Vermont Mut. Ins. Co. v. Malcolm

• Decision Date: 02 October 1986
• Docket Number: No. 85-357,85-357
• Citation: 128 N.H. 521,517 A.2d 800
• Parties: VERMONT MUTUAL INSURANCE COMPANY v. Miller Day MALCOLM.
• Court: New Hampshire Supreme Court

Page 800

517 A.2d 800

128 N.H. 521

VERMONT MUTUAL INSURANCE COMPANY v. Miller Day MALCOLM.

No. 85-357.

Supreme Court of New Hampshire.

Oct. 2, 1986.

Downs, Rachlin & Martin, Burlington, Vt. and Ransmeier & Spellman, Concord, (Robert D. Rachlin orally and on brief, and Michael J. Gannon on brief), for plaintiff.

Avery & Friedman, Boston, Mass., Font & Glazer, Cambridge, Mass. and Backus, Shea & Meyer, Manchester (Michael Avery & a. on brief and orally), for intervenors, plaintiffs in the underlying suit.

SOUTER, Justice.

In this declaratory judgment proceeding, the insurer appeals a decree of summary judgment entered by the Superior Court (Murphy, J.), finding coverage under a homeowner's insurance policy for liability arising from an insured's acts of sexual assault. We reverse.

An eleven-year-old boy and his mother brought an underlying civil action in which they alleged that over the course of a weekend the defendant committed five sexual assaults upon the boy, including fellatio and sodomy, causing psychological injury that necessitated expensive remedial treatment. The defendant's insurer brought the present action under RSA 491:22 to determine whether its homeowner's policy issued to the defendant would cover any liability that might result, and the mother was permitted to intervene. The insurer and the intervenor filed cross motions for summary judgment, and on the intervenor's motion the trial court made three specific rulings: (1) the assaults were an "occurrence" as defined by the policy, which conditions coverage upon the existence of an "occurrence" causing bodily injury or property damage; (2) the resulting coverage was not defeated by a policy exclusion designed to deny coverage when the underlying injury was either expected or intended from the standpoint of the insured; and (3) the five acts of assault were a single "occurrence" for purposes of determining coverage limits. The court accordingly granted summary judgment for the intervenor on the existence of coverage but limited its potential extent.

The intervenor has appealed the third ruling, and the insurer has appealed the first and second. We hold that the court erred in ruling that the assaults alleged were an "occurrence" for purposes of determining coverage, and therefore we do not reach the second or third issues.

The relevant portions of the company's policy are written in language that became common after 1966. See Annot., 31 A.L.R.4th 957, 972 (1984). In the basic provision for personal liability coverage the insurer "agrees to pay on behalf of the Insured all sums which the Insured shall become legally obligated to pay as damages because of bodily injury ... to which this insurance applies, caused by an occurrence."

The insurer does not deny that in the underlying action the boy has alleged that he sustained "bodily injury." Therefore, the threshold issue of coverage in this proceeding is whether the assaults that allegedly caused the injury were an "occurrence."

The policy defines "occurrence" as "an accident, including injurious exposure to conditions, which results, during the policy term, in bodily injury." "Occurrence" thus sweeps wider than "accident," because "occurrence" is defined to include an injurious exposure to continuing conditions as well as a discrete event. See R. Keeton, Basic Text on INSURANCE LAW 300 (1971). The injurious exposure must, however, itself be accidental in nature. See McAllister v. Peerless Ins. Co., 124 N.H. 676, 680, 474 A.2d 1033, 1036 (1984); Aetna Casualty & Surety Co. v. Freyer, 89 Ill.App.3d 617, 619, 44 Ill.Dec. 791, 793, 411 N.E.2d 1157, 1159 (1980).

Thus, the touchstone of interpretation is the definition of "accident" as a cause of injury, as distinct from the injury itself. See McGinley v. Insurance Co., 88 N.H. 108, 111, 194 A. 593, 595 (1936) (policy language may distinguish between accidental means and accidental injury). To understand "accident" we look for the meaning that a reasonable person would attach to the term, Spaulding v. Concord Gen. Mut. Ins. Co., 122 N.H. 515, 516, 446 A.2d 1172, 1173 (1982), and accordingly select the following definition: "[A]n accident is an undesigned contingency, ... a happening by chance, something out of the usual course of things, unusual, fortuitous, not anticipated, and not naturally to be expected." Guerdon Industries Inc. v. Fidelity & Casualty Co. of New York, 371 Mich. 12, 18-19, 123 N.W.2d 143, 147 (1963), quoting 10 R. Anderson, Couch Cyclopedia of Insurance Law § 41.6, at 27-28 (2d ed. 1962).

Although this definition is not remarkable, its application poses the further question, whether the fortuity should be determined by reference to the insured or to the victim. The answer must be, by reference to the insured. Because an injury is always fortuitous to a non-consenting victim, if its accidental character were to be judged in relation to such a victim, virtually all instances of compensable injury would also be instances of accident, and nothing would be accomplished by determining coverage in relation to occurrence rather than injury alone. Thus the general rule for applying "accident" or "occurrence" causation coverage looks to the insured defendant to determine whether the causal event was fortuitous or not. See R. Keeton op. cit. at 291-293.

At the least, therefore, an insured's act is not an accidental contributing cause of injury when the insured actually intended to cause the injury that results. "[A]n accident is never present when a deliberate act is performed unless some additional unexpected, independent and unforeseen [circumstance exists or] happening occurs which produces or brings about the result of injury or death." Unigard Mut. v. Spokane School Dist., 20 Wash.App....