State Farm Fire & Cas. Co. v. S.S.

• Decision Date: 30 June 1993
• Docket Number: No. D-1339,D-1339
• Citation: 858 S.W.2d 374
• Parties: STATE FARM FIRE & CASUALTY COMPANY, Petitioner, v. S.S. & G.W., Respondents.
• Court: Texas Supreme Court

Page 374

858 S.W.2d 374

STATE FARM FIRE & CASUALTY COMPANY, Petitioner, v. S.S. & G.W., Respondents.

No. D-1339.

Supreme Court of Texas.

June 30, 1993.

Rehearing Overruled Sept. 10, 1993.

Scott R. Kidd, Austin, David V. Jones, Carol A. Jenson, San Antonio, for petitioner.

David J. Nagle, Mark P. Clark, Austin, for respondents.

OPINION

HIGHTOWER, Justice.

This cause involves the applicability of the intentional injury exclusion of a homeowner's policy to a claim resulting from the transmission of genital herpes. State Farm Fire and Casualty Company (State Farm) brought suit against G.W. and S.S. seeking a declaratory judgment that G.W.'s homeowner's policy did not provide coverage for the claims asserted against him by S.S. The trial court rendered summary judgment in favor of State Farm. The court of appeals reversed and remanded holding that State Farm failed to meet its summary judgment burden because it did not produce conclusive evidence that G.W. intended to transmit herpes to S.S. 808 S.W.2d 668. For the reasons explained herein, we affirm the judgment of the court of appeals.

S.S. contracted genital herpes after engaging in consensual sexual intercourse with G.W. at his home in November 1986. After S.S. requested that G.W. compensate her for her injuries, G.W. notified State Farm, the issuer of his homeowner's insurance policy. State Farm agreed to investigate the claim and provide G.W. with defense counsel, but required that G.W. sign a "request of services and non-waiver of rights agreement." G.W.'s homeowner's policy included an intentional injury exclusion provision. Based on that provision, State Farm questioned whether the policy actually covered S.S.' claim and rejected S.S.' settlement offers for amounts within the policy limits. G.W. later rejected State Farm's offer of counsel and employed his own attorney. S.S. filed suit against G.W. alleging that he negligently transmitted genital herpes to her. S.S. and G.W. settled and entered into an agreement providing for the entry of a $1 million judgment in favor of S.S. and that S.S. would not execute the judgment against G.W. in exchange for the assignment of one-third of any claims which he might have against State Farm for bad faith claims adjustment, deceptive trade practices, or Insurance Code violations. After S.S. and G.W. informed State Farm of the agreed judgment, State Farm instituted this declaratory judgment action seeking a declaration that it is not obligated to pay the $1 million judgment because, among other things, (1) S.S.' claims in the underlying suit fell within the intentional injury exclusion provision in the policy and thus no coverage exists under the policy, and (2) G.W.'s actions in failing to notify State Farm of S.S.' lawsuit and entering into an agreed judgment without State Farm's knowledge breached his duty to cooperate under the policy and precluded any recovery by G.W. under the policy. Subsequently, State Farm filed a motion for summary judgment on these grounds. G.W. and S.S. counterclaimed alleging that State Farm engaged in bad faith settlement practices in failing to pay the claim under the policy. S.S. also filed a motion for summary judgment. The trial court rendered summary judgment in favor of State Farm on the specific ground that the homeowner's policy did not, as a matter of law, provide coverage for any of the claims asserted by S.S. in the underlying suit. The trial court's summary judgment order did not address State Farm's claim that G.W. breached his duty to cooperate. The trial court overruled S.S.' motion for summary judgment and denied G.W. and S.S. any relief on their counterclaim. The court of appeals affirmed the trial court's denial of S.S.' summary judgment holding that S.S. failed to conclusively show that coverage existed as a matter of law. The court of appeals reversed the judgment of the trial court granting summary judgment to State Farm holding that the summary judgment evidence did not conclusively show that G.W. intended to transmit the disease to S.S. nor did it indicate that G.W.'s conduct was so extreme that intent to injure can be inferred as a matter of law. The court of appeals also reversed the summary judgment on G.W. and S.S.' counterclaims and remanded the cause to the trial court for further proceedings.

I.

State Farm argues that as a matter of law, the transmission of genital herpes is an intentional injury which comes within the "intentional injury exclusion" of G.W.'s homeowner's policy. Consequently, S.S.' claim is not covered by G.W.'s homeowner's policy. We disagree.

