State Farm Fire and Casualty Company v. Hanohano

Filing 46

ORDER GRANTING IN PART AND DENYING IN PART (1) STATE FARM FIRE AND CASUALTY COMPANY'S MOTION FOR SUMMARY JUDGMENT AND (2) NOLAN HANOHANO'S COUNTERMOTION FOR SUMMARY JUDGMENT re 29 , 35 - Signed by JUDGE SUSAN OKI MOLLWAY on 1/ 25/2016. "Judgment will be entered following resolution of the attorney's fees issue. The court sets February 12, 2016, as the deadline for filing such a motion." (emt, )< center>CERTIFICATE OF SERVICEParticipants registered to receive electronic notifications received this document electronically at the e-mail address listed on the Notice of Electronic Filing (NEF). Participants not registered to receive electronic notifications were served by first class mail on the date of this docket entry

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF HAWAII
STATE FARM FIRE AND CASUALTY
COMPANY, AN ILLINOIS
CORPORATION,
Plaintiff,
vs.
NOLAN HANOHANO,
Defendant.

)
)
)
)
)
)
)
)
)
)
)
)

CIVIL NO. 14-00532 SOM/BMK
ORDER GRANTING IN PART AND
DENYING IN PART (1) STATE
FARM FIRE AND CASUALTY
COMPANY’S MOTION FOR SUMMARY
JUDGMENT AND (2) NOLAN
HANOHANO’S COUNTERMOTION FOR
SUMMARY JUDGMENT

ORDER GRANTING IN PART AND DENYING IN PART (1) STATE FARM FIRE
AND CASUALTY COMPANY’S MOTION FOR SUMMARY JUDGMENT AND (2) NOLAN
HANOHANO’S COUNTERMOTION FOR SUMMARY JUDGMENT
I.

INTRODUCTION.
This case, brought under the Declaratory Judgment Act,

28 U.S.C. § 2201, seeks a determination as to whether Plaintiff
State Farm Fire and Casualty Company has a duty to defend its
insured, Defendant Nolan Hanohano, with respect to claims brought
against him in an underlying suit.
Before the court are countermotions for summary
judgment.

Because the claims asserted against Hanohano are at

least potentially covered by the homeowner’s policy that State
Farm issued to Hanohano, the court concludes that State Farm
currently has a duty to defend Hanohano.
therefore, granted on this issue.

Hanohano’s motion is,

Hanohano’s attorney’s fees

request is denied without prejudice to his filing of a motion
that complies with Local Rule 54.3.
The court does, however, grant State Farm summary

judgment on the issue of whether it must indemnify Hanohano for
any punitive damages awarded in the underlying action.
Hanohano’s policy clearly does not provide coverage for punitive
damages.

State Farm’s motion is therefore granted in part and

denied in part.
II.

BACKGROUND.
A.

The Underlying Lawsuit.

On June 20, 2014, a suit was filed in this court,
Daphne S. Dinnan, et al. v. City and County of Honolulu, Nolan
Hanohano, et al., Civil No. 14-00286 DKW/RLP, alleging the
wrongful death of Stephen J. Dinnan.

See ECF No. 30-2.

The suit

was instituted by Daphne Dinnan, individually and as personal
representative of the Estate of Stephen Dinnan and Sean F.
Dinnan; Elisha Kalani, individually and as parent and next friend
of her minor child, Steisha-Lovie Kalani, Ian C. Dinnan,
Christina K.S. Dinnan, and Katelyn S.L. Dinnan; and Shardeah
K.K.K. Serhant, individually and as parent and next friend of her
minor child, Shaydence K. Serhant and Saydee K.P.H.K. Serhant.
See id.
According to the Complaint, on June 3, 2013, Hanohano
was told by his son that Hanohano’s truck had been stolen from
Makapu’u Beach Park.

See id., PageID # 201.

Using GPS to track

the cellphone that his son had left in the truck, Hanohano and
his son located the truck in Waimanalo, Hawaii.

2

See id., PageID

# 201; ECF No. 1, PageID # 3.
Hanohano and his son called 9-1-1 to report the theft
and the location of the truck.
02.

See ECF No. 30-2, PageID #s 201-

Officer Matsumoto responded to the call and met Hanohano and

his son near the property where the truck was located.
Hanohano then led Officer Matsumoto to the property.

See id.
See id.

At

the time, Dinnan and two other men were at the property smoking
marijuana.

See id.
When one of the men saw Officer Matsumoto and Hanohano

come onto the property, he immediately tried to get on his
motorcycle, but was pulled off the bike by Officer Matsumoto and
told to stay put.

See id., PageID #s 202-03.

Dinnan, allegedly

fearful that he would be arrested for smoking marijuana, also
tried to leave.

