to contest Plaintiff's interpretation of the exclusions in either of the policies, instead focusing on the application of the concurrent cause rule to her claims. See, e.g., Doc. [33] at 2 (); id. at 4 (). The Court agrees that the relevant policy provisions are unambiguous and will therefore apply the language of the exclusions to the claims to determine whether the policies provide coverage as a matter of law. The Court will briefly address the application of each relevant exclusion before turning to Defendant's argument that the concurrent cause rule saves her claims from the exclusions.
As an initial matter, in Missouri, the phrase "arose out of" is construed broadly in the context of insurance contracts. See Walden v. Smith, 427 S.W.3d 269, 274-75 (Mo. Ct. App. 2014). Insurance contracts containing this language do not require direct or proximate cause; rather, such contracts only require that the insurer show a causal relationship between the excluded cause and the injury. See, e.g., Colony Ins. Co. v. Pinewoods Enters., Inc., 29 F. Supp. 2d 1079, 1083 (E.D. Mo. 1998) (); Walden, 427 S.W.3d at 274-75.
The homeowners policy expressly does not provide coverage for bodily injury "which is . . . the foreseeable result of an act . . . intended by any insured," and the exclusion applies even if such injury "is of a different kind or degree than expected or intended." Doc. [18-3] at 27 (emphasis omitted). The umbrella policy contains a provision that is effectively identical. See Doc. [18-4] at 24. In her Second Amended Complaint, Defendant contends that the Younts had fentanyl at their home, that they distributed or administered the fentanyl to Pickens's son, and that Pickens's son then overdosed on fentanyl. Doc. [33-3] ¶¶ 17-21. Pickens thus asserts intentional action on the part of the Younts in providing fentanyl to her son, and injury by overdose is a foreseeable result of illicit drug use. See Brown v. Davis, 813 F.3d 1130, 1136 (8th Cir. 2016) (). The exclusion further states that it bars coverage even if the bodily injury is of a different degree than expected or intended. The extentof the injury Defendant's son sustained thus does not bring it outside the scope of the foreseeability exclusion. This exclusion therefore applies to Defendant's claims.
The criminal acts exclusions also encompass Defendant's claims. The homeowners policy does not apply to bodily injury "which results from violation of criminal law committed by, or with the knowledge or consent of any insured," regardless of whether any insured is charged or convicted with a crime. Doc. [18-3] at 28. As with the foreseeability exclusion, the umbrella policy contains a largely identical provision excluding coverage for any bodily injury "arising out of a criminal act." Doc. [18-4] at 26.
It is a crime in Missouri to knowingly possess or distribute a controlled substance, which under Missouri law includes fentanyl. See Mo. Rev. Stat. § 579.015(1) (); Mo. Rev. Stat. § 579.020(1) (); Mo. Rev. Stat. § 195.010(6) (); Mo. Rev. Stat. § 195.017(4)(2)(i) (). While Pickens's Second Amended Petition does not include allegations of criminal activity by the Younts, it clearly asserts that the Younts possessed and distributed fentanyl the night of the overdose. Doc. [33-3] ¶¶ 17-19. There can be no doubt that the pleadings suggest that the overdose—the bodily injury here—"result[ed] from" and "ar[ose] out of" the Younts' knowing possession and distribution of fentanyl, both crimes in Missouri. As such, the criminal acts exclusion applies to Pickens's claims in the State Action as well.
Even if the first two exclusions did not apply, the controlled substance exclusions bar coverage of Pickens's claims by either Policy. Both Policies do not provide coverage for bodily injuries "arising out of the use . . . or possession by any person of a controlled substance(s) as defined by . . . 21 U.S.C.A. Sections 811 and 812." Docs. [18-3] at 30, [18-4] at 26 (emphasis added). Section 812 classifies fentanyl as a Schedule II controlled substance. 21 U.S.C. § 812 (2018). Footnote 1 of § 812 provides that revised schedules are published in Title 21, Part 1308 of the Code of Federal Regulations, and the current version of that regulation continues to list fentanyl as a Schedule II drug. 21 C.F.R. § 1308.12(c)(9). The language of the exclusions is clear: a bodily injury that arises out of the use or possession of a controlled substance, as defined by 21 U.S.C. § 812, is not covered. The bodily injury forming the basis of Defendant's claims bears a causal relationship to the possession or use of fentanyl, a controlled substance...
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