Brumley v. Lee

Six, J.,

dissenting: I would affirm the district court and the Court of Appeals in denying coverage.

I disagree with the majority’s finding of ambiguity in the “exclusion” section of the Safeco policy. Upland Mutual Insurance, Inc. v. Noel, 214 Kan. 145, 519 P.2d 737 (1974), forms the departure point for the majority’s discussion. A critical analysis of Upland is found in the dissent in Marquis v. State Farm Fire & Cas. Co., 265 Kan. 317, 335-40, 961 P.2d 1213 (1998). A part of that dissent merits repeating here.

Justice Larson, speaking for the three Marquis dissenters, said:

“Kansas appears to be completely out of step with all the holdings around the United States with regard to our interpretation of these provisions. The overwhelming majority of states, in determining coverage, look to the underlying cause of the injury rather than the specific theory of liability alleged. . . .
“Our holding in Upland is not only contrary to the almost unanimous weight of authority in other jurisdictions, but has also been to some extent disregarded by our own Court of Appeals. . . .
“The Upland test and theory has not survived the logic and judgment of other states. It is an unsupportable minority. It needs to be abandoned. It is also confusing and allows coverage beyond that anticipated in the policy.”

Recognizing that Upland lives, I address the majority’s conclusion flowing from its observation that because of Upland, “one looks to the underlying theory of liability alleged to determine whether there was coverage.” The Brumleys, emphasizing the severability clause of the Safeco policy, rely on Catholic Diocese of Dodge City v. Raymer, 251 Kan. 689, 840 P.2d 456 (1992), as their primary authority. In holding that coverage should apply to the negligent supervision claim against the Raymers, we said:

“We agree with the Court of Appeals determination that under the specific facts of this case, in construing the exclusionary and severability of interests clauses of a homeowners insurance policy, the exclusions are to be applied only against the insured for whom coverage is sought.” (Emphasis added). 251 Kan. at 699.

*826Our holding in Raymer was intended to be narrow and fact-specific. Raymer involved a liability coverage exclusion for injury intended by “an insured.” 251 Kan. at 698. This case involves an exclusion for injury intended by “any insured.” Raymer is distinguishable on that basis.

The Brumleys cite the first listing from the definition of “any” contained in the Random House Dictionary of the English Language 68 (1973). The complete definition provides:

“adj. 1. one, a, an, or some; one or more without specification or identification: If you have any witnesses, produce them. Pick out any six you like. 2. whatever or whichever it may be; at any price. 3. in whatever quantity or number, great or small; some; Have you any butter? 4. every; all: Any schoolboy would know that. Read any books you find on the subject. 5. (following a negative) at all: She can’t endure any criticism. —pron. 6. any unspecified person or persons; anybody; anyone: He does better than any before him. 7. any single one or any ones; any unspecified thing or things; any quantity or number: We don’t have any left. adv. 8. in whatever degree: to some extent: at all: Do you feel any better?”

Although the first definition listed does equate “any” with “an,” that definition goes on to define “any” as “one or more without specification or identification.” The context in which “any” is used in the Safeco policy must also be considered. “Any” is used as an adjective modifying the noun “insured.”

We emphasized the distinctive nature of “any” in a severability clause context in Rose Constr. Co. v. Gravatt, 231 Kan. 196, 642 P.2d 569 (1982). We reasoned that a policy’s use of the term “the insured” obviously is not the same as “named insured” or “any insured.” 231 Kan. at 197-98. We acknowledged Rose’s distinction between “the insured” and “any insured” in Raymer. 251 Kan. At 698.

Other jurisdictions have considered similar policy interpretation issues. In Taryn E.F. v. Joshua M.C., 178 Wis. 2d 719, 505 N.W.2d 418 (Ct. App. 1993), Taryn, a minor, and her parents sued Joshua, a minor, and his parents for alleged sexual assaults and batteries Joshua committed while babysitting Taryn. The trial court granted summary judgment to the insurer. The Wisconsin Court of Appeals affirmed, holding that the exclusionary language for intentional acts of “any insured” “unambiguously denies coverage for all liability *827incurred by each and any insured as a result of certain conduct by any of the persons insured by the policy.” 178 Wis. 2d at 724.