See id.

Officer Matsumoto called out to Dinnan

and told him to remain so that he could ask Dinnan some
questions.

See id.
Ignoring Officer Matsumoto’s command, Dinnan ran toward

some stairs leading up to the house.

Officer Matsumoto caught up

with Dinnan, who locked his arms around the stair railing, which
Officer Matsumoto tried to pry Dinnan off of.
203-04.

See id., PageID #s

When this did not work, Officer Matsumoto hit Dinnan’s

hands, arms, and body to separate him from the railing.

See id.,

PageID # 205.
According to the Complaint, Hanohano, seeing this and

3

allegedly “now filled with rage and hatred, walked up to Dinnan,
grabbed him by the neck and started choking and squeezing his
neck with his bare hands.”

See id., PageID # 206.

While choking

Dinnan, Hanohano allegedly shouted, “You like steal my fucking
truck?

You steal from me, you like steal my truck?

you get for stealing from Hawaiians.”

See id.

This is what

Hanohano

eventually let go of Dinnan when Officer Matsumoto told him,
“Enough already.”

See id., PageID # 207.

The Complaint alleges

that, in choking Dinnan, Hanohano ruptured his windpipe.

See id.

Once Hanohano let go of Dinnan, Dinnan tried to flee
again, but was chased by Officer Matsumoto, who pulled him to the
ground.

See id., PageID # 208.

As Dinnan was struggling,

Hanohano came over and allegedly held Dinnan’s legs while Officer
Matsumoto worked at handcuffing him.
asked Dinnan, “Why you running for?
questions.

See id.

Officer Matsumoto

I only want to ask you

So I don’t know why you running for.”

See id.

Hanohano was holding Dinnan’s legs while Officer
Matsumoto, who is over six foot tall and weighs over 230 pounds,
allegedly had his knee on Dinnan’s back, between his shoulder
blades and near the base of his neck, and was simultaneously
pushing Dinnan’s face into the ground.
09.

See id., PageID #s 208-

Dinnan allegedly called out, “Help, help” three times.

id., PageID # 208.

See

Although Dinnan’s face allegedly turned

cyatonic (or purple), Officer Matsumoto allegedly continued to

4

apply his body weight to Dinnan’s neck, face, and back.

See id.

The Complaint’s only allegation about Hanohano at this point is
that he held Dinnan’s legs down.

See id., PageID #s 208-09.

Sometime later, Dinnan’s girlfriend, who was the mother
of two of his children, was allegedly walking to the driveway
with two other police officers and one of her children.

She saw

Dinnan lying face-down but not moving and allegedly screamed,
“What the hell is going on?”

See id., PageID # 210.

Officer

Matsumoto then allegedly got off of Dinnan and said, “Okay, I’m
done.”

See id.

One of the two police officers turned Dinnan

over, and Dinnan allegedly appeared to be lifeless.

See id.

The

two officers tried to resuscitate Dinnan at the scene
unsuccessfully.

See id., PageID #s 210-11.

The Complaint asserts various claims against the City
and County of Honolulu, Officer Matsumoto, and Hanohano.
No. 30-2.

See ECF

The claims asserted against Hanohano include

wrongful death, assault and battery, false imprisonment,
negligence, gross negligence, intentional infliction of emotional
distress, and negligent infliction of emotional distress.

See

id., PageID #s 215-18, 219-21.
Hanohano tendered the defense of this underlying suit
to State Farm.

See ECF No. 1, PageID # 13.

State Farm is

participating in the defense of the underlying suit subject to a
reservation of rights, while seeking declaratory relief in the

5

present action.
B.

The Homeowner’s Policy.

During the periods alleged in the underlying Complaint,
Hanohano was insured under a homeowner’s policy issued by State
Farm on his residence in Kailua, on Oahu.

See ECF No. 1, PageID

# 13.
The policy includes the following liability provisions:
SECTION II – LIABILITY COVERAGES
COVERAGE L – PERSONAL LIABILITY
If a claim is made or a suit is brought
against an insured for damages because of
bodily injury or property damage to which
this coverage applies, caused by an
occurrence, we will:
1. pay up to our limit of liability for the
damages for which the insured is legally
liable; and
2. provide a defense at our expense by
counsel of our choice. We may make any
investigation and settle any claim or suit
that we decide is appropriate. Our
obligation to defend any claim or suit ends
when the amount we pay for damages, to effect
settlement or satisfy a judgment resulting
from the occurrence, equals our limit of
liability.
ECF No. 30-4, PageID # 267.
The policy defines “bodily injury” and “occurrence”:
1. “bodily injury” means physical injury,
sickness, or disease to a person. This
includes required care, loss of services and
death resulting therefrom . . . .
. . . .

