State Farm Fire and Cas. Co. v. Abraio

• Decision Date: 16 February 1989
• Docket Number: No. 88-1799,88-1799
• Parties: STATE FARM FIRE AND CASUALTY COMPANY, Plaintiff-Appellee, v. Patricia ABRAIO, as Personal Representative of Antoine Abraio, Deceased, Louis Abraio and Tiffany K., a minor, by and through her guardian ad litem Adeline Dennis, Defendants, Appeal of Adeline DENNIS, individually, Defendant.
• Court: U.S. Court of Appeals — Ninth Circuit

Page 619

874 F.2d 619

STATE FARM FIRE AND CASUALTY COMPANY, Plaintiff-Appellee, v. Patricia ABRAIO, as Personal Representative of Antoine

Abraio, Deceased, Louis Abraio and Tiffany K., a

minor, by and through her guardian ad

litem Adeline Dennis, Defendants,

Appeal of Adeline DENNIS, individually, Defendant.

No. 88-1799.

United States Court of Appeals, Ninth Circuit.

Submitted Feb. 16, 1989. ^*

Decided April 5, 1989.

As Amended July 25, 1989.

Jill Elaine Weissich, San Rafael, Cal., for defendants-appellants.

Gail Y. Norton and Geordie L. Duckler, Ropers, Majeski, Kohn, Bentley and Kane, San Francisco, Cal., for plaintiff-appellee.

Appeal from the United States District Court for the Northern District of California.

Before CHOY, SNEED and NOONAN, Circuit Judges.

CHOY, Circuit Judge:

Defendants Patricia Abraio, Louis Abraio, Tiffany K. and Adeline Dennis appeal from the district court's grant of summary judgment to plaintiff State Farm Fire and Casualty Insurance Co. ("State Farm"). State Farm sought a declaratory judgment that it owed no duty to defend or indemnify Antoine Abraio's estate in a tort action brought against the estate in a California court by Tiffany K. and her mother Adeline Dennis. We have jurisdiction pursuant to 28 U.S.C. Sec. 1291 and we affirm.

FACTUAL BACKGROUND

On October 2, 1984, the Marin County District Attorney filed an information against Antoine Abraio, charging him with sexually molesting Tiffany K., an eight year old girl. Abraio was charged with one count of violating California Penal Code Sec. 288(a). ¹ Abraio admitted to fondling Tiffany K. and touching her genitals on several occasions during the summer of 1984. The incidents occurred at Tiffany's home and on occasions when Abraio took her on motorcycle rides in the country. In November, 1984, Abraio pled guilty to one count of Penal Code Sec. 647a, a misdemeanor. ² Abraio served a six month jail sentence. Soon after his release, Abraio died from a gunshot wound to the head which was apparently self-inflicted.

On January 23, 1986, Tiffany K.'s guardian ad litem filed a state court action against Abraio's estate seeking compensatory and punitive damages for Tiffany under various intentional tort and negligence theories. The defense of the case was ultimately tendered to State Farm, Abraio's father's insurance company. Acknowledging that Abraio had been covered by his father's homeowner's policy during the period in question, State Farm assumed the defense under a reservation of rights. State Farm then filed this action in federal court on the basis of diversity of citizenship. State Farm sought a declaratory judgment that it owed no duty to Abraio's estate because Abraio's actions were excluded from coverage.

State Farm moved for summary judgment, relying upon the policy language, upon California Insurance Code Sec. 533, and upon Allstate Ins. Co. v. Kim W., 160 Cal.App.3d 326, 206 Cal.Rptr. 609 (1984). The State Farm homeowner's policy excluded from coverage "bodily injury or property damage which is expected or intended by the insured" while California Insurance Code Sec. 533 provides that an insurer is not liable for losses caused by the insured's willful acts. ³ In Kim W., a California appellate court held that acts which would constitute a violation of Penal Code Sec. 288 are "willful" within the meaning of Sec. 533 as a matter of law.

In response, defendants relied upon Clemmer v. Hartford Ins. Co., 22 Cal.3d 865, 151 Cal.Rptr. 285, 587 P.2d 1098 (1978), in which the California Supreme Court held that an insurance company is only exonerated from liability under Sec. 533 when the insured's acts were done with a "preconceived design to injure." Id. at 297, 587 P.2d at 1110. Defendants argued that Clemmer required a subjective intent to harm and that Abraio did not have such an intent, but rather acted out of affection for Tiffany. In support of this claim, defendants produced affidavits from Abraio's criminal defense attorney and Tiffany's therapist stating their opinions that Abraio had not intended to harm Tiffany. In addition, defendants produced the affidavit of a medical doctor who stated his opinion that the heart medication that Abraio was taking at the time of the molestation may have prevented Abraio from being able to form a specific intent to harm Tiffany.

