St. Paul Fire & Marine Insurance v. Schrum

149 F.3d 878

8th Cir.

1998

Check Treatment

ST. PAUL FIRE & MARINE INSURANCE COMPANY, Appellee, v. William SCHRUM, Rebecca Schrum, Defendants, Steve Zotta; Susan Zotta; J.L.Z., by next friend Susan Zotta; S.J.Z., by next friend Susan Zotta, minors, Defendants/Appellants.

No. 97-3403

United States Court of Appeals, Eighth Circuit

July 23, 1998

Rehearing Denied Aug. 19, 1998

149 F.3d 878

As noted above, evidence concerning ailments outside of the relevant time period can support or elucidate the severity of a condition. See

Fowler, 866 F.2d at 252; . However, evidence outside the relevant time period cannot serve as the only support for the disability claim. Such a holding would be contrary to the Social Security Act, 42 U.S.C. §§ 416(i), 423(c), which requires proof of disability during the time for which it is claimed. The only evidence that Pyland provides for meeting six of the nine depressive syndrome symptoms is a psychiatric evaluation performed almost 6 months after her insured status expired. Substantial evidence on the record supports, at most, a manifestation of two symptoms: psychomotor agitation, which the Commissioner concedes, and thoughts of suicide. A reasonable mind could conclude that her husband‘s testimony of a suicide attempt, which may or may not have occurred during the relevant time period, points to the existence of that symptom during the time for which benefits might be awarded.⁷ Two of the required four symptoms, however, is not enough.

In addition, we note that Pyland‘s claim of functional limitations under § 12.04(B) is not supported by the record. There is some evidence that, prior to the expiration of her insured status, she was restricted in daily living, had trouble functioning socially, and had problems working. The Listing, however, requires the ALJ to assess whether the limitations on daily living and social functioning were “marked” or “seriously interfere[d] with the ability to function independently, appropriately and effectively” and whether deterioration or decompensation in work was “repeated.” 20 C.F.R. Pt. 404, Subpt. P, App. 1, § 12.00(C). The ALJ determined that Pyland only suffered from “moderate” restrictions in daily activities and “slight” difficulties in social functioning with no deterioration or decompensation in work. Administrative Transcript, v.1, Psychiatric Review Technique Form at 3. These moderate and slight restrictions do not rise to the Listing‘s required level of severity. The substantial evidence standard requires that we evaluate the evidence in terms of the reasonableness of the ALJ‘s determination. The findings of moderate restrictions in her daily activities, slight difficulties in social functioning and no deterioration or decompensation in work are reasonable.

Likewise, the ALJ‘s determination that Pyland retained the residual functional capacity to perform her past relevant work as a secretary is supported by substantial evidence. The ALJ found that, if she observed routine seizure precautions such as avoiding unprotected high places or the operation of automotive equipment, Pyland could engage in substantial gainful activities. ALJ Decision at 3. He determined that her work as a secretary did not require a great deal of interpersonal contact and did not require any activity precluded by routine seizure precautions. ALJ Decision at 5. A reasonable mind could conclude that, based on the evidence, Pyland could perform her past relevant work as a secretary and, therefore, was not disabled. See

Stephens v. Shalala, 50 F.3d 538, 542 (8th Cir.1995).

Conclusion

In light of the foregoing, we hold that there is substantial evidence on the record as a whole to support the Commissioner‘s decision to deny disability benefits. Accordingly, the judgment of the district court is affirmed.

Joseph L. Walsh, St. Louis, MO, argued, for Defendants/Appellants.

James E. DeFranco, Bellville, IL, argued, for Appellee.

Before McMILLIAN and WOLLMAN, Circuit Judges, and BOGUE,¹ District Judge.

WOLLMAN, Circuit Judge.

Susan and Steve Zotta, and J.L.Z. and S.J.Z., minors, by and through Susan Zotta, (Zottas) appeal from the district court‘s grant of summary judgment in favor of St. Paul Fire and Marine Insurance Company (St. Paul). We reverse and remand.

I.

In March of 1996, the Zottas filed a petition in Missouri circuit court against William and Rebecca Schrum. The petition alleged that in 1993, Richard Lee Backes, who resided with the Schrums, sexually abused the Zottas’ two minor children while they were in the Schrum home. The Zottas claimed that the Schrums negligently supervised the Zotta children and that the alleged negligence was a direct and proximate cause of the children‘s harm.

In July of 1996, St. Paul, which had issued a homeowner‘s policy to the Schrums, filed this action, seeking a declaration that the policy excluded coverage for the Zottas’ claim. The district court concluded that the policy‘s sexual act exclusion precluded coverage and granted summary judgment to St. Paul.

II.

We review a district court‘s grant of summary judgment de novo. See

The Prudential Ins. Co. of America v. Doe, 140 F.3d 785, 790 (8th Cir.1998). In this diversity action, interpretation of the insurance policy is a question of state law. See . We review de novo the district court‘s interpretation of state law. See . When determining the state-law issue of insurance policy coverage, we are bound in our construction of Missouri law by the decisions of the Missouri Supreme Court. See . In the absence of any controlling Missouri Supreme Court authority, we may consider “relevant state precedent, analogous decisions, considered dicta, and any other reliable data.” (quoting ). In Missouri, the party claiming coverage has the burden of proving coverage under the policy. See .

The sexual act exclusion in the Schrums’ policy provides:

SECTION II—EXCLUSIONS

1. Coverage E—Personal Liability and Coverage F—Medical Payments to others do not apply to bodily injury or property damage:

. . .

(j) arising out of any sexual act, including but not limited to molestation, incest or rape.

Initially, the Zottas contend that the sexual act exclusion is made ambiguous by the policy‘s controlled substance exclusion, which denies coverage for bodily injury or damage “arising out of the use, sale, manufacture, delivery, transfer or possession by any person of a controlled substance.” In short, they argue that because the controlled substance exclusion applies to all controlled substance activities, whether by the named insured or anyone else, the absence of the all-encompassing language “by any person” from the sexual act exclusion renders the latter ambiguous. Because we hold for the Zottas on their next argument, we need not address this contention.

The Zottas argue that the sexual act exclusion is not applicable to their negligent supervision claim. Citing

A.R.H. v. W.H.S., 876 S.W.2d 687 (Mo.Ct.App.1994), they contend that at the core of their claim for negligent supervision is the obligation of the Schrums to protect the children from harm. The sexual act exclusion, they assert, focuses on the conduct of the actor, here Backes, who caused the harm. In , the Missouri Court of Appeals considered whether a young girl who was sexually molested by her step-grandfather could state a cause of action against her grandmother for negligent supervision. See at 688. The court held that the girl had stated a cause of action, even though her grandmother claimed that she had no power or right to take any action against the step-grandfather. See at 690. In the course of reaffirming Missouri‘s recognition of a cause of action based upon the theory of negligent supervision, the court stated that “it is the obligation and ability to supervise and control the child, not the instrumentality that caused the harm, that is the decisive factor.” at 689. The allegations made by the Zottas in this case are similar to the cause of action asserted in , in that the focus of the Zottas’ suit is the alleged negligence of the Schrums, rather than a sexual act committed by a third person.

St. Paul cites

Shelter Mut. Ins. Co. v. Politte, 663 S.W.2d 777, 779-780 (Mo.Ct.App.1983) for the general proposition that plaintiffs may not evade insurance exclusions through artful pleading. In , an insured owned an automobile that his son was driving when it was involved in an accident. The plaintiff, who was a passenger in the insured‘s automobile at the time of the accident, filed an action against the insured, alleging negligent entrustment. The Missouri Court of Appeals held that the automobile exclusion within the homeowner‘s policy precluded recovery. See at 779. The decision was premised upon the notion that because an essential element of liability for negligent entrustment is the “concurrent negligence of the entrustee, the entrustor‘s liability necessarily ‘arises out of the operation of the motor vehicle.‘” St. Paul argues that the present case presents an analogous situation in that the concurrent sexual molestation by Backes should be considered an essential element of the Schrums’ negligent supervision liability, thereby triggering the sexual act exclusion. We disagree.

Centermark Properties, Inc. v. Home Indem. Co., 897 S.W.2d 98, 102-03 (Mo.Ct.App.1995), the plaintiff was struck by a vehicle owned by an insured that was driven by an unauthorized third party. The plaintiff alleged that the insured had negligently hired, trained, and supervised its security personnel, resulting in the third party‘s unauthorized use of the vehicle. Citing , the court held that this cause of action was not precluded by the policy‘s automobile exclusion. In so holding, the court distinguished by pointing out that in the theory of negligent entrustment was merely incidental to the permissive use of the automobile in a negligent manner. In , on the other hand, the ownership or use of the automobile was incidental to and not an essential element of the negligence claim against the insured. at 103.

A.R.H. and lead us to conclude that Backes‘s alleged conduct is merely incidental to the Zottas’ negligence claim against the Schrums. The Zottas contend that the Schrums were negligent in failing to properly supervise and control the Zotta children, thereby affording Backes the opportunity to harm them. “On these facts, these allegations contain separate and non-excluded causes of [the children‘s] injuries, apart from the [accompanying sexual act].” .

The judgment is reversed, and the case is remanded to the district court for entry of a judgment consistent with the views set forth in this opinion.

ROGER L. WOLLMAN

UNITED STATES CIRCUIT JUDGE

Notes

The HONORABLE ANDREW W. BOGUE, United States District Judge for the District of South Dakota, sitting by designation.

The ALJ found the testimony of Pyland‘s husband to be unpersuasive and “motivated by the desire to see [his wife] obtain benefits.” ALJ Decision at 5.