Raymer endorsed the Court of Appeals’ conclusion that coverage existed, a conclusion based on the reasoning of the Wisconsin Court of Appeals in Northwestern Nat. Ins. Co. v. Nemetz, 135 Wis. 2d 245, 400 N.W.2d 33 (Ct. App. 1986), rev. denied 134 Wis. 2d 458 (1987). I follow with a quote from Taryn; however, an explanatory prologue to the Taryn language is in order. (1) The intentional acts exclusion in Raymer said “an insured.” (2) The exclusion in Nemetz said “an insured.” (3) Raymer relied on Nemetz. (4) The exclusion in Taryn said “any insured.” (5) The exclusion here in the Safeco policy said “any insured.” Taryn distinguished Nemetz as follows:

“In contrast, the policies in Nemetz, 135 Wis. 2d at 253-54 n.2, 400 N.W.2d at 37 n.2, excluded coverage for damages ‘expected or intended by an insured person’ and damages ‘intended or expected by the insured.’ We noted in Nemetz that by using the terms ‘an insured,’ and ‘the insured’ in their exclusionary provisions, the insurers failed to adequately draft the policy to exclude coverage for both insureds based on the excludable acts of one insured. Id. at 256, 400 N.W.2d at 38. Thus, we held that the exclusionary clauses precluded coverage for the insured who committed the excludable acts, but not for the innocent insured. Id. Here, the exclusionary clause precludes coverage under the policy based on the excludable acts of any insured. Even when read with the severability clause, this exclusion unambiguously operates to preclude coverage to all insureds for liability attributable to the excludable acts of any one of the insureds. Unlike the insurers in Nemetz, little Black drafted its policy more carefully to exclude this risk.
“Taryn argues that ‘[tjhere is no logical or grammatical difference between “an” and “any”.’ We disagree. ‘An’ is an indefinite article used before nouns beginning with a vowel or, sometimes, a soft consonant (e.g. an herb) instead of the related indefinite article ‘a.’ WEBSTER’S THIRD NEW INT’L DICTIONARY 75 (Unabr. 1976). ‘A’ is ‘used as a function word before most singular nouns [or] to suggest limitation in number . . . .’ WEBSTER’S THIRD NEW INT’L DICTIONARY at 1. ‘The articles (a, an, the) maybe classed as adjectives because they possess limiting or specifying functions.’ HARRY SHAW, ERRORS IN ENGLISH AND WAYS TO CORRECT THEM, 277 (1970). ‘Any’ is defined as ‘one indifferently out of more than two: one or some indiscriminately of whatever kind . . . one, no matter what one: EVERY — used as a function word esp. in assertions and denials to indicate one that is selected without restriction or limitation of choice ....’ WEBSTER’S THIRD NEW INT’L DICTIONARY at 97. Thus, the distinction between ‘an’ and ‘any’ is that the former refers to one object *828(an oak tree) and the latter refers to one or more objects of a certain type (any person)." 178 Wis. 2d at 724-26.

The coverage question in Taryn concerned a claim for vicarious liability against the parents, not direct negligence, as in a negligent supervision claim. However, other courts relying on Taryn have not distinguished it on that basis. See, e.g., Johnson v. Allstate Ins. Co., 687 A.2d 642, 645 (Me. 1997); Northwest G.F. Mut. Ins. Co. v. Norgard, 518 N.W.2d 179, 182 (N.D. 1994). I agree with Taryn s analysis of the “any insured” exclusion clause language.

Other courts and text authority have disagreed with the majority’s reasoning in this case. See 2 Windt, Insurance Claims and Disputes § 11.08, p. 234 (3d ed. 1995).