The district court granted State Farm's motion for summary judgment and entered a declaratory judgment that State Farm owed no duty to indemnify Abraio. 683

                F.Supp. 220.    The district court determined that Abraio's actions were "willful" within the meaning of Sec. 533 and therefore excluded from coverage
                

STANDARD OF REVIEW

California's substantive insurance law governs in this diversity case. James B. Lansing Sound Inc. v. National Union Fire Ins. Co., 801 F.2d 1560, 1561 (9th Cir.1986). However, there is no California Supreme Court case addressing the issue presented on this appeal. When the state supreme court has not ruled definitively on a point, this court looks to decisions by intermediate appellate state courts for guidance. Dimidowich v. Bell & Howell, 803 F.2d 1473, 1482 (9th Cir.1986), modified 810 F.2d 1517 (1987). This court should follow these decisions unless there is convincing evidence that the state supreme court would decide differently. Id. This is especially true when the supreme court has refused to review the lower court's decision. Tenneco West, Inc. v. Marathon Oil Co., 756 F.2d 769, 771 (9th Cir.1985).

This court reviews a grant of summary judgment de novo. Bonner v. Lewis, 857 F.2d 559, 561 (9th Cir.1988). The district court's interpretation of state law is also reviewed de novo. In re McLinn, 739 F.2d 1395, 1403 (9th Cir. 1984) (en banc).

DISCUSSION

This case turns upon the interpretation of a "willful" act under Sec. 533. In 1978, the California Supreme Court stated that for the purpose of exclusion from insurance coverage, willfulness is defined more narrowly than under traditional tort principles. Clemmer v. Hartford Ins. Co., 22 Cal.3d 865, 151 Cal.Rptr. 285, 287, 587 P.2d 1098, 1100 (1978). In Clemmer, the California Supreme Court determined that an insurance company is only exonerated from liability if the insured acted with a "preconceived design to inflict injury," not simply because the insured acted intentionally. Id. at 297, 587 P.2d at 1110; see also Peterson v. Superior Ct., 31 Cal.3d 147, 181 Cal.Rptr. 784, 790, 642 P.2d 1305, 1311 (1982) (act is not willful under Sec. 533 if performed without an intent to harm).

The first California case applying the Clemmer requirement of a "preconceived design to inflict harm" to a case involving child molestation was Allstate Ins. Co. v. Kim W., 160 Cal.App.3d 326, 206 Cal.Rptr. 609 (1984). In Kim W., a minor sued the insured for injuries resulting from sexual assault. The appellate court found that the insured's actions were excluded from insurance coverage by Sec. 533.

The court found that "under certain circumstances, the nature of the intentional act of the insured is such that an intent to cause at least some harm can be inferred as a matter of law." Id. at 613. The court concluded that an act which violates Penal Code Sec. 288 is such an act. Id. Although never convicted of criminal charges, the insured had admitted during the course of the civil litigation that he had engaged in acts which would violate Penal Code Sec. 288. Therefore, his actions were deemed to be uninsurable as a matter of law. The California Supreme Court declined review of Kim W. ⁴

Recently, another California appellate court had the opportunity to address the insurability of acts of child molestation. Fire Ins. Exchange v. Abbott, 204 Cal. App. 3d 1012, 1027-28, 251 Cal. Rptr. 620, 630 (1988), petition for review denied December 15, 1988. The Abbott court held that conduct which violates Sec. 288 creates an irrebuttable inference that the insured intended harm. This inference can not be overcome by evidence of a subjective lack of intent to harm. Id. at 1027, 251 Cal. Rptr. at 630. ⁵

In Jenner, the insured pled guilty to three counts of violating Penal Code Sec. 288(a) and two counts of violating Sec. 288a(c) ⁴. He then committed suicide. The victim filed a complaint against his estate, alleging theories of intentional tort and negligence. State Farm defended the suit, but filed an action in federal court seeking a declaratory judgment that Jenner's actions were excluded from coverage by Sec. 533.

In opposition to State Farm's motion for summary judgment, the defendants presented declarations from two doctors who had examined Jenner's medical records. The doctors stated that Jenner was a pedophile who could not have formed the intent to harm his victims. The defendants also produced the declaration of Jenner's criminal defense attorney stating the opinion that Jenner never foresaw harm to the boys he befriended and then molested. The district court granted summary judgment to State Farm, finding that even if Jenner's actions were not willful as a matter of law, the defendants' evidence was insufficient to create a genuine issue of intent.

The panel of this court reversed stating that the insurance company bore the burden of proving that Jenner's actions were within the ambit of Sec. 533. The court stated that while Jenner's conviction might shift the burden to the defendants to prove that Jenner's actions were insured, the declarations presented by the defendants were sufficient to raise a genuine issue of fact regarding Jenner's intent. Id. at 1365. Therefore, it held, there was a genuine issue as to whether his actions were covered and the grant of summary judgment was improper.

The facts of Jenner are virtually identical to those in this case. However, the most recent California appellate court case addressing this issue rejected Jenner. Fire Ins. Exchange v. Abbott, 204 Cal.App.3d 1012, 251 Cal.Rptr. 620, 630 (1988), petition for review denied December In Abbott, the...