Country Mutual Insurance Co. v. Hagan
Annotate this Case
No. 2-97-1058
_________________________________________________________________
IN THE
APPELLATE COURT OF ILLINOIS
SECOND JUDICIAL DISTRICT
_________________________________________________________________
COUNTRY MUTUAL INSURANCE ) Appeal from the Circuit Court
COMPANY, ) of Winnebago County.
)
Plaintiff-Appellee, )
)
v. ) No. 96--MR--139
)
JOHN MARTIN HAGAN III, )
)
Defendant-Appellant )
)
(John Martin Hagan, Carol ) Honorable
Hagan, and Jennifer Hardwick, ) J. Todd Kennedy,
Defendants). ) Judge, Presiding.
_________________________________________________________________
JUSTICE BOWMAN delivered the opinion of the court:
This case arises from an insurance coverage dispute between
plaintiff, Country Mutual Insurance Company (Country Mutual), and
defendant John Martin Hagan III (Marty Hagan). At issue is whether
Country Mutual must defend and indemnify Marty Hagan in a lawsuit
filed by defendant Jennifer Hardwick. Hardwick filed a complaint
against Marty Hagan and his parents, defendants John Martin Hagan
and Carol Hagan, alleging that Marty Hagan had sexually abused her
when she was 6 years old and he was 14. The Hagans tendered their
defense in this action to Country Mutual, who insured them under a
homeowner s policy. Subsequently, Country Mutual filed a
declaratory judgment action, in which it asserted that it owed
neither indemnification nor a defense to the Hagans because
Hardwick s complaint alleged intentional acts. The trial court
granted summary judgment in favor of John and Carol Hagan and
against Country Mutual, and neither party appeals that ruling.
Marty Hagan, however, appeals the trial court s judgment granting
summary judgment against him and in favor of Country Mutual. We
reverse.
In her five-count fourth amended complaint, Hardwick alleged
that, during the summer of 1982, Marty Hagan invited Hardwick and
her seven-year-old brother to his room to play. In his room, Marty
Hagan performed certain sexual acts with Hardwick, such as forcing
her to perform oral sex and attempting to rape her. Based on these
allegations, Hardwick alleged that Marty Hagan was liable for
assault and battery, for intentional infliction of emotional
distress, for negligence, and for willful and wanton conduct.
Although Hardwick does not state claims against John and Carol
Hagan in her fourth amended complaint (at some point during the
proceedings, they were dismissed from the action with prejudice),
the record indicates that her original complaint initially
contained two counts against them. In these counts, she alleged
that they were negligent in failing to restrict Marty Hagan s
access to other minors.
At the time of the acts alleged in Hardwick s complaint, the
Hagans were insured under a homeowner s policy issued by Country
Mutual. On March 12, 1996, Marty Hagan and his parents tendered
their defense in this action to Country Mutual. After refusing the
tender of the Hagans defense, Country Mutual filed a complaint for
declaratory judgment against the Hagans and Hardwick.
In its complaint, Country Mutual alleged that there was no
coverage based on the following exclusion contained in the policy:
"Exclusions -- Section 1
Liability and Medical Payments, Coverages A & B,
does not apply to bodily injury or property damage:
1. caused intentionally by or at the direction of an
insured."
According to Country Mutual, Hardwick s complaint contained
allegations of intentional conduct, and, therefore, there was no
coverage under the policy pursuant to this exclusion and thus no
duty to defend or indemnify the Hagans.
In addition, Country Mutual alleged that there was no coverage
according to the coverage provisions of the policy, which provided
in relevant part:
"Liability, Coverage A
We promise to pay on behalf of an insured for
damages resulting from bodily injury or property damage
caused by an occurrence, if the insured is legally
obligated."
Country Mutual maintained that the intentional conduct alleged in
Hardwick s complaint could not be considered an "occurrence,"
because the policy defined "occurrence" as "an accident, *** which
results in bodily injury or property damage." According to Country
Mutual, under this language, it owed no duty to defend or indemnify
Marty Hagan and also was not obligated to defend or indemnify John
and Carol Hagan because their alleged conduct "arose out of"
Marty s intentional conduct.
Country Mutual, therefore, asked the trial court to declare
that (1) it is not liable to the Hagans under the policy for any
judgment or settlement based on Hardwick s complaint; and (2) it is
not obligated to provide the Hagans with a defense to Hardwick s
complaint.
John and Carol Hagan filed a motion for summary judgment with
respect to the declaratory judgment complaint, and, in December
1996, the trial court granted their motion in part. It held that
the intentional conduct exclusion in the insurance policy did not
apply to the allegations against them because the complaint charged
them with negligence, not intentional conduct. The trial court,
therefore, held that Country Mutual must provide them with a
defense. It declined, however, the parents request for summary
judgment on the issue of indemnification. Neither party has
appealed this ruling.
The appeal in this case stems from Marty Hagan s separate
motion for summary judgment against Country Mutual, which he filed
on June 20, 1997. He argued that Country Mutual owed him a defense
because Hardwick s complaint contained allegations of negligence,
which was not excluded from coverage of the policy. In addition,
he contended that Country Mutual s request for the court to rule on
the issue of coverage was premature.
A few days later, Country Mutual filed a cross-motion for
summary judgment against Marty Hagan. It argued that there was no
coverage for the acts alleged in the assault, battery, intentional
infliction of emotional distress, and "willful and wanton" counts
of the complaint because the intentional conduct alleged in these
counts could not be considered an "accident" within the coverage
language of the policy and because such conduct fell within the
policy s exclusionary language.
Country Mutual argued that the negligence count of the
complaint also did not trigger coverage or its duty to defend
because, despite the fact that this count was couched in terms of
negligence, the factual allegations on which it was based were
those of intentional conduct. In addition, it argued that an
insured s intent to injure is presumed in cases involving sexual
abuse of a minor. Country Mutual, therefore, asked the trial court
to find that it was not required to indemnify John, Carol, or Marty
Hagan and that it owed no defense to Marty.
After hearing the arguments of the parties, the trial court
granted summary judgment in favor of Country Mutual and against
Marty Hagan. On October 3, 1997, it held that Country Mutual had
no obligation to indemnify the Hagans and that it did not owe a
defense to Marty Hagan. Thereafter, Marty Hagan filed this timely
appeal.
On appeal, Marty Hagan contends that the trial court erred in
finding, as a matter of law, that the acts alleged in Hardwick s
complaint were excluded from the coverage of the Country Mutual
policy. He argues that the negligence count of the complaint was
within the coverage of the policy and that the trial court erred in
concluding that there is a presumption that a minor who sexually
abuses another minor does so with an intent to injure. According
to Marty Hagan, whether he performed the acts alleged in the
complaint and whether he did so with an intent to injure Hardwick
are questions of fact, which preclude summary judgment. Based on
this fact question, Marty Hagan argues that it was improper for the
court to grant Country Mutual s summary judgment motion.
Country Mutual counters that summary judgment in its favor was
appropriate because it may be inferred, as a matter of law, that an
insured intends to cause injury by sexually abusing a minor.
Consequently, the acts alleged in the complaint were not
"accidents" as required by the coverage language of the policy and
were intentional injuries expressly excluded from the policy.
Summary judgment is appropriate when the pleadings,
depositions, admissions, and affidavits on file show that there is
no genuine issue of material fact, and the moving party is entitled
to judgment as a matter of law. Evanston Hospital v. Crane, 254
Ill. App. 3d 435, 440 (1993). In determining whether a genuine
question of material fact exists, a court must construe matters in
the record against the party moving for summary judgment and
liberally in favor of the opponent. Bysom Enterprises, Ltd. v.
Peter Carlton Enterprises, Ltd., 267 Ill. App. 3d 1, 6 (1994).
Although summary judgment is encouraged to expeditiously dispose of
a lawsuit, it is a drastic means of disposition of litigation and
should be allowed only when the resolution of the case depends on
a question of law, and the moving party s right to judgment is free
and clear from doubt. Lily Lake Road Defenders v. County of
McHenry, 156 Ill. 2d 1, 8 (1993). When parties file cross-motions
for summary judgment, they invite the court to decide the issues as
questions of law, but summary judgment is nevertheless
inappropriate when there are questions of material fact. Rumford
v. Countrywide Funding Corp., 287 Ill. App. 3d 330, 334 (1997).
The appellate court s review of a ruling on summary judgment is de
novo. Castaneda v. Community Unit School District No. 200, 268
Ill. App. 3d 99, 102 (1994).
In this case, the trial court granted summary judgment in
favor of Country Mutual with respect to both its duty to defend
Marty Hagan and its duty to indemnify the Hagans. We begin our
analysis with a review of the court s ruling on the duty to defend
because this duty is broader than its duty to indemnify. See Crum
& Forster Managers Corp. v. Resolution Trust Corp., 156 Ill. 2d 384, 393-94 (1993).
