Opinion
Civil No. 04-3019-CO.
November 19, 2004
FINDINGS AND RECOMMENDATION
Plaintiff brings this declaratory judgment action pursuant to 28 U.S.C. §§ 1332 and 2201 against defendants Michael Fulmer and Jennifer Titus, as personal representative of the estate of Michael Ford. Plaintiff seeks a declaration that it has no duty to defend defendant Fulmer in the Titus lawsuit and no duty to indemnify defendant Fulmer for any liability that may be found in the Titus lawsuit. Plaintiff also seeks costs and disbursements. Plaintiff moves for summary judgment (#9).
I. FACTS
Plaintiff submits the following statement of facts:
Defendant Jennifer Titus's response to plaintiff's concise statement of facts does not satisfy the requirements of Local Rule 56.1 (c)(1) which requires a party to cite to a particular affidavit, deposition, or other document supporting the party's statement, acceptance, or denial of the material fact. A denial without such a citation is insufficient. In addition, defendant Titus objects to plaintiff's paragraph 4 and 5 arguing that the facts are not relevant to a determination of whether plaintiff has a duty to defend. The court finds the facts are relevant and these objections are overruled.
1. On September 19, 2003, defendant Michael Stephen Fulmer allegedly entered the home of Michael Ford and shot and killed Ford. (Exhibit 1 ¶ 2).
2. The underlying complaint alleges that Fulmer's acts in entering Ford's home and shooting and killing Ford were intentional. (Exhibit 1 ¶ 3).
3. The underlying complaint also alleges that Fulmer "was negligent in discharging a firearm in the direction of Michael Ford, when defendant knew or should have known that such conduct could foreseeably result in the death of Michael Ford." (Exhibit 1 ¶¶ 8,9).
4. Fulmer was charged with murder as a result of the shooting. (Exhibit 2).
5. In the criminal proceeding, Fulmer pleaded an insanity defense and a defense of mental disease or defect. (Exhibit 3).
6. Plaintiff issued a Deluxe Plus Homeowner's Policy to Fulmer, No. 06481036404/16, effective April 16, 2001 to April 16, 2002. (Exhibit 4).
7. The policy included Family Liability Protection Coverage which provides in part:
Subject to the terms, conditions and limitations of this policy, Allstate will pay damages which an insured person becomes legally obligated to pay because of bodily injury or property damage arising from an occurrence to which this policy applies, and is covered by this part of the policy. (Exhibit 4 at 6).
8. The policy defines an occurrence as follows:
Occurrence — means an accident, including continuous or repeated exposure to substantially the same general harmful conditions during the policy period, resulting in bodily injury or property damage. (Exhibit 4 at 5).
9. The Family Liability Protection Coverage does not apply to the following:
We do not cover any bodily injury or property damage intended by, or which may reasonably be expected to result from the intentional or criminal acts or omissions of, any insured person. This exclusion applies even if:
a) such insured person lacks the mental capacity to govern his or her conduct;
b) such bodily injury or property damage is of a different kind or degree than that intended or reasonably expected; or
c) such bodily injury or property damage is sustained by a different person than that intended or reasonably expected.
This exclusion applies regardless of whether or not such insured person is actually charged with, or convicted of a crime. (Exhibit 4 at 6).
Defendant Titus submits the following additional facts:
1. The criminal trial of Michael Fulmer is scheduled for January 18, 2005 through January 27, 2005 in Josephine County, Oregon. (Titus Exhibit 1).
2. No civil trial has taken place in the case of Jennifer Titus as personal representative of the estate of Michael Ford v. Michael Fulmer, Josephine County Case No. 03CV0597. (Titus Exhibit 2).
II. LEGAL STANDARDS
Pursuant to Rule 56(c) of the Federal Rules of Civil Procedure, a moving party is entitled to summary judgment as a matter of law "if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact." Fed.R.Civ.P. 56(c); Bhan v. NME Hosps., Inc., 929 F.2d 1404, 1409 (9th Cir.), cert. denied, 502 U.S. 994 (1991). In deciding a motion for summary judgment, the court must determine, based on the evidence of record, whether there is any material dispute of fact that requires a trial. Waldridge v. American Hoechst Corp., 24 F.3d 918, 920 (7th Cir. 1994) (citations omitted). The parties bear the burden of identifying the evidence that will facilitate the court's assessment. Id.
