Safeco Insurance Company of America v. Golden et al

Filing 40

OPINION. Signed by Honorable Judge Myron H. Thompson on 8/20/2013. (jg, )

IN THE DISTRICT COURT OF THE UNITED STATES FOR THE
MIDDLE DISTRICT OF ALABAMA, EASTERN DIVISION

SAFECO INSURANCE COMPANY OF )
AMERICA,
)
)
Plaintiff,
)
)
v.
)
)
JENNIFER GOLDEN,
)
)
Defendant.
)

CIVIL ACTION NO.
3:12cv537-MHT
(WO)

OPINION
Plaintiff Safeco Insurance Company of America brought
this suit seeking declaratory judgment against defendant
Jennifer Golden.

Safeco seeks a judgment declaring that

it has no duty to defend or indemnify Golden against a
civil suit arising from her husband’s molestation of a
minor in their home.
properly

invoked

The jurisdiction of the court is

pursuant

to

28

U.S.C.

§

1332

(diversity).
The matter is now before the court on Safeco’s and
Golden’s motions for summary judgment. For the reasons
that follow, Safeco’s motion will be granted in part and

denied in part, Golden’s motion will be granted in part
and denied in part, and a show-cause order will issue.

I.

SUMMARY-JUDGMENT STANDARD

“A party may move for summary judgment, identifying
each claim or defense--or the part of each claim or
defense--on which summary judgment is sought.

The court

shall grant summary judgment if the movant shows that
there is no genuine dispute as to any material fact and
the movant is entitled to judgment as a matter of law.”
Fed.

R.

Civ.

P.

56(a).

The

court

must

view

the

admissible evidence in the light most favorable to the
non-moving party and draw all reasonable inferences in
favor of that party.

Matsushita Elec. Indus. Co. Ltd. v.

Zenith Radio Corp., 475 U.S. 574, 587 (1986).

II.

BACKGROUND

David and Stacey Bence and their minor daughter filed
suit against Golden and her husband in state court,

2

alleging

that,

spending

the

while

night

the

in

Bences’

their

home

minor
for

daughter
a

was

sleep-over,

Golden’s husband removed the minor’s clothing and took
video and photographs of her body.

The lawsuit further

alleges that on the night in question Golden left the
Bences’ daughter and other minors with Golden’s husband
and went out with her girlfriends.
The Bences’ suit includes ten charges and names
Golden in counts six through ten.1 Count six charges both
Golden and her husband with loss of consortium of a minor
child; count seven charges Golden with negligent failure
to warn of dangerous premises; count eight alleges that
Golden and her husband “conspired to do something that is
unlawful, oppressive and/or immoral”; count nine charges
Golden and her husband with felonious injury; and count
ten charges Golden with negligent and wanton supervision
of the Bences’ minor daughter.

First Am. Compl. (Doc.

No. 31-1).
1.
only.

Counts one through five name Golden’s husband
3

Safeco issued to Golden and her husband a homeowners’
insurance policy that was in effect the night the Bences’
daughter was molested.

The insurance company agreed to

represent them against the Bences’ civil suit under a
reservation of its right to argue that its policy does
not cover Golden and her husband for the suit’s claims.
The policy provides for three exclusions to coverage of
personal liability and medical payments to others for
“bodily injury or property damage.”

Policy (Doc. No. 1-

2) at 5.
The first exclusion precludes for loss or damage
“which is expected or intended by any insured or which is
the foreseeable result of an act or omission intended by
any insured.”

Id. § 1(a) at 5.

(emphasis in original).

The policy provides that “this exclusion applies even if:
(1)

such

bodily

injury

or

property

damage

is

of

a

different kind or degree than expected or intended; or
(2) such bodily injury or property damage is sustained by
a

different

person,

or

persons,

4

than

expected

or

intended...” Id. (emphasis in original).

The second

exclusion precludes coverage for loss or damage “which
results from violation of criminal law committed by, or
with the knowledge or consent of any insured...”

