Allstate Insurance Co. v. Vose

Allstate Insurance Co. v. Vose (2004-074); 177 Vt. 412; 869 A.2d 97

2004 VT 121

[Filed 17-Dec-2004]


       NOTICE:  This opinion is subject to motions for reargument under
  V.R.A.P. 40 as well as formal revision before publication in the Vermont
  Reports.  Readers are requested to notify the Reporter of Decisions,
  Vermont Supreme Court, 109 State Street, Montpelier, Vermont 05609-0801 of
  any errors in order that corrections may be made before this opinion goes
  to press.


                                 2004 VT 121

                                No. 2004-074


  Allstate Insurance Company	                 Supreme Court

                                                 On Appeal from
       v.	                                 Chittenden Superior Court


  Janet Vose, Jeffrey Vose and 	                 September Term, 2004 
  John Finlay, II, on behalf of 
  Minor, S.C.


  Matthew I. Katz, J.

  Bret P. Powell of Unsworth Powell Barra Orr & Bredice, PLC, Essex Junction,
    for  Plaintiff-Appellee.

  Kurt M. Hughes of Murdoch & Hughes, Burlington, for Defendants-Appellants.


  PRESENT:  Dooley, Johnson, Skoglund and Reiber, JJ., and 
            Allen, C.J. (Ret.), Specially Assigned

        
       ¶  1.  ALLEN, C.J. (Ret.), Specially Assigned.  Janet Vose, Jeffrey
  Vose, and John Finlay, II, acting as legal representative of S.C., a minor,
  appeal from the trial court's order granting summary judgment to Allstate
  Insurance Company.  The Voses sought insurance coverage after being sued
  for claims stemming from Janet Vose's abuse of S.C., a disabled foster
  child in their care.  Allstate filed a complaint for declaratory relief,
  asserting that its policy did not cover the acts alleged in the underlying
  complaint.  The trial court agreed, and granted summary judgment in
  Allstate's favor.  The trial court found that there had not been an
  "occurrence" within the meaning of Allstate's  policy because Janet Vose
  had intended to harm S.C.  Because the policy excluded coverage for
  injuries caused by the intentional acts of "any insured," the court found
  no coverage for the negligence claim raised against Jeffrey Vose.  The
  court thus concluded that Allstate had no duty to defend or indemnify the
  Voses.  On appeal, appellants argue that summary judgment was inappropriate
  because disputed issues of material fact exist, and Allstate was not
  entitled to judgment as a matter of law.  We affirm.

       ¶  2.  The following facts are undisputed.  The Voses were foster
  parents licensed by the State of Vermont.  In February 2000, S.C., a blind
  and developmentally disabled minor, was placed in their care.  In August
  2000, Janet Vose put the child in the bathtub and turned on only the hot
  water.  S.C. suffered severe burns as a result.  S.C. was removed from the
  Voses' home, and Janet Vose subsequently pled nolo contendre to first
  degree aggravated domestic assault.  She was sentenced to fifteen years in
  jail, all suspended but six years. 

       ¶  3.  Janet Vose later acknowledged committing other acts of abuse
  against S.C., including swinging the child by her feet against a wall and
  knocking out one of her teeth, slapping her across the face so hard that
  the child had a mark on her face for several days, throwing S.C. across the
  room causing the child's mouth to bleed, pulling the child's hair, and
  putting the child in an empty dresser drawer and closing the drawer for
  approximately five minutes.

       ¶  4.  As to the burns inflicted on S.C., Vose testified that she
  placed S.C. in the bathtub, and turned on just the hot water.  The bathtub
  drain was closed.  Janet Vose then left the room.  Vose testified that she
  acted as she did because she did not want S.C. to "be happy."  S.C.
  suffered second degree burns as a result of Janet Vose's acts.
   
       ¶  5.  In April 2002, attorney John Finlay, II, acting as legal
  representative of S.C., filed a complaint against the Voses, raising claims
  of assault and battery and negligence.  The complaint alleged that on
  numerous occasions between February and August 2000, Janet Vose had caused
  bruising, and other physical and emotional injury to S.C. that was plainly
  visible to others, including Jeffrey Vose.  The complaint stated that S.C.
  had suffered serious burns after Janet Vose placed her in the bathtub,
  turned on the hot water, and left the room.  The complaint also alleged
  that the Voses had breached a duty owed to S.C. by directly causing, or
  allowing S.C. to suffer, severe physical and emotional harm.

       ¶  6.  At the time of the acts alleged in the complaint, the Voses
  were insured under a Homeowners Insurance policy issued by Allstate.  Under
  the terms of its policy, Allstate agreed to pay damages that "an insured
  person becomes legally obligated to pay because of bodily injury or
  property damage arising from an occurrence to which this policy applies . .
  . ."  The policy defined an "occurrence" as an "accident, including
  continuous or repeated exposure to substantially the same general harmful
  conditions during the policy period, resulting in bodily injury . . . ." 
  The policy excluded coverage for "any bodily injury . . . intended by, or
  which may reasonably be expected to result from the intentional or criminal
  acts or omissions of, any insured person."