6

7. “occurrence”, when used in Section II of
this policy, means an accident, including
exposure to conditions, which results in:
a. bodily injury . . . .
Id., PageID #s 253-54.
The policy includes an exclusion for intentional acts:
SECTION II–-EXCLUSIONS
1. Coverage L and Coverage M do not apply to:
a. bodily injury or property damage:
(1) which is either expected or intended by
the insured; or
(2) which is the result of willful and
malicious acts of the insured[.]
Id., PageID # 268.
The policy also includes a personal injury endorsement,
Endorsement FE-7468.4, which provides:
FE-7468.4 PERSONAL INJURY ENDORSEMENT
DEFINITIONS
The following is added to “occurrence”:
Occurrence also means the commission of an
offense, or series of similar offenses, which
result in personal injury during the policy
period. All personal injury resulting from
one offense, series of similar offenses or
from continuous and repeated exposure to the
same general conditions is considered to be
one occurrence.
The following definition is added:
“Personal Injury” means injury arising out of
one or more of the following offenses:
a. false arrest, false imprisonment, wrongful
7

eviction, wrongful detention, malicious
prosecution; or
b. libel, slander, defamation of character or
invasion of rights of privacy.
COVERAGE L – PERSONAL LIABILITY
The first paragraph is replaced with the following:
If a claim is made or a suit is brought
against an insured for damages because of
bodily injury, personal injury or property
damage to which this coverage applies, caused
by an occurrence, we will:
SECTION II – EXCLUSIONS do not apply to
personal injury. Personal Injury does not
apply:
. . . .
2. to injury caused by a violation of penal
law or ordinance committed by or with the
knowledge or consent of any insured;
. . . .
7. when you act with specific intent to cause
harm or injury;
8. to any person or property which is the
result of your willful and malicious act, no
matter at whom the act was directed;
. . . .
All other policy provisions apply.
Id., PageID # 241.
III.

STANDARD.
Summary judgment shall be granted when “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.”

8

Fed.

R. Civ. P. 56(a) (2010).

See Addisu v. Fred Meyer, Inc., 198

F.3d 1130, 1134 (9th Cir. 2000).

Movants must support their

position that a material fact is or is not genuinely disputed by
either “citing to particular parts of materials in the record,
including depositions, documents, electronically stored
information, affidavits or declarations, stipulations (including
those made for the purposes of the motion only), admissions,
interrogatory answers, or other materials”; or “showing that the
materials cited do not establish the absence or presence of a
genuine dispute, or that an adverse party cannot produce
admissible evidence to support the fact.”

Fed. R. Civ. P. 56(c).

One of the principal purposes of summary judgment is to identify
and dispose of factually unsupported claims and defenses.
Celotex Corp. v. Catrett, 477 U.S. 317, 323–24 (1986).

Summary

judgment must be granted against a party that fails to
demonstrate facts to establish what will be an essential element
at trial.

See id. at 323.

A moving party without the ultimate

burden of persuasion at trial—usually, but not always, the
defendant—has both the initial burden of production and the
ultimate burden of persuasion on a motion for summary judgment.
Nissan Fire & Marine Ins. Co. v. Fritz Cos., 210 F.3d 1099, 1102
(9th Cir. 2000).
The burden initially falls on the moving party to
identify for the court those “portions of the materials on file

9

that it believes demonstrate the absence of any genuine issue of
material fact.”

T.W. Elec. Serv., Inc. v. Pac. Elec. Contractors

Ass’n, 809 F.2d 626, 630 (9th Cir. 1987) (citing Celotex Corp.,
477 U.S. at 323).

“When the moving party has carried its burden

under Rule 56(c), its opponent must do more than simply show that
there is some metaphysical doubt as to the material facts.”
Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574,
586 (1986) (footnote omitted).
The nonmoving party must set forth specific facts
showing that there is a genuine issue for trial.
Serv., Inc., 809 F.2d at 630.

T.W. Elec.

At least some “‘significant

probative evidence tending to support the complaint’” must be
produced.

Id. (quoting First Nat’l Bank of Ariz. v. Cities Serv.

Co., 391 U.S. 253, 290 (1968)).

See Addisu, 198 F.3d at 1134 (“A

scintilla of evidence or evidence that is merely colorable or not
significantly probative does not present a genuine issue of
material fact.”).

“[I]f the factual context makes the non-moving

party’s claim implausible, that party must come forward with more
persuasive evidence than would otherwise be necessary to show
that there is a genuine issue for trial.”

Cal. Arch’l Bldg.

Prods., Inc. v. Franciscan Ceramics, Inc., 818 F.2d 1466, 1468
(9th Cir. 1987) (citing Matsushita Elec. Indus. Co., 475 U.S. at
587).

