Chacon v. American Family Mutual Insurance Company

(indicia III.A., 7, III.A., part above, part thiness. See above ing. note See 804(b)(5)); reliability under see CRE also above. Workman, 140, v. 860 F.2d States United testimony Story’s admission of Mrs. — denied, (4th Cir.1988), U.S. 144-45 cert. rea- plain error for the additional was not 1529, -, L.Ed.2d 834 109 S.Ct. the substantial amount of evidence son that (1989); People, v. Nunez defen- defendant’s motive and the (Colo.1987).8 testimony Story’s guilt made Mrs. dant’s Jensen, at 1253- 747 P.2d cumulative. See of the court of III.B., part above. see reversed.

V.

Finally, the ad we consider whether into evidénce of Mrs. Paddock’s

mission Story’s statements violated the

and Mrs. right to confront

defendant’s constitutional Roberts, witnesses.

adverse Ohio 56, 66, 100 65 L.Ed.2d

U.S. S.Ct. CHACON, Chacon, Supreme held that Court Reyes T. Sarah present hearsay is not declarant through “when his next Nicholas trial, the Confron Petitioners, for cross-examination at friend, Reyes Chacon, normally requires showing Clause tation then, Even his that he is unavailable. FAMILY MUTUAL INSUR- AMERICAN if it only bears statement admissible ” COMPANY, corpo- ANCE Wisconsin reliability.’ adequate ‘indicia of ration, licensed to do business “[rjeliability noted that can be Court Colorado, Respondent. State ferred more in a case where the without firmly hear falls within a rooted evidence No. 88SC330. say exception.” Id. Court Colorado, Supreme Court of cases must be ex the evidence “[i]n En Banc. cluded, showing partic at least absent guarantees ularized of trustworthiness.” March 1990. (footnote omitted). adopted the Su We Rehearing April Denied two-part preme Court’s Ohio v. Roberts Dement, analysis People (Colo.1983). The trial court

680-81 two-part from Roberts and

apply the test the admis

Dement to determine whether constitutionally testimony

sion of the

permissible. the state- conclude in this case

We appli- two-part inquiry

ments satisfied ques- to federal confrontation clause

cable

tions. Mrs. Walker was unavailable testimony re- testify, hearsay and the her corroborated

peating declarations was guarantees

by particularized of trustwor- doubt). yond Here the evidence of also conclude error the trial court a reasonable 8. We admitting hearsay guilt state- have made in and the defendant’s the defendant's motive it ments was not reversible error because was overwhelming. possibility There is no beyond a See Gra- harmless reasonable doubt. Story’s testimony Paddock’s and Mrs. sub- (if (Colo.1985) People, ham jury’s stantially verdict or influenced the affect- dimension, an error is constitutional reversal Id. at overall fairness of the trial. ed the required unless the error was harmless be- Family Compa- American Mutual Insurance (American Family). We ny granted certio- whether rari consider a homeowner’s clause, which contains insured, to an based upon the actions of a co-insured. The court that, appeals pursuant poli- held exclusion, cy’s inten- “intentional act” precluded any insured recov- tional act of ery by all insureds. Chacon v. American Family Mutual (Colo.App.1988). We affirm. This case arose as result of the van- elementary dalism an school the Cha- cons’ 10-year-old Nicholas boy, damages and another which caused $6,000. in- excess of The school district’s the school for the surer reimbursed district damages It then filed suit incurred. pursuant against to section the Chacons 13-21-107(1), al- 6A C.R.S. damages lows a school district recover $3,500 exceed an amount not to from eigh- parents of a minor teen, parents, willful- living with ly damages property belonging to the dis- trict. A default was entered $3,492.21 plus against the Chacons costs and interest.

