Opinion
1. Introduction
Was the trial court required to infer from adult criminal sexual misconduct with a child that the adult intended to injure the child? A finding of such intent precludes insurance coverage due to statutory and policy exclusions for intentionally caused injuries. In these two cases consolidated for purposes of oral argument and decision, Fire Insurance Exchange (insurer) seeks declarations that it is not required to indemnify its insured, Robert Abbott, or defend its insured, Robert Shreve, in underlying civil actions by minors
We explain below why we will reverse both judgments.
2. Facts
A. Abbott (H002982)
On June 17, 1983, Abbott engaged in sexual misconduct with a six-year-old girl. He reached inside her pants and fondled her thigh. She complied with his request to touch his penis, but refused his request to kiss it. Abbott testified he had become exposed when he sat in a child’s chair after fixing a movie machine which a number of children were watching in his house. He acted on a sudden feeling of sexual arousal after eye contact with the girl. His penis contacted her face when he came to his senses, felt ashamed, stood up, and left the room.
On November 9, 1983, in the underlying criminal case Abbott pled no contest to a felony charge of “willfully and lewdly” committing “any lewd or lascivious act. . . upon or with the body, or any part or member thereof, of a child under the age of 14 years, with the intent of arousing, appealing to, or gratifying the lust or passions or sexual desires of such person or of such child” in violation of Penal Code section 288, subdivision (a).
On December 19, 1983, the girl filed a civil case against Abbott alleging negligent and intentional sexual molestation resulting in personal injuries including emotional and mental distress. The negligence claim alleged Abbott’s “mental incapacity.”
Prior to the incident, Abbott purchased renter’s insurance from insurer affording liability coverage up to $100,000 for accidents. The policy defines “accident” as “a sudden event . . . resulting in bodily injury . . . neither expected nor intended by the insured.”
At Abbott’s request, insurer retained counsel to defend him in the underlying civil case, but reserved its rights. At the close of the girl’s case-in-chief, she withdrew her intentional tort claim. The court granted her motion for a directed verdict of negligence and instructed the jury, regarding
Insurer subsequently brought this declaratory relief action against Abbott and the girl alleging, among other things, that Abbott’s conduct is not covered by his renter’s insurance policy. Abbott and the girl answered insurer’s complaint by alleging that Abbott’s actions resulted from mental incapacity or emotional distress and were not intentional or intended to harm the girl.
One of the issues severed for court trial was whether insurer has a duty to indemnify Abbott for the judgment in the underlying civil case.
The evidence recited above was presented in the court trial of the declaratory relief action. Additionally, a psychiatrist and a psychologist who interviewed Abbott were called by him as expert witnesses to testify as follows. Abbott is a pedophile, a type of child molester who prefers prepubescent children to arouse or gratify his own sexual desires. Like other pedophiles, he thought sexual contact with a child was harmless or even mutually beneficial and pleasurable, not harmful. He lacked the mental capacity to govern his sexual attraction to children in accordance with reason. Denial of this sexual interest is part of his psychological makeup.
The psychologist testified that Abbott has an impulsive disorder of pedophilia. Unlike a predatory pedophile who creates situations to interact with children, Abbott is regressed and erupted in a sudden manner that surprised him. His self-control was impaired and he acted without forethought of sexual gratification. He did intend his physical acts. The psychiatrist testified that Abbott did have sufficient volitional control to satisfy his own lust by touching the child or asking the child to touch him.
After court trial, the trial judge concluded that, although Abbott’s conduct had violated Penal Code section 288, subdivision (a), insurer was required to indemnify him based on the following findings. “This Court accepts the psychiatric testimony proving that Abbott is mentally ill and, in fact, had no intent to harm the . . . girl. . . . [fl] [Insurer] is obligated to provide coverage to . . . Abbott for the molestation of [the girl], which this
B. Shreve (H003275)
Shreve commenced a sexual relationship with a 14-year-old boy in mid-June 1983. The boy was a ninth-grade public school student in a class taught by Shreve during the 1982-1983 school year. On the last day of that school year, the boy was discussing girls with Shreve when Shreve said if worse came to worse, the boy could always take this out and wave it at them. Shreve illustrated his remark by grasping the boy’s penis through his pants. The boy was surprised, but felt it was a friendly gesture and continued talking with Shreve for a while. At the time, the boy felt that Shreve was his only friend and was very supportive.
Their relationship became overtly sexual during the summer of 1983 when Shreve called the boy to help him with a school project. While they were alone together in a classroom, Shreve masturbated the boy. Shreve felt driven to do so and intended to do so.