Whether an insurer has a duty to defend depends on a
comparison of the allegations of the underlying complaint to the
relevant policy provisions. Dixon Distributing Co. v. Hanover
Insurance Co., 161 Ill. 2d 433, 438 (1994). In determining an
insurer s duty to defend, the allegations of the complaint and the
policy must be liberally construed in favor of the insured. U.S.
Fidelity & Guaranty Co. V. Wilkin Insulation Co., 144 Ill. 2d 64,
74 (1991). An insurer may not justifiably refuse to defend unless
it is clear from the face of the underlying complaint that the
facts alleged do not fall within or potentially within the coverage
of the policy. Wilkin, 144 Ill. 2d at 73. Even if only one theory
of recovery alleged in the complaint falls within the coverage of
the policy, the insurer must defend the insured with respect to all
theories set forth in the complaint. National Union Fire Insurance
Co. v. Glenview Park District, 158 Ill. 2d 116, 124-25 (1994).
Marty Hagan s argument that Country Mutual had a duty to
defend him is based on the negligence count of Hardwick s
complaint. The existence of a duty to defend, therefore, depends
on a comparison of the allegations contained in this count with the
coverage and exclusionary provisions cited by Country Mutual in its
declaratory judgment complaint.
In her negligence count, Hardwick alleged that Marty Hagan
cared for her and her brother as a baby-sitter and, in that
capacity, assumed a duty to use reasonable care to ensure that his
actions did not injure her or her brother. She alleged that he
breached that duty by performing the following acts:
"(a) he removed the clothing of [Hardwick] exposing her
genitals;
(b) he physically touched [Hardwick s] genitals;
(c) he forced [Hardwick] to touch his genitals;
(d) he committed oral sex (i.e., cunnilingus) upon
[Hardwick s] genitals;
(e) he forced Hardwick to commit oral sex (i.e., fellatio)
upon his genitals, continuing to the point of
ejaculation;
(f) he attempted to rape [Hardwick] by attempted vaginal
intercourse; and
(g) many other lewd, indecent, and lascivious acts upon
[Hardwick]."
According to Hardwick, as a direct and proximate result of these
negligent acts, she suffered physical, mental, and emotional
injuries.
The parties focus their arguments on the applicability of the
intentional injury exclusion of the policy to these allegations.
According to this exclusion, there is no coverage for bodily injury
or property damage "caused intentionally" by an insured.
Marty Hagan argues that the trial court erred in finding that,
because the allegations of the complaint pertained to sexual
molestation of a minor, the conduct alleged in the complaint was
per se intentional and therefore within the exclusionary language
of the policy. Although he acknowledges that, in cases involving
an adult insured s sexual abuse of a minor, Illinois courts have
inferred an intent to injure (see, e.g., State Farm Fire & Casualty
Co. v. Watters, 268 Ill. App. 3d 501 (1994)), he asserts that these
cases are inapplicable when the insured is a minor. He argues that
there is no authority in Illinois for inferring an intent to injure
with respect to a minor insured, and he urges us to follow cases in
other jurisdictions in which courts have refused to infer intent
when a minor insured sexually abuses another minor.
Country Mutual responds that the inference of intent that
applies in cases of sexual abuse by adult insureds should apply
with equal force when the perpetrator is a minor. It asks this
court to infer that Marty Hagan intended to injure Hardwick based
on the Illinois inferred-intent cases and cases in other
jurisdictions in which the courts have extended the inference to
minor insureds accused of sexual abuse.
In cases involving an adult insured s sexual abuse of a minor,
Illinois courts have inferred, as a matter of law, that the insured
intended to injure the minor. See Western States Insurance Co. v.
Bobo, 268 Ill. App. 3d 513 (1994); State Farm Fire & Casualty Co.
v. Watters, 268 Ill. App. 3d 501 (1994); Scudder v. Hanover
Insurance Co., 201 Ill. App. 3d 921 (1990). Like Illinois, an
overwhelming majority of courts in other jurisdictions have held
that, in situations involving sexual abuse of a minor, it may be
inferred as a matter of law that an adult insured intended to harm
the victim. See Manufacturers & Merchants Mutual Insurance Co. v.
Harvey, 330 S.C. 152, 498 S.E.2d 222 (1998) (collecting cases); see
also, e.g., State Farm Fire & Casualty Co. v. Smith, 907 F.2d 900
(9th Cir. 1990) (Nevada law); Troy v. Allstate Insurance Co., 789 F. Supp. 1134 (D. Kan. 1992) (Kansas law); Horace Mann Insurance
Co. v. Fore, 785 F. Supp. 947 (M.D. Ala. 1992) (Alabama law); Whitt
v. DeLeu, 707 F. Supp. 1011 (W.D. Wis. 1989) (Wisconsin law); Twin
City Fire Insurance Co. v. Doe, 163 Ariz. 388, 788 P.2d 121 (1989);
Troelstrup v. District Court, 712 P.2d 1010 (Colo. 1986); Landis v.
Allstate Insurance Co., 546 So. 2d 1051 (Fla. 1989); Perreault v.
Maine Bonding & Casualty Co., 568 A.2d 1100 (Maine 1990); Worcester
Insurance Co. v. Fells Acres Day School Inc., 408 Mass. 393, 558 N.E.2d 958 (1990); Young v. All America Insurance Co., 81 Ohio App.
3d 493, 611 N.E.2d 421 (1992); Mutual of Enumclaw v. Merrill, 102
Or. App. 408, 794 P.2d 818 (1990); Maayeh v. Trinity Lloyds
Insurance Co., 850 S.W.2d 193 (Tex. Ct. App. 1992).
Whether an intent to injure may be inferred when a minor
insured sexually abuses another minor is an issue of first
impression in Illinois. Although a clear majority of courts in
other jurisdictions infer intent when the insured is an adult
(Scudder, 201 Ill. App. 3d at 927-28), the courts are evenly split
with respect to the extension of this inference to minors. While
a slight majority of courts are willing to infer as a matter of law
that a minor insured who sexually abuses another minor does so
intentionally (Allstate Insurance Co. v. Steele, 74 F.3d 878 (8th
Cir. 1996) (holding that, under Minnesota law, a 16-year-old s
intent would be inferred); B.B. v. Continental Insurance Co., 8 F.3d 1288 (8th Cir. 1993) (under Missouri law, intent was inferred
for perpetrator who was 13 to 16 years old at the time of the
abuse); Allstate Insurance Co. v. Bailey, 723 F. Supp. 665 (M.D.
Fla. 1989) (finding a 15-year-old s intent inferred under Florida
law); Allstate Insurance Co. v. Roelfs, 698 F. Supp. 815 (D. Alaska
1987) (16-year-old s intent as inferred under Alaska law); D.W.H.
v. Steele, 512 N.W.2d 586 (Minn. 1994) (inferring the intent of an
11-year-old); Illinois Farmers Insurance Co. v. Judith G., 379 N.W.2d 638 (Minn. Ct. App. 1986) (intent was inferred for
perpetrator who was 13 to 16 years old at the time of the abuse);
Cuervo v. Cinncinnati Insurance Co., 76 Ohio St. 3d 41, 665 N.E.2d 1121 (1996) (inferred-intent standard applied to 16-year-old); see
also Swentkowski v. Dawson, 881 P.2d 437 (Colo. Ct. App. 1994)
(relying on both the inference of intent and an adjudication of
delinquency to find that a minor acted intentionally)), almost as
many jurisdictions have refused to extend the presumption of intent
to minor insureds (see Allstate Insurance Co. v. Patterson, 904 F. Supp. 1270 (D. Utah 1995) (under Utah law, inferred-intent standard
did not apply to perpetrators who were 12 to 16 years old at the
time of the abuse); Allstate Insurance Co. v. Jack S., 709 F. Supp. 963 (D. Nev. 1989) (under Nevada law, refusing to infer intent of
14-year-old); United Services Automobile Ass'n v. DeValencia, 190
Ariz. 436, 949 P.2d 525 (1997) (refusing to infer intent of 14-
year-old); Fire Insurance Exchange v. Diehl, 450 Mich. 678, 545 N.W.2d 602 (1996) (refusing to infer intent of perpetrator who was
7 to 9 years old at the time of the abusive acts)).
Courts applying the inference of intent to minor insureds
accused of sexually abusing other minors do so based on the
rationale that the act of sexual abuse is inherently harmful. See,
e.g., Bailey, 723 F. Supp. at 668. They note that, in cases
involving adult perpetrators, intent is inferred as a matter of law
because " 'sexual misconduct with a minor is objectively so
substantially certain to result in harm to the minor victim, that
the perpetrator cannot be allowed to escape society s determination
that he or she is expected to know that.' " B.B., 8 F.3d at 1293,
quoting Whitt v. DeLeu, 707 F. Supp. 1011, 1016 (W.D. Wis. 1989).