Id. §

1(b) at 5 (emphasis in original). The third exclusion
precludes for loss or damage “arising out of physical or
mental abuse, sexual molestation or sexual harassment.”
Id. § 1(k) at 7.
In this case, Safeco asserts that it has no duty to
defend

and

indemnify

Golden

because

the

underlying

conduct falls within the above three policy exclusions.
Golden argues that the existence of a severability clause
in

the

Safeco

inapplicable
insurance

to

applies

policy
her.

renders
The

separately

these

clause
to

exclusions

provides:

each

insured.

“This
This

condition shall not increase our limit of liability for
any one occurrence.”

Id. at 11. (emphasis in original).

Because Safeco has already secured a default judgment
precluding coverage for Golden’s husband, the case now

5

pertains

exclusively

to

Safeco’s

duty

to

defend

and

indemnify Golden.

III.

DUTY TO DEFEND

Safeco moves for summary judgment in its favor on the
basis that

it has no obligation to defend and indemnify

Golden against the Bences’ civil lawsuit because the suit
falls within one or more of the policy’s exclusions.
Specifically,

the

insurance

company

argues

that

the

exclusions for intended actions, criminal actions, and
sexual abuse apply to preclude coverage for the suit.
Golden moves for summary judgment in her favor, arguing
that none of these exclusions applies.

A. Counts Six Through Nine
The parties do not dispute that Alabama law governs
this diversity action.

The Alabama Supreme Court has

already interpreted a policy provision excluding coverage
for intended actions in the sexual-molestation context.

6

In State Farm Fire and Casualty Company v. Davis, 612 So.
2d 458 (Ala. 1993), the court addressed the question of
an insurance company’s duty to defend and indemnify its
insureds--Jerry and Delores Davis--against a personalinjury lawsuit arising from Jerry’s alleged molestation
of several children.

The court answered the question by

reference to a provision of the policy that excluded
coverage for “bodily injury or property damage... which
is either expected or intended by an insured.”
460.

Id. at

It found that application of this exclusion to

child-sex-abuse cases relieved the insurance company of
the obligation to defend and indemnify the insured as a
matter

of

law,

because

an

intent

to

inferred in child-molestation cases.2

cause

harm

is

Id. at 465. In

doing so, it carved out a narrow exception to the general
rule that the issue of “intent” is a subjective question
2.
The court expressly included both the duty to
defend and the duty to indemnify in its decision, finding
the “two duties inseparable” in child-sex-abuse cases.
Davis, 612 So. 2d at 465. As a general rule, however,
under Alabama law the duty to defend can be broader than
the duty to indemnify. Id.
7

reserved for a factfinder.

Id. at 464; see also Sphere

Drake Ins., P.L.C. v. Shoney’s, Inc., 923 F. Supp. 1481,
1490 n. 7 (M.D. Ala. 1996) (Thompson, C.J.) (recognizing
“one narrow exception” to the subjective intent rule for
“cases of sexual abuse of children”).
The sole difference between the policy exclusion in
Davis

and

the

exclusion

in

this

case

is

that

the

exclusion in Davis used the term “an insured,” 612 So. 2d
at 460, whereas the exclusion in Golden’s policy refers
to “any insured.”

However, the Davis court found that

“‘an insured’ unambiguously means ‘any insured.’”

Id. at

466 (quoting Allstate Ins. Co. v. Freeman, 443 N.W.2d
734, 754 (Mich. 1989)).
the court ruled

Interpreting the policy thus,

it “exclude[d] coverage for Delores

Davis for harm directly attributable to the intentional
conduct of her husband, Jerry Davis.”

Id.

In other

words, because her husband was also insured under the
policy, Delores Davis was not covered for damages arising
from her husband’s intentional acts.

8

As the policy

provision at issue here refers to the intent of “any
insured,” it likewise could be read to exclude coverage
for

Golden

for

harm

“directly

attributable

intentional conduct of her husband.”

to

the

The question is

thus whether the Bences’ lawsuit indeed seeks to recover
from

Golden

for

harm

directly

attributable

to

her

husband’s intentional conduct.
“An insurance company’s duty to defend its insured is
determined by the language of the insurance policy and by
the allegations in the complaint giving rise to the
action against the insured.”

