State Farm Fire and Cas. Co. v. Doe By and Through Doe

• Decision Date: 19 April 1990
• Docket Number: No. 2,CA-CV,2
• Citation: 165 Ariz. 179,797 P.2d 718
• Parties: STATE FARM FIRE AND CASUALTY CO., Plaintiff/Appellee/Cross-Appellant, v. John DOE, a minor, By and Through his next best friend and mother, Jane DOE, Defendant/Appellant/Cross-Appellee. 90-0020.
• Court: Arizona Court of Appeals

Page 718

797 P.2d 718

165 Ariz. 179

STATE FARM FIRE AND CASUALTY CO., Plaintiff/Appellee/Cross-Appellant, v. John DOE, a minor, By and Through his next best friend and mother, Jane DOE, Defendant/Appellant/Cross-Appellee.

No. 2 CA-CV 90-0020.

Court of Appeals of Arizona Division 2, Department A.

April 19, 1990.

Review Denied Sept. 25, 1990. ^*

Ridenour, Swenson, Cleere & Evans by Lloyd J. Andrews and Eric B. Gonzalez, Phoenix, for plaintiff/appellee/cross-appellant.

Fred J. Pain, Jr., P.C. by Fred J. Pain, Jr., Scottsdale, and Dennis I. Davis, Show Low, for defendant/appellant/cross-appellee.

OPINION

HOWARD, Judge.

This is an appeal from a judgment in an action for declaratory relief. The appellee (State Farm) has filed a cross-appeal which we shall treat as a cross-issue because State Farm is not seeking to enlarge any of its rights. See White v. Pima County, 161 Ariz. 90, 775 P.2d 1154 (App.1989).

In 1982, William Quebedeaux committed a series of child molestations upon John Doe. He was subsequently charged with child molestation and pled guilty to sexual abuse. On the day that he entered his plea, his wife shot and killed him. She was subsequently charged with first-degree murder, entered a plea to second-degree murder and was sentenced to prison.

John Doe filed this lawsuit against the Quebedeaux estate seeking damages for the injuries caused as a result of the molestations. State Farm then filed this action, seeking a declaratory judgment that it had no duty to indemnify or defend the Quebedeauxs under their homeowner's policy and "success protectors" policy.

The trial court, sitting without a jury, found that although Quebedeaux intended to molest the minor he did not possess the subjective intent to harm him. The trial court also found that, although the homeowner's policy was unambiguous and excluded coverage for intentional acts, the success protectors policy was ambiguous by describing an "occurrence" as being an "accident, including injurious exposure to conditions, which results, ... in personal injury...." The policy further defines personal injury as:

(a) bodily injury, sickness, disease, shock, mental anguish or mental injury; (b) false arrest, false imprisonment, wrongful eviction, wrongful detention, malicious prosecution, or humiliation; (c) libel, slander, defamation of character or invasion of rights of privacy; (d) assault and battery.

Coverage L of the policy covers personal liability and states:

This Company will indemnify the Insured for ultimate net loss which the Insured shall become legally obligated to pay as damages, ... because of personal injury ... to which this insurance applies, caused by an occurrence....

(Emphasis in original.) There is also the following exclusion in the policy:

This insurance does not apply as respects Coverage L:

* * * * * *

(b) to any act committed by or at the direction of the Insured with intent to cause personal injury....

(Emphasis in original.) The court then ruled that this ambiguity should be resolved in favor of the minor. However, the trial court also concluded that because of the strong public policy against compelling policy holders to bear the financial burden of compensating a victim for another's perverse sexual conduct, State Farm had no duty to defend or indemnify its insured.

Appellant contends the trial court erred because (1) the policy was ambiguous and should therefore be interpreted in his favor to provide coverage, and (2) insurance for intentional torts should be afforded when the insured cannot personally benefit from his wrongdoing.

In its cross-issue, State Farm contends that the trial court erred in finding the insurance policy ambiguous. Ambiguous terms in the contract of insurance ought to be strictly construed in favor of the insured in coverage, and against the insurer. Roberts v. State Farm Fire & Casualty Co., 146 Ariz. 284, 705 P.2d 1335 (1985).

Appellant contends that...