Because intent can be inferred from the nature of the act,
therefore, courts have refused to consider subjective intent in
cases involving adult molestors. See, e.g., Landis, 546 So. 2d at
1053. Based on these holdings that intent should be inferred from
the act and that the perpetrator s subjective intent is not
relevant, courts have applied the inferred-intent standard
regardless of the age of the perpetrator. See, e.g., Bailey, 723 F. Supp. at 668.
Courts that infer intent for minor perpetrators also cite
several policy reasons for doing so. According to these courts, if
they did not infer intent, this would in effect require the insurer
to "subsidize" sexual abuse at the expense of other insureds who
would "cringe at the very suggestion" that their premiums were
being used to pay for liability arising out of child sexual abuse.
See B.B., 8 F.3d at 1295, quoting Wiley v. State Farm Fire &
Casualty Co., 995 F.2d 457, 464 (3d Cir. 1993). Although these
courts recognize that the application of the inferred-intent
standard removes a source of compensation for the victim of the
abuse, they find that the victim s interest in compensation is
outweighed by the need to deter offenders by holding them
personally liable for their victims injuries. See B.B., 8 F.3d at
1295.
By contrast, other courts have found that, based on minors
relative lack of experience in sexual matters, it is improper to
infer an intent to injure in cases where a minor sexually abuses
another minor. See, e.g., Patterson, 904 F. Supp. at 1282-83;
Diehl, 450 Mich. at ____, 545 N.W.2d at 607-08. These courts
reason that to infer that a minor intends to cause the injury
resulting from his sexual misconduct with another minor is
inconsistent with criminal statutes that protect minors from sexual
conduct based on a presumption that they are unable to understand
the nature and consequences of sexual acts. See Jack S., 709 F. Supp. at 966; DeValencia, 190 Ariz. at ___, 949 P.2d at 529.
According to these courts, although it may be inferred based on the
harm inherent in a sexually abusive act that an adult intends to
injure the victim, it is "too broad a leap in logic to find that a
minor intended to injure another minor by engaging in sexual acts."
Jack S., 709 F. Supp. at 966.
In addition, at least one court has noted that it is
inconsistent to rely on the age of the victim in inferring intent,
yet ignore the age of the perpetrator. See Patterson, 904 F. Supp.
at 1282-83. As the Patterson court explained, sexual abuse of a
minor is considered inherently harmful because the minor victim
cannot fully appreciate the consequences of the activity and
therefore lacks the ability to consent to it. See Patterson, 904 F. Supp. at 1282. The Patterson court concluded that, for the same
reason, a child perpetrator should not be held to the same standard
as an adult. Patterson, 904 F. Supp. at 1282-83.
Instead of inferring intent as a matter of law, this latter
group of courts has held that whether a minor who molests another
minor intends injury should be determined on a case-by-case basis.
See, e.g., DeValencia, 190 Ariz. at ___, 949 P.2d at 529. As in
negligence cases, whether the results of a minor s acts were
foreseeable should be determined by an examination of the minor s
individual characteristics, such as his age, ability, intelligence,
and experience. See Patterson, 904 F. Supp. at 1284; DeValencia,
190 Ariz. at ___, 949 P.2d at 529; Diehl, 450 Mich. at ___, 545 N.W.2d at 607.
We agree that the inferred-intent standard should not apply
when the insured is a minor. Although there are sound reasons for
inferring that an adult who abuses a minor intends the injury
caused by the abuse, extending a blanket presumption of intent to
all minor perpetrators will lead to absurd results in some cases.
For example, if we were to apply the inferred-intent standard to
minors, a six-year-old who engages in sexual experimentation with
a peer would be deemed to have intended the same injury foreseen
and caused by an adult who sexually molests a child.
Not only is this result contrary to logic, but also it is
inconsistent with Illinois law. Like other states, Illinois has
enacted criminal laws to protect minors from sexual conduct. For
example, an individual who engages in an act of sexual penetration
or sexual conduct with a child under the age of 17 may be found
guilty of criminal sexual abuse or aggravated criminal sexual
abuse, depending on the ages of the perpetrator and the victim.
See 720 ILCS 5/12-15(b),(c) (West 1994); 720 ILCS 5/12-16(c)(1)(i),
(c)(2)(i), (d) (Smith-Hurd Supp. 1998). The consent of the victim
is not a defense to these offenses. See 720 ILCS 5/12-17 (West
1994). As the court stated in People v. Riley, 84 Ill. App. 2d
296, 300 (1967), a young child is incapable of consenting to an act
of intercourse because she cannot be expected to understand the
nature of the act. See also People v. Strait, 116 Ill. App. 3d
110, 113 (1983). To infer that a minor accused of sexual abuse
understands the nature of his conduct and intends any resulting
injury is inconsistent with these principles of Illinois criminal
law.
Inferring that minors intend the injuries resulting from their
sexual conduct with other minors is also inconsistent with this
state s tort law. A child of any age may be liable for an
intentional tort, such as battery, because the only intent required
for such torts is the intent to perform the harmful act, and even
children of a tender age may have the capacity for forming this
intent. See Seaburg v. Williams, 16 Ill. App. 2d 295, 305-06
(1958). By contrast, Illinois courts conclusively presume that
children under the age of seven years cannot be contributorily
negligent because they cannot foresee the consequences of their
actions, which is the state of mind required for negligence. See
Jorgensen v. Nudelman, 45 Ill. App. 2d 350, 352-54 (1963). When
children are between the ages of 7 and 14, their capacity to be
contributorily negligent is a question of fact, and when a child is
14 years old, he is held to the same degree of care as an adult.
Seaburg, 16 Ill. App. 2d at 300, citing Maskaliunas v. Chicago &
Western Indiana R.R. Co., 318 Ill. 142, 149-50 (1925).
Under Illinois law, exclusionary provisions, such as the one
in this case, require that an insured act with the specific intent
to injure. Scudder, 201 Ill. App. 3d at 927. In cases where such
clauses are at issue the intent required is therefore more like
that in negligence cases, where the consequences of an act must be
foreseen, than in cases involving intentional torts, where only the
act must be intended. Given that minors below a certain age are
presumed to be unable to understand the consequences of their
actions in tort cases, we should not infer that, regardless of age,
minor insureds who commit sexual abuse of other minors intend the
resulting injury.
Because a minor insured may or may not have the capacity to
form the intent to injure another minor with whom he engages in
sexual conduct, this issue is better left to the trier of fact. By
refusing to apply the inferred-intent standard, we do not require
insurers to defend and provide coverage whenever a minor sexually
abuses another minor. We merely require that the minor
perpetrator s intent be determined on a case-by-case basis.
Coverage will be required only when a trier of fact determines,
based on the particular characteristics and experience of a minor,
that the minor did act with an intent to injure when he sexually
abused another minor.
In addition, we believe our ruling is correct as a matter of
policy. Public policy in Illinois favors affording compensation to
victims. University of Illinois v. Continental Casualty Co., 234
Ill. App. 3d 340, 358 (1992). As the B.B. court acknowledged, the
effect of the application of the inferred-intent standard is to
deprive victims of sexual abuse of a source of compensation. B.B.,
8 F.3d at 1295. In cases where the perpetrator is a minor, we do
not believe the benefit of compensating victims is outweighed by
the need to hold perpetrators responsible for their actions.
Depriving a minor perpetrator of insurance coverage can have little
deterrent effect on a minor who likely has little understanding of
the ramifications of his conduct, much less insurance coverage.
Based on the foregoing authority and policy considerations, we
hold that a court should not infer an intent to injure in cases
where a minor insured sexually abuses another minor. In such
cases, a minor s intent is a question of fact based on the
circumstances of the sexual conduct and the minors individual
characteristics and experience.
Under the facts of this case, therefore, it was error for the
trial court to decide, as a matter of law, that the exclusionary
provision precluded coverage. Marty Hagan s intent to cause
Hardwick s injuries cannot be inferred as a matter of law. In
addition, the allegations of her complaint, which must be construed
in the light most favorable to Marty Hagan, do not permit a
conclusion, as a matter of law, that he intended to injure her.
Although there are allegations that he intended the sexual acts,
there are no allegations that he intended to injure Hardwick by
performing the acts. The intentional injury exclusion of the
policy, therefore, does not support the trial court s ruling that
there was no coverage for Hardwick s complaint.
In its declaratory judgment complaint, however, Country Mutual
also asserted that Hardwick s allegations were not within the
coverage provisions of the policy. According to these provisions,
there is coverage only for bodily injury and property damage
"caused by an occurrence," which the policy defines as "an
accident."
