NO. 89-590
IN THE SUPREME COURT OF THE STATE OF MONTANA
1990
NEW HAMPSHIRE INSURANCE GROUP,
Plaintiff and Respondent,
-vs-
JAKE STRECKER,
Defendant,
and
K.S.,
Defendant and Appellant.
APPEAL FROM: District Court of the Thirteenth Judicial District,
In and for the County of Yellowstone,
The Honorable G. Todd Baugh, Judge presiding.
COUNSEL OF RECORD:
For Appellants:
James D. Walen, Keefer, Roybal, Hanson, Stacey &
Walen, Billings, Montana
For Respondent:
L.D. Nybo, Conklin, Nybo, LeVeque & Murphy, P.C.,
Great Falls, Montana
Submitted on Brief: July 13, 1990
Decided: September 13, 1990
Filed:
Clerk
Justice John Conway Harrison delivered the Opinion of the Court.
This is an appeal from the Thirteenth Judicial District Court,
Yellowstone County. Plaintiff New Hampshire Insurance Group (New
Hampshire) brought suit, seeking a declaratory judgment that it did
not owe a duty to defend or indemnify its insured, defendant Jake
Strecker (Jake) in a civil action brought by co-defendant and
appellant K.S. for sexual molestation. The District Court found
in New Hampshire's favor on a motion for summary judgment. K.S.
appeals from that order. We affirm.
The issue raised by appellant K.S. is:
id the District Court err by granting New Hampshire's motion
for summary judgment, thus precluding insurance coverage?
Jake sexually assaulted, molested and abused his daughter,
K.S., for approximately ten years beginning when she was six years
old. Jake testified by deposition that he did not intend to harm
K.S. as a result of this continual sexual molestation. Jake was
charged with and pled guilty to three counts of felony sexual
assault. In January 1986, K.S. filed a civil action against Jake
based on this sexual abuse seeking damages for economic losses,
medical treatment, and emotional distress.
Jake tendered this lawsuit to his insurer, New Hampshire, to
defend and indemnify in the event K.S. recovered. The two policies
in effect were a farm-ranch comprehensive general liability
umbrella policy for Strecker Farms, Inc., which also named Jake
Strecker individually. The general liability policy provisions
stated that the company will pay damages for bodily injury or
property damage caused by an lgoccurrence.l'Occurrence is defined
as "an accident, including continuous or repeated exposure to
conditions, which results in bodily injury or property damage
neither expected nor intended from the standpoint of the insured."
(Emphasis added.) The general liability extension provides that
insurance does not apply to "personal injury . . . arising out of
willful violation of a penal statute or ordinance committed by or
with the knowledge or consent of the insured." The commercial
umbrella policy covers damages for personal injury caused by an
occurrence which is neither I1expected or intended from the
standpoint of the insured." Personal injury includes assault and
battery not committed by or at the direction of the insured unless
preventing or eliminating danger to persons or property.
Based on these clear and unambiguous policy exclusions, New
Hampshire declined to provide a defense in the underlying lawsuit
or to indemnify Jake for any damages which might be recovered
against him. New Hampshire filed a declaratory judgment action in
the District Court seeking a determination that there was no
insurance coverage for Jake under these policies for K.S. Is
damages. New Hampshire moved for summary judgment pursuant to Rule
56, M.R.Civ.P. The motion was submitted to the District Court on
a set of stipulated facts. The matter was fully briefed and argued
by counsel for the parties. On August 18, 1989, the District Court
entered its memorandum and order granting summary judgment in favor
of New Hampshire. Judgment was entered accordingly from which K.S.
now appeals.
llOccurrencell
insurance policies clarify the concept of
llaccidentll order to preclude coverage for harm resulting from
in
intentional acts. This definition of occurrence raises the issue
of whether Jake's sexual molestation of K.S. was intentional,
rather than accidental, thus precluding coverage under Jake's
insurance policy with New Hampshire. We agree with the District
Court's finding that Jake intentionally molested K.S.
