American National Property and Casualty Company v. Clendenen et al
Filing
56
MEMORANDUM OPINION AND ORDER FOLLOWING STATUS CONFERENCE. Signed by District Judge Irene M. Keeley on 3/1/2016. (Copy counsel of record)(jmm)
IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF WEST VIRGINIA
AMERICAN NATIONAL PROPERTY AND
CASUALTY COMPANY,
Plaintiff,
v.
//
CIVIL ACTION NO. 1:14CV155
LEAD CASE
(Judge Keeley)
TARA CLENDENEN, JAMES CLENDENEN,
MARY A. NEESE Administratrix and
Personal Representative of the Estate
of Skylar Neese, Deceased, DAVID
NEESE, and MARY A. NEESE, individually,
Defendants.
and
ERIE INSURANCE PROPERTY &
CASUALTY COMPANY,
Plaintiff,
v.
//
CIVIL ACTION NO. 1:14CV172
(Judge Keeley)
MARY A. NEESE, Individually and as
Administratrix of the Estate of Skylar
Neese, DAVID NEESE, SHELIA EDDY,
RACHEL SHOAF, TARA CLENDENEN, and
PATRICIA SHOAF,
Defendants.
MEMORANDUM OPINION AND ORDER FOLLOWING STATUS CONFERENCE
Pending before the Court in this declaratory judgment action
are several cross-motions for summary judgment.
American
National
Property
and
Casualty
The plaintiffs,
Company
(“American
National”) and Erie Insurance Property & Casualty (“Erie”), seek a
AMERICAN NAT’L V. CLENDENEN
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declaration that defendants Tara Clendenen (“Mrs. Clendenen”) and
Patricia
Shoaf
(“Mrs.
Shoaf”)
are
not
insureds
under
their
respective homeowner’s policies, or that coverage is excluded. For
their part, the defendants seek a declaration that Mrs. Clendenen
and Mrs. Shoaf are entitled to a defense and indemnity under the
homeowner’s policies in an underlying state court action.
During
a status conference held on February 23, 2016, the Court ruled in
favor of the defendants on the insurability question.
This Memorandum Opinion and Order addresses the following
issues:
(1) Whether Skylar Neese’s death was an “occurrence” from
the perspective of Mrs. Clendenen and Mrs. Shoaf; (2) whether Mrs.
Shoaf and Rachel Shoaf are entitled to coverage under the personal
injury portion of the Erie homeowner’s policy; and, (3) whether
either
the
severability
clauses
homeowner’s policies are ambiguous.
or
the
exclusions
in
the
The Court intends to certify
the exclusion and severability questions to the Supreme Court of
Appeals of West Virginia (“the Supreme Court of Appeals”) by
separate order.
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FACTUAL BACKGROUND1
In the spring and summer of 2012, teenagers Skylar Neese
(“Skylar”), Shelia Eddy (“Eddy”), and Rachel Shoaf (“Shoaf”) began
to drift apart (Dkt. No. 1-5 at 6).2
The girls had been close
friends for a number of years, but Eddy and Shoaf wanted to
terminate their friendship with Skylar.
Id.
Eddy and Shoaf were
fearful, however, that Skylar would divulge sensitive, embarrassing
information about them to others.
Id.
On July 5, 2012, after finishing her shift at work, Skylar
sneaked out of her home and met Eddy and Shoaf.
Clendenen’s
2006
Toyota
Camry,
the
girls
Id.
Driving Mrs.
traveled
from
West
Virginia to a “rural, sparsely populated area” outside of Brave,
Pennsylvania, where they parked, exited the vehicle, and began
smoking marijuana.
Id. at 6, 10.
When Skylar turned her back, Eddy and Shoaf armed themselves
with kitchen knives that they had taped to their torsos.
Id. at 7.
Eddy and Shoaf then “violently and repeatedly” stabbed Skylar in
the neck and back, killing her.
Id.
Skylar’s body was not
1
Unless otherwise noted, all citations refer to documents
filed in the lead case, 1:14CV155.