Before discussing whether the allegations of the complaint are
encompassed within the coverage language of the policy, we note
that neither party has addressed this issue in the briefs they
submitted to us, aside from a few isolated references to the word
"accident." The parties failure to argue this issue and provide
us with citation to relevant authority is a violation of Supreme
Court Rule 341(e)(7) (155 Ill. 2d R. 341(e)(7)) and constitutes
waiver of the issue (see Pyskaty v. Oyama, 266 Ill. App. 3d 801,
822-23 (1994); Antol v. Chavez-Pereda, 284 Ill. App. 3d 561, 573
(1996)).
The rule of waiver is a limitation on the parties, however,
and not the jurisdiction of the court. See Hux v. Raben, 38 Ill. 2d 223, 224 (1967). Even though an issue is waived, we may address
it based on our obligation to achieve a just result and maintain a
uniform body of precedent. See Roche v. Fireside Chrysler-
Plymouth, Mazda, Inc., 235 Ill. App. 3d 70, 86-87 (1992); Barnett
v. Zion Park District, 171 Ill. 2d 378, 389 (1996). In this case,
our review of the trial court s ruling depends on the application
and interpretation of the coverage provisions, given our conclusion
that the exclusionary language of the policy does not apply. We,
therefore, choose to address this issue, waiver notwithstanding.
The policy does not define "accident." We must, therefore,
look elsewhere for guidance as to the interpretation of this term.
In other insurance cases in which policies have defined the word
"occurrence" as an "accident," Illinois courts have described the
meaning of "accident" as follows:
"An accident has been defined as an unforeseen
occurrence, usually of an untoward or disastrous
character or an undesigned sudden or unexpected event of
an inflictive or unfortunate character." Aetna Casualty
& Surety Co. v. Freyer, 89 Ill. App. 3d 617, 619 (1980).
See also Monticello Insurance Co. v. Wil-Freds Construction, Inc.,
277 Ill. App. 3d 697, 703 (1996); Bituminous Casualty Corp. v.
Newberg Construction Co., 218 Ill. App. 3d 956, 965-66 (1991);
Travelers Insurance Cos. v. P.C. Quote, Inc., 211 Ill. App. 3d 719,
726 (1991).
It is not entirely clear from this definition, however, what
must be unexpected, the act that causes the injury or the injury
itself. This is the critical issue in the case before us because,
although Marty Hagan does not dispute that Hardwick s complaint
contains allegations of intentional acts, he argues that her
allegations do not permit a conclusion that he intended to injure
her.
Illinois courts have focused on whether the injury is expected
in determining whether an occurrence is an "accident." As the
court stated in State Farm Fire & Casualty Co. v. Watters, 268 Ill.
App. 3d 501, 506 (1994), "an occurrence which is defined as an
accident involves the consideration of whether the injury was
expected or intended from the standpoint of the insured." (Emphasis
added.) See also Commercial Union Insurance Co. v. Image Control
Property Management, Inc., 918 F. Supp. 1165, 1169 (N.D. Ill.
1996), quoting Calvert Insurance Co. v. Western Insurance Co., 874 F.2d 396, 399 (7th Cir. 1989) ("In determining whether a complaint
sufficiently alleges an 'occurrence,' '[t]he focus at all times,
under Illinois law, is whether the injury was expected or intended
by the [insured], not whether the acts of the [insured] were
performed intentionally' ").
In Illinois, therefore, if an injury is not expected or
intended by the insured, it is considered an accident. For
example, in a recent case from the fifth district, State Farm Fire
& Casualty Co. v. Martin, No. 5-95-0810 (May 6, 1998)), the court
held that the deaths of two fire fighters that resulted from a fire
intentionally set by the insured were "accidents" within the
coverage language of the policy. Although the insured admitted
that he intended to destroy a building by setting fire to it, there
was no evidence that he foresaw or intended bodily injury or death.
Thus, the court held that the insurance company had a duty to
defend and indemnify the insured in the wrongful death suits filed
by the fire fighters' survivors. Martin, slip op. at 4.
Based on this case law, whether there is coverage in this case
depends on whether Marty Hagan expected or intended to injure
Hardwick. In a case directly on point, Allstate Insurance Co. v.
Patterson, 904 F. Supp. 1270 (D. Utah 1995), the court held that,
whether sexual abuse by minor insureds of other minors was an
"accident" was a question of fact. In that case, the underlying
complaint alleged that three boys between the ages of 12 and 16
engaged in inappropriate sexual conduct with two boys between the
ages of five and eight " 'without the intention of causing bodily
injury.' " Patterson, 904 F. Supp. at 1285. The coverage and
exclusionary provisions in Patterson were essentially identical to
the ones in the case before us. After refusing to apply the
inferred-intent standard to minors accused of sexual abuse, the
Patterson court held that whether the acts of the minor insureds
constituted an "accident" under the policy was a question of fact.
It stated, "[C]omparing the allegations of the complaint with the
terms of the policies, the court cannot say there is no possibility
of coverage under the policies." Patterson, 904 F. Supp. at 1285.
The court, therefore, refused to grant summary judgment for the
insurer on the issues of its duty to defend and its duty to
indemnify. Patterson, 904 F. Supp. at 1285.
We believe that the result in this case should be the same.
As we have explained, we will not infer, as a matter of law, that
Marty Hagan intended to injure Hardwick when he performed the acts
alleged in her complaint. Based on the allegations contained in
the negligence count of Hardwick s complaint, we also cannot
conclude, as a matter of law, that Marty Hagan "expected or
intended" to injure her. We note that the parties asked the trial
court to decide the case based only on the pleadings.
Consequently, the only facts before us concerning Marty Hagan s
state of mind are those alleged in Hardwick s complaint.
In her negligence count, she does not allege that Marty Hagan
expected or intended to injure her when he performed the sexual
acts she alleges. To the contrary, she alleges that he owed her a
duty to avoid any action that would cause her injury in a
reasonably forseeable manner, that he breached these duties by
performing certain sex acts with her, and that she was injured as
a proximate result of these "negligent, wrongful and indecent
acts." These allegations do not conclusively show that Marty Hagan
"expected or intended" to injure Hardwick. As in Patterson, our
comparison of the allegations of the complaint to the language of
the policy does not indicate that there is no possibility of
coverage under the policy. Whether the conduct alleged in the
negligence count was an "accident" within the coverage of the
policy was, therefore, at least a question of fact, and the trial
court erred in entering summary judgment in favor of Country
Mutual.
In granting summary judgment in favor of Country Mutual, the
trial court relied on the decision in State Farm Fire & Casualty
Co. v. Watters, 268 Ill. App. 3d 501, 506-07 (1994), in which the
court held that an adult insured s sexual molestation of minors was
not an accident. Country Mutual argues that this reliance was
appropriate and supports the judgment in its favor. We disagree.
In Watters, the court s holding that the insured s acts of
sexual molestation were not an accident was based on its
application of the inferred-intent standard. According to the
court, in sexual abuse cases injury is inevitable, and therefore an
insured s intent to harm is inferred. Based on the inference of
intent to cause the injury, the court found that the insured was
not entitled to coverage under the policy, which limited coverage
to "accidents." Watters, 268 Ill. App. 3d at 506-12.
We find that the reasoning and the holding in the Watters case
are not applicable to the facts before us. In Watters, the insured
was a 28-year-old adult. Although there was evidence that he had
diminished mental capacity, the court found that his criminal
conviction established that he had the necessary capacity to form
the intent to commit the acts of sexual abuse. Watters, 268 Ill.
App. 3d at 508. Based on these facts, the Watters court held that
his intent should be inferred.
In this case, by contrast, the insured was only 14 at the time
of the alleged sexual acts and has not been charged with any
criminal offense. As explained previously, we decline to infer
intent under these circumstances. Unlike the Watters court,
therefore, we cannot conclude as a matter of law that the
occurrences in this case were not an "accident." See Patterson,
904 F. Supp. at 1285.
Based on the questions of fact with respect to coverage under
the policy, we hold that it was error for the trial court to grant
summary judgment in favor of Country Mutual on the issue of its
duty to defend. For the same reasons, the trial court erred in
granting summary judgment in favor of Country Mutual on the issue
of indemnification. When there is a bona fide dispute as to
whether an insured acted negligently or intentionally, the issue of
indemnification may not be decided on declaratory judgment until
the underlying tort litigation has been completed. See State Farm
Fire & Casualty Co. v. Leverton, 289 Ill. App. 3d 855, 856 (1997).
Accordingly, we reverse the trial court s decision to grant
summary judgment in favor of Country Mutual and against Marty
Hagan, and we remand the cause for further proceedings on the
declaratory judgment complaint.
Judgment reversed; cause remanded.
