State Farm Fire and Casualty Company v. Huguely et al

Filing 66

MEMORANDUM OPINION. Signed by Judge Deborah K. Chasanow on 1/7/2020. (sat, Chambers)

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MARYLAND
:
STATE FARM FIRE AND CASUALTY
COMPANY
v.

:
:

Civil Action No. DKC 13-3088

:
GEORGE W. HUGUELY, V, et al.
:
MEMORANDUM OPINION
Presently

pending

and

ready

for

resolution

in

this

declaratory judgment action is the motion for summary judgment
filed by Plaintiff State Farm and Casualty Company (“Plaintiff”).
(ECF No. 60).

The issues have been briefed, and the court now

rules, no hearing being deemed necessary.

Local Rule 105.6.

For

the following reasons, the motion for summary judgment will be
granted.
I.

Background
This case centers around the actions of George W. Huguely, V

(“Defendant”) and his responsibility for the death of Yeardley
Love in May 2010.1

An earlier memorandum opinion, (ECF No. 30),

outlines the specifics of the multiple actions arising from that
event.

Therefore, only a brief summary is necessary.

In a

criminal case, a jury in the Circuit Court for the City of

1

Unless otherwise noted, the facts outlined here are
undisputed or construed in the light most favorable to Defendant,
the non-moving party.

Charlottesville, Virginia found Defendant responsible for the
death of Yeardley Love and guilty of second degree murder. Huguely
v. Commonwealth, 63 Va.App. 92, 105 (2014).

In a civil case,

Sharon D. Love (Ms. Love), as administrator of the estate of
Yeardley Love, brought a civil suit against Defendant in the
Circuit Court for the City of Charlottesville.
complaint

alleges

that

Defendant

was

Yeardley Love’s injuries and death.

the

Her amended

proximate

cause

of

The case in this court

concerns whether Plaintiff, an insurance company, is contractually
obligated to defend and to indemnify Defendant in the civil case.
Interested
(together

party
with

Andrew

Defendant

Murphy,
and

III,

Defendant’s

interested

party

step-father

Marta

Murphy,

“Respondents”), purchased a homeowners’ insurance policy (“the
Policy”) from Plaintiff for Respondents’ home in Maryland.
No. 60-3).

(ECF

The Policy includes broad indemnification provisions

stating that “[i]f a claim is made or a suit is brought against an
insured for damages because of bodily injury. . . 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[.]”

(Id.,

at 20). The Policy defines “occurrence” as “an accident, including
exposure to conditions, which results in. . . bodily injury[.]”
(Id., at 7).

The Policy excludes coverage for injury that is

“either expected or intended by the insured; or. . . the result of
2

willful and malicious acts of the insured[,]” (the “Exclusions”).
(Id., at 21).
After

Ms.

Love

filed

her

complaint

in

the

civil

case,

Defendant sought coverage from both Plaintiff, (ECF No. 1, ¶ 22),
and Chartis Property Casualty Company (“Chartis”), which insured
Mr. and Mrs. Murphy under two other policies (see Case No. DKC13-1479, ECF No. 1).

Chartis initially provided a defense for

Defendant under a reservation of rights.

(Id. ¶ 50).

On May 20,

2013, Chartis filed a declaratory judgment action in this court
(the “Chartis Case”) and on March 20, 2017, this court granted
Chartis’s motion for summary judgment and declared that Chartis
had no duty to defend or to indemnify Defendant in the civil case.
On November 1, 2013, Plaintiff initiated this suit, naming
Respondents and Ms. Love as interested parties and seeking a
declaratory judgment that it was not required to defend or to
indemnify Defendant in the civil case under the Policy.

On

December 9, 2016, after a stay pending Defendant’s direct appeal
in the criminal case and the lifting of the stay upon Defendant’s
exhaustion of all direct appeals in his criminal proceedings,
Plaintiff filed a motion for summary judgment and argued that both
the

Exclusions

cooperate

with

Plaintiff’s investigation provided bases to deny coverage.