2
Mrs. Clendenen is Eddy’s mother, and Mrs. Shoaf is Shoaf’s
mother.
3
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discovered until January, 2013, more than six months after her
disappearance.
Id. at 8.
Shoaf pleaded guilty to second degree
murder, and was sentenced to thirty years in prison (Dkt. No. 1 at
3).
Eddy pleaded guilty to first degree murder, and was sentenced
to life in prison with mercy.
Id.
On June 4, 2014, David and Mary Neese (“Mr. and Mrs. Neese”),
Skylar’s parents, filed suit both individually and on behalf of
Skylar’s estate in the Circuit Court of Monongalia County, West
Virginia (“the state court complaint”) (Dkt. No. 1-5 at 3).
The
Neeses sued Eddy and Shoaf, as well as Mrs. Clendenen and Mrs.
Shoaf. Id.
at 7-9.
Their state court complaint alleged three counts. Id.
In Count I, titled “Murder,” the Neeses seek compensatory
and punitive damages from Eddy and Shoaf.
Id. at 7-8.
In Count
II, Negligence/Reckless Concealment, the Neeses seek damages from
Eddy and Shoaf for their concealment of Skylar’s body. Id. at 8-9.
Finally, Count III, Negligent Supervision/Entrustment, alleges that
Mrs.
Clendenen
and
Mrs.
Shoaf,
as
parents,
guardians,
and
custodians of Eddy and Shoaf, “were negligent and careless in their
supervision and guidance of their daughters . . . .”
Id. at 9.
At the time of Skylar’s murder, American National insured Mrs.
Clendenen under an automobile policy and a homeowner’s policy (Dkt.
4
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No. 1 at 3).3
The American National automobile policy did not
cover Eddy’s 2006 Toyota Camry, which she drove on the night of the
murder.
Based on the homeowner’s policy, American National is
currently defending Mrs. Clendenen in the state court case under a
reservation of rights.
Id. at 4.
Similarly, Erie insured Mrs. Shoaf under an automobile policy
and a homeowner’s policy at the time of Skylar’s murder (Case No.
1:14CV172, Dkt. No. 1 at 2). It also provided an automobile policy
to Mrs. Clendenen that covered the 2006 Toyota Camry.
Id. at 2,
13. Erie denied a defense and indemnification to Shoaf, Eddy, Mrs.
Clendenen, and Mrs. Shoaf under the automobile policies, but is
currently defending Mrs. Shoaf under a reservation of rights
pursuant to the homeowner’s policy.
Id. at 4.
PROCEDURAL HISTORY
On September 12, 2014, American National filed suit in this
Court, seeking a declaratory judgment that Mrs. Clendenen is not
covered by the insurance policies, thereby obviating its duty to
defend or indemnify (Dkt. No. 1 at 8).
On October 16, 2014, Erie
filed suit, seeking a declaratory judgment that Shoaf, Eddy, Mrs.
3
Under the American National policies, James Clendenen, who
is Mrs. Clendenen’s husband and Eddy’s step-father, was the named
insured (Dkt. No. 1 at 3). The parties do not dispute that Mrs.
Clendenen and Eddy were also insured under the policy.
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Clendenen,
and
policies,
and
Mrs.
Shoaf
therefore
are
not
not
covered
entitled
by
to
the
a
insurance
defense
indemnification (Case No. 1:14CV172, Dkt. No. 1 at 18).
December
3,
2014,
the
Court
consolidated
the
two
cases
or
On
and
designated 1:14CV155 as the lead case (Dkt. No. 24).
On
March
9,
2015,
American
National
moved
for
summary
judgment, arguing that its automobile policy did not cover the
vehicle used on the night of Skylar’s murder (Dkt. No. 40 at 2-3).
As to its homeowner’s policy, it contends no coverage exists
because there was no “occurrence” within the meaning of the policy
and, even if there was an occurrence, the policy exclusions for
intentional or criminal acts preclude coverage.
Id. at 3.