Accord Addisu, 198 F.3d at 1134 (“There must be enough

doubt for a ‘reasonable trier of fact’ to find for plaintiffs in

10

order to defeat the summary judgment motion.”).
All evidence and inferences must be construed in the
light most favorable to the nonmoving party.
Inc., 809 F.2d at 631.

T.W. Elec. Serv.,

Inferences may be drawn from underlying

facts not in dispute, as well as from disputed facts that the
judge is required to resolve in favor of the nonmoving party.
Id.

When “direct evidence” produced by the moving party

conflicts with “direct evidence” produced by the party opposing
summary judgment, “the judge must assume the truth of the
evidence set forth by the nonmoving party with respect to that
fact.”
IV.

Id.
ANALYSIS.
This is a diversity action.

See ECF No. 1.

Federal

courts sitting in diversity apply state substantive law and
federal procedural law.

See Snead v. Metro. Prop. & Cas. Ins.

Co., 237 F.3d 1080, 1090 (9th Cir. 2001).

When interpreting

state law, a federal court is bound by the decisions of a state’s
highest court.

Ariz. Elec. Power Coop. v. Berkeley, 59 F.3d 988,

991 (9th Cir. 1995).

In the absence of such a decision, federal

courts attempt to predict how the highest state court would
decide the issue, using intermediate appellate court decisions,
decisions from other jurisdictions, statutes, treatises, and
restatements as guidance.

Id.; see also Burlington Ins. Co. v.

Oceanic Design & Constr., Inc., 383 F.3d 940, 944 (9th Cir. 2004)

11

(“To the extent this case raises issues of first impression, our
court, sitting in diversity, must use its best judgment to
predict how the Hawaii Supreme Court would decide the issue.”
(quotation and brackets omitted)).
A.

General Law Concerning Insurance Policies.

Under Hawaii law, general rules of contract
construction apply to the interpretation of insurance contracts.
Dawes v. First Ins. Co. of Haw., 77 Haw. 117, 121, 883 P.2d 38,
42 (1994).

Insurance policies must be read as a whole and

construed in accordance with the plain meaning of their terms,
unless it appears that a different meaning is intended.

Id.;

First Ins. Co. of Haw. v. State, 66 Haw. 413, 423, 665 P.2d 648,
655 (1983); see also Haw. Rev. Stat. § 431:10–237 (“[e]very
insurance contract shall be construed according to the entirety
of its terms and conditions as set forth in the policy”).
Because insurance contracts are contracts of adhesion,
they must be construed liberally in favor of the insured, and any
ambiguities must be resolved against the insurer.

Put another

way, the rule is that policies are to be construed in accordance
with the reasonable expectations of a layperson.

Tri–S Corp. v.

W. World Ins. Co., 110 Haw. 473, 489, 135 P.3d 82, 98 (2006)
(citations omitted); Dawes, 77 Haw. at 121, 883 P.2d at 42.
The duty to defend arises when there is any potential
or possibility for coverage.

Sentinel Ins. Co. v. First Ins. Co.

12

of Hawaii, 76 Haw. 277, 287, 875 P.2d 894, 904 (1994) (as amended
on grant of reconsideration).

“In other words, the duty to

defend rests primarily on the possibility that coverage exists.
This possibility may be remote, but if it exists, the insurer
owes the insured a defense.”
and citations omitted).

Id. (alterations, quotation marks,

Any doubt as to the duty to defend “is

resolved against the insurer and in favor of the insured.”
(citation omitted).

Id.

However, when the pleadings fail to allege

any basis for recovery under an insurance policy, the insurer has
no duty to defend.

Pancakes of Hawaii v. Pomare Props., 85 Haw.

286, 291, 944 P.2d 83, 88 (1997).

In other words, for this court

to conclude that State Farm has no duty to defend Hanohano, the
court must determine that it would be impossible for a claim in
the underlying suit to be covered by State Farm’s insurance
policy.

See Dairy Rd. Partners v. Island Ins. Co., Ltd., 92 Haw.

398, 412-13, 992 P.2d 93, 107-08 (2000).
Because the duty to defend turns on the possibility of
coverage, this court must consider the issue of coverage.

The

burden is on the insured to establish coverage under an insurance
policy.

See Sentinel, 76 Haw. at 292 n.13, 875 P.2d at 909 n.13.

The insurer has the burden of establishing the applicability of
an exclusion.

See id. at 297, 875 P.2d at 914.

The duty to indemnify is owed “for any loss or injury
which comes within the coverage provisions of the policy,

13

provided it is not removed from coverage by a policy exclusion.”
Dairy Rd., 92 Haw. at 412, 992 P.2d at 108.