(ECF

No. 23).

and

Defendant’s

failure

to

After full briefing and a hearing, the court denied

Plaintiff’s motion for summary judgment and concluded that genuine
3

disputes

about

material

facts

existed

regarding

whether

the

intentional acts exclusion applied and whether Defendant’s failure
to cooperate with Plaintiff’s investigation prejudiced Plaintiff.
(ECF No. 30).
On March 4, 2019, after Ms. Love unsuccessfully appealed this
court’s decision in the Chartis Case and unsuccessfully petitioned
for en banc review, Plaintiff filed an amended complaint.
No. 49).

(ECF

Plaintiff explains that Ms. Love “non-suited” the civil

case in May 2018 and “re-initiated” the action in December 2018.
(Id., at 3 ¶ 12).

Plaintiff additionally explains that “[a] non-

suit is a procedure permitted in Virginia state court which allows
a [p]laintiff to dismiss the action and re-file the same action
within [six] months.”

(Id., at 4 n.1).

Plaintiff emphasizes that

Ms. Love’s re-filed complaint “removed any reference to negligence
and/or gross negligence and [her] claims are now limited to claims
of intentional and willful conduct and her only cause of action is
for assault and battery.” (Id., at 6 ¶ 25). The amended complaint
names Respondents as interested parties but does not name Ms. Love
as an interested party.
December

2018,

the

(Id., at 1).

Love

family

has

Plaintiff explains: “As of
taken

the

position

that

[because] it has limited its civil claims against [Defendant] to
[a]ssault and [b]attery, it no longer challenges [Plaintiff’s]
position on insurance coverage. . . [and] has withdrawn its

4

participation in this declaratory proceeding.”

(ECF No. 60-1, at

3 ¶ 4).
On April 1, 2019, Respondents filed an answer and counterclaim
to Plaintiff’s amended complaint.
2019, Plaintiff answered.

(ECF No. 52).

(ECF No. 55).

Plaintiff filed a motion for summary judgment.

On April 22,

On May 31, 2019,
(ECF No. 60).

On

July 19, 2019, Respondents responded and stated: “Due to a number
of factors, Respondents have decided to take no position on the
[m]otion.

Respondents respectfully defer to the [c]ourt to rule

on the [m]otion as it sees fit.”
2019, Plaintiff replied.
II.

(ECF No. 64, at 1).

On July 29,

(ECF No. 65).

Standard of Review
Summary judgment will be granted only if “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); see Celotex

Corp. v. Catrett, 477 U.S. 317, 322 (1986); Anderson v. Liberty
Lobby, Inc., 477 U.S. 242, 250 (1986).

To prevail on a motion for

summary judgment, the moving party generally bears the burden of
showing that there is no genuine dispute as to any material fact.
Liberty Lobby, 477 U.S. at 248–50.

A dispute about a material

fact is genuine “if the evidence is such that a reasonable jury
could return a verdict for the nonmoving party.”

Id. at 249.

In

undertaking this inquiry, a court must view the facts and the
reasonable inferences drawn therefrom “in the light most favorable
5

to the party opposing the motion,” Matsushita Elec. Indus. v.
Zenith Radio Corp., 475 U.S. 574, 587 (1986) (quoting United States
v. Diebold, Inc., 369 U.S. 654, 655 (1962)); see also EEOC v. Navy
Fed. Credit Union, 424 F.3d 397, 405 (4th Cir. 2005), but a “party
cannot create a genuine dispute of material fact through mere
speculation or compilation of inferences,” Shina v. Shalala, 166
F.Supp.2d 373, 375 (D.Md. 2001) (citation omitted).
III. Applicable Law
In

diversity

actions,

a

district

court

applies

the

substantive law and choice of law rules of the state in which the
court sits.

Padco Advisors, Inc. v. Omdahl, 179 F.Supp.2d 600,

605 (D.Md. 2002) (citing Erie R.R. Co. v. Tompkins, 304 U.S. 64
(1938)).