Prior of the suit to commencement carrier, the Chacons the school district’s relating damages filed a claim loss P.C., Stephen Myrick, E. P. William under their their son’s vandalism Starrett, Denver, Doyle and Robert A. in ef- policy which then homeowner’s petitioners. Family. Coverage was fect with American “intentional upon policy’s denied based Dickinson, Everstine, Kelly & brought act” exclusion. Chacons then Prud’Homme, A. Dickinson Gilbert Family American for breach suit Garcia, Denver, respondent. M. Teresa settle, defend, duty to a contractual demnify. Opinion ROVIRA delivered Justice

of the Court. summary judgment Cross-motions parties. trial court were petitioners, Reyes and Sarah Cha- filed con, appeals $250 found the Chacons could recover challenge the court of decision provision in the grant supplemental under a affirming the trial court’s summa- act respondent, cy,1 barred the intentional but were ry judgment favor section, Coverag- Damage Property We will "Supplementary Others. 1. This entitled II,” provides per pay up that the insurer: occurrence for $250 es—Section of others caused following pay the in addition to the [W]ill liability. requires recovering un- that the exclusion general liability provisions applied independently der to each insured. affirmed the policy. court of approach, “any Under this insured” de- holding of the trial court. who, among the scribes individual will be excluded their own intentional undisputed It is that the Chacons are the is, They argue that act. a policy, insureds this while named under minimum, reasonably susceptible to qualifies an additional insured. either their son “you interpretation, defines insured mean requiring that it be con- your your if residents relatives provide coverage strued to the insured. any It person also means household. your of 21 in care or II your pro- relatives.” It care resident person that “each described above is vides An insurance is policy.” insured under this interpreted consistently which should be severability provision policy also contains a principles with the settled of contrac well states that “this insurance interpretation. Republic tual e.g., separately each insured. condition (Colo.1988); Jernigan, liability not increase limit of will our Commercial Union Ins. Co. v. State any one occurrence.” Casualty Co., F.Supp. Farm Fire & undisputed It is incurred (D.Colo.1982). This approach acknowl resulting Chacons from the by the actions edges that: scope coverage is of their son within the insurance contract is mutual [A]n provided which states that agreement, ratified the insured his pay, up insurer “will to our limit of acceptance, parties both are bound liability, all sums for which is provisions, unless annulled for waived or bodily legally injury liable because of In lawful reasons. the absence statu- damage by this policy.” covered inhibition, tory impose may an insurer however, Family, American that contends any terms and conditions consistent with Chacons, recovery by general under the public policy which it see fit. liability provisions policy, is preclud- an “intentional act” exclusion in the 12 Appleman, Insurance Law Prac provides personal liability (rev. 1981) (foot that tice at 37-39 ed. § coverage bodily injury does “not omitted). princi applying Thus, provides for a result.2 we must Similarly, in McCauley Enterprises v. exclusionary provi determine whether the Hampshire Co., New Insurance 716 clearly unambiguous sion at issue here (D.Conn.1989), F.Supp. 718 the court con ly coverage. denies sidered a which contained both severability an exclusionary clause4 and Initially, the “intentional act” provision, applied which actions of pol- contained the Chacons’ homeowner’s “any recovery insured.” The court denied referring in- icy “any the actions of co-insured, innocent noting that “the sured,” distinguished must from those be language ‘any has insured’ been consistent “the policies which refer to actions of ly interpreted expressing a contractual majority of insured.”3 The courts