The obligation to

defend an insured is broader than the duty to indemnify.
With respect to summary judgment regarding the duty to
indemnify, the insurer is “not required to disprove any
possibility that its insured might be liable for a claim asserted
in the underlying lawsuits.”

Id. (emphasis omitted).

“Rather,

without reference to what the eventual outcome of the underlying
lawsuits might actually be, [the insurer is] required only to
establish the absence of a genuine issue of material fact
regarding the question of coverage pursuant to the plain language
of the insurance policies and the consequent entitlement to the
entry of judgment as a matter of law.”

Id.

“Hawaii adheres to the ‘complaint allegation rule.’”
Burlington Ins. Co., 383 F.3d at 944.

In that regard,

The focus is on the alleged claims and facts.
The duty to defend “is limited to situations
where the pleadings have alleged claims for
relief which fall within the terms for
coverage of the insurance contract. ‘Where
pleadings fail to allege any basis for
recovery within the coverage clause, the
insurer has no obligation to defend.’”
Id. at 944–45 (citing Hawaiian Holiday Macadamia Nut Co. v.
Indus. Indem. Co., 76 Haw. 166, 872 P.2d 230 (1994)).

14

B.

There Is a Question of Fact as to Whether Dinnan’s
Injuries Arose from an “Occurrence.”

As a preliminary matter, because Hanohano is not
asserting coverage under the Rental Condominium Unitowners
Policy, see ECF No. 35-1, PageID # 324, the following discussion
only concerns State Farm’s duties under his homeowner’s policy.
See ECF No. 29-2, PageID #s 183-84.
The policy provides coverage for claims made “against
an insured for damages because of bodily injury or property
damage . . . caused by an occurrence.”
# 267.

See ECF No. 30-4, PageID

The policy defines “occurrence”:
an accident, including exposure to
conditions, which first results in:
a. bodily injury; or
b. property damage; during the policy period.
All bodily injury and property damage
resulting from one accident, series of
related accidents or from continuous and
repeated exposure to the same general
conditions is considered to be one
occurrence.

See id., PageID # 244.
State Farm argues that the claims against Hanohano in
the underlying lawsuit are not for bodily injury or property
damage caused by an “occurrence” because the claims do not allege
an “accident.”

See id., PageID # 174-77.

In Hawaiian Insurance & Guaranty Co., Ltd. v. Blanco,
72 Haw. 9, 804 P.2d 876 (1990), the Hawaii Supreme Court

15

discussed the meaning of the term “occurrence” in an insurance
policy.

The court said that, when examining whether there had

been an “occurrence” for purposes of insurance coverage, it
examined whether “the insured’s expected result of the act or
omission was the injury.”

Id. at 16, 804 P.2d at 880.

If yes,

the injury was not caused by an accident and was not an
“occurrence” for which insurance coverage was available.
The underlying complaint in Blanco alleged personal
injury resulting from the insured’s firing of a rifle in the
general direction of a neighbor.

According to the insured, he

only intended to frighten his neighbor by firing in his
direction, but the bullet ricocheted off an object fifteen feet
from where the neighbor was standing and struck his leg.
15, 804 P.2d at 879.

Id. at

The complaint alleged that the insured’s

discharge of the rifle was wilful and intentional, as well as
negligent.

Id. at 12, 804 P.2d at 878.

The insured sought

coverage, but the insurer refused the tender of defense on the
ground that the act was intentionally harmful.

Id. at 12-15, 804

P.2d at 878-79.
The Blanco court affirmed the grant of summary judgment
in favor of the insurer, reasoning that the bodily injury
resulting from the discharge of the rifle was not a covered
“occurrence.”

See id. at 11-18, 804 P.2d at 877-81.

Rejecting

the insured’s argument that the harm was not intended because he

16

only meant to scare his neighbor, the court explained, “we do not
see how it logically can be said that . . . the injury . . . was
the result of an accident. . . .

That physical injury might

result from such an action is certainly something which a
reasonable man in [the insured’s] position should have
anticipated and expected.”

Id. at 18, 804 P.2d at 881.

In Hawaiian Insurance & Guaranty Co. v. Brooks, 67 Haw.
285, 686 P.2d 23 (1984), another case relied on by State Farm,
the insured was sued after he gave a woman a ride in his vehicle
but did nothing to stop another passenger from sexually
assaulting her.

See id. at 286-91, 686 P.2d at 24-28.

The woman

filed a complaint in state court, asserting both intentional and
negligence-based tort claims against the insured.
686 P.2d at 24-25.

Id. at 286-87,

The insurer sought a declaratory judgment

providing that it had no duty to defend or indemnify the insured.
Id. at 287, 686 P.2d at 25.