The moving party bears the initial burden of proof. See Rebel Oil Co., Inc. v. Atlantic Richfield Co., 51 F.3d 1421, 1435 (9th Cir.), cert. denied, 516 U.S. 987 (1995). The moving party meets this burden by identifying portions of the record on file which demonstrates the absence of any genuine issue of material fact. Id. "[T]he moving party . . . need not produce evidence, but simply can argue that there is an absence of evidence by which the nonmovant can prove his case." Cray Communications, Inc. v. Novatel Computer Systems, Inc., 33 F.3d 390, 393 (4th Cir. 1994), cert. denied, 513 U.S. 1191 (1995) (citation omitted).
In assessing whether a party has met their burden, the court must view the evidence in the light most favorable to the nonmoving party. Allen v. City of Los Angeles, 66 F.3d 1052 (9th Cir. 1995). All reasonable inferences are drawn in favor of the nonmovant. Id.
If the moving party meets their burden, the burden shifts to the opposing party to present specific facts which show there is a genuine issue for trial. Fed.R.Civ.P. 56(e); Auvil v. CBS "60 Minutes", 67 F.3d 816 (9th Cir. 1995), cert. denied, 517 U.S. 1167 (1996). The nonmoving party cannot carry their burden by relying solely on the facts alleged in their pleadings. Leonard v. Clark, 12 F.3d 885, 888 (9th Cir. 1994). Instead, their response, by affidavits or as otherwise provided in Rule 56, must designate specific facts showing there is a genuine issue for trial. Id.
III. DISCUSSION
Plaintiff moves for summary judgment arguing that:1) Allstate has no duty to defend Fulmer in the underlying action, because the underlying complaint does not allege any liability that could be covered by the policy; and
2) Allstate has no duty to indemnify Fulmer for liability not covered by the policy.
In response, defendant Titus argues that:
1) Allstate has a duty to defend, because the second claim alleges the shooting was not intentional, but negligent and these allegations are sufficient to invoke coverage as an occurrence under the policy — the intentional acts exclusion and the criminal acts exclusion are inapplicable; and
2) since Fulmer's subjective intent has not been proven by a criminal trial, plaintiff's motion for summary judgment on indemnification is premature — the criminal trial may establish facts which give rise to a duty to indemnify.
In reply, plaintiff argues that:
1) Allstate has no duty to defend Fulmer, because the underlying complaint alleges liability for an injury reasonably expected to result from the insured's intentional or criminal act and the policy excludes coverage for an injury: a) subjectively intended; b) reasonably expected to result from intentional acts; and c) reasonably expected to result from criminal acts;
2) the policy excludes coverage for accidents or occurrences that result from intentional or criminal conduct; and
3) Allstate has no duty to indemnify Fulmer, because the policy excludes coverage for Fulmer's conduct.
Duty to Defend
An insurer has a duty to defend if the allegations of the complaint in the underlying action, without amendment and with ambiguities construed in favor of the insured, could impose liability for conduct covered by the policy. W. Equities, Inc. v. St. Paul Fire Marine Ins. Co., 184 Or. App. 368, 371 (2002); Ledford v. Gutoski, 319 Or. 397, 399-400 (1994). Even if the complaint alleges conduct that would not be covered, the insurer has a duty to defend if the complaint allegations could impose liability for conduct covered under the policy. Marleau v. Truck Ins. Exch., 333 Or. 82, 91 (2001); Ledford, 319 Or. at 400; Abrams v. Gen. Star Indem. Co., 335 Or. 392, 299-400 (2003); Drake v. Mut. of Enumclaw Ins., 167 Or. App. 475, 478, 488 (2000). When the allegations in the underlying complaint state a claim for excluded conduct only, the insurer has no duty to defend. See Abrams v. General Star Indemnity Co., 335 Or. 392, 399-400 (2003).
Whether an insurer has a duty to defend is a question of law, which is determined by comparing the terms of the insurance policy and the facts alleged in the complaint against the insured. Drake, 167 Or.App. at 478. The interpretation of an insurance policy is a question of law. Hoffman Construction Co. of Alaska v. Fred S. James Co. of Oregon, 313 Or. 464, 469 (1992).