In contract claims, Maryland applies the doctrine of lex

loci contractus, meaning the law of the place where the contract
was made applies.
(1992).

Allstate Ins. Co. v. Hart, 327 Md. 526, 529

“The locus contractus is the place where the last act is

performed which makes an agreement a binding contract.”

Grain

Dealers Mut. Ins. Co. v. Van Buskirk, 241 Md. 58, 65-66 (1965).
In an insurance contract, the delivery of the policy and the
payment of the premiums constitute these “last acts.” Id. (citing
Sun Ins. Office, Ltd. v. Mallick, 160 Md. 71, 81 (1931)). Although
it

appears

that

the

Policy

was

addressed

to

Mr.

Murphy

in

California, (ECF No. 60-3, at 1), Plaintiff contends that it was
delivered to the Murphys at their Maryland address and that
6

Maryland substantive law applies to the dispute (ECF No. 60-1, at
7-8).

Plaintiff argues in the alternative that California law

would apply Maryland law because the property insured was in
Maryland.

(Id., at 8).

Ms. Love and Respondents did not brief

the pending motion. Previously, they did not dispute that Maryland
substantive law was applicable.

(ECF No. 30, at 8).

Maryland law

does not, however, govern procedural rules in this court, even
when jurisdiction is based on diversity.
IV.

Declaratory Judgment While State Action is Pending
“Federal standards guide the inquiry as to the propriety of

declaratory relief in federal courts, even when the case is under
the court’s diversity jurisdiction.”

White v. Nat’l Union Fire

Ins. Co., 913 F.2d 165, 167 (4th Cir. 1990).

Under federal law,

district courts have “some measure of discretion [as to whether]
to entertain a declaratory judgment action that is otherwise
properly within its jurisdiction.” Nautilus Ins. Co. v. Winchester
Homes, Inc., 15 F.3d 371, 375 (4th Cir. 1994).

The United States

Court of Appeals for the Fourth Circuit has held that district
courts should not entertain a declaratory judgment action during
the pendency of a related state proceeding “when the result would
be to ‘try a controversy by piecemeal, or to try particular issues
without settling the entire controversy.’”2

2

Mitcheson v. Harris,

The Fourth Circuit recently questioned the existence of
federal jurisdiction to hear duty to indemnify cases prior to the
7

955 F.2d 235, 239 (4th Cir. 1992) (quoting Aetna Cas. & Sur. Co.
v. Quarles, 92 F.2d 321, 325 (4th Cir. 1937)).

A court must

consider four factors in deciding whether to make a declaratory
judgment in such a case:
(i) the strength of the state’s interest in
having the issues raised in the federal
declaratory action decided in the state
courts; (ii) whether the issues raised in the
federal action can more efficiently be
resolved in the court in which the state
action is pending; (iii) whether permitting
the federal action to go forward would result
in unnecessary “entanglement” between the
federal and state court systems, because of
the presence of “overlapping issues of fact or
law[;]”[] and (iv) whether the declaratory
judgment action is being used merely as a
device for “procedural fencing.”
Myles Lumber Co. v. CNA Fin. Corp., 233 F.3d 821, 824 (4th Cir.
2000) (quoting Nautilus, 15 F.3d at 377).

The court previously

determination of liability and suggested that such cases present
justiciability concerns because the alleged injury – that the
insurer might have to guarantee a future judgment – “is of a
hypothetical and contingent nature: the injury may or may not occur
depending on the outcome of the state lawsuit.” Trustgard Ins.
The court
Co. v. Collins, 942 F.3d 195, 200 (4th Cir. 2019).
“distinguished duty-to-defend cases that addressed who was
required to pay the costs of defending a suit prior to judgment.”
Id. The court concluded that “suits about the duty to indemnify
– unlike the duty-to-defend suits – would ordinarily be advisory
when the insured’s liability remains undetermined.” Id. After
highlighting the justiciability concerns, the Fourth Circuit
stated that it “need not resolve this constitutional question
today[]” and resolved the case on another ground.
Id. at 201.
This case involves both the duty to defend and the duty to
indemnify (and the duty to defend addresses who is required to pay
the costs of defending the suit). The Trustgard concerns are thus
inapplicable here.
8

weighed all four factors and determined that proceeding with this
declaratory judgment action was appropriate.