The trial court awarded summary

judgment in favor of the insurer.

Id.

The issue on appeal in Brooks was “whether the rape of
a passenger in an insured vehicle by another passenger was an
‘occurrence’ that gave rise to a duty on the insurer’s part of
defending a tort suit brought by the victim against the driver.”
Id. at 286, 686 P.2d at 24.

In affirming the grant of summary

judgment, the Hawaii Supreme Court explained that the sexual
assault “was not an accident that resulted in bodily injury

17

neither expected nor intended” because the driver was aware of
the assault but “he chose not to do anything to prevent or
mitigate the harm suffered by the victim.”
at 28.

Id. at 291, 686 P.2d

The court thus held that the insurer was not obligated to

defend and assume the liability for damages because the bodily
injury alleged in the underlying complaint was expected from the
insured’s perspective.

Id.

The Hawaii Supreme Court later noted that, in both
Brooks and Blanco, allegations in the underlying complaints that
the insureds’ harmful conduct was also negligent did not change
the outcome regarding coverage.
P.2d at 112.

Dairy Rd., 92 Haw. at 417, 992

“This court’s primary purpose in Brooks and Blanco

was to ensure that plaintiffs could not, through artful pleading,
bootstrap the availability of insurance coverage under an insured
defendant’s policy by purporting to state a claim for negligence
based on facts that, in reality, reflected manifestly
intentional, rather than negligent, conduct.”

Id.

“[W]hen the

facts alleged in the underlying complaint unambiguously exclude
the possibility of coverage, conclusory assertions contained in
the complaint regarding the legal significance of those facts
(such as that the facts as alleged demonstrate ‘negligent’ rather
than ‘intentional’ conduct) are insufficient to trigger the
insurer’s duty to defend.”

Id.

Relying on these and other cases, State Farm contends

18

that the incident in which Hanohano allegedly choked Dinnan and
shouted, “You like steal my f**king truck?
you like steal my truck?

You steal from me,

That is what you get for stealing from

Hawaiians,” was not, as a matter of law, an “accident” under the
policy because Hanohano intentionally harmed Dinnan, or at the
very least, should have anticipated that choking him would result
in bodily injury.

See ECF No. 29-3, PageID #s 174-82; ECF No.

38, PageID #s 407-09.

State Farm also insists that the

allegations of negligence and other nonintentional conduct in the
underlying Complaint do not transform otherwise intentionally
harmful conduct, not covered by the policy, into conduct giving
rise to a duty to defend.

See ECF No. 29-3, PageID # 175-79.

However, even if the alleged choking incident was
intentional, that does not necessarily preclude coverage.

For

State Farm to prevail on its motion, it must establish that it
would be impossible for any claim in the underlying suit to be
covered by the policy.

See Dairy Rd., 92 Haw. at 412-13, 992

P.2d at 107-08; Sentinel Ins., 76 Haw. at 287, 875 P.2d at 904
(holding that duty to defend arises when there is any potential
or possibility for coverage).

When even one claim is

potentially covered, an insurer must defend the entire suit.
See, e.g., Hawaiian Holiday, 76 Haw. at 169, 872 P.2d at 233
(“[W]here a suit raises a potential for indemnification liability
of the insurer to the insured, the insurer has a duty to accept

19

the defense of the entire suit even though other claims of the
complaint fall outside the policy’s coverage.”).
As Hanohano points out, however, the underlying
Complaint includes allegations and claims for relief that
potentially fall within the coverage provisions in the insurance
contract, thereby triggering State Farm’s duty to defend.

The

underlying claims allege that Hanohano held Dinnan’s legs while
Officer Matsumoto initially handcuffed Dinnan, then allegedly
suffocated Dinnan.

See ECF No. 30-2, PageID # 201.

These

actions are not only alleged to have caused Dinnan’s death, they
are the primary basis upon which the plaintiffs seek damages
against the defendants, including Hanohano, for wrongful death,
negligence, gross negligence, false imprisonment, and negligent
infliction of emotional distress.

See id. (“This is a wrongful

death suit against the defendants who were negligent, grossly
negligent, and/or willful and wanton in the way they restrained
Dinnan when they tried to detain him for questioning and in the
process caused his death.”).
Notably, the underlying lawsuit does not include a
claim limited solely to the choking allegation.

Instead, the

alleged choking appears to be alleged as part of continuing acts
that culminated in Dinnan’s death, while or after Hanohano held
Dinnan’s legs.

Even if the choking was intentional and subject

to the intentional acts exclusion, none of the claims in the

20

underlying suit can be said to rest solely on the choking.
At the very least, there is a genuine issue of material
fact regarding whether Hanohano contributed to Dinnan’s death by
holding down Dinnan’s legs while Officer Matsumoto subdued
Dinnan.