       ¶  7.  Allstate entered into a reservation of rights and nonwaiver
  agreement with the Voses, and it retained counsel to defend them in the
  underlying action.  In September 2002, Allstate filed a complaint for
  declaratory relief, seeking to be relieved of any obligation to defend and
  indemnify the defendants in the underlying action.  It alleged that the
  injuries to S.C. were not caused by an occurrence; that they were intended
  or were reasonably expected to result from Janet Vose's actions;  and that
  coverage was also barred by a professional services exclusion and an
  exclusion barring recovery for bodily injury to a regular resident of the
  premises.  Allstate later moved for summary judgment, asserting that the
  undisputed facts demonstrated that the acts alleged in the underlying
  complaint were not covered under its policy. 
   
       ¶  8.  In February 2004, the court granted summary judgment in
  Allstate's favor, concluding that Allstate had no duty to defend the Voses
  because there had not been an "occurrence" within the meaning of its
  policy.  The court compared the allegations in the underlying complaint
  with the terms of the policy.  In conducting its analysis, the court did
  not consider the negligence claim raised against Janet Vose, finding it
  unsupported by the facts alleged in the complaint.  The court recognized
  that an "accident" could occur despite the intentional nature of the
  insured's conduct.  The critical inquiry, the court explained, was whether
  the injury was intended or expected.  The court found that, in this case,
  Vose's acts were so likely to result in injury that, as a matter of law, it
  could infer her intent to harm from the nature of her acts.  As the court
  explained, the undisputed facts established that Janet Vose's
  actions-including throwing the four-year-old blind and developmentally
  delayed child across a room; kicking; slapping; pulling the child's hair;
  swinging the child into a wall; placing the child in the bathtub knowing
  that only the hot water was running and leaving the room; and knocking the
  child onto the ground-were all done, as Janet Vose admitted, to make the
  child "unhappy."  
   
       ¶  9.  Because the court inferred Janet Vose's intent to harm as a
  matter of law, it rejected her assertion that she had not intended to harm
  S.C. through her actions.  The court also rejected  the argument that Janet
  Vose lacked the mental capacity to control her actions.  In support of this
  assertion, counsel for S.C. had pointed to Janet Vose's testimony regarding
  her lack of intent, and a document entitled "Family Life Services Staff
  Review Sheet," which noted, presumably with respect to Janet Vose, "mental
  stability?" as one issue to be addressed.  The court explained that there
  were no supporting affidavits showing who had created this document, when
  it was created, how it was used, or how to interpret this one brief
  notation.  The court found that, even accepting the facts put forth by
  counsel as true, they merely raised a suggestion that, at one point,
  someone thought that it might be a good idea to question Janet Vose about
  her mental stability.  The court found these facts insufficient to create a
  triable issue as to whether Janet Vose lacked the mental capacity to govern
  her conduct or to establish that she was not acting under her own free will
  in carrying out her stated intent to cause the child "unhappiness" through
  physical abuse.  The court thus concluded, as a matter of law, that the
  undisputed facts demonstrated that Janet Vose intended to harm S.C.  The
  court noted that it would also find that the harm to S.C. was "reasonably
  expected to result" from Janet Vose's actions.

       ¶  10.  The court turned next to the negligence claim against Jeffrey
  Vose, which was based on an allegation that he knew or should have known
  that Janet Vose was injuring S.C.  The court noted that counsel for S.C.
  acknowledged that Jeffrey Vose had not committed the underlying physical
  injuries complained of, nor did counsel argue that S.C. had suffered
  injuries that were separable from those caused by Janet Vose's acts.  The
  court explained that Allstate's policy excluded coverage for bodily
  injuries that were "intended by, or which may reasonably be expected to
  result from the intentional or criminal acts or omissions of any insured
  person."  Thus, the court reasoned, because S.C.'s injuries were the result
  of Janet Vose's intentional acts, there was no coverage for the allegation
  of negligence against Jeffrey Vose.  Thus, the court found that Allstate
  had no duty to indemnify the Voses as a matter of law, and it therefore
  granted summary judgment to Allstate.  This appeal followed.  
   
       ¶  11.  Appellants first argue that Janet Vose is entitled to
  coverage under the policy because the underlying complaint alleges an
  "occurrence" within the meaning of the policy, and coverage is not excluded
  under the intentional or criminal acts exclusion.  According to appellants,
  Janet Vose's acts were an "accident" because they stemmed from "her
  inability to control her own conduct due to her mental capacity." 
  Appellants assert that Janet Vose did not intend to injure S.C., and the
  injuries suffered by S.C. were certainly "unusual" and "not to be expected"
  by S.C.
        