Erie moved for summary judgment on March 9, 2015, arguing that
Mrs. Shoaf is not covered under its homeowner’s policy because
Skylar’s murder was not an “occurrence” (Dkt. No. 42 at 2).
As
does American National, Erie contends that, even if coverage
exists, the claims in the state court case fall within the policy’s
criminal or intentional act exclusions.
Id.
As to the automobile
policies, Erie alleges that no coverage exists because Skylar’s
murder did not arise out of the ownership, operation, maintenance,
use, loading, or unloading of a covered vehicle.
6
Id.
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On April 8, 2015, the Neeses filed a combined cross-motion for
partial summary judgment and opposition to American National and
Erie’s motions (Dkt. No. 45).4
They concede that Eddy and Shoaf
are not entitled to insurance coverage under any policy, and that
the automobile policies are inapplicable because Skylar’s murder
did not arise out of the use of a motor vehicle (Dkt. No. 46 at 34).
The Neeses, however, contend that Mrs. Clendenen and Mrs.
Shoaf are entitled to coverage under the homeowner’s policies for
the following reasons:
(1) Skylar’s death was an accident, and
thus, an occurrence, from the viewpoint of Mrs. Clendenen and Mrs.
Shoaf; and, (2) the criminal or intentional act exclusions in the
homeowner’s
policies
conflict
with
the
severability
clauses,
thereby creating an ambiguity that must be resolved in favor of the
defendants.
Id. at 8-10.
Mrs. Shoaf filed a combined cross-motion for summary judgment
and response on April 13, 2015 (Dkt. No. 48).5
She admits that
Erie owes her no coverage under her automobile policy, but contends
that coverage exists under her homeowner’s policy (Dkt. No. 49 at
4
On April 13, 2015, the Clendenens joined the Neeses’ crossmotion for summary judgment (Dkt. No. 47).
5
Rachel Shoaf adopted Mrs. Shoaf’s cross-motion and response
(Dkt. Nos. 50, 53).
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2). Mrs. Shoaf argues that she does not fall within the exclusions
in the policy, that the severability clause protects her from
exclusion, and that Erie owes her coverage under the personal
injury portion of her policy for various torts allegedly pleaded in
Id. at 2-5.
the state court case.
American National and Erie
filed their replies on May 1, 2015 (Dkt. Nos. 51, 52).
On February 23, 2016, the Court held a status conference in
the
case,
during
which
it
ruled
that
Skylar’s
death
was
an
“occurrence” within the meaning of the American National and Erie
policies.
This
Memorandum
Opinion
and
Order
discusses
the
reasoning behind that ruling, as well as other matters. By further
order, the Court intends to certify to the Supreme Court of Appeals
the case-dispositive question of whether the exclusions in both
policies
conflict
with
the
severability
provisions
of
these
policies.
LEGAL STANDARD
Summary
documents,
judgment
is
electronically
declarations,
stipulations
appropriate
stored
.
.
where
the
information,
.,
admissions,
“depositions,
affidavits
or
interrogatory
answers, or other materials” show that “there is no genuine dispute
as to any material fact and the movant is entitled to judgment as
8
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a matter of law.”
Fed R. Civ. P. 56(a), (c)(1)(A).
When ruling on
a motion for summary judgment, the Court reviews all the evidence
“in the light most favorable” to the nonmoving party.
Providence
Square Assocs., L.L.C. v. G.D.F., Inc., 211 F.3d 846, 850 (4th Cir.
2000).
The Court must avoid weighing the evidence or determining
the truth, and limit its inquiry solely to a determination of
whether genuine issues of triable fact exist.
Anderson v. Liberty
Lobby, Inc., 477 U.S. 242, 249 (1986).
The moving party bears the initial burden of informing the
Court
of
the
basis
for
the
motion
and
of
establishing
nonexistence of genuine issues of material fact.
Catrett, 477 U.S. 317, 323 (1986).
the
Celotex Corp. v.
Once the moving party has made
the necessary showing, the nonmoving party “must set forth specific
facts showing that there is a genuine issue for trial.”