Indeed, according to the tort claims, Hanohano’s only

involvement after the choking was that he “was holding Dinnan’s
legs down.”

See id., PageID # 209.

There are no allegations

that Hanohano intended to injure Dinnan by holding his legs, or
that Hanohano was even aware that Dinnan was suffocating under
Officer Matsumoto’s body weight.

See id., PageID #s 208-09.

Nor should the court infer such knowledge.

Unlike the

driver in Brooks, who admitted to knowing that the victim was
being sexually assaulted by a passenger, it is not clear that,
while holding Dinnan’s legs, Hanohano knew that he was
participating in injuring, much less killing, Dinnan.

After all,

Officer Matsumoto was a police officer, who, Hanohano could have
reasonably expected, should have been trained in safely
apprehending a suspect and avoiding restraints that, without
necessity, would be lethal.

It is therefore conceivable that

Hanohano was, at most, negligent in assisting Officer Matsumoto
in restraining Dinnan.

The underlying claims include one or more

potentially covered “occurrences,” and State Farm must defend
against all claims.
For the same reasons, the court rejects State Farm’s

21

argument that the underlying claims for negligence are merely
attempts to recast intentional acts as negligent ones.

In

support of its argument, State Farm cites Bayudan v. Tradewind
Insurance Co., Ltd., 87 Haw. 379, 957 P.2d 1061 (Ct. App. 1998),
State Farm Fire & Cas. Co. v. Elsenbach, No. CV 09–00541 DAE–BMK,
2011 WL 2606005 (D. Haw., June 30, 2011), and Anderson v.
Southern Guar. Ins. Co. of Georgia, 508 S.E.2d 726 (Ga. Ct. App.
1998).
None of these cases supports State Farm’s position.
Although State Farm relies most heavily on Bayudan, that case
actually supports the recognition of a duty to defend here.

In

Bayudan, the Hawaii Intermediate Court of Appeals noted that
certain claims did not give rise to a duty to defend because
they, like the alleged injuries, related to a kidnaping and
assault.

87 Haw. at 380, 957 P.2d at 1062.

But the court held

that the insurer had a duty to defend arising from a separate
incident that related to a “slip and fall.”
at 1063.

Id. at 380, 957 P.2d

The Bayudan court thus vacated the trial court’s grant

of summary judgment in favor of the insurer on the duty to defend
and remanded the case to the trial court in light of the
potential coverage raised by the “slip and fall.”

Id.

Here, too, the underlying Complaint includes factual
allegations that could potentially qualify as intentionally
harmful conduct, i.e., the alleged choking incident, and conduct

22

that was arguably unintentionally harmful, i.e., Hanohano’s
restraint of Dinnan’s legs.
Elsenbach and Anderson involved allegations of
intentional conduct such as assault and harassment, without
accompanying allegations of additional conduct that might not
rise to the level of an intentional tort.

Those cases do not

support the argument that the claims against Hanohano are merely
attempts to recast intentional acts as negligent ones.
C.

State Farm Has Not Demonstrated that Coverage Is
Precluded by Policy Exclusions.

State Farm argues that coverage is precluded by either
the policy’s intentional acts exclusion or its willful and
malicious acts exclusion.

See ECF No. 29-3, PageID #s 181-82.

The policy excludes “bodily injury or property damage:
(1) which is either expected or intended by the insured; or (2)
which is the result of willful and malicious acts of the
insured.”

See ECF No. 30-4, PageID # 268.
State Farm’s arguments with regard to the policy

exclusions fail for the same reason as its arguments with regard
to whether the claim involves a covered “occurrence.”

See ECF

No. 29-3, PageID #s 182-83; ECF No. 38, PageID #s 411-12.

When a

claim is based on alleged injuries that were intended or expected
from the insured’s perspective, the claim would be precluded both
because it is not a covered “accident” and because it triggers
the intentional acts exclusion.

Because Hanohano might be held
23

liable for negligence in holding Dinnan’s legs even if Hanohano
did not thereby intend to injure Dinnan, the court does not apply
the policy’s intentional acts exclusion.

Even if Hanohano

intentionally held Dinnan’s legs, he arguably did not intend the
act of holding to cause any injury.
Nor does the willful and malicious acts exclusion
preclude coverage here.

See ECF No. 29-3, PageID #s 182-83; ECF

No. 38, PageID #s 411-12.

The policy does not define

“wilfulness” or “malice.”

See ECF No. 30-4, PageID #s 253-54.

The court therefore construes both terms in accordance with their
plain meaning, as required under Hawaii law.
at 121, 883 P.2d at 42.

See Dawes, 77 Haw.