INGLIS and HUTCHINSON, JJ., concur.
_________________________________________________________________
IN THE
APPELLATE COURT OF ILLINOIS
SECOND JUDICIAL DISTRICT
_________________________________________________________________
COUNTRY MUTUAL INSURANCE ) Appeal from the Circuit Court
COMPANY, ) of Winnebago County.
)
Plaintiff-Appellee, )
)
v. ) No. 96--MR--139
)
JOHN MARTIN HAGAN III, )
)
Defendant-Appellant )
)
(John Martin Hagan, Carol ) Honorable
Hagan, and Jennifer Hardwick, ) J. Todd Kennedy,
Defendants). ) Judge, Presiding.
_________________________________________________________________
JUSTICE BOWMAN delivered the opinion of the court:
This case arises from an insurance coverage dispute between
plaintiff, Country Mutual Insurance Company (Country Mutual), and
defendant John Martin Hagan III (Marty Hagan). At issue is whether
Country Mutual must defend and indemnify Marty Hagan in a lawsuit
filed by defendant Jennifer Hardwick. Hardwick filed a complaint
against Marty Hagan and his parents, defendants John Martin Hagan
and Carol Hagan, alleging that Marty Hagan had sexually abused her
when she was 6 years old and he was 14. The Hagans tendered their
defense in this action to Country Mutual, who insured them under a
homeowner s policy. Subsequently, Country Mutual filed a
declaratory judgment action, in which it asserted that it owed
neither indemnification nor a defense to the Hagans because
Hardwick s complaint alleged intentional acts. The trial court
granted summary judgment in favor of John and Carol Hagan and
against Country Mutual, and neither party appeals that ruling.
Marty Hagan, however, appeals the trial court s judgment granting
summary judgment against him and in favor of Country Mutual. We
reverse.
In her five-count fourth amended complaint, Hardwick alleged
that, during the summer of 1982, Marty Hagan invited Hardwick and
her seven-year-old brother to his room to play. In his room, Marty
Hagan performed certain sexual acts with Hardwick, such as forcing
her to perform oral sex and attempting to rape her. Based on these
allegations, Hardwick alleged that Marty Hagan was liable for
assault and battery, for intentional infliction of emotional
distress, for negligence, and for willful and wanton conduct.
Although Hardwick does not state claims against John and Carol
Hagan in her fourth amended complaint (at some point during the
proceedings, they were dismissed from the action with prejudice),
the record indicates that her original complaint initially
contained two counts against them. In these counts, she alleged
that they were negligent in failing to restrict Marty Hagan s
access to other minors.
At the time of the acts alleged in Hardwick s complaint, the
Hagans were insured under a homeowner s policy issued by Country
Mutual. On March 12, 1996, Marty Hagan and his parents tendered
their defense in this action to Country Mutual. After refusing the
tender of the Hagans defense, Country Mutual filed a complaint for
declaratory judgment against the Hagans and Hardwick.
In its complaint, Country Mutual alleged that there was no
coverage based on the following exclusion contained in the policy:
"Exclusions -- Section 1
Liability and Medical Payments, Coverages A & B,
does not apply to bodily injury or property damage:
1. caused intentionally by or at the direction of an
insured."
According to Country Mutual, Hardwick s complaint contained
allegations of intentional conduct, and, therefore, there was no
coverage under the policy pursuant to this exclusion and thus no
duty to defend or indemnify the Hagans.
In addition, Country Mutual alleged that there was no coverage
according to the coverage provisions of the policy, which provided
in relevant part:
"Liability, Coverage A
We promise to pay on behalf of an insured for
damages resulting from bodily injury or property damage
caused by an occurrence, if the insured is legally
obligated."
Country Mutual maintained that the intentional conduct alleged in
Hardwick s complaint could not be considered an "occurrence,"
because the policy defined "occurrence" as "an accident, *** which
results in bodily injury or property damage." According to Country
Mutual, under this language, it owed no duty to defend or indemnify
Marty Hagan and also was not obligated to defend or indemnify John
and Carol Hagan because their alleged conduct "arose out of"
Marty s intentional conduct.
Country Mutual, therefore, asked the trial court to declare
that (1) it is not liable to the Hagans under the policy for any
judgment or settlement based on Hardwick s complaint; and (2) it is
not obligated to provide the Hagans with a defense to Hardwick s
complaint.
John and Carol Hagan filed a motion for summary judgment with
respect to the declaratory judgment complaint, and, in December
1996, the trial court granted their motion in part. It held that
the intentional conduct exclusion in the insurance policy did not
apply to the allegations against them because the complaint charged
them with negligence, not intentional conduct. The trial court,
therefore, held that Country Mutual must provide them with a
defense. It declined, however, the parents request for summary
judgment on the issue of indemnification. Neither party has
appealed this ruling.
The appeal in this case stems from Marty Hagan s separate
motion for summary judgment against Country Mutual, which he filed
on June 20, 1997. He argued that Country Mutual owed him a defense
because Hardwick s complaint contained allegations of negligence,
which was not excluded from coverage of the policy. In addition,
he contended that Country Mutual s request for the court to rule on
the issue of coverage was premature.
A few days later, Country Mutual filed a cross-motion for
summary judgment against Marty Hagan. It argued that there was no
coverage for the acts alleged in the assault, battery, intentional
infliction of emotional distress, and "willful and wanton" counts
of the complaint because the intentional conduct alleged in these
counts could not be considered an "accident" within the coverage
language of the policy and because such conduct fell within the
policy s exclusionary language.
Country Mutual argued that the negligence count of the
complaint also did not trigger coverage or its duty to defend
because, despite the fact that this count was couched in terms of
negligence, the factual allegations on which it was based were
those of intentional conduct. In addition, it argued that an
insured s intent to injure is presumed in cases involving sexual
abuse of a minor. Country Mutual, therefore, asked the trial court
to find that it was not required to indemnify John, Carol, or Marty
Hagan and that it owed no defense to Marty.
After hearing the arguments of the parties, the trial court
granted summary judgment in favor of Country Mutual and against
Marty Hagan. On October 3, 1997, it held that Country Mutual had
no obligation to indemnify the Hagans and that it did not owe a
defense to Marty Hagan. Thereafter, Marty Hagan filed this timely
appeal.
On appeal, Marty Hagan contends that the trial court erred in
finding, as a matter of law, that the acts alleged in Hardwick s
complaint were excluded from the coverage of the Country Mutual
policy. He argues that the negligence count of the complaint was
within the coverage of the policy and that the trial court erred in
concluding that there is a presumption that a minor who sexually
abuses another minor does so with an intent to injure. According
to Marty Hagan, whether he performed the acts alleged in the
complaint and whether he did so with an intent to injure Hardwick
are questions of fact, which preclude summary judgment. Based on
this fact question, Marty Hagan argues that it was improper for the
court to grant Country Mutual s summary judgment motion.
Country Mutual counters that summary judgment in its favor was
appropriate because it may be inferred, as a matter of law, that an
insured intends to cause injury by sexually abusing a minor.
Consequently, the acts alleged in the complaint were not
"accidents" as required by the coverage language of the policy and
were intentional injuries expressly excluded from the policy.
Summary judgment is appropriate when the pleadings,
depositions, admissions, and affidavits on file show that there is
no genuine issue of material fact, and the moving party is entitled
to judgment as a matter of law. Evanston Hospital v. Crane, 254
Ill. App. 3d 435, 440 (1993). In determining whether a genuine
question of material fact exists, a court must construe matters in
the record against the party moving for summary judgment and
liberally in favor of the opponent. Bysom Enterprises, Ltd. v.
Peter Carlton Enterprises, Ltd., 267 Ill. App. 3d 1, 6 (1994).
Although summary judgment is encouraged to expeditiously dispose of
a lawsuit, it is a drastic means of disposition of litigation and
should be allowed only when the resolution of the case depends on
a question of law, and the moving party s right to judgment is free
and clear from doubt. Lily Lake Road Defenders v. County of
McHenry, 156 Ill. 2d 1, 8 (1993). When parties file cross-motions
for summary judgment, they invite the court to decide the issues as
questions of law, but summary judgment is nevertheless
inappropriate when there are questions of material fact. Rumford
v. Countrywide Funding Corp., 287 Ill. App. 3d 330, 334 (1997).
The appellate court s review of a ruling on summary judgment is de
novo. Castaneda v. Community Unit School District No. 200, 268
Ill. App. 3d 99, 102 (1994).
In this case, the trial court granted summary judgment in
favor of Country Mutual with respect to both its duty to defend
Marty Hagan and its duty to indemnify the Hagans. We begin our
analysis with a review of the court s ruling on the duty to defend
because this duty is broader than its duty to indemnify. See Crum
& Forster Managers Corp. v. Resolution Trust Corp., 156 Ill. 2d 384, 393-94 (1993).