Anderson,
477 U.S. at 256 (internal quotation marks and citation omitted).
The “mere existence of a scintilla of evidence” favoring the
nonmoving party will not prevent the entry of summary judgment; the
evidence
must
be
such
that
a
rational
reasonably find for the nonmoving party.
9
trier
of
fact
Id. at 248–52.
could
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ANALYSIS
As previously discussed, the parties have agreed that no
coverage exists under the three automobile policies. Additionally,
the Neeses and Clendenens concede that no coverage exists for
either Eddy or Shoaf.6
following issues:
The Court therefore will address the
(1) Was Skylar’s death an “occurrence” from the
perspective of Mrs. Clendenen and Mrs. Shoaf? (2) Are Mrs. Shoaf
and Rachel Shoaf entitled to coverage under the personal injury
portion of the Erie homeowner’s policy? and, (3) Are either the
severability clauses or the exclusions in the homeowner’s policies
ambiguous?
I.
Insurability
American National and Erie contend that the state court
complaint does not allege an “occurrence” that would trigger a duty
to defend and indemnify Mrs. Clendenen or Mrs. Shoaf because
Skylar’s death was not an accident (Dkt. No. 41 at 21-22; Dkt. No.
43 at 15).
The Neeses argue that the determination of whether an
incident is an accident, and therefore an occurrence, must be made
6
At the status conference, counsel for Mrs. Shoaf clarified
that the Shoafs believe coverage exists for Mrs. Shoaf and Rachel
Shoaf.
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from the viewpoint of the insureds, Mrs. Clendenen and Mrs. Shoaf
(Dkt. No. 46 at 16).
Mrs. Clendenen’s American National homeowner’s policy provides
that an “occurrence” is defined as “an accident, including exposure
to conditions,” which results in either bodily injury or property
damage during the policy period (Dkt. No. 1-3 at 8).
“Repeated or
continuous exposure to substantially the same general conditions is
considered to be one occurrence.”
Id.
Similarly, Mrs. Shoaf’s
Erie homeowner’s policy defines an occurrence as “an accident,
including continuous or repeated exposure to the same general
harmful conditions” (Dkt. No. 49-2 at 6).
The term “accident” is not defined in either policy.7
See
Columbia Cas. Co. v. Westfield Ins. Co., 617 S.E.2d 797, 799 (W.
Va. 2005) (giving the undefined term “accident” its normal meaning
in light of all the relevant circumstances).
When not defined in
the policy, an accident generally means “an unusual, unexpected and
unforeseen event,” a “chance event or event arising from unknown
causes.”
West Virginia Fire & Cas. Co. v. Stanley, 602 S.E. 2d
7
In this diversity action, state law controls the Court’s
construction of the insurance policy. See In re Nantahala Vill.,
Inc., 976 F.2d 876, 880-81 (W. Va. 1992).
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483, 492 (W. Va. 2004)(internal citations and quotation marks
omitted).
Importantly, when determining whether an occurrence was an
accident, the Court must give “primary consideration, relevance,
and weight” to the perspective or standpoint “of the insured whose
coverage under the policy is at issue.”
at 800-801.
Columbia Cas., 617 S.E.2d
In Columbia Casualty, the Supreme Court of Appeals
analyzed whether a county commission was entitled to coverage under
its liability insurance policy after two inmates committed suicide.
Id. at 798. The insurer declined to defend the commission, arguing
that the inmates’ deaths were not accidental, and therefore not
occurrences as defined by the policy.
Id.
The Supreme Court of
Appeals held that the inmates’ suicides were accidental from the
perspective
of
the
insured
commission,
thereby
“occurrences” within the meaning of the policy.
Here,
after
examining
the
coverage
making
them
Id. at 801.
question
from
the
perspective of Mrs. Clendenen and Mrs. Shoaf, the Court concludes
that Skylar’s death was an occurrence within the meaning of the
American National and Erie policies.
was intended by Eddy and Shoaf.
Skylar’s death indisputably
Yet, when taken from the Mrs.
Clendenen and Mrs. Shoaf’s perspectives, the facts in the state
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court complaint suggest that Skylar’s death was certainly unusual,
unexpected, and unforeseen.