which joint obligations intent create have this issue held that considered have prohibit recovery by an innocent co-in phrase insured,’ phrase “unlike the ‘the sured.” Id. at 721. See Travelers ‘any unambiguously expresses insured’ Blanchard, (La. 431 So.2d 913 Ins. Co. joint obli- contractual intent create (innocent App.1983) co-insured denied re gations prohibit recovery by an inno- covery pursuant to an intentional act exclu cent co-insured.” Sales Farm State applicable by “an sion to acts committed Co., 849 1385 Casualty Fire & F.2d insured,” unambiguously excluded (11th Cir.1988) (citations omitted). insureds); coverage as to all Farm State Casualty Wolford, Fire & Co. v. 116 example, Spezialetti For v. Pacif (1986) (re 631 A.D.2d 498 N.Y.S.2d Co., F.2d Employers ic Insurance 759 covery precluded as to all insureds (3 Cir.1985), court held that language). exclusionary recovery by arson of a co-insured barred an spouse exclusionary innocent because an courts sim Some which have considered provision provided however, exclusionary provisions, ilar have apply “insurance shall not to loss or dam they preclude recovery by did not any age [resulting dishonest act or example, an innocent insured. For from] insured_” omission Insurance v. Mar Worcester Mutual nell, plaintiff argued provision 398 Mass. insureds, parents, were sued indicate who excluded named (1978) (where Jemigan, Wash.App. no there was indicating any coverage that the misconduct of and exclusion both defined in terms recovery by bar “nor was would separable insured" and excluded "the any language stating that there the misconduct not bar act of one insured does policy.” Republic insured would void the insureds). additional (Colo.App. Co. v. 1985). McCauley, of insured 4.In definition sep afforded "[t]he stated that insurance example, Automo Arenson v. National arately to each whom claim bile & brought, except respect to made or suit is (1955) ("the insured” in exclusion liability.” McCauley company’s the limits of the interpreted prevent indemnification insureds); Hampshire Ins. wrongdoer Enters. v. New Uni not of other (D.Conn.1989). Argonaut gard Mutual Ins. Co. v. damage is or as a their when party damages third any insured. result of the actions of in an an unnamed automobile exclusion, con accident. The automobile court Accordingly, provid tained in their homeowner’s is affirmed. bodily “arising out of injury C.J., QUINN, dissents. use, maintenance, loading ownership, VOLLACK, JJ„ join KIRSHBAUM unloading of ... motor vehicle owned in the dissent. operated by or rented or loaned to ERICKSON, J., specially concurs. Id. 496 N.E.2d at 159. insured....” held that the court Worcester specially Justice ERICKSON policy required clause5 contained concurring in the result: having sep that each insured treated majority’s conclusion concur with coverage, arate which resulted lia- that the intentional act exclusion bars only being precluded as to the bility coverage of the Chacons for the acknowledged son. The Worcester acts of child when the dam- exclusionary ages supplemental in the are excess of “any” superflu the word clause rendered addition, policy agree I limit of $250.1 ous, prefer but felt that dissent's conclusion the sever- the approach to the in able the advocated separate insurable in- ability clause creates carrier, surance which the indicated writing terests in each of the insureds. severability the entire of would “render that, emphasize I de- separately, intend to meaningless.” insurance clause clause, spite the severability exclusion Bend Mutual See West expresses preclude a clear cover- intent Salemi, 241, 110 Ill.App.3d Ill.Dec. age part on the of an insured (1987) (holding that individ- for the intentional acts of other reasonably language could Spezialetti ual Em- insureds. Pacific coverage only terpreted denying 1189, 1141-42 ployers Ins. 759 F.2d culpable party). (3rd Cir.1985); Hamp- McCauley v. New reasoning majority shire We find the of of (D.Conn.1989). language of the inten- persuasive than of The