“[I]t has been held that an ‘any insured’ exclusion will be treated like a ‘the insured’ exclusion if the policy contains a severability clause; that is, a provision stating that the ‘insurance applies separately to each insured.’ Such a holding is not justifiable. A severability clause provides that each insured will be treated independently under the policy. The fact remains, however, that as applied even independently to each insured, an ‘any insured’ exclusion unambiguously eliminates coverage for each and every insured.
“The rationale used by the courts that have held . . . that a severability clause renders an ‘any insured’ exclusion meaningless — have done so on the basis that, otherwise, the severability clause would itself be meaningless. That is untrue. A severability clause would still have meaning in a variety of contexts.” 2 Windt, § 11.08, pp. 234-35.

See California Casualty Ins. Co. v. Northland Ins. Co., 48 Cal. App. 4th 1682, 1696, 56 Cal. Rptr. 2d 434 (1996) (“The unambiguous intent [of the watercraft exclusion] is to exclude coverage for any insured, even if liability of that insured does not arise from his or her personal ownership or use of the watercraft.”).

Two recent Missouri cases have considered the effect of a severability clause on a liability coverage exclusion in a homeowner’s policy: American Family Mut. Ins. Co. v. Moore, 912 S.W.2d 531 (Mo. App. 1995), and American Family v. Copeland-Williams, 941 S.W.2d 625 (Mo. App. 1997). Moore involved an exclusion for injury arising out of “business pursuits of any insured ... by an insured” and a liability coverage question concerning a claim for a child’s dog bite at the babysitter’s home. 912 S.W.2d at 533. The *829babysitter, her husband, and her son (who owned the dog) were insureds under the policy. The district court awarded summary judgment to tire insurer on the coverage question, and the Missouri Court of Appeals affirmed:

“Because an insurance contract is an agreement between parties that should be interpreted in a manner consistent with the expressions therein, the policy before us unambiguously expresses an intention to deny coverage to all insureds when damage is the result of a business pursuit. The purpose of the severability clause is not to negate the plainly worded meaning of the business exclusion clause.” 912 S.W.2d at 534-35.

Copeland-Williams involved a homeowner’s policy with a severability clause and an exclusion for injuries “expected or intended from the standpoint of any insured.” 941 S.W.2d at 627. The insured husband was alleged to have sexually molested his step-granddaughter. The insured wife allegedly negligently allowed the molestation. Although coverage for the husband was held excluded, the trial court found that coverage existed for the claim against the wife. The Missouri Court of Appeals reversed, relying on Moore, viewing the Moore court as having rejected the reasoning of Marnell. The Copeland-Williams court also found the reasoning of Taryn, 178 Wis. 2d 719, and Northwest G.F. Mut. Ins. Co. v. Norgarid, 518 N.W.2d 179 (N.D. 1994), to be persuasive, holding: “The use of the phrase ‘any insured’ makes the exclusionary clause unambiguous even in light of the severability clause.” 941 S.W.2d at 629. See also Michael Carbone, Inc. v. General Acc. Ins. Co., 937 F. Supp. 413 (E.D. Pa. 1996) (summary judgment for the insurer on the coverage issue, holding that the automobile exclusion applied to bar coverage). Carbone concluded: “[T]he bulk of the courts which have addressed the issue have held that an exclusion worded ‘any insured’ unambiguously expresses a contractual intent to create joint obligations and preclude coverage to innocent co-insureds. [Citations omitted.] . . . I believe that the majority view is better reasoned.” 937 F. Supp. at 422. Carbone continued:

“Following the majority rule in this case therefore gives meaning to both the word ‘any’ in the automobile exclusion and the separation of insureds clause. This adheres to the Third Circuit’s dictate that a court interpreting an insurance policy *830‘should read policy provisions to avoid ambiguities if possible and should not torture the language to create them.’ ” [Citation omitted.] 937 F. Supp. at 423.