See Stanley, 602 S.E. 2d at 492.
The state court complaint alleges that Mrs. Clendenen and Mrs.
Shoaf
were
“negligent
and
careless
guidance of their daughters.”
in
their
supervision
(Dkt. No. 1-5 at 9).
allegations include the following:
and
These
(1) that Mrs. Clendenen and
Mrs. Shoaf failed to monitor their daughters’ activities, behavior,
and
whereabouts;
(2)
that
they
“negligently
and
unwittingly”
provided “the instruments, weapons, opportunities, and means”
necessary to harm Skylar; (3) that they negligently and recklessly
“allowed and condoned their daughters’ use of marijuana”; and, (4)
that Mrs. Clendenen negligently allowed Eddy to use the 2006 Toyota
Camry on the night of the murder.
suggests
that
Mrs.
Clendenen
or
Id. at 10.
Mrs.
None of these facts
Shoaf
intentionally
or
knowingly assisted their daughters, or participated in Skylar’s
murder in any way.8
8
Such facts clearly would change the result here. See, e.g.,
Am. Modern Home Ins. Co. v. Corra, 671 S.E.2d 802, 806-07 (W. Va.
2008) (holding that a homeowner’s policy did not provide coverage
when the homeowner knowingly permitted an underage adult – who was
subsequently involved in an automobile accident resulting in two
deaths – to consume alcoholic beverages on the homeowner’s
property).
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The cases cited by the plaintiffs do not compel the opposite
conclusion.
In Smith v. Animal Urgent Care, Inc., 542 S.E.2d 827,
832 (W. Va. 2000), the Supreme Court of Appeals found no coverage
for a veterinary business because one employee’s sexual harassment
of another was not accidental. There, the Supreme Court of Appeals
focused
on
the
relationship
between
Animal
Urgent
Care,
the
employer, and one of its veterinarians, who was accused of sexually
harassing a fellow employee, before denying Animal Care coverage.
Id. at 829, 832.
In Columbia Casualty, however, which was decided
after Animal Urgent Care, the Supreme Court of Appeals examined the
accidental nature of the incident from the viewpoint of the insured
whose coverage was at issue, the county commission charged with
overseeing the jail.
For
all
of
the
617 S.E.2d at 801.
reasons
discussed,
when
taken
from
the
perspective of Mrs. Clendenen and Mrs. Shoaf, the Court CONCLUDES
that Skylar’s death was an occurrence within the meaning of the
American National and Erie homeowner’s policies.
II.
Personal Injury Torts
The Neeses and Clendenens concede that none of the policies
provides liability insurance coverage for Eddy or Shoaf (Dkt. No.
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45 at 3; Dkt. No. 47 at 2).9
Mrs. Shoaf, however, vigorously
argues that coverage for herself and her daughter should exist for
the
“specific
intentional
acts”
pleaded
in
the
state
court
complaint under the personal injury liability coverage portion of
the Erie homeowner’s policy (Dkt. No. 49 at 18). Shoaf has adopted
that argument by reference (Dkt. No. 50 at 2).
According to Mrs. Shoaf, certain allegations in Count II of
the state court complaint – which only names Eddy and Shoaf – “can
be
read”
to
state
claims
for
libel,
slander,
defamation
of
character, invasion of privacy, and wrongful detention (Dkt. No. 49
at
19-21).
She
contends
that
Count
III,
which
alleges
she
negligently allowed her daughter to commit tortious acts, permits
the Neeses to seek damages against her for the same intentional
torts alleged against her daughter.
Id. at 21.
The Erie homeowner’s policy provides coverage for personal
injuries (Dkt. No. 49-2 at 15).
It defines “personal injury” as
injury arising out of “libel, slander or defamation of character;
false
arrest,
wrongful
detention
or
imprisonment,
malicious
prosecution, racial or religious discrimination, wrongful entry or
9
The Clendenens adopted by reference the Neeses’ cross-motion
and memorandum of law (Dkt. No. 47 at 2). Eddy did not file a
response or cross-motion.