courts more that unambiguously ex- tional act exclusion Worcester, gives it because considers severability presses the intent to render the recog- policy provisions effect to all the inapplicable liability of one in- policy is a contract nizes that an insurance policy sured under the intentional parties en- which should be between McCauley, acts of another insured. in manner consistent with the in- forced F.Supp. at 721. inquiry The expressed tentions therein.6 one, objective focusing rea- an on what a Auto. Cas. Arenson National person would have understood the sonable Here, policy pro- mean. contract to act that the intentional exclusion stated liability coverage apply does not vides that “[tjhis policy injury, does not ... disease, “which is sickness death destruction insured.” This by or at the direction 82-83, unambiguously expresses an the insured...” Cal.2d at court in deny coverage intention to all 286 P.2d at 817. The Arenson insureds stead, severability inquiry indi- whether the contract 5. The clause at issue Worcester parties intended such a result. contained in the Cha- cates that identical policy. cons’ supplemental policy provides acts of an insured of a clause within the Chacons intentional 6. The inclusion extent of of thirteen the contract is not inconsistent with the creation child under $250. In- blanket for intentional acts. part policy case the insurance in that entitled “Definitions,” “you liability based on the states the words your” person people acts of a co-insured. Id. at 83- refer “to intentional P.2d at The use the word shown as the named insured in the declara- case, “any” Reyes in the Chacons’ homeowner T. tions”—in this and Sarah result than that goes a different dictates Chacon. The then on to define “insured,” Allstate pertinent reached Arenson. See Ins. Co. part, the term Freeman, 691-93, 432 Mich. follows: 751-52 N.W.2d if you your means relatives Insured your residents of It also household. dissenting: QUINN Chief Justice person means under the your 21 in or in your care the care of respectfully majority dissent. ac- resident relatives. knowledges long-standing principle law, ty cy in a manner an accordance with contrary clause in the insurance but then to, proceeds rather basic policy. should be construed in nullifies the principles than to construe the Such construction accord severabili- with, Each rate of liability. does not increase our # insured under this person ^[*] described above is a sjc [the insurer’s] ^[*] policy. $ sepa- ^[*] limit principles (Emphasis original). contract law. basic section Liability” devoted to “Personal cov- The insurance in this case must be erage company states rules applica construed accordance with pay, up liability, “will to our limit integrated E.g., ble to an contract. Marez for legally sums lia- insured Co., (Colo. Dairyland 638 P.2d v. Ins. 286 ble because of ... cover- 1981); North American Accident Ins. Co. (Emphasis original). policy.” in 515, Cochran, (1924). 74 223 P. 28 v. Colo. “property damage” The term in is defined A basic rule of contract law is that- “[a]n policy meaning “injury the or destruc- integrated in first the instance is property including tion of tangible the loss interpreted entirety in its with the of its use.” The “Exclusions” section of seeking in of end view harmonize and to personal policy the that the states give provisions effect all so that none apply to property does not dam- meaningless.” Pepcol will be rendered “which is Corp., v. P.2d Mfg. Co. Denver Union 687 (Emphasis original). in insured.” (Colo.1984); see Restatement 202(2) (Second) virtue of the definition of an Contracts § of therefore, creates insur- special meaning separate at the the absence some and Mr. and and expressed tached to contractual terms able interests for Mrs. Chacon itself, son. ten-year-old in the contract words that have a Consistent interests, commonly accepted meaning separate in these insurable the should be cy provides personal liability for terpreted according to their common mean Co., sums, damage up all to the ing. Pepcol for Manufacturing If, however, coverage, for which insured an insurance light separate the insurable ambiguous fairly susceptible rea is liable. In two interpretations, personal liability interests created one of which is fa for sonable plausible interpretation policy, to the and the other to the the the most vorable insurer, is to the of the exclusion clause exclude cover- must be construed strict separate interest of against the the drafter the for the insurable ly insurer as prop- intentionally causes agreement and in favor of the insured. that insured who manner, provi- erty damage. In this all Empire E.g., Coxen Western Life given one (1969); are effect and 168 Colo. 452 P.2d sions the meaningless is not rendered American Accident Ins. North other. at 223 P. at the gives the whole construction effect to Limiting personal liability exclusion Such the intentionally nullify “separate policy, not insured” who does to the damage, other, and, my expense not to and causes view, with this court's is consistent our recent decision is consistent with Jernigan, Ins. Co. v. Republic holding as with as well (Colo.1988). In that case e.g., jurisdictions. law from other case joint and wife were named as husband Auto. & Arenson Nat’l. policy and a homeowners sureds under (1955) (in 286 P.2d 816 smoke against a claim insurer for made exclude act exclusion does not The insur damage fire to their home. intention liability coverage parents that the their claim on basis er denied son, who of vandalism committed al act had set fire husband policy); was an insured under also declaratory judgment action In a home. Marnell, Mut. Ins. Co. Worcester company, the trial filed (1986) (severabil Mass. intention found that the husband had insur ity separate clause in created fire home but determined ally set parents able interests so as not separate the wife severability clause policy by reason policy); an insured under stated: Argonaut Unigard Mut. Ins. Co. insur- “Severability insurance. Co., Wash.App. each separately ance (1978) (intentional applica act exclusion not limit not increase our This condition shall engage to other insureds who ble liability by any one occurrence.” conduct). excluded approving trial court’s construction least, very At sever- emphasized we ambiguous this case is when considered indepen ability clause created sep provision creating connection with poli rights obligations under the dent arate insurable interests Mr. and rights obligations, cy, joint rather than minor son. Chacon and their Under to re the wife was entitled circumstances, ambiguity in the damages, not to ex cover one-half of the must be construed the insurer for the loss ceed Coxen, E.g., in favor of the insureds. separate up to the her insurable interest Wilson 452 P.2d at limits of that interest. 753 P.2d at Auto. Owners Ass’n. 148 Colo. in the instant As (1961); Royal Indemnity interest separate case creates a insurable Markley, 116 Colo. respect personal liability of with “in each result reasons, I reverse For the above would act” exclusion should appeals and of the court of separate of Mr. and insurable interests Chacon, Mr. and would hold that Mrs. intentionally neither of whom property cause the to the school. damage, were not excluded from Jer- attempts distinguish majority damage exclu- virtue of the intentional nigan “any term reason of the sion. in the in the exclusion clause basing holding solely case. instant VOLLACK, JJ., join KIRSHBAUM insured,” majority “any the term on in the dissent. disregards negates separate insur- expressly interests created able

cy. I would construe term in the mean the

sured” exclusion clause to any particu- interest of insurable responsible inten-

lar insured who was

tionally damage. causing the notes these which is ... given ples, plain should be words by any insured.” meaning ordinary intent of the unless the contract, parties, expressed in indi Family argues American that this exclu- cates that an alternative is unambiguously sion excludes provision intended. Where contractual is to all insureds when individu- unambiguous clear damage should al insured causes which is “expected or It asserts that the not it to arrive at a strained construction. intended.” rewrite damage. There- gan, focus P.2d at Jerni fore, when caused However, a contractual when insured, by all recovery insureds is reasonably susceptible mean to different precluded. ings it must be construed the draft providing er and in favor of Chacons, however, argue Amer- Id.; see also Commercial Union Family’s interpretation ican of the insur- Farm Co. v. State Fire & give fails effect to ance the sever- (D.Colo.1982); Coxen ability provision in the contained contract. Co., 168 Empire They Western conclude that the Life separate insured status each P.2d 16 creates intentionally by any pay property damage: We will not b. attained ... who has court, however, coverage. The Republic Insurance Co. v. concluded to; trying the innocent co-insured was (Colo.1988), an that we considered policy which contained a sever- application a clear of the clause [A]void presented ambiguities.... ability by conjuring up clause identical here A here, provisions court should read and concluded ambiguities rights possible As avoid if the insured several. and should made language not torture the them. such, create recovery by an innocent insured was difficulty determining have no We precluded by not the intentional act in this case insured” means one however, Jemigan, co-insured. does policy.... covered to an inno preclude denial policy explicitly cent where

Case Details

Case Name: Chacon v. American Family Mutual Insurance Company

Court Name: Supreme Court of Colorado

Date Published: Mar 5, 1990

Citation: 788 P.2d 748

Docket Number: 88SC330

Court Abbreviation: Colo.