(ECF No. 30, at 8–

12).
V.

Analysis
In Maryland, insurance policies are to be construed pursuant

to “ordinary principles of contract interpretation.”

Megonnell v.

United Servs. Auto. Ass’n, 368 Md. 633, 655 (2002).

Thus, the

words used in an insurance policy should be given “their usual,
ordinary, and accepted meaning” – i.e., the “meaning a reasonably
prudent layperson would attach to the term.”

Bausch & Lomb Inc.

v. Utica Mut. Ins. Co., 330 Md. 758, 779 (1993).

Where the

provisions of an insurance policy are unambiguous, the meaning of
the terms is determined by the court as a matter of law.

Cole v.

State Farm Mut. Ins. Co., 359 Md. 298, 305 (2000).
Under

Maryland

law,

the

insurer’s

duty

to

defend

is

a

“contractual duty arising out of the terms of a liability insurance
policy” and is “broader than the duty to indemnify.”

Litz v. State

Farm Fire and Cas. Co., 346 Md. 217, 225 (1997).

Whereas the

insurer’s duty to indemnify only attaches upon liability, “[a]n
insurance company has a duty to defend its insured for all claims
that are potentially covered under the policy.”

Cowan Sys. v.

Harleysville Mut. Ins. Co., 457 F.3d 368, 372 (4th Cir. 2006)
(citing Walk v. Hartford Cas. Ins. Co., 382 Md. 1 (2004).

Even

where an insurer’s duty to defend against a suit is based on its
9

potential liability in that suit, the duty to defend is distinct
from the duty to indemnify.

Walk, 382 Md. at 15.

In determining whether a liability
insurer has a duty to provide its insured with
a defense in a tort suit, two types of
questions ordinarily must be answered: (1)
what is the coverage and what are the defenses
under the terms and requirements of the
insurance policy? (2) do the allegations in
the tort action potentially bring the tort
claim within the policy’s coverage? The first
question focuses upon the language and
requirements of the policy, and the second
question focuses upon the allegations of the
tort suit.
St. Paul Fire & Marine Ins. Co. v. Pryseski, 292 Md. 187, 193
(1981).

Because the duty to defend is a “broader” duty, Walk, 382

Md. at 15, if there is any doubt about “whether or not the
allegations of a complaint against the insured state a cause of
action within the coverage of a liability policy sufficient to
compel the insurer to defend the action, such doubt will be
resolved in [the] insured’s favor.”

Aetna Cas. & Sur. Co. v.

Cochran, 337 Md. 98, 107 (1995) (quoting U.S. Fid. & Guar. Co. v.
Nat’l Paving and Contracting Co., 228 Md. 40, 54 (1962)).
The Policy’s personal liability coverage provision states:
“If a claim is made or a suit is brought against an insured for
damages because of bodily injury. . . 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[.]”
10

(ECF No. 60-

3, at 20).

The Policy defines “occurrence” as “an accident,

including exposure to conditions, which results in. . . bodily
injury[.]” (Id., at 7).

The Policy does not define “accident.”

The Policy excludes coverage for bodily injury which is either
expected or intended by the insured, or which is the result of
willful and malicious acts of the insured.

(Id., at 21).

Ms. Love’s amended complaint states one cause of action for
assault and battery.3 (ECF No. 60-4, at 3–4 ¶¶ 16–22). The amended
complaint narrows the civil case by dropping the negligence counts.
(Compare ECF No. 60-4 with ECF No. 23-5).

The narrowing of the

civil case also refocuses this declaratory judgment action.

While

the basic facts have not changed, the coverage analysis is clearer
and simpler.
Plaintiff contends that there is no duty to defend or duty to
indemnify because the Policy provides coverage for bodily injury
caused by an accident and the civil case alleges “a non-accidental
incident – specifically an assault and battery.”