Whether an insurer has a duty to defend depends on a
comparison of the allegations of the underlying complaint to the
relevant policy provisions. Dixon Distributing Co. v. Hanover
Insurance Co., 161 Ill. 2d 433, 438 (1994). In determining an
insurer s duty to defend, the allegations of the complaint and the
policy must be liberally construed in favor of the insured. U.S.
Fidelity & Guaranty Co. V. Wilkin Insulation Co., 144 Ill. 2d 64,
74 (1991). An insurer may not justifiably refuse to defend unless
it is clear from the face of the underlying complaint that the
facts alleged do not fall within or potentially within the coverage
of the policy. Wilkin, 144 Ill. 2d at 73. Even if only one theory
of recovery alleged in the complaint falls within the coverage of
the policy, the insurer must defend the insured with respect to all
theories set forth in the complaint. National Union Fire Insurance
Co. v. Glenview Park District, 158 Ill. 2d 116, 124-25 (1994).
Marty Hagan s argument that Country Mutual had a duty to
defend him is based on the negligence count of Hardwick s
complaint. The existence of a duty to defend, therefore, depends
on a comparison of the allegations contained in this count with the
coverage and exclusionary provisions cited by Country Mutual in its
declaratory judgment complaint.
In her negligence count, Hardwick alleged that Marty Hagan
cared for her and her brother as a baby-sitter and, in that
capacity, assumed a duty to use reasonable care to ensure that his
actions did not injure her or her brother. She alleged that he
breached that duty by performing the following acts:
"(a) he removed the clothing of [Hardwick] exposing her
genitals;
(b) he physically touched [Hardwick s] genitals;
(c) he forced [Hardwick] to touch his genitals;
(d) he committed oral sex (i.e., cunnilingus) upon
[Hardwick s] genitals;
(e) he forced Hardwick to commit oral sex (i.e., fellatio)
upon his genitals, continuing to the point of
ejaculation;
(f) he attempted to rape [Hardwick] by attempted vaginal
intercourse; and
(g) many other lewd, indecent, and lascivious acts upon
[Hardwick]."
According to Hardwick, as a direct and proximate result of these
negligent acts, she suffered physical, mental, and emotional
injuries.
The parties focus their arguments on the applicability of the
intentional injury exclusion of the policy to these allegations.
According to this exclusion, there is no coverage for bodily injury
or property damage "caused intentionally" by an insured.
Marty Hagan argues that the trial court erred in finding that,
because the allegations of the complaint pertained to sexual
molestation of a minor, the conduct alleged in the complaint was
per se intentional and therefore within the exclusionary language
of the policy. Although he acknowledges that, in cases involving
an adult insured s sexual abuse of a minor, Illinois courts have
inferred an intent to injure (see, e.g., State Farm Fire & Casualty
Co. v. Watters, 268 Ill. App. 3d 501 (1994)), he asserts that these
cases are inapplicable when the insured is a minor. He argues that
there is no authority in Illinois for inferring an intent to injure
with respect to a minor insured, and he urges us to follow cases in
other jurisdictions in which courts have refused to infer intent
when a minor insured sexually abuses another minor.
Country Mutual responds that the inference of intent that
applies in cases of sexual abuse by adult insureds should apply
with equal force when the perpetrator is a minor. It asks this
court to infer that Marty Hagan intended to injure Hardwick based
on the Illinois inferred-intent cases and cases in other
jurisdictions in which the courts have extended the inference to
minor insureds accused of sexual abuse.
In cases involving an adult insured s sexual abuse of a minor,
Illinois courts have inferred, as a matter of law, that the insured
intended to injure the minor. See Western States Insurance Co. v.
Bobo, 268 Ill. App. 3d 513 (1994); State Farm Fire & Casualty Co.
v. Watters, 268 Ill. App. 3d 501 (1994); Scudder v. Hanover
Insurance Co., 201 Ill. App. 3d 921 (1990). Like Illinois, an
overwhelming majority of courts in other jurisdictions have held
that, in situations involving sexual abuse of a minor, it may be
inferred as a matter of law that an adult insured intended to harm
the victim. See Manufacturers & Merchants Mutual Insurance Co. v.
Harvey, 330 S.C. 152, 498 S.E.2d 222 (1998) (collecting cases); see
also, e.g., State Farm Fire & Casualty Co. v. Smith, 907 F.2d 900
(9th Cir. 1990) (Nevada law); Troy v. Allstate Insurance Co., 789 F. Supp. 1134 (D. Kan. 1992) (Kansas law); Horace Mann Insurance
Co. v. Fore, 785 F. Supp. 947 (M.D. Ala. 1992) (Alabama law); Whitt
v. DeLeu, 707 F. Supp. 1011 (W.D. Wis. 1989) (Wisconsin law); Twin
City Fire Insurance Co. v. Doe, 163 Ariz. 388, 788 P.2d 121 (1989);
Troelstrup v. District Court, 712 P.2d 1010 (Colo. 1986); Landis v.
Allstate Insurance Co., 546 So. 2d 1051 (Fla. 1989); Perreault v.
Maine Bonding & Casualty Co., 568 A.2d 1100 (Maine 1990); Worcester
Insurance Co. v. Fells Acres Day School Inc., 408 Mass. 393, 558 N.E.2d 958 (1990); Young v. All America Insurance Co., 81 Ohio App.
3d 493, 611 N.E.2d 421 (1992); Mutual of Enumclaw v. Merrill, 102
Or. App. 408, 794 P.2d 818 (1990); Maayeh v. Trinity Lloyds
Insurance Co., 850 S.W.2d 193 (Tex. Ct. App. 1992).
Whether an intent to injure may be inferred when a minor
insured sexually abuses another minor is an issue of first
impression in Illinois. Although a clear majority of courts in
other jurisdictions infer intent when the insured is an adult
(Scudder, 201 Ill. App. 3d at 927-28), the courts are evenly split
with respect to the extension of this inference to minors. While
a slight majority of courts are willing to infer as a matter of law
that a minor insured who sexually abuses another minor does so
intentionally (Allstate Insurance Co. v. Steele, 74 F.3d 878 (8th
Cir. 1996) (holding that, under Minnesota law, a 16-year-old s
intent would be inferred); B.B. v. Continental Insurance Co., 8 F.3d 1288 (8th Cir. 1993) (under Missouri law, intent was inferred
for perpetrator who was 13 to 16 years old at the time of the
abuse); Allstate Insurance Co. v. Bailey, 723 F. Supp. 665 (M.D.
Fla. 1989) (finding a 15-year-old s intent inferred under Florida
law); Allstate Insurance Co. v. Roelfs, 698 F. Supp. 815 (D. Alaska
1987) (16-year-old s intent as inferred under Alaska law); D.W.H.
v. Steele, 512 N.W.2d 586 (Minn. 1994) (inferring the intent of an
11-year-old); Illinois Farmers Insurance Co. v. Judith G., 379 N.W.2d 638 (Minn. Ct. App. 1986) (intent was inferred for
perpetrator who was 13 to 16 years old at the time of the abuse);
Cuervo v. Cinncinnati Insurance Co., 76 Ohio St. 3d 41, 665 N.E.2d 1121 (1996) (inferred-intent standard applied to 16-year-old); see
also Swentkowski v. Dawson, 881 P.2d 437 (Colo. Ct. App. 1994)
(relying on both the inference of intent and an adjudication of
delinquency to find that a minor acted intentionally)), almost as
many jurisdictions have refused to extend the presumption of intent
to minor insureds (see Allstate Insurance Co. v. Patterson, 904 F. Supp. 1270 (D. Utah 1995) (under Utah law, inferred-intent standard
did not apply to perpetrators who were 12 to 16 years old at the
time of the abuse); Allstate Insurance Co. v. Jack S., 709 F. Supp. 963 (D. Nev. 1989) (under Nevada law, refusing to infer intent of
14-year-old); United Services Automobile Ass'n v. DeValencia, 190
Ariz. 436, 949 P.2d 525 (1997) (refusing to infer intent of 14-
year-old); Fire Insurance Exchange v. Diehl, 450 Mich. 678, 545 N.W.2d 602 (1996) (refusing to infer intent of perpetrator who was
7 to 9 years old at the time of the abusive acts)).
Courts applying the inference of intent to minor insureds
accused of sexually abusing other minors do so based on the
rationale that the act of sexual abuse is inherently harmful. See,
e.g., Bailey, 723 F. Supp. at 668. They note that, in cases
involving adult perpetrators, intent is inferred as a matter of law
because " 'sexual misconduct with a minor is objectively so
substantially certain to result in harm to the minor victim, that
the perpetrator cannot be allowed to escape society s determination
that he or she is expected to know that.' " B.B., 8 F.3d at 1293,
quoting Whitt v. DeLeu, 707 F. Supp. 1011, 1016 (W.D. Wis. 1989).