Black’s Law Dictionary defines

“willfullness” as “involv[ing] conscious wrong or evil purpose on
the part of the actor, or at least inexcusable carelessness,
whether the act is right or wrong.

The term willful is stronger

than voluntary or intentional; it is traditionally the equivalent
of malicious, evil, or corrupt.”
2009).

Black’s Law Dictionary (9th ed.

“Malice” is “[t]he deliberate intent to commit an injury,

as evidenced by external circumstances.”

Id.

Both terms denote

an intent to commit harm, though “willfulness” also includes
“inexcusable carelessness” regarding whether the act was right or
wrong.
Again, State Farm focuses exclusively on the alleged
choking incident, arguing that “the choking and detention[] were

24

willful and malicious,” while ignoring the possibility that it
may be Hanohano’s holding of Dinnan’s legs that forms the basis
for a potentially covered claim.

See ECF No. 38, PageID # 412.

The holding of the legs might not have been willful or malicious,
even if it was deliberate.
Moreover, this court cannot say that Hanohano is
alleged to have been inexcusably careless in the way he held
Dinnan’s legs, such that his conduct would be adjudged to be
willful.

It is possible that Hanohano will be found to have been

willful in this regard, but it is also possible that the trierof-fact will find that Hanohano was not inexcusably careless in
trying to assist Officer Matsumoto, a trained police officer, in
restraining Dinnan.
State Farm has not satisfied its particularly heavy
burden of proof as the movant for summary judgment regarding its
duty to defend.

See Dairy Rd., 92 Haw. at 412, 992 P.2d at 107

(holding that the “already heavy burden of proof as a movant for
summary judgment [is] significantly augmented” when an insurer
seeks summary judgment that it has no duty to defend).

By

contrast, Hanohano has carried his burden of establishing the
possibility that he could be found liable for a covered claim.
Hanohano is therefore entitled to summary judgment in his favor
with regard to State Farm’s duty to defend.

25

D.

Punitive Damages.

State Farm contends, and Hanohano does not dispute,
that State Farm is not responsible for any punitive damages that
may be awarded against Hanohano in the underlying suit.

Under

Hawaii law, “[c]overage under any policy of insurance issued in
[Hawaii] shall not be construed to provide coverage for punitive
or exemplary damages unless specifically included.”
Rev. Stat. § 431:10-240.

See Haw.

The policy does not specifically

include coverage for punitive damages.

State Farm thus is not

obligated to indemnify Hanohano for any punitive damages that are
awarded against him.

State Farm must nevertheless defend

Hanohano against the punitive damage claims, as well as against
the other claims, to satisfy its general duty to defend him as to
the entire suit.

See, e.g., Hawaiian Holiday, 76 Haw. at 169,

872 P.2d at 233 (“[W]here a suit raises a potential for
indemnification liability of the insurer to the insured, the
insurer has a duty to accept the defense of the entire suit even
though other claims of the complaint fall outside the policy’s
coverage.”).
E.

Attorney’s Fees.

Hanohano also seeks attorney’s fees and costs for this
suit, pursuant to Haw. Rev. Stat. § 431:10-242.
1, PageID # 325.

See ECF No. 35-

Haw. Rev. Stat. § 431:10-242 provides, “Where

an insurer has contested its liability under a policy and is

26

ordered by the courts to pay benefits under the policy, the
policyholder, the beneficiary under a policy, or the person who
has acquired the rights of the policyholder or beneficiary under
the policy shall be awarded reasonable attorney’s fees and the
costs of suit, in addition to the benefits under the policy.”
While this court’s ruling that State Farm has a duty to defend
Hanohano in the underlying suit clearly affects the attorney’s
fees issue, this court defers any ruling on the subject until an
attorney’s fees motion complying with Local Rule 54.3 has been
filed.
V.

CONCLUSION.
For the above reasons, the court grants Hanohano’s

motion seeking a ruling that State Farm has a duty to defend
Hanohano in the underlying action.

State Farm’s motion is denied

with respect to all matters other than the punitive damages
issue.
Judgment will be entered following resolution of the
attorney’s fees issue.

The court sets February 12, 2016, as the

deadline for filing such a motion.

27

IT IS SO ORDERED.
DATED: Honolulu, Hawaii, January 25, 2016.

/s/ Susan Oki Mollway
Susan Oki Mollway
United States District Judge

State Farm Fire and Casualty Company v. Nolan Hanohano, Civ. No. 14 00532
SOM/BMK; ORDER GRANTING IN PART AND DENYING IN PART (1) STATE FARM FIRE AND
CASUALTY COMPANY’S MOTION FOR SUMMARY JUDGMENT AND (2) NOLAN HANOHANO’S
COUNTERMOTION FOR SUMMARY JUDGMENT

28