(ECF No. 60, at

4 ¶ 10; see also ECF No. 60-1, at 14–18; ECF No. 65, at 4–5).
Additionally,

Plaintiff

contends

3

that

the

intentional

acts

The amended complaint identifies “punitive damages” as a
second count. (ECF No. 60-4, at 4–5 ¶¶ 23-24). Plaintiff explains
that Ms. Love’s counsel recognizes that punitive damages is not a
separate cause of action and lists punitive damages as a separate
count “to put Defendant on notice of Plaintiff’s intent to seek
punitive damages.” (ECF No. 60, at 3 n.1).
11

exclusion applies.4

(ECF No. 60, at 4–5 ¶ 10; ECF No. 60-1, at

18–22).
Plaintiff cites the dictionary definition of accident and two
Court of Appeals of Maryland cases, State Farm Mut. Auto Ins. Co.
v. Treas, 254 Md. 615 (1969) and Harleysville Mut. Cas. Co. v.
Harris & Brooks, Inc., 248 Md. 148 (1967), to support its argument
that the Policy only covers claims or lawsuits arising out of
accidents.

(ECF No. 60–1, at 14–18).

Plaintiff contends that

4

Plaintiff limits its motion to these issues. (ECF No. 60,
at 2 ¶ 3).
Plaintiff does not seek summary judgment on other
potential coverage issues, namely that Defendant does not qualify
as an insured and that Defendant breached the cooperation clause.
(Id.).
Plaintiff’s amended complaint seeks a declaration that it
does not have a duty to defend or indemnify Defendant, but
specifically contends that the lack of insurance coverage is due
to Defendant’s breach of the duty to cooperate and the
applicability of the intentional acts exclusion. As noted above,
the motion for summary judgment argues that assault and battery is
not an “accident” and does not constitute an “occurrence” so as to
trigger coverage under the Policy. It is at least arguable that
Plaintiff is raising an issue not encompassed by the pleadings.
Fed.R.Civ.P. 15 governs amendments, and Rule 15(b)(2) provides
that an issue tried by implied or express consent is treated as if
raised in the pleadings. There is a circuit split as to whether
that Rule applies at the summary judgment stage, although the
Fourth Circuit has indicated that, in some circumstances, a
district court may recognize and allow a constructive amendment on
summary judgment. Feldman v. Pro Football, Inc., 419 Fed.Appx.
381, at * 7 (4th Cir. 2011) (citing People for the Ethical Treatment
of Animals v. Doughney, 263 F.3d 359, 367 (4th Cir. 2001).
Defendant has not objected to consideration of this issue, nor has
he defended against the claim. To avoid any concern, the court
construes Plaintiff’s motion as including a motion for leave to
amend, which is granted.
12

these cases require courts to apply an objective standard to
determine

“whether

a

given

occurrence

is

accidental

or

intentional” and to conclude that a given occurrence is not
accidental when “a reasonable person in the shoes of the insured
would foresee the potential results of the insured’s actions.”
(Id.).

Plaintiff misunderstands these cases for at least two

reasons.

First, under some circumstances, a subjective standard

applies.

Second, these cases involved negligence claims, not

intentional tort claims.
Since the Court of Appeals of Maryland decided Harleysville
in 1967 and Treas in 1969, it has had occasion to revisit those
opinions.

Critically, in Sheets v. Brethren Mut. Ins. Co., 342

Md. 634 (1996), the Court of Appeals discussed previous cases,
including

Harleysville

and

negligent

acts

insured

by

an

Treas,

that

considered

constituted

“whether

“accidents”

under

liability insurance policies[]” and clarified that a subjective
standard applies to the inquiry.

342 Md. at 650–654.

Sheets held

that “when a negligent act causes damage that is unforeseen or
unexpected by the insured, the act is an ‘accident’ under a general
liability policy.”
Despite

Id. at 652.