       ¶  12.  As discussed below, we conclude that the intentional acts of
  child abuse alleged in the underlying complaint are not "occurrences"
  within the meaning of Allstate's policy.  Therefore, Allstate had no duty
  to defend or indemnify Janet Vose. 

       ¶  13.  Our standard of review is familiar.  We review a grant of
  summary judgment using the same standard as the trial court.  Richart v.
  Jackson, 171 Vt. 94, 97, 758 A.2d 319, 321 (2000).  Summary judgment is
  appropriate when, taking all allegations made by the nonmoving party as
  true, there are no genuine issues of material fact and the movant is
  entitled to judgment as a matter of law.  Id.; V.R.C.P. 56(c).  A party is
  entitled to summary judgment if at least one legally sufficient defense
  that would bar a plaintiff's claims is presented.  Smith v. Day, 148 Vt.
  595, 597, 538 A.2d 157, 158 (1987). 

       ¶  14.  An insurer has a duty to defend "whenever it is clear that the
  claim against the insured  might be of the type covered by the policy." 
  Garneau v. Curtis & Bedell, Inc., 158 Vt. 363, 366, 610 A.2d 132, 134
  (1992).  This duty does not extend, however, to circumstances where, as a
  matter of law, there is no duty to indemnify.  Id.  An insurer's duty to
  defend is normally measured by comparing the terms of its policy with the
  underlying allegations in the complaint against its insured.  Id.  While
  resolution of this question is generally made on the language of the policy
  and the language of the complaint, we have also "looked to the known facts
  underlying a plaintiff's complaint to understand the application of policy
  provisions or exclusions."  Id.
   
       ¶  15.  In this case, the underlying complaint alleged that Janet
  Vose physically and emotionally abused S.C. over a seven month period,
  including leaving S.C. in the bathtub with only the hot water running,
  which caused S.C. to suffer severe burns.  We must determine if these acts
  constitute an "occurrence" within the meaning of Allstate's policy.  We do
  not consider the negligence claim raised against Janet Vose because it is
  inconsistent with the facts alleged in the underlying complaint.  See
  Serecky v. Nat'l Grange Mut. Ins., 2004 VT 63, ¶ 15, 857 A.2d 775 
  (refusing to consider negligence claim in determining insurer's duty to
  indemnify where facts alleged in complaint were inconsistent with
  unintentional conduct or injury); see also TBH v. Meyer, 168 Vt. 149, 153,
  716 A.2d 31, 34 (1998) ("We must focus on the factual allegations in [the
  underlying complaint] and not on the legal theories asserted, and unless
  the complaint alleges facts within the coverage of the policies, [the
  insurer] has no duty to defend or indemnify."). 


       ¶  16.  As previously noted, Allstate's policy defines an "occurrence"
  as an "accident" that results in bodily injury.  In the absence of a
  specific definition, we give the word "accident" its  plain meaning. 
  Serecky, 2004 VT 63, at ¶ 17 (defining accident as "an event that is
  undesigned and unforeseen.") (internal quotation marks and citation
  omitted).  We read the policy's definition of "occurrence" together with
  the exclusion for bodily injuries that are "intended by . . . any insured
  person" to determine if there is coverage.  Id. at ¶ 18.  In other words,
  to determine if Janet Vose's intentional acts constitute an "accident," we
  ask "whether the harm that resulted from the intentional act was . . .
  intended by the insured."  Id. at ¶ 19.  

       ¶  17.  Appellants assert that there is a dispute of fact as to
  whether Janet Vose intended to harm S.C.  In support of this assertion,
  they point to Vose's testimony that her act of throwing the child across
  the room was "a spontaneous incident," and she "didn't think of anything." 
  They also maintain that Vose did not intend to scald S.C. by leaving her
  alone in the bathtub with the hot water running, instead, she merely
  "intended to be mean" and wanted S.C. to "be uncomfortable."
   
       ¶  18.  There is no factual dispute regarding Janet Vose's intent to
  harm S.C.  Although an insured's intent often presents a question of fact,
  we have recognized that there are some actions that "are so likely to
  result in injury that, as a matter of law, the court will find that the
  injury did not result from an accident regardless of the actor's subjective
  intent or expectations."  Id. at ¶ 20 (internal quotation marks and
  citation omitted).  In such cases, "courts conclusively presume intent to
  harm as a matter of law based on the nature and character of the insured's
  alleged acts, regardless of whether the insured asserts that he or she had
  no subjective intent to injure."  Id. (internal quotation marks and
  citation omitted).
   