The issue raised on appeal is whether the District Court erred
by granting New Hampshire's motion for summary judgment.
The standard of review is clear. Summary judgment is only
proper under Rule 56(c), M.R.Civ.P., where the record discloses
that no genuine issue of material fact exists and the moving party
is entitled to judgment as a matter of law. Mutual Service Cas.
Ins. Co. v. McGehee (1985), 219 Mont. 304, 306, 711 P.2d 826, 827.
Under the undisputed facts of this case, as stipulated to by
all parties, New Hampshire was entitled to summary judgment as a
matter of law. The undisputed facts show the following:
(1) Jake admits that he sexually molested K.S. for nearly ten
years. In the instant case there is no evidence to show that Jake
did not intend to sexually molest his daughter for ten years. Such
actions are not accidental. Furthermore, Jake was not suffering
from any mental disability. Evidence of diminished mental capacity
might preclude the insured from forming the requisite intent to
harm. See, e.g. , State Farm Fire & Casualty Co. v. Jenner (9th
Cir. 1988), 856 F.2d 1359; Allstate Insurance Co. v. Gilbert (9th
Cir. 1988), 852 F.2d 449; State Farm Fire & Casualty Co. v. Pickard
(9th Cir. 1988), 849 F.2d 1220. Jake testified in his deposition
that he knew he had a problem, that he needed help and that he
might be harming K.S. Jake also pleaded guilty to three counts of
felony sexual assault of a minor. This plea may be introduced in
the subsequent civil action as an admission. Teitelbaum Furs, Inc.
v. Dominion Insurance Co. (Cal. 1962), 375 P.2d 439, 441; cert.
denied, 372 U.S. 966, 83 S.Ct. 1091, 10 L.Ed.2d 130 (1963). In
light of these considerati'ons it would fly in the face of reason
to hold that Jake did not intend to harm K.S. by continuing his
course of conduct. We adopt the District Court's finding that
Jake's actions were intentional.
(2) This sexual abuse caused injury to K.S.
(3) Jake's insurance policies with New Hampshire do not
provide coverage for personal or bodily injury caused by
intentional acts. This is not a question of contract
interpretation. Courts have no authority to change a contract when
its intent is clear. Courts may not disregard the express language
of a contract. Lemley v. Bozeman Community Hotel Co. (1982), 200
Mont. 470, 651 P.2d 979. See also 5 28-3-401, MCA.
The insurance policies here are plain and unambiguous. The
general liability policy provisions preclude coverage for injury
if either of two prongs are satisfied. The first prong is
satisfied if the injury was not caused by an accident. The second
prong is satisfied if the injury was either expected or intended
from the standpoint of the insured. The District Court found that
Jake's acts of sexual molestation were intentional and we adopt
this finding. As such, the first prong of the general liability
policy's exclusionary clause is satisfied and coverage is
precluded.
Furthermore, along this same line of reasoning, we agree with
the District Court's holding that neither the general liability
extension nor the commercial umbrella policy provide coverage for
harm resulting from sexual molestation. Both of these policies
were clearly intended to deny coverage for intentional misconduct.
Neither Jake nor New Hampshire contemplated insurance coverage for
sexual molestation. Jake cannot insulate himself under any of
these policies since the undisputed facts show that Jake intended
to sexually assault K . S . We hold that there are no questions of
fact and as a matter of law, New amps shire is entitled to judgment.
Jake's testimony by deposition raises a factual question
regarding his subjective intent to cause K . S . harm. Appellant
contends that the existence of this factual question precludes
summary judgment. We disagree. In reaching our holding we do not
focus on Jake's subjective intent to cause harm.
K.S. alleged theories of negligence in her underlying
complaint, but these theories are necessarily based upon the
numerous alleged acts of molestation which cannot be deemed
negligent acts. Coverage is based