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eviction, invasion of privacy, or humiliation caused by any of
these.”
Id. at 6.
In Count II of the state court complaint, which is labeled
“Negligence/Reckless Concealment,” the Neeses allege that Eddy and
Shoaf “negligently and recklessly failed to disclose [Skylar’s]
whereabouts and provided false and misleading information regarding
[Skylar’s] disappearance . . .” (Dkt. No. 1-5 at 8).
According to Mrs. Shoaf, the allegation that Eddy and Shoaf
provided false and misleading information “presumably relate[s] to
numerous false reports . . . provided to investigators . . . .”
(Dkt.
No.
49
at
19).
Those
reports
“presumably”
include
“suggestions . . . relating to Skylar Neese’s character,” which
“would
be
consistent
with
libel,
slander,
or
defamation
of
character, all of which are covered under the [Erie policy] . . .
.”
Id. at 20.
Similarly, Mrs. Shoaf contends the factual allegation that
Eddy and Shoaf “provided false and misleading information” about
Skylar’s
disappearance
“can
fairly
be
read
to
be
providing
publicity that ‘unreasonably places another in a false light before
the public,’ in other words an invasion of privacy.” Id.
Finally,
Mrs. Shoaf alleges that the contentions in the complaint regarding
a plan to take Skylar to Pennsylvania for a purpose other than what
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she
intended
raise
imprisonment.
a
claim
of
wrongful
detention
or
false
Id. at 21.
Unsurprisingly, Erie argues that Mrs. Shoaf’s attempt to find
coverage
under
the
personal
injury
liability
portion
of
the
homeowner’s policy is “misguided” (Dkt. No. 52 at 20). It does not
contest that the enumerated intentional torts are included within
its policy’s definition of personal injury.
Id.
Rather, Erie
contends that “[e]ven a liberal reading of the complaint in the
underlying action” compels the conclusion that Count II is a
concealment claim, and not any of the torts mentioned by Mrs.
Shoaf.
Id.
The Court agrees.
“[A]n insurer’s duty to defend is tested by whether the
allegations in the plaintiff’s complaint are reasonably susceptible
of an interpretation that the claim may be covered by the terms of
the insurance policy.”
Aetna Cas. & Sur. Co. v. Pitrolo, 342
S.E.2d 156, 160 (W. Va. 1986).
The Court need not adjudicate the
underlying facts to make this determination.
S.E.2d at 490.
See Stanley, 602
The insurer has a duty to defend the insured “only
if the claim stated in the underlying complaint could, without
amendment, impose liability for risks the policy covers.”
State
Auto. Mut. Ins. Co. v. Alpha Eng’g Serv. Inc., 342 S.E.2d 876, 879
(W. Va. 2000).
Although West Virginia is a notice pleading state
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that requires complaints to be read liberally, “a plaintiff may not
fumble around searching for a meritorious claim within the elastic
boundaries of a barebones complaint . . . .”
State ex rel. McGraw
v. Scott Runyan Pontiac-Buick, Inc., 461 S.E.2d 516, 522 (W. Va.
1995)(citing Chaveriat v. Williams Pipe Line Co., 11 F.3d 1420,
1430 (7th Cir. 1993) (internal quotations omitted)).
After carefully comparing the state court complaint to Erie’s
homeowner’s policy, the Court concludes that the allegations in the
state
court
complaint
are
not
“reasonably
susceptible
of
an
interpretation that the claim may be covered by the terms of the
insurance policy,” as urged by Mrs. Shoaf.
Aetna, 342 S.E.2d at
160.
Simply put, the layers of “presumption” needed to transform
Mrs.
Shoaf’s
suppositions
into
meritorious
claims
belie
her
argument that Counts II and III of the state court complaint could
impose liability for the types of intentional torts cited.
The
Court therefore CONCLUDES that no personal injury coverage exists
under the Erie homeowner’s policy for Rachel Shoaf or Mrs. Shoaf
because the state court complaint does not contain any claims that
fall within the definition of personal injuries.