Genital herpes is a contagious disease which is spread through sexual intercourse and for which there is no known cure. See generally Louis A. Alexander, Note, Liability in Tort for the Sexual Transmission of Disease: Genital Herpes and the Law, 70 CORNELL L.REV. 101 (1984). Generally, the medical community advises herpes infected patients to avoid sexual intercourse when experiencing actual symptoms of the disease in order to prevent transmission of the disease to their sexual partner. See Ervin Adam, Herpes Simplex Virus Infections, in HUMAN HERPESVIRUS INFECTIONS, CLINICAL ASPECTS 1, 23-25 (Ronald Glaser & Tamar Gotlieb-Stematsky eds., 1982); J. David Oriel, Genital Lesions, in DIAGNOSIS AND TREATMENT OF SEXUALLY TRANSMITTED DISEASES 95, 98-99 (William M. McCormack ed., 1983). However, in recent years, some researchers have identified the theory of asymptomatic shedding, i.e., that a herpes carrier may be contagious and spread the disease even when the individual is not experiencing any symptoms. See Kenneth H. Fife & Lawrence Corey, Herpes Simplex Virus in SEXUALLY TRANSMITTED DISEASES 941 (King K. Holmes et al. eds., 1990); Gregory J. Merts, M.D. et al., Frequency of Acquisition of First-episode Genital Infection with Herpes Simplex Virus from Symptomatic and Asymptomatic Source Contacts, 12 SEXUALLY TRANSMITTED DISEASES 33, 37-39 (1985); James F. Rooney, M.D. et al., Acquisition of Genital Herpes from an Asymptomatic Sexual Partner, 314 NEW ENG.J.MED. 1561, 1563-64 (1986).

The homeowner's policy covering G.W. in November 1986 ¹ included the following "intentional injury exclusion" provision:

EXCLUSIONS--Coverage D shall not apply:

to bodily injury or property damage caused intentionally by or at the direction of the Insured[.]

When considering the applicability of similar intentional injury exclusions to claims resulting from the transmission of herpes, other jurisdictions recognize that the resulting damage may be unintended although the acts leading to the damage are intentional. See State Farm Fire & Casualty Co. v. Irene S., 138 A.D.2d 589, 526 N.Y.S.2d 171, 173 (N.Y.App.Div.1988); see also State Farm Fire & Casualty Co. v. Eddy, 218 Cal.App.3d 958, 267 Cal.Rptr. 379, 386 (Cal.Ct.App.1990) (coverage not necessarily precluded when transmission was unexpected, unforeseen, and independent of the intentional sexual conduct). In Milbank Ins. Co. v. B.L.G. & M.M.D., 484 N.W.2d 52, 53 (Minn.Ct.App.1992), a Minnesota court of appeals considered whether B.L.G. "intended" to infect M.M.D. with the herpes virus. Interpreting a similar policy provision, the court held that "[c]overage is not avoided by an intentional act exclusion unless the insured has acted with intent to cause a bodily injury. When the act itself is intended but the resulting injury is not, the insurance exclusion has no application." Id. at 58. The court concluded that "a reasonable possibility that an actor is contagious does not compel the conclusion that it is highly certain a particular act of his will result in the infection of another." Id.

This Court recognizes that when "the effect is not the natural and probable consequence of the means which produce it--an effect which does not ordinarily follow and cannot be reasonably anticipated from the use of the means, or an effect which the actor did not intend to produce, and which he cannot be charged with a design of producing--it is produced by accidental means." Republic Nat'l Life Ins. Co. v. Heyward, 536 S.W.2d 549, 555-56 (Tex.1976). The Court also recognizes "that a person insured against injury effected through accidental means would consider himself insured against such a casualty, since the very purpose of such insurance is to provide indemnity against any fortuitous, unexpected, or undesigned injury." Id. at 557. Although our language in Republic National referred to "accidents," the same reasoning applies in cases when the policy contains an intentional injury exclusion. An insured under a policy with an intentional injury exclusion still relies on the policy to provide indemnity against fortuitous, unexpected or undesigned injury. ² When considering whether G.W. intended to injure S.S. it is instructive to examine the meaning of intent. Ordinarily, whether an insured intended harm or injury to result from an intentional act is a question of fact. See Spoljaric v. Percival Tours, Inc., 708 S.W.2d 432, 434 (Tex.1986) (issue of intent is uniquely within the realm of the factfinder); Logan v. Mullis, 686 S.W.2d 605, 608 (Tex.1985) (intent is generally a question of fact to be decided by the jury); see also Raby v. Moe, 153 Wis.2d 101, 450 N.W.2d 452, 456 (1990) (insured's intent to injure is question of fact). This Court relies on the definition of intent provided in the Restatement (Second) of Torts. Rodriguez v. Naylor Indus., Inc., 763 S.W.2d 411, 412 (Tex.1989); Reed Tool Co. v. Copelin, 689 S.W.2d 404, 406 (Tex.1985). Under the Restatement (Second) of Torts, an insured intends to injure or harm another if he intends the consequences of his act, or believes that they are substantially certain to follow. RESTATEMENT (SECOND) OF TORTS § 8A (1965). Prosser also provides insight on the nature of intent.

[I]ntent is broader than a desire or purpose to bring about physical results. It extends not only to those consequences which are desired, but also to...