Because intent can be inferred from the nature of the act,
therefore, courts have refused to consider subjective intent in
cases involving adult molestors. See, e.g., Landis, 546 So. 2d at
1053. Based on these holdings that intent should be inferred from
the act and that the perpetrator s subjective intent is not
relevant, courts have applied the inferred-intent standard
regardless of the age of the perpetrator. See, e.g., Bailey, 723 F. Supp. at 668.
Courts that infer intent for minor perpetrators also cite
several policy reasons for doing so. According to these courts, if
they did not infer intent, this would in effect require the insurer
to "subsidize" sexual abuse at the expense of other insureds who
would "cringe at the very suggestion" that their premiums were
being used to pay for liability arising out of child sexual abuse.
See B.B., 8 F.3d at 1295, quoting Wiley v. State Farm Fire &
Casualty Co., 995 F.2d 457, 464 (3d Cir. 1993). Although these
courts recognize that the application of the inferred-intent
standard removes a source of compensation for the victim of the
abuse, they find that the victim s interest in compensation is
outweighed by the need to deter offenders by holding them
personally liable for their victims injuries. See B.B., 8 F.3d at
1295.
By contrast, other courts have found that, based on minors
relative lack of experience in sexual matters, it is improper to
infer an intent to injure in cases where a minor sexually abuses
another minor. See, e.g., Patterson, 904 F. Supp. at 1282-83;
Diehl, 450 Mich. at ____, 545 N.W.2d at 607-08. These courts
reason that to infer that a minor intends to cause the injury
resulting from his sexual misconduct with another minor is
inconsistent with criminal statutes that protect minors from sexual
conduct based on a presumption that they are unable to understand
the nature and consequences of sexual acts. See Jack S., 709 F. Supp. at 966; DeValencia, 190 Ariz. at ___, 949 P.2d at 529.
According to these courts, although it may be inferred based on the
harm inherent in a sexually abusive act that an adult intends to
injure the victim, it is "too broad a leap in logic to find that a
minor intended to injure another minor by engaging in sexual acts."
Jack S., 709 F. Supp. at 966.
In addition, at least one court has noted that it is
inconsistent to rely on the age of the victim in inferring intent,
yet ignore the age of the perpetrator. See Patterson, 904 F. Supp.
at 1282-83. As the Patterson court explained, sexual abuse of a
minor is considered inherently harmful because the minor victim
cannot fully appreciate the consequences of the activity and
therefore lacks the ability to consent to it. See Patterson, 904 F. Supp. at 1282. The Patterson court concluded that, for the same
reason, a child perpetrator should not be held to the same standard
as an adult. Patterson, 904 F. Supp. at 1282-83.
Instead of inferring intent as a matter of law, this latter
group of courts has held that whether a minor who molests another
minor intends injury should be determined on a case-by-case basis.
See, e.g., DeValencia, 190 Ariz. at ___, 949 P.2d at 529. As in
negligence cases, whether the results of a minor s acts were
foreseeable should be determined by an examination of the minor s
individual characteristics, such as his age, ability, intelligence,
and experience. See Patterson, 904 F. Supp. at 1284; DeValencia,
190 Ariz. at ___, 949 P.2d at 529; Diehl, 450 Mich. at ___, 545 N.W.2d at 607.
We agree that the inferred-intent standard should not apply
when the insured is a minor. Although there are sound reasons for
inferring that an adult who abuses a minor intends the injury
caused by the abuse, extending a blanket presumption of intent to
all minor perpetrators will lead to absurd results in some cases.
For example, if we were to apply the inferred-intent standard to
minors, a six-year-old who engages in sexual experimentation with
a peer would be deemed to have intended the same injury foreseen
and caused by an adult who sexually molests a child.
Not only is this result contrary to logic, but also it is
inconsistent with Illinois law. Like other states, Illinois has
enacted criminal laws to protect minors from sexual conduct. For
example, an individual who engages in an act of sexual penetration
or sexual conduct with a child under the age of 17 may be found
guilty of criminal sexual abuse or aggravated criminal sexual
abuse, depending on the ages of the perpetrator and the victim.
See 720 ILCS 5/12-15(b),(c) (West 1994); 720 ILCS 5/12-16(c)(1)(i),
(c)(2)(i), (d) (Smith-Hurd Supp. 1998). The consent of the victim
is not a defense to these offenses. See 720 ILCS 5/12-17 (West
1994). As the court stated in People v. Riley, 84 Ill. App. 2d
296, 300 (1967), a young child is incapable of consenting to an act
of intercourse because she cannot be expected to understand the
nature of the act. See also People v. Strait, 116 Ill. App. 3d
110, 113 (1983). To infer that a minor accused of sexual abuse
understands the nature of his conduct and intends any resulting
injury is inconsistent with these principles of Illinois criminal
law.
Inferring that minors intend the injuries resulting from their
sexual conduct with other minors is also inconsistent with this
state s tort law. A child of any age may be liable for an
intentional tort, such as battery, because the only intent required
for such torts is the intent to perform the harmful act, and even
children of a tender age may have the capacity for forming this
intent. See Seaburg v. Williams, 16 Ill. App. 2d 295, 305-06
(1958). By contrast, Illinois courts conclusively presume that
children under the age of seven years cannot be contributorily
negligent because they cannot foresee the consequences of their
actions, which is the state of mind required for negligence. See
Jorgensen v. Nudelman, 45 Ill. App. 2d 350, 352-54 (1963). When
children are between the ages of 7 and 14, their capacity to be
contributorily negligent is a question of fact, and when a child is
14 years old, he is held to the same degree of care as an adult.
Seaburg, 16 Ill. App. 2d at 300, citing Maskaliunas v. Chicago &
Western Indiana R.R. Co., 318 Ill. 142, 149-50 (1925).
Under Illinois law, exclusionary provisions, such as the one
in this case, require that an insured act with the specific intent
to injure. Scudder, 201 Ill. App. 3d at 927. In cases where such
clauses are at issue the intent required is therefore more like
that in negligence cases, where the consequences of an act must be
foreseen, than in cases involving intentional torts, where only the
act must be intended. Given that minors below a certain age are
presumed to be unable to understand the consequences of their
actions in tort cases, we should not infer that, regardless of age,
minor insureds who commit sexual abuse of other minors intend the
resulting injury.
Because a minor insured may or may not have the capacity to
form the intent to injure another minor with whom he engages in
sexual conduct, this issue is better left to the trier of fact. By
refusing to apply the inferred-intent standard, we do not require
insurers to defend and provide coverage whenever a minor sexually
abuses another minor. We merely require that the minor
perpetrator s intent be determined on a case-by-case basis.
Coverage will be required only when a trier of fact determines,
based on the particular characteristics and experience of a minor,
that the minor did act with an intent to injure when he sexually
abused another minor.
In addition, we believe our ruling is correct as a matter of
policy. Public policy in Illinois favors affording compensation to
victims. University of Illinois v. Continental Casualty Co., 234
Ill. App. 3d 340, 358 (1992). As the B.B. court acknowledged, the
effect of the application of the inferred-intent standard is to
deprive victims of sexual abuse of a source of compensation. B.B.,
8 F.3d at 1295. In cases where the perpetrator is a minor, we do
not believe the benefit of compensating victims is outweighed by
the need to hold perpetrators responsible for their actions.
Depriving a minor perpetrator of insurance coverage can have little
deterrent effect on a minor who likely has little understanding of
the ramifications of his conduct, much less insurance coverage.
Based on the foregoing authority and policy considerations, we
hold that a court should not infer an intent to injure in cases
where a minor insured sexually abuses another minor. In such
cases, a minor s intent is a question of fact based on the
circumstances of the sexual conduct and the minors individual
characteristics and experience.
Under the facts of this case, therefore, it was error for the
trial court to decide, as a matter of law, that the exclusionary
provision precluded coverage. Marty Hagan s intent to cause
Hardwick s injuries cannot be inferred as a matter of law. In
addition, the allegations of her complaint, which must be construed
in the light most favorable to Marty Hagan, do not permit a
conclusion, as a matter of law, that he intended to injure her.
Although there are allegations that he intended the sexual acts,
there are no allegations that he intended to injure Hardwick by
performing the acts. The intentional injury exclusion of the
policy, therefore, does not support the trial court s ruling that
there was no coverage for Hardwick s complaint.
In its declaratory judgment complaint, however, Country Mutual
also asserted that Hardwick s allegations were not within the
coverage provisions of the policy. According to these provisions,
there is coverage only for bodily injury and property damage
"caused by an occurrence," which the policy defines as "an
accident."