Ajdarodini v. State Auto

Mut. Ins. Co., 628 So. 2d 312, 313 (Ala. 1993).

“If the

allegations of the injured party’s complaint show an
accident or occurrence which comes within the coverage of
the policy, the insurer is obligated to defend regardless
of the ultimate liability of the insured.”

Chandler v.

Alabama Mut. Ins. Co., 585 So. 2d 1365, 1367 (Ala. 1991)
(internal quotations omitted).
show

that

no

injury

alleged

9

But, if the allegations
is

within

the

policy’s

coverage, or if they are ambiguous, “the court is not
limited to the bare allegations of the complaint ... but
may

also

look

to

the

admissible evidence.”

facts

which

may

be

proved

by

Id.; see also Perkins v. Hartford

Ins. Group, 932 F.2d 1392 (11th Cir. 1991).
The factual allegations in the Bences’ complaint show
that the majority of the claims against Golden derive
from her husband’s molestation of the Bences’ daughter.
Counts six through nine--loss of consortium, failure to
warn of danger, conspiracy, and felonious injury–-all
claim damages stemming from the molestation.
Golden argues, however, that the existence of the
Safeco severability clause in her homeowners policy means
her

husband

cannot

be

considered

“any

insured.”

According to Golden, the severability clause means that
“any insured” refers to her alone and thus excludes
coverage for her intentional acts only.
that

the

discussed

effect
in

of

Davis

a
and

severability
that

10

Alabama

She points out
clause
has,

was
in

not

other

contexts, applied severability clauses in interpreting
policy exclusions.
In United States Fire Insurance Company v. McCormick,
243 So.2d 367, 375 (Ala. 1970), superseded by statute on
other grounds as stated in Reed v. Brunson, 527 So. 2d
102, 108 (Ala. 1988), the Alabama Supreme Court found
that a severability clause in an employer’s insurance
policy

“require[d]

consideration

of

each

insured

separately, independently of every other insured whether
named or an additional insured.”

As applied to an

exclusion from coverage for injuries to “any employee of
the insured,” id. at 370, the court stated that the
operation of the severability clause meant that the term
“the

insured”

seeking

refers

coverage

to

under

only
the

the

individual

policy.

Id.

person

at

375.

Therefore, where an employee of an insured corporation,
who is insured under his corporation’s insurance policy,
is

sued

by

a

co-employee

of

the

corporation,

the

insurance company must defend the employee against the

co-employee’s suit unless the employee directly employs
the co-employee.
There are three problems with extending McCormick’s
interpretation
policy.

of

First,

a
as

severability
Safeco

clause

points

out,

to

Safeco’s

McCormick’s

interpretation was only in the context of an employment
relationship.

While not dispositive, this fact does

indicate that this court should tread cautiously
area.

Second,

the

severability

clause

in

in this

McCormick

differs from the severability clause here because it
explains

the

usage

of

the

key

term

“insured.”

The

McCormick clause explains that, “the term ‘the insured’
is used severally and not collectively,” id. at 373,
while the Safeco clause simply states, “This insurance
applies separately to each insured” without any obvious
explanation of ‘insured.’

Policy (Doc. No. 1-2) at 11.

Because

clauses

the

severability

are

different,

the

application of the severability clause to the Safeco
exclusion is less certain.

Moreover, as stated, the

McCormick court applied the clause to an exclusion that
12

included the term “the insured,” and the severability
clause in that policy thus helped define that term.
Here, the exclusion applies to the intentional acts of
“any

insured”

but

the

necessarily

define

Third,

exclusion

the

severability

what

is

in

meant

by

McCormick

clause
“any
refers

does

not

insured.”
to

“the

insured,” and the court specifically noted that the word
“insured” was, in that case, “unqualified.”
at 375.