       ¶  19.  We have previously applied the rule of inferred intent to
  acts of sexual abuse and sexual harassment.  See id. at ¶ 24 (applying
  rule of inferred intent to claims arising from acts of sexual harassment);
  Meyer, 168 Vt. at 149-150, 716 A.2d  at 32 (no duty to defend or indemnify
  insured for intentional nonphysical sexual exploitation of a minor because
  insured's conduct was so certain to result in injury that his intent to
  injure could be inferred as a matter of law); Nationwide Mut. Fire Ins. Co.
  v. Lajoie, 163 Vt. 619, 620, 661 A.2d 85, 86 (1995) (mem.) (applying rule
  of inferred intent to claims of nonsexual verbal and psychological abuse
  and destruction of familial relationships where the nucleus of underlying
  action was sexual abuse); Mass Mut. Life Ins. Co. v. Ouellette, 159 Vt.
  187, 192, 617 A.2d 132, 135 (1992) (recognizing applicability of rule of
  inferred intent for acts of sexual abuse).  We find the rule equally
  applicable here.  Like acts of sexual abuse and sexual harassment, child
  abuse "is not the type of act that only occasionally results in harm - it
  is inherently harmful."  Serecky, 2004 VT 63, at ¶ 24.  Leaving a blind
  and developmentally disabled child alone in the bathtub, turning on only
  the hot water, and leaving the room, is an act that is so likely to result
  in injury that Janet Vose's intent to harm can be inferred from the nature
  of this act alone.  Requiring Allstate to indemnify Janet Vose under these
  circumstances would in effect require it to subsidize her acts of child
  abuse, and force its other policyholders to bear the expense of any
  passed-along costs.  See id. (voicing same policy concern with respect to
  intentional acts of sexual harassment).

       ¶  20.  Because we infer Janet Vose's intent to harm from the nature
  of her acts, her testimony that she did not "intend" to harm S.C. is
  immaterial.  We also reject appellants' assertion that there is a factual
  dispute as to whether Janet Vose lacked the mental capacity to control her
  conduct.  As the trial court explained, the evidence offered in support of
  this assertion was insufficient to create a triable issue regarding Vose's
  mental state.  Therefore, because Janet Vose's intent to harm can be
  inferred as a matter of law from the nature of her acts, the harm that
  resulted to S.C. does not constitute an "accident" within the meaning of
  Allstate's policy.  There is therefore no "occurrence" within the meaning
  of the policy, and consequently, no duty to defend or indemnify.  Based on
  our conclusion, it is unnecessary to address whether the "professional
  services" and "regular resident" exclusions in Allstate's policy should
  apply to bar coverage. 

       ¶  21.  We turn next to the negligence claim raised against Jeffrey
  Vose.  Appellants maintain that Jeffrey Vose is entitled to coverage
  because the question of whether his alleged failure to protect S.C. is an
  "occurrence" is a factual one, and the intentional acts exclusion is not
  applicable to him as a matter of law.  According to appellants, the
  underlying complaint alleged that S.C.'s injuries resulted from the
  unintended or unexpected consequences of Jeffrey Vose's conduct, and thus,
  his negligence must be treated separately from Janet Vose's acts in
  determining coverage.
   
       ¶  22.  These arguments are without merit.  There is no coverage for
  the negligence claim raised against Jeffrey Vose because Allstate's policy
  excludes coverage for bodily injuries that are intended by "any insured." 
  "When the exclusionary language refers to intentional acts of 'an insured,'
  courts have uniformly concluded that the exclusion applies to all claims
  which arise from the intentional acts of any one insured, even though the
  claims are stated against another insured."  N. Sec. Ins. Co. v. Perron,
  172 Vt. 204, 220, 777 A.2d 151, 163 (2001) (footnote omitted).  There is no
  meaningful difference between the terms "an insured" or "any insured."  In
  this case, Allstate "intended that the wrongful act of any insured would
  void the policy," and it unambiguously drafted and included language to
  this effect in its contract with the insureds.  Id. at 222, 777 A.2d  at 164
  (emphasis in original, internal quotation marks and citation omitted).  

       ¶  23.  The negligence claim against Jeffrey Vose arises from, and is
  dependent on, the intentional acts of Janet Vose.  Without her intentional
  acts of abuse against S.C., there could be no claim against Jeffrey Vose. 
  Thus, the relevant act for determining coverage is Janet Vose's intentional
  abuse of S.C., not Jeffrey Vose's alleged negligent failure to protect S.C.
  from this abuse.  See id. at 221, 777 A.2d  at 163.  Because there is no
  coverage for Janet Vose's intentional acts, there is no coverage for the
  derivative negligence claim raised against Jeffrey Vose.  See id.  Summary
  judgment was therefore properly granted for Allstate.

       Affirmed.


                                       FOR THE COURT:



                                       _______________________________________
                                       Chief Justice (Ret.), Specially Assigned