Shreve massaged and masturbated the boy several more times during summer vacation. At least once they engaged in mutual oral copulation. This sexual relationship continued throughout the boy’s tenth-grade school year, 1983-1984. Shreve often masturbated the boy in his office during the lunch hour, sometimes through his pants. (Shreve minimized the frequency of these contacts.) According to the boy, Shreve sodomized him once in October 1983 in a classroom after school. On this occasion, Shreve furnished blankets and lotion. Shreve denied sodomy.
On February 19, 1985, in the underlying criminal case, Shreve pled guilty to a felony charge of being a “person over the age of 21 years who participates in an act of oral copulation with another person who is under 16 years of age” in violation of Penal Code section 288a, subdivision (b)(2).
On August 15, 1985, the boy and his family filed a civil case against Shreve alleging negligent sexual molestation resulting in personal injuries including mental and emotional distress. The negligence claim alleged Shreve’s mental incapacity and disturbance and psychological disability.
Prior to commencement of this sexual relationship, Shreve purchased homeowner’s insurance from insurer affording liability coverage up to $100,000 for accidents. The policy definition of “accident” is the same as in
At Shreve’s request, insurer retained counsel to defend him in the underlying civil case. Pursuant to a reservation of rights, on November 19, 1985, insurer filed this declaratory relief action against Shreve, the boy and his family, alleging that Shreve’s conduct is not covered by his homeowner’s insurance policy because it was intentional. Shreve answered insurer’s complaint by alleging that his conduct was caused by a mental disease or defect depriving him of the capacity to cause the resulting damage or harm and was not intentional. The boy and his family answered insurer’s complaint by alleging that due to mental incapacity and emotional distress, Shreve never expected or intended to harm them.
The evidence recited above was presented in a court trial of this declaratory relief action. Additionally, Shreve testified that he did not intend to harm the boy in any way. The same psychologist who testified about Abbott interviewed and testified about Shreve as follows. Shreve has been basically homosexual since adolescence but has repressed it and is unhappy about it due to a fundamentalist background. He married and had children in hopes of ending his homosexual orientation. He is also compulsive and bottles up his feelings, which occasionally overwhelm his control. He feels comfortable with adolescent boys because he himself is a teenager emotionally. He lacked the mental capacity to govern his sexual attraction to the boy in accordance with reason. He believed the sexual contact was enjoyable and not harmful to the boy. Even though the relationship continued over a year, Shreve was acting impulsively and compulsively.
A clinical sexologist who had interviewed Shreve was called by insurer to testify. He basically agreed with the psychologist’s description of Shreve, in particular that Shreve lacked the mental capacity to govern his sexual activities with the boy in accordance with reason. Shreve’s mental state was comparable to temporary insanity in that he was unaware while involved with the boy of the difference between right and wrong. He did not think Shreve was compulsively attracted to children or teenagers as a primary sexual outlet, but did think Shreve’s conduct with the boy resulted from an irresistible impulse arising from the circumstances.
After court trial, the same trial court concluded that, although Shreve’s conduct had violated Penal Code section 288a, subdivision (b)(2), insurer was obliged to defend and indemnify him based on the following findings. “The expert psychiatric testimony . . . is in complete agreement that at the time of the molestations . . . Shreve suffered from a recognized psychiatric disorder known as ego dystonic homosexuality, which was equivalent to an
3. Uninsurability of Willful and Intentional Acts in General
Insurance Code section 533 provides: “An insurer is not liable for a loss caused by the wilful act of the insured; but he is not exonerated by the negligence of the insured . . . .” (See also Civ. Code, § 1668.) This section is treated as an exclusionary clause in every insurance contract. (Evans v. Pacific Indemnity Co. (1975)
It is settled that “wilful ac[” in section 533
Clemmer illustrates this interpretation of section 533. There, heirs of a decedent obtained a wrongful death judgment against the killer, who had been convicted of second degree murder. The killer’s insurer resisted the heirs’ action against it on the grounds the killing was a willful act excluded from coverage by section 533 or a policy exclusion for “ ‘any act committed by . . . the insured with intent to cause personal injury.’ ” (
The Supreme Court first determined that the heirs were not collaterally estopped by the second degree murder conviction. (22 Cal.3d at pp. 873-877.) Next, against the insurer’s contention the killing was a willful act as a matter of law, the court found that the following evidence substantially supported the verdict and the court’s denial of a judgment notwithstanding the verdict. A psychiatrist testified that the killer was a paranoid personality who, at the time of the shooting, “did not have the mental capacity to deliberate and premeditate or to form the specific intent to shoot and harm the victim and did not understand the consequences of his act, being then directed by paranoid delusions.” (Id. at p. 878.) The jury was properly instructed to determine whether the killer was mentally incapable due to disease or defect of governing his own conduct and intending to shoot and harm his victim. (Id. at pp. 886-887.)