Jessica M.F. v. Liberty Mut. Fire Ins. Co., 209 Wis. 2d 42, 561 N.W.2d 787 (Ct. App.), rev. denied 210 Wis. 2d 46 (1997), involved the question of liability coverage for claims of sexual abuse of minor grandchildren against grandparents. The grandfather was sued for acts of sexual abuse over several years and the grandmother for negligence in fading to prevent the acts or protect the grandchildren. The homeowners’ policies involved included severability clauses and exclusions for injuries expected or intended by “the insured” or “an insured.” The trial court decided there was no coverage, based on the intentional acts exclusions. The grandchildren and parents appealed the coverage determination as to the claims against the grandmother, and the Wisconsin Court of Appeals affirmed. The court examined the alleged conduct of the grandmother and reasoned that “if the grandmother ‘knew’ of her husband’s actions, she ‘expected or intended’ the harm to her grandchildren.” 209 Wis. 2d at 54. The court stated: “[W]e conclude that, in the context of child sexual abuse allegedly committed by one’s spouse under circumstances in which the spouse ‘in the exercise of reasonable care, should have known,’ the intentional-acts exclusion precludes coverage.” 209 Wis. 2d at 55. The court distinguished Nemetz as follows:

“Nemetz dealt with arson and, therefore, did not encounter the special considerations that arise in the context of child sexual abuse, particularly within a family. Moreover, Nemetz considered whether an apparently innocent spouse retains separate coverage. Here, by contrast, the grandmother allegedly knew or should have known. Therefore, according to the pleadings, she was not ‘innocent.’ Indeed, Nemetz reiterates the ‘premise that public policy considerations should prevent recovery by an insured who is not innocent with respect to intentional damages.’ See id., 135 Wis. 2d. at 258,400 N.W.2d at 38. A grandmother who, according to the complaint, knew or should have known of her husband’s sexual abuse of their four grandchildren ‘for several years’ certainly ‘is not innocent with respect to [the] intentional damages’ resulting from sex abuse.” 209 Wis. 2d at 58-59.

The concurring opinion of Judge Schudson identified some cogent public policy reasons for the decision:

*831“Moreover, what now may seem a remote possibility could become far less remote should courts ever conclude that the so-called ‘non-offending’ spouse could receive homeowner insurance coverage for the offender’s abuse. Not only would prevention, intervention, and deterrence of sexual abuse decline, but collusion could increase as sexually-abusive families discovered they could not only assault children, but gain insurance recoveries as well.
“Thus, I also conclude that although in most cases any impact is remote, in some situations the unavailability of coverage will prevent abuse and, where abuse has occurred, will motivate the ‘non-offending’ spouse to intervene on behalf of the victims.” 209 Wis. 2d at 62-64.

I suggest that the Upland rule, as described in Raiymer, 251 Kan. at 697, (i.e., to determine coverage, do not look to the underlying cause of the injury but to the specific theory of liability alleged) has not been consistently followed by this court. I refer to First Financial Ins. Co. v. Bugg, 265 Kan. 690, 962 P.2d 515, (1998), our most recent case involving criminal activity, injury, and insurance coverage.

In Bugg, we reversed the district court and denied coverage on a negligence claim for injury arising from a bar shooting. The injured patrons alleged the bar owners were negligent for (a) firing a gun in a crowded tavern, (b) failing to have exits clearly marked within the tavern, and (c) failing to properly protect patrons from an assailant.

The policy in Bugg had an exclusion for assault and battery. We looked not to the specific theory of liability alleged, i.e., negligence, but to the underlying cause of the injury, the assault and battery. Syllabus ¶ 5 in Bugg says: ‘When a liability insurance policy contains an assault and battery exclusion, a negligence claim for injuries arising out of an assault and battery is irrelevant. An assault and battery exclusion clause is intended to exclude all claims arising out of an assault and battery.”

In Bugg, Woodberry, one of the injured patrons, relying on Raymer, argued that her specific theory of liability was negligence. Woodberry pointed out that she made no allegations “in her petition that an assault or battery occurred with respect to her person.” She also observed that she “makes no allegation that the employees of Tewz Enuff [the bar] intended to injure her.” She *832concluded, therefore, the assault or battery and the intentional acts provisions of the policy did not apply. The insurer should be required to provide coverage for any liability that the insured is found responsible for under the negligence actions. Bugg does not reference Raymer or Upland. I agree with the result in Bugg and would apply the Bugg reasoning here.