It further
CONCLUDES that neither policy provides coverage for Rachel Shoaf
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1:14CV155
1:14CV172
MEMORANDUM OPINION AND ORDER FOLLOWING STATUS CONFERENCE
and
Shelia
Eddy,
who
are
accused
of
committing
intentional,
criminal acts.10
III. Ambiguity
The Neeses and the Clendenens argue that the confluence of the
exclusionary and severability clauses in the homeowner’s policies
creates an ambiguity under West Virginia law (Dkt. No. 46 at 10;
Dkt. No. 47 at 3).
American National and Erie contend that their
policy provisions unambiguously exclude coverage for intentional
and criminal acts, notwithstanding the severability clause (Dkt.
No. 41 at 14; Dkt. No. 43 at 16).
American National’s homeowner’s policy excludes coverage for
bodily injury or property damage “which is expected or intended by
any insured even if the actual injury or damage is different than
expected or intended . . . .” (Dkt. No. 1-4 at 5).
unambiguously
excludes
any
bodily
injury
or
property
It also
damage
“arising out of any criminal act committed by or at the direction
of any insured . . . .”
Id. at 6.
The severability of insurance
clause provides that “[t]his insurance applies separately to each
insured.”
Id. at 8.
10
As previously noted, the Clendenens and Neeses admit that
no coverage exists under either policy for Eddy or Shoaf.
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Similarly, Erie’s policy excludes from coverage “[b]odily
injury, property damage, or personal injury expected or intended by
anyone we protect . . . .” (emphasis in original) (Dkt. No. 49-2 at
16).11
It also excludes “[p]ersonal injury arising out of willful
violation of a law or ordinance by anyone we protect.” (emphasis in
original) (Dkt. No. 49-2 at 17).
The severability of insurance
clause provides that “[t]his insurance applies separately to anyone
we protect.” (emphasis in original) (Dkt. No. 49-2 at 18).
When interpreting an insurance policy, the Court must give the
policy language its plain, ordinary meaning.
Stanley, 602 S.E.2d
at 489 (quoting Syl. Pt. 1, Soliva v. Shand, Morahan & Co., Inc.,
345 S.E.2d 33 (1986) (internal quotation marks omitted)). When the
policy language is clear and unambiguous, it is “not subject to
judicial construction or interpretation.”
Id. (quoting Syl.,
Keffer v. Prudential Ins. Co., 172 S.E.2d 714 (1970) (internal
quotation marks omitted)). Rather, the Court will give full effect
to the plain meaning intended.
ambiguous
if
the
language
“is
11
Id.
A policy provision is
reasonably
susceptible
of
two
Anyone we protect is defined, in relevant part, as follows:
“anyone we protect means you and the following members of your
household: 1. relatives and wards; 2. other persons in the care of
anyone we protect . . .” (Dkt. No. 49-2 at 5).
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ERIE V. NEESE
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1:14CV172
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different meanings or is of such doubtful meaning that reasonable
minds might be uncertain or disagree as to its meaning.”
Id.
(quoting Syl. Pt. 1, Prete v. Merch. Prop. Ins. Co., 223 S.E.2d 441
(1976) (internal quotation marks omitted)).
In West Virginia, ambiguous terms in insurance contracts are
to be strictly construed against the insurer and in favor of the
insured.
Id. at 490 (quoting Syl. Pt. 4, Nat’l Mut. Ins. Co. v.
McMahon & Sons, 356 S.E.2d 488 (1987), overruled on other grounds
by Potesta v. U.S. Fid. & Guar. Co., 504 S.E.2d 135 (1998)
(internal quotation marks omitted)).
“The mere fact that parties
do not agree to the construction of a contract does not render it
ambiguous.
The question as to whether a contract is ambiguous is
a question of law to be determined by the court.”
Am. States Ins.
Co. v. Surbaugh, 745 S.E.2d 179, 186 (W. Va. 2013).