243 So. 2d

Here, on the other hand, the word “insured” is

qualified by the word “any.”
Nonetheless, other state courts have seen fit to
interpret

intentional-act

provisions

in

tandem

with

severability clauses. In Minkler v. Safeco Ins. Co. of
America, 49 Cal. 4th 315 (2010), the California Supreme
Court interpreted the same Safeco severability provision
at issue here in almost this same context and found that
a mother was not excluded from coverage for a lawsuit
alleging that she negligently supervised a minor in her
home where the harm from the negligent supervision was
directly attributable to her son’s sexual molestation of
13

the minor.

Id. at 332-33.

The court held that, because

the severability clause made the exclusion ambiguous, the
clause should be interpreted in favor of the insured.
Id.

Other courts have reached a similar conclusion:

Shapiro v. American Home Assur. Co., 616 F. Supp. 900,
904 (D. Mass. 1984) (Keeton, J.) (applying severability
clause to policy exclusion for intentional acts and thus
interpreting “any insured” severally); Catholic Diocese
of Dodge City v. Rymer, 840 P.2d 456 (Kan. 1992) (same);
Worcester Mut. Ins. Co. v. Marnell, 496 N.E.2d 158 (Mass.
1986) (same).
But other courts have reached a different conclusion:
Standard Fire Ins. Co. v. Proctor, 286 F. Supp. 2d 567,
574 (D. Md. 2003) (Williams, J.) (finding that “any
insured”

is

unambiguous

and

that,

regardless

of

severability clause, exclusion for the intentional act of
“any insured” is collective); Allstate Ins. Co. v. Kim,
121 F. Supp. 2d 1301, 1308 (D. Haw. 2000) (Kay, J.)
(“severability clause does not prevent an intentional
acts exclusion from barring coverage for the alleged
14

negligence of an intentional tortfeasor’s coinsured”);
Co-operative Insurance Companies v. Woodward, 45 A.3d 89,
94-95 (Vt. 2012) (rejecting Minkler and finding that
exclusion of coverage for loss caused by intentional acts
of

“an

insured”

applied

to

both

insureds

under

the

policy, despite existence of a severability clause, as
the exclusion was unambiguous); BP America, Inc. v. State
Auto Property & Cas. Ins. Co., 148 P.3d 832, 841 (Okla.
2005) (reviewing cases nationwide and finding that “most
courts addressing the issue of whether a severability
clause will render a clear and unambiguous exclusionary
provision doubtful determine that the clear language of
the exclusion must prevail”); Am. Family Mut. Ins. Co. v.
White, 65 P.3d 449, 456 (Ariz. 2003) (“Most courts that
have construed the phrase ‘any insured’ in an exclusion
have

found

that

it

bars

coverage

for

any

claim

attributable to the excludable acts of any insured, even
if the policy contains a severability clause.

We join

that majority.”); Johnson v. Allstate Ins. Co., 687 A.2d
642, 645 (Me. 1997) (“An unambiguous exclusion is not
15

negated by a severability clause.”); Chacon v. Am. Family
Mut. Ins. Co., 788 P.2d 748, 751-52 (Colo. 1990) (“any
insured” provision “clearly and unambiguously expresses
an intention to deny coverage to all insured when damage
is intended or expected as a result of the actions of any
insured,” despite presence of severability clause).
This court, however, need not decide today whether,
in light of the severability clause, Alabama state courts
would

interpret

the

intentional-act

exclusion

as

excluding only those acts that Golden herself intended,
because

here

the

third

exclusion

clearly

precludes

coverage for Golden as to counts six through nine.3 The
third exclusion Safeco asserts as barring coverage is for
harm “arising out of ... sexual molestation or sexual
harassment.”

Policy (Doc. No. 1-2) § 1(k) at 7.

Unlike

the exclusions for intentional acts and criminal acts,

3.
Though it perhaps goes without saying, Safeco
has no duty to defend Golden against counts one through
five, as she is not named in those counts. See AutoOwners Ins. Co. v. Toole, 947 F. Supp. 1557, 1562 (M.D.
Ala. 1996) (Thompson, J.).
16

this exclusion is unconditional and does not require that
the molestation be committed by “any insured.”