Before discussing whether the allegations of the complaint are
encompassed within the coverage language of the policy, we note
that neither party has addressed this issue in the briefs they
submitted to us, aside from a few isolated references to the word
"accident." The parties failure to argue this issue and provide
us with citation to relevant authority is a violation of Supreme
Court Rule 341(e)(7) (155 Ill. 2d R. 341(e)(7)) and constitutes
waiver of the issue (see Pyskaty v. Oyama, 266 Ill. App. 3d 801,
822-23 (1994); Antol v. Chavez-Pereda, 284 Ill. App. 3d 561, 573
(1996)).
The rule of waiver is a limitation on the parties, however,
and not the jurisdiction of the court. See Hux v. Raben, 38 Ill. 2d 223, 224 (1967). Even though an issue is waived, we may address
it based on our obligation to achieve a just result and maintain a
uniform body of precedent. See Roche v. Fireside Chrysler-
Plymouth, Mazda, Inc., 235 Ill. App. 3d 70, 86-87 (1992); Barnett
v. Zion Park District, 171 Ill. 2d 378, 389 (1996). In this case,
our review of the trial court s ruling depends on the application
and interpretation of the coverage provisions, given our conclusion
that the exclusionary language of the policy does not apply. We,
therefore, choose to address this issue, waiver notwithstanding.
The policy does not define "accident." We must, therefore,
look elsewhere for guidance as to the interpretation of this term.
In other insurance cases in which policies have defined the word
"occurrence" as an "accident," Illinois courts have described the
meaning of "accident" as follows:
"An accident has been defined as an unforeseen
occurrence, usually of an untoward or disastrous
character or an undesigned sudden or unexpected event of
an inflictive or unfortunate character." Aetna Casualty
& Surety Co. v. Freyer, 89 Ill. App. 3d 617, 619 (1980).
See also Monticello Insurance Co. v. Wil-Freds Construction, Inc.,
277 Ill. App. 3d 697, 703 (1996); Bituminous Casualty Corp. v.
Newberg Construction Co., 218 Ill. App. 3d 956, 965-66 (1991);
Travelers Insurance Cos. v. P.C. Quote, Inc., 211 Ill. App. 3d 719,
726 (1991).
It is not entirely clear from this definition, however, what
must be unexpected, the act that causes the injury or the injury
itself. This is the critical issue in the case before us because,
although Marty Hagan does not dispute that Hardwick s complaint
contains allegations of intentional acts, he argues that her
allegations do not permit a conclusion that he intended to injure
her.
Illinois courts have focused on whether the injury is expected
in determining whether an occurrence is an "accident." As the
court stated in State Farm Fire & Casualty Co. v. Watters, 268 Ill.
App. 3d 501, 506 (1994), "an occurrence which is defined as an
accident involves the consideration of whether the injury was
expected or intended from the standpoint of the insured." (Emphasis
added.) See also Commercial Union Insurance Co. v. Image Control
Property Management, Inc., 918 F. Supp. 1165, 1169 (N.D. Ill.
1996), quoting Calvert Insurance Co. v. Western Insurance Co., 874 F.2d 396, 399 (7th Cir. 1989) ("In determining whether a complaint
sufficiently alleges an 'occurrence,' '[t]he focus at all times,
under Illinois law, is whether the injury was expected or intended
by the [insured], not whether the acts of the [insured] were
performed intentionally' ").
In Illinois, therefore, if an injury is not expected or
intended by the insured, it is considered an accident. For
example, in a recent case from the fifth district, State Farm Fire
& Casualty Co. v. Martin, No. 5-95-0810 (May 6, 1998)), the court
held that the deaths of two fire fighters that resulted from a fire
intentionally set by the insured were "accidents" within the
coverage language of the policy. Although the insured admitted
that he intended to destroy a building by setting fire to it, there
was no evidence that he foresaw or intended bodily injury or death.
Thus, the court held that the insurance company had a duty to
defend and indemnify the insured in the wrongful death suits filed
by the fire fighters' survivors. Martin, slip op. at 4.
Based on this case law, whether there is coverage in this case
depends on whether Marty Hagan expected or intended to injure
Hardwick. In a case directly on point, Allstate Insurance Co. v.
Patterson, 904 F. Supp. 1270 (D. Utah 1995), the court held that,
whether sexual abuse by minor insureds of other minors was an
"accident" was a question of fact. In that case, the underlying
complaint alleged that three boys between the ages of 12 and 16
engaged in inappropriate sexual conduct with two boys between the
ages of five and eight " 'without the intention of causing bodily
injury.' " Patterson, 904 F. Supp. at 1285. The coverage and
exclusionary provisions in Patterson were essentially identical to
the ones in the case before us. After refusing to apply the
inferred-intent standard to minors accused of sexual abuse, the
Patterson court held that whether the acts of the minor insureds
constituted an "accident" under the policy was a question of fact.
It stated, "[C]omparing the allegations of the complaint with the
terms of the policies, the court cannot say there is no possibility
of coverage under the policies." Patterson, 904 F. Supp. at 1285.
The court, therefore, refused to grant summary judgment for the
insurer on the issues of its duty to defend and its duty to
indemnify. Patterson, 904 F. Supp. at 1285.
We believe that the result in this case should be the same.
As we have explained, we will not infer, as a matter of law, that
Marty Hagan intended to injure Hardwick when he performed the acts
alleged in her complaint. Based on the allegations contained in
the negligence count of Hardwick s complaint, we also cannot
conclude, as a matter of law, that Marty Hagan "expected or
intended" to injure her. We note that the parties asked the trial
court to decide the case based only on the pleadings.
Consequently, the only facts before us concerning Marty Hagan s
state of mind are those alleged in Hardwick s complaint.
In her negligence count, she does not allege that Marty Hagan
expected or intended to injure her when he performed the sexual
acts she alleges. To the contrary, she alleges that he owed her a
duty to avoid any action that would cause her injury in a
reasonably forseeable manner, that he breached these duties by
performing certain sex acts with her, and that she was injured as
a proximate result of these "negligent, wrongful and indecent
acts." These allegations do not conclusively show that Marty Hagan
"expected or intended" to injure Hardwick. As in Patterson, our
comparison of the allegations of the complaint to the language of
the policy does not indicate that there is no possibility of
coverage under the policy. Whether the conduct alleged in the
negligence count was an "accident" within the coverage of the
policy was, therefore, at least a question of fact, and the trial
court erred in entering summary judgment in favor of Country
Mutual.
In granting summary judgment in favor of Country Mutual, the
trial court relied on the decision in State Farm Fire & Casualty
Co. v. Watters, 268 Ill. App. 3d 501, 506-07 (1994), in which the
court held that an adult insured s sexual molestation of minors was
not an accident. Country Mutual argues that this reliance was
appropriate and supports the judgment in its favor. We disagree.
In Watters, the court s holding that the insured s acts of
sexual molestation were not an accident was based on its
application of the inferred-intent standard. According to the
court, in sexual abuse cases injury is inevitable, and therefore an
insured s intent to harm is inferred. Based on the inference of
intent to cause the injury, the court found that the insured was
not entitled to coverage under the policy, which limited coverage
to "accidents." Watters, 268 Ill. App. 3d at 506-12.
We find that the reasoning and the holding in the Watters case
are not applicable to the facts before us. In Watters, the insured
was a 28-year-old adult. Although there was evidence that he had
diminished mental capacity, the court found that his criminal
conviction established that he had the necessary capacity to form
the intent to commit the acts of sexual abuse. Watters, 268 Ill.
App. 3d at 508. Based on these facts, the Watters court held that
his intent should be inferred.
In this case, by contrast, the insured was only 14 at the time
of the alleged sexual acts and has not been charged with any
criminal offense. As explained previously, we decline to infer
intent under these circumstances. Unlike the Watters court,
therefore, we cannot conclude as a matter of law that the
occurrences in this case were not an "accident." See Patterson,
904 F. Supp. at 1285.
Based on the questions of fact with respect to coverage under
the policy, we hold that it was error for the trial court to grant
summary judgment in favor of Country Mutual on the issue of its
duty to defend. For the same reasons, the trial court erred in
granting summary judgment in favor of Country Mutual on the issue
of indemnification. When there is a bona fide dispute as to
whether an insured acted negligently or intentionally, the issue of
indemnification may not be decided on declaratory judgment until
the underlying tort litigation has been completed. See State Farm
Fire & Casualty Co. v. Leverton, 289 Ill. App. 3d 855, 856 (1997).
Accordingly, we reverse the trial court s decision to grant
summary judgment in favor of Country Mutual and against Marty
Hagan, and we remand the cause for further proceedings on the
declaratory judgment complaint.
Judgment reversed; cause remanded.
INGLIS and HUTCHINSON, JJ., concur.
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