The Court, like the majority of courts to have considered this
issue, finds that the exclusions in both homeowner’s policies are
unambiguous. See Chacon v. Am. Family Mut. Ins. Co., 788 P.2d 748,
751 (Colo. 1990) (finding the exclusion for intentional acts
unambiguous). Similarly, the severability clauses are unambiguous.
See EMCASCO Ins. Co. v. Diedrich, 394 F.3d 1091, 1097 (8th Cir.
2005) (“[T]he definition of an ‘insured’ and the intentional acts
exclusion
in
the
[homeowner’s
policy]
21
is
unambiguous.
The
AMERICAN NAT’L V. CLENDENEN
ERIE V. NEESE
1:14CV155
1:14CV172
MEMORANDUM OPINION AND ORDER FOLLOWING STATUS CONFERENCE
severability clause does not create any ambiguity”).
Indeed, the
parties do not contend that the exclusions and severability clauses
are ambiguous when taken by themselves.
Rather, they argue that
ambiguity results when one applies the severability clause to the
exclusions.
When the Court considers the language of both the exclusions
and the severability clauses, it cannot fairly say that the result
“is reasonably susceptible of two different meanings or is of such
doubtful meaning that reasonable minds might be uncertain or
disagree as to its meaning.”
Stanley, 602 S.E.2d at 489 (quoting
Syl. Pt. 1, Prete, 223 S.E.2d at 441); see also Minkler v. Safeco
Ins. Co. of Am., 232 P.3d 612, 625 (Cal. 2010) (recognizing the
majority rule that a severability clause does not alter the
“collective application of an exclusion”).
That the parties
disagree as to which of the two clauses should prevail does not
render the policy ambiguous.
See Surbaugh, 745 S.E.2d at 186.
Rather, the case-dispositive issue is which clause in the
insurance policies should prevail over the other.
See Keffer v.
Prudential Ins. Co. of Am., 172 S.E.2d 714, 716 (W. Va. 1970)
(explaining the general rule that the Court should not construe an
unambiguous insurance policy).
This question of public policy
should not be decided in the first instance by this Court sitting
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ERIE V. NEESE
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in diversity.
See Am. Ins. Co. v. South Carolina Ins. Co., 359
F.2d 432, 432 (4th Cir. 1966) (per curiam) (“Being a diversity
action, state law controls and our decision will have limited
precedential value.
Since the case is one of first impression, we
refrain from writing a full opinion in deference to the state court
which must establish the controlling law”).
Given the Court’s finding that the language of the policies is
unambiguous, the heartland issues are as follows:
(1) Whether,
under West Virginia public policy and the rules of contract
construction, the exclusions in the policies should preclude Mrs.
Clendenen and Mrs. Shoaf, who admittedly did not murder Skylar,
from obtaining coverage based on the actions of their daughters,
who were also insured under the policies; and, (2) whether the
severability clauses in the policies require American National and
Erie to apply the exclusions separately against each insured, based
on that insured’s own actions.
The Court intends to certify these
questions to the Supreme Court of Appeals by separate order.
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ERIE V. NEESE
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1:14CV172
MEMORANDUM OPINION AND ORDER FOLLOWING STATUS CONFERENCE
CONCLUSION
Therefore, for the reasons stated, the Court CONCLUDES as
follows:
1.
Skylar’s death was an “occurrence” from the perspective
of Mrs. Clendenen and Mrs. Shoaf;
2.
Neither Mrs. Shoaf nor Rachel Shoaf is entitled to
coverage under the personal injury portion of the Erie
homeowner’s policy;
3.
Neither the severability clauses nor the exclusions in
the homeowner’s policies are ambiguous;
4.
Neither Eddy nor Shoaf is entitled to coverage under any
of the insurance policies in the case; and,
5.
The defendants are not entitled to coverage under any of
the automobile insurance policies.
It is so ORDERED.
The Court
DIRECTS
the Clerk to transmit copies of this
Memorandum Opinion and Order to counsel of record.
DATED:
March 1, 2016.
/s/ Irene M. Keeley
IRENE M. KEELEY
UNITED STATES DISTRICT JUDGE
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