As this

exclusion does not require that Golden herself molested
the

Bences’

daughter,

it

is

unaffected

by

the

severability clause; the exclusion applies regardless as
to who committed the molestation.
the

face

of

the

Bences’

And it is clear from

complaint

that

the

damages

alleged “arise out of” their daughter’s molestation.
See, e.g., Am. Compl. (Doc. No. 31-1) at ¶ 11 (alleging
that “Kevin Golden, a sexual predator and child molester,
entered the girls’ bedroom and began molesting Jane Doe
and taking the girl(s) clothes off” and claiming injuries
from this action). Therefore, as to the duty to defend,
the court will grant summary judgment in favor of Safeco
and against Golden on counts six through nine.

B. Count Ten
There remains one count from the Bences’ lawsuit that
requires discussion.

The Bences amended their complaint

to

claim

include

a

new

of
17

negligent

and

wanton

supervision against Golden.

The new claim, count ten,

alleges that Golden left the Bences’ minor daughter after
volunteering to supervise her and went out drinking with
friends.

It further alleges that she was arrested for

driving under the influence of alcohol and stayed the
night in jail.

Most critically, the amended complaint

specifies that the harm from this alleged conduct is
independent from the actions of Golden’s husband that
night and “would exist absent any acts committed by
Defendant Kevin Golden.”
¶ 73 n. 3.

Am. Compl. (Doc. No. 31-1) at

As such, count ten does not derive from the

intentional conduct of Golden’s husband, but from the
alleged

negligent

and

wanton

conduct

of

Golden.

Therefore, the exclusion for intentional conduct does not
apply to this allegation.
harm

resulting

from

The coverage exclusions for

criminal

conduct

and

physical,

mental, and sexual molestation are likewise inapplicable
to count ten, and Safeco must defend Golden against this
count.

18

Therefore, as to the duty to defend, this court will
grant summary judgment in favor of Golden and against
Safeco on count ten.

IV.

DUTY TO INDEMNIFY

It appears that Safeco’s request for a declaration
that it has no duty to indemnify Golden against an
adverse

judgment

in

the

appropriate for resolution.
Toole,

947

F.

Supp.

1557,

Bences’

lawsuit

is

not

Auto-Owners Ins. Co. v.
1565-66

(M.D.

Ala.

1996)

(Thompson, J.); Guaranty Nat. Ins. Co. v. Beeline Stores,
Inc.,

945

F.

(Thompson, J.).

Supp.

1510,

1514-15

(M.D.

Ala.

1996)

It is still possible for the Bences to

change the nature of the allegations against Golden and
allege a theory of liability that is covered under the
policy.

Indeed, they have already done so by adding

count ten in the amended complaint.

Moreover, Golden

could prevail in her defense against the Bences’ suit,
making this claim moot, in which case “[t]he time and
effort the court and the parties would have put toward
19

resolving the issue would be wasted.”

Beeline Stores,

945 F. Supp. at 1515. It thus appears that “the issue of
indemnification is not sufficiently ripe to present a
‘case’ or ‘controversy’ and that, if there were, the
court would still, in the exercise of its discretion,
decline to provide declaratory relief.”

Id.

Summary judgment will therefore be denied to both
Safeco and Golden on the insurance company’s request for
a declaration that it has no duty to indemnify Golden.
However,

because,

as

shown

above,

it

appears

that

Safeco’s indemnification claim is premature, the court
will require that the parties show cause as to why this
claim should not be dismissed without prejudice.
***
The court will therefore grant summary judgment in
favor of Safeco and against Golden on the insurance
company’s duty to defend as to counts six through nine of
the Bences’ lawsuit; grant summary judgment in favor of
Golden and against Safeco on the insurance company’s duty
to defend count ten; deny summary judgment as to both
20

Safeco and Golden on the insurance company’s duty-toindemnity claim; and issue a show-cause order as to why
Safeco’s duty-to-indemnify claim should not be dismissed
without prejudice as premature.
An appropriate judgment will issue.
DONE, this the 20th day of August, 2013.
/s/ Myron H. Thompson
UNITED STATES DISTRICT JUDGE