The complaint against the insured alleges the following relevant facts:
On or about September 19, 2003, defendant Michael Stephen Fulmer entered the home of decedent, Michael Loudon Ford, shot and killed him. Defendant Fulmer's acts were intentional. . . . Defendant Fulmer was negligent in discharging a firearm in the direction of Michael Ford, when defendant knew or should have known that such conduct could foreseeably result in the death of Michael Ford. (Complaint Exhibit 1 at 1-2).
The insurance policy at issue contains the following language:
Losses We Do Not Cover Under Coverage X:
1. We do not cover any bodily injury or property damage intended by, or which may reasonably be expected to result from the intentional or criminal acts or omissions of, any insured person. This exclusion applies even if:
a) such insured person lacks the mental capacity to govern his or her conduct;
b) such bodily injury or property damage is of a different kind or degree than that intended or reasonably expected; or
c) such bodily injury or property damage is sustained by a different person than that intended or reasonably expected. (Plaintiff's Concise Statement of Material Facts Exhibit 4 at 6).Intentional Acts Exclusion
Plaintiff argues that, because the underlying complaint in this case alleges that Fulmer's act of shooting Ford was intentional and that the act of intentionally discharging a firearm in the direction of another is so certain to cause injury, an intent to injure can be inferred as a matter of law, citing Mutual of Enumclaw v. Merrill, 102 Or.App. 408 (1990).
The subjective intent of the insured to cause injury is a question of fact. Ledford, 319 Or. at 403. The court will "only infer that the insured had a subjective intent to cause harm or injury as a matter of law when such subjective intent is the only reasonable inference that may be drawn from the insured's conduct." Allstate Ins. Co. v. Stone, 319 Or. 275, 278-279 (1994). The court may infer subjective intent to harm or injure in cases where subjective intent to harm or injure is a necessary element to establish liability in the underlying action.Ledford, 319 Or. at 404-405. Subjective intent to cause harm is not a necessary element to establish liability in a negligence action. See Id. at 405.
The complaint alleges in part that Defendant Fulmer was negligent in discharging a firearm in the direction of Michael Ford, when defendant knew or should have known that such conduct could foreseeably result in the death of Michael Ford. Based on these allegations, the court finds that this is not the type of action from which intent to injure must be inferred as a matter of law. See State Farm Fire and Casualty Co. v. Green, 139 Or.App. 51, 55-56 (1996) (inference of intent to harm could not be compelled as a matter of law, but could be inferred by the jury where a man carried a loaded gun to a party and aimed and shot the gun into the crowd); See Farmers Ins. Co. of Oregon v. Limbocker, 109 Or.App. 130, 134-135(1991) (guilty plea to assault charge in which defendant admitted he acted recklessly did not establish conclusively an intent to harm); See Merrill, 102 Or.App. at 412 (court could infer intent to harm from the insured's act of sexually molesting victim); See Cunningham Walsh, Inc. v. Atlantic Mutual Ins., 88 Or.App. 251, 255 (1988) (court could infer intent to harm when complaint alleged misrepresentation and deceit). The complaint clearly alleges negligent conduct and subjective intent is not an element of a negligence claim.
Plaintiff argues that the wording of its policy exclusion, which states "may reasonably be expected to result from the intentional or criminal acts", is an objective standard, not a subjective standard and, therefore, Fulmer's subjective intent to harm is not required, because an injury is reasonably expected to result from shooting a gun in the direction of another person, citing Allstate Ins. Co. v. Sowers, 97 Or.App. 658, 660-661 (1989) and cases from other jurisdictions interpreting the same policy language. Oregon courts have rejected using an objective standard when determining whether an intentional acts exclusion applies, including policy with language regarding whether the harm is intended or expected. See Allstate Ins. Co. v. Stone, 319 Or. 275, 279 (1994).