Plaintiff’s

confusion

regarding

the

case

law,

Plaintiff is correct that it does not owe a duty to defend or
indemnify Defendant.

Ms. Love’s amended complaint does not allege

that Defendant acted negligently; it alleges the intentional tort
13

of assault and battery.5

(ECF No. 60-4, at 3–4 ¶¶ 16–22).

Sheets

recognized that the insurer had no duty to defend against a claim
of “intentional misrepresentation, as the terms of the policy
clearly indicate that there is no duty to defend or indemnify
against intentional torts.” 342 Md. at 637 n. 1; see also Kaufmann
v. Travelers Cos., Inc., No. 09-cv-0171-DKC, 2010 WL 889791 (D.Md.
Mar. 5, 2010).6

There is no “accident” in the assault and battery

claim, because it alleges an intentional tort.

Therefore, it

cannot be covered as an “occurrence.”
Two cases, Lincoln Nat. Life Ins. Co. v. Evans, 943 F.Supp.
564 (D.Md. 1996) and Cole v. State Farm Mut. Ins. Co., 359 Md. 298
(2000), warrant brief discussion.

In each, the court determined

that a voluntary act (in Lincoln, the setting fire to the bed of
the insured victim and in Cole, the shooting of the insured victim)
may constitute an “accident” for liability insurance purposes.
Lincoln, 943 F.Supp. at 571 (“The record in this case, and the

5

There is no question that assault and battery is an
intentional tort. See, e.g., Lititz Mut. Ins. Co. v. Bell, 352
Md. 782, 793-795 (1999) (discussing common law battery); Johnson
v. Valu Food, Inc., 132 Md.App. 118, 126 (Md.App. 2000) (discussing
battery under Maryland law); White Pine Ins. Co. v. Taylor, 233
Md.App. 479, 502 (Md.App. 2017) (discussing common law assault and
battery); Mayr v. Osborne, 293 Va. 74, 81 (Va. 2017) (noting that
battery under Virginia law is “exclusively an intentional tort.”)
6

In addressing the meaning of “accident” in the Sheets
policy, the court noted that the policy “also excludes from
coverage property damage ‘expected or intended from the standpoint of the ‘insured.’’”
Sheets, 342 Md. at 646.
The same
exclusion appears in the policy in this case.
14

applicable case law causes this [c]ourt to conclude that reasonable
minds could differ as to whether the death of [the victim] was
‘accidental.’”); Cole, 359 Md. at 318 (“We hold, under the facts
of this case, that [the victim’s] death was the direct result of
an ‘accident’ because her shooting was an unusual and unforeseen
event when viewed from her perspective as the insured victim.”).
Cole noted that the Court of Appeals of Maryland “has not been
faced with the question of whether an intentional tort may be
considered an ‘accident’ as that term is used in accidental death
insurance coverage.”

Id. at 312.

for

events

analyzing

“the

of

Cole and Lincoln provide a test
an

intentional

tort

from

the

perspective of an insured who is also the victim of the intentional
tort.”

Id. at 315.

Crucially, both courts “define[d] ‘accident’

from the point of view of the insured.”
Lincoln, the insured was the victim.

Id.

In both Cole and

That is not the case here.

Here, the insured is the perpetrator of the alleged intentional
tort.
be

Cole explicitly stated that an intentional tort “hardly can

called

tortfeasor.

an

accident”
359

distinguishable.

Md.

when

at

standing

307.

Cole

in
and

the

shoes

Lincoln

of

are

the
thus

The assault and battery claim in this case

alleges an intentional tort and cannot constitute an “accident”
giving rise to a duty to defend or to indemnify.
Given

this

conclusion,

it

is

not

necessary

to

discuss

separately the applicability vel non of the exclusion, or the
15

counterclaim.

State Farm is entitled to a declaration that it

owes no duty to defend or to indemnify arising from the civil case.
VI.

Conclusion
For the foregoing reasons, the motion for summary judgment

filed by Plaintiff will be granted.

A separate order will follow.

/s/
DEBORAH K. CHASANOW
United States District Judge

16