Occurrence

I also disagree with the majority’s occurrence analysis. Neither the majority nor either party has identified a Kansas severability clause case characterizing the defined term “occurrence” or the undefined term “accident” ambiguous when liability is sought against a co-insured for injuries intentionally caused by another co-insured.

The Brumleys are asserting a wrongful death claim against their son-in-law David for the murder of their child Douglas by their daughter Kimberlee. Bodily injury is defined in the policy as including “bodily harm,.. and death resulting therefrom.” The damages claimed are for the murder of Douglas because of Kimberlee’s intentional act of abuse. We should look at the act which caused the bodily injury resulting in death to decide whether the policy’s definition of occurrence applies.

The policy states: “ ‘occurrence’ means an accident, including exposure to conditions which results, during the policy period in bodily injury or properly damage.” In Harris v. Richards, 254 Kan. 549, 552, 867 P.2d 325 (1994), we reviewed the meaning of “occurrence,” which was defined as is “occurrence” here. We observed that Kansas has adopted the natural and probable consequences test and that the word accident has a generally accepted meaning according to the popular understanding. 254 Kan. at 553-54.

We have said that an insured has the burden of demonstrating coverage. Harris, 254 Kan. at 553. The parties agree that Kimberlee’s fatal blow to Douglas’ abdominal area, tearing the mesentery and resulting in peritonitis, was intentional. Kimberlee pled to second-degree murder.

*833David was not present at the time Kimberlee fatally injured Douglas. The question of causation arises. I would focus our analysis here on causation in determining whether there was an “occurrence.”

A similar fact situation was considered in Mutual of Enumclaw v. Wilcox, 123 Idaho 4, 843 P.2d 154 (1992), and Allstate Insurance Company v. Grayes, 216 Ga. App. 419, 454 S.E.2d 616 (1995), discussed by the majority.

David’s alleged negligent conduct did not cause Douglas’ death, the act complained of, so there is no “occurrence” as to David. I do not find that the absence of a severability clause discussion in either Wilcox or Grayes dilutes the effect of the causation rationale.

The absence of causation here is endorsed by our disposition of the claims of negligent entrustment in Davey v. Hedden, 260 Kan. 413, 920 P.2d 420 (1996). Jeff and Jon Hedden, age 14, were at home under the care of their married sister while the parents were on vacation in Hawaii. While at a friend’s home, the plaintiff Davey asked Jon for and was granted permission to drive the Hedden’s Mercedes convertible. Catherine Farnsworth was Davey’s passenger. Both were under 16. Catherine in due course shifted to the driver’s position, lost control, and hit a tree. Davey sued Farnsworth, the vacationing parents, and others. K.S.A. 8-222, which imposes joint and several liability on any person who permits one under 16 to drive, was involved. The district court held that negligent entrustment, if it existed at all, was not the proximate cause of Davey’s injuries. 260 Kan. at 417-18. In affirming the district court, we reasoned that the ultimate question deals with the causation of Davey’s injuries. We held the negligence of Davey and Catherine constituted 100% of the efficient intervening cause. Any negligent entrustment was not the efficient cause of Davey’s injuries. 260 Kan. at 428.

Here, any negligence of David, who was not present when Kimberlee murdered Douglas, did not cause the death of Douglas.

The majority emphasizes the absence of a definition of “accident” in the “occurrence” section. An explanation of the 1966 revisions in the standard comprehensive liability form keying cover*834age to the word “occurrence” and not to “accident” is found in Jerry, Understanding Insurance Law § 65[a], p. 333 (1987).

We should affirm the result reached by the district court and the Court of Appeals.

McFarland, C.J., and Larson, J., join in the foregoing dissenting opinion.