Thus, “wilful” in section 533 does not have the same meaning given “willfully” in Penal Code section 7, subdivision 1, namely “when applied to the intent with which an act is done . . . , implies simply a purpose or willingness to commit the act. . . .It does not require any intent to violate law, or to injure another, or to acquire any advantage.” It has been held that a battery conviction for “any willful and unlawful use of force or violence upon the person of another” (Pen. Code, § 242) does not necessarily involve the type of “wilful act” excluded from coverage by section 533. (Allstate Ins. Co. v. Overton (1984)
The same interpretation is given to express policy exclusions for injuries caused “intentionally” by the insured. (Congregation of Rodef Shalom v. American Motorists Ins. Co. (1979)
Modern insurance policies have replaced the exclusion of injuries caused intentionally by the insured with an exclusion, similar to the policies in issue, of injuries “expected” or “intended by the insured.” (Annot. (1984)
A. California Authority
Insurer contends that when an adult engages in criminal sexual misconduct with a minor, an intent to injure must be inferred as a matter of law. All parties claim to find support in Allstate Ins. Co. v. Kim W. (1984)
Based on such pleadings, the appellate court affirmed a judgment on the pleadings finding no insurance coverage. The policy excluded coverage for “ ‘bodily injury . . . intentionally caused by an insured person’” (160 Cal.App.3d at pp. 329-330), but the appellate court relied mainly on section 533. (Id. at p. 334, fn. 4.) Kim W. recognized that section 533 excludes only acts done with “a ‘ “preconceived design to inflict injury” ’ ” (id. at pp. 333-334), not where “the resulting damage or injury is not intentional and is unexpected.” (Id. at p. 331.) But the court pointed out that this principle had not been applied to require “an insurer to pay for damages resulting from a wilful sexual assault by its insured. [Fn. omitted.]” (Id. at p. 332.)
The court’s conclusion of noncoverage stands on two alternative grounds. “When an appellate court bases its decision on alternative grounds, none is dictum.” (Greyhound Lines, Inc. v. County of Santa Clara (1986)
The pleadings here differ from those in Kim W. in that the insureds and their victims placed in issue whether the former intended to injure the latter. Moreover, both cases here have been tried and the fact finder has
Insurer’s contention of presumed intent to injure is based on Kim W. ’s other ground for denying coverage, summarized as follows. In attempting to protect children by enacting Penal Code section 288, the Legislature has implicitly determined “that at least some harm is inherent in and inevitably results from those acts.” (
“We acknowledge we are not bound by an opinion of another District Court of Appeal, however persuasive it might be. [Citation.] We respect stare decisis, however, which serves the important goals of stability in the law and predictability of decision. Thus, we ordinarily follow the decisions of other districts without good reason to disagree.” (Greyhound Lines, Inc., supra,
Insureds and their victims provide no good reason for us to disagree with Kim W. ’s inference, as a matter of law, of an intent to injure from the commission of such crimes. It has been recently applied as California law in State Farm Fire and Casualty Co. v. Bomke (9th Cir. 1988)
At oral argument, Shreve forcefully contended: his violation of Penal Code section 288a, subdivision (b)(2), with a boy who was 14 and 15 at the time is not as inherently bad as a violation of section 288; he says that in a number of states and some foreign countries, sex with a 14-year-old is not a crime at all; therefore, Kim W. ’s presumption of excluded intent should not
Abbott and his victim point out that Penal Code section 288, subdivision (a), defines a specific intent crime (People v. Austin, supra,
Insureds and their victims contend that the rationale of a unanimous Supreme Court in Clemmer, supra,
While the California Supreme Court’s denial of review in Kim W. (
Insureds and their victims request judicial notice of exclusions allegedly found in other insurance policies more specifically directed to child abuse or abuse of another person. We deny this request. Insurer properly objects on the basis that insufficient information is supplied to establish the context of these photocopies. (Evid. Code, §§ 452, subd. (h), 453, 459; Whispering Pines Mobile Home Park, Ltd. v. City of Scotts Valley (1986)
Insureds and their victims emphasize that unlike the court in Kim W., we are confronted with psychiatric and other evidence that insureds did not
B. Other Jurisdictions
All parties claim support in other jurisdictions. The following cases exhibit a variety of approaches to determining whether insurance coverage applies to sexual misconduct with minors when there is a policy exclusion for injury expected or intended by the insured. Most favor insurer. None involves a statutory insurance exclusion.
One line of authority differs from California law by measuring the intent of the insured by the objective reasonable person standard—not the insured’s subjective intent. (CNA Ins. Co. v. McGinnis (1984)
This objective analysis was criticized in Rodriguez v. Williams (1986)
Most jurisdictions, including Washington, which ordinarily apply this subjective standard have nevertheless disregarded the insured’s denial of a specific intent to injure and inferred an intent to injure or harm as a matter of law in sexual misconduct cases. Some decisions appear to draw this inference only after considering evidence apart from the fact of the insured’s sexual misconduct with a minor. (Fireman’s Fund Ins. Co. v. Hill, supra,
Most courts, however, like Kim W., have inferred a specific intent to injure as a matter of law from the fact of sexual misconduct with a minor. (Horace Mann Ins. Co. v. Independent School Dist. (Minn. 1984)
Some of these opinions disregard not only the insured’s denial of an intent to injure, but psychiatric evidence to the same effect. (Illinois Farmers Ins. Co. v. Judith G., supra,
Insureds and their victims prefer us to follow a minority of decisions treating insurance coverage for sexual misconduct as dependent on evidence of the insured’s actual, subjective intent to injure. (State Auto Mut. Ins. Co. v. McIntyre, supra,
One undiluted authority favoring insureds and their victims is McIntyre, supra,
An opinion very recently filed after these cases were submitted for oral argument, State Farm Fire and Casualty Co. v. Estate of Elmer Jenner (9th Cir. 1988)
The court recognized itself to be bound by its prior decisions in Bomke and Gilbert above. It noted (
Estate of Jenner arose from a summary judgment, while our cases arise after trial. As we explain below, we part company with the Ninth Circuit regarding the quality of the evidence sufficient to rebut the inference from criminal sexual misconduct of an excludable intent to injure.
5. Psychiatric Evidence
The position of insureds and their victims is that we are bound by the substantial evidence rule to affirm the trial court’s findings that neither Abbott nor Shreve had the intent to injure their victims which avoids insurance coverage.
As we have previously stated the standard of review: “ ‘[A]ll factual matters will be viewed most favorably to the prevailing party . . . and in support of the judgment [citation].’ (Nestle v. City of Santa Monica (1972)
On the other hand, “ ‘Substantial’ means evidence ‘of ponderable legal significance. Obviously the word cannot be deemed synonymous with “any” evidence. It must be reasonable in nature, credible, and of solid value; it must actually be “substantial” proof of the essentials which the law requires in a particular case.’ [Citations.]” Claussen v. First American Title Guaranty Co. (1986)
In our view, the psychiatric evidence failed to remove either case from the rule of Kim W., supra,
6. Duty to Defend
Shreve separately contends the sole question before us is insurer’s duty to defend him, not indemnify him. We recognize that insurer’s duty to defend Shreve is broader than its duty to indemnify Abbott because the duty to defend arises if the underlying civil claim is potentially covered by insurance. (Cf. Gray, supra,
The judgments in both cases are reversed with directions to the trial courts to enter judgment in favor of insurer.
Brauer, J., and Capaccioli, J., concurred.
The petitions of all parties for review by the Supreme Court were denied December 15, 1988. Broussard, J., was of the opinion that the petitions should be granted.
Notes
We do not name the victims or their families to protect their privacy.
The jury also awarded the girl’s mother $50,000 for negligent infliction of emotional distress, but the trial court granted Abbott a judgment notwithstanding the verdict on the mother’s claim and we affirmed this ruling in an unpublished opinion (H000413) filed November 4, 1986.
Our conclusions about the policy exclusion make it unnecessary to consider evidence or arguments concerning possible rescission of Abbott’s policy due to noncooperation in his defense in the underlying civil action, the other issue severed for court trial.
We observe that Shreve’s mental state will presumably afford no defense to the underlying action due to Civil Code section 41, which provides: “A minor, or person of unsound mind, of whatever degree, is civilly liable for a wrong done by him, but is not liable in exemplary damages unless at the time of the act he was capable of knowing that it was wrongful.”
Unspecified section references are to the Insurance Code.
United States Fid. & Guar. Co. v. American Employer's Ins. Co. (1984)
Consequently we need not resolve a conflict in California cases interpreting similar exclusions. Other Courts of Appeal have held (Mullen v. Glens Falls Ins. Co. (1977)
This criticism was directed at the earlier opinion of the Washington Court of Appeal (at
This was the only foreign authority discussed, although not expressly relied on, by Kim W. (
The New Hampshire Supreme Court adopted an objective approach in Vermont Mutual Ins. Co. v. Malcolm (1986)