Despite variations in the language of the policies, this court has interpreted various policy provisions excluding insurance coverage for intentionally-caused injuries similarly. See, e.g., Allstate Ins. Co. v. Stone, 319 Or. 275, 278, 876 P.2d 313 (1994) (policy excluding bodily injury or property damage caused intentionally by, or at the direction of, an insured person); Snyder v. Nelson, Leatherby Ins., 278 Or. 409, 413, 564 P.2d 681 (1977) (policy covering injuries caused by accident); Nielsen v. St. Paul Companies, supra, 283 Or. at 279, 583 P.2d 545 (policy covering bodily injury or property damage neither expected nor intended from the standpoint of the Insured ). Cf. Isenhart v. General Casualty Co., supra, 233 Or. at 53, 377 P.2d 26 (applying same analysis to policy without provision excluding coverage for intentionally-inflicted injuries because coverage of such injuries would be against public policy). Injuries resulting from intentional acts are excluded from insurance coverage when the insured intended to cause the particular injury or harm, as opposed to merely intending the act. . . . For an exclusion from insurance coverage for intentional conduct to apply, it is not sufficient that the insured's intentional, albeit unlawful, acts have resulted in unintended harm; the acts must have been committed for the purpose of inflicting the injury and harm before either a policy provision excluding intentional harm applies or the public policy against insurability attaches. . . .Ledford, 319 Or. at 401-402 (citations and quotations omitted) (emphasis added). Based on Stone and Ledford, this court finds the cases relied upon by plaintiff, which apply an objective standard in determining whether an intentional acts exclusion applies, are not consistent with recent Oregon law. Oregon law requires subjective intent to harm for an intentional acts exclusion to apply. The factual allegations of the underlying complaint, which state that Fulmer knew or should have known his action would cause the injury, do not establish that Fulmer had a subjective intent to cause the harm to Ford. Criminal Acts Exclusion
Plaintiff argues that the conduct alleged in the underlying complaint constitutes several different crimes including criminal homicide under ORS 163.005, ORS 163.115, ORS 163.145(1), manslaughter under ORS 163.118 or ORS 163.175, assault under ORS 163.185, ORS 163.175, or ORS 163.165, or unlawful use of a weapon under ORS 166.220, and, therefore, the criminal acts exclusion applies. Plaintiff also argues that the injury was reasonably expected to result from the criminal conduct, and, therefore, the exclusion applies.
"Unless specifically provided otherwise, a person is not guilty of a crime unless he acts with a culpable mental state." O'Brien v. Eugene Chemical Exports, Inc., 63 Or.App. 284, 288 fn. 2 (1983). A "culpable mental state means [a person acts] intentionally, knowingly, recklessly, or with criminal negligence . . ." ORS 161.085(6). These terms are defined in ORS 161.085(7)-(10). All of the crimes set forth by plaintiff require a person to act with a culpable mental state.
The underlying complaint alleges that Fulmer knew or should have known his actions would result in harm. These allegations comprise an ordinary negligence standard. "Civil liability for negligence may be found where there is merely an inadvertent breach of duty or imprudent conduct. The breach must be greater for criminal liability to result." State v. Stringer, 49 Or.App. 51, 54-55 (1980). Because the underlying complaint alleges ordinary negligence, the court finds the criminal acts exclusion does not apply.
Duty to Indemnify
Plaintiff argues that it does not have a duty to indemnify because any liability arising from Fulmer's conduct is excluded from coverage. This court finds that the intentional acts and criminal acts exclusions do not apply based on the allegations of the underlying complaint.
In addition, "The duty to indemnify is independent of the duty to defend. Even when an insurer does not have a duty to defend based on the allegations in the initial complaint, the facts proved at trial on which liability is established may give rise to a duty to indemnify if the insured's conduct is covered." Ledford, 319 Or. at 403 (citation omitted). In this case, the facts proved at trial may show that the conduct of Fulmer is covered by the policy.
IV. RECOMMENDATION
Based on the foregoing, it is recommended that plaintiff's motion for summary judgment (#9) be denied.
This recommendation is not an order that is immediately appealable to the Ninth Circuit Court of Appeals. Any notice of appeal pursuant to Rule 4(a)(1), Federal Rules of Appellate Procedure, should not be filed until entry of the district court's judgment or appealable order. The parties shall have ten days from the date of service of a copy of this recommendation within which to file specific written objections with the Court. Thereafter, the parties have ten days within which to file a response to the objections. Failure to timely file objections to any factual determinations of the Magistrate Judge will be considered a waiver of a party's right to de novo consideration of the factual issues and will constitute a waiver of a party's right to appellate review of the findings of fact in an order or judgment entered pursuant to the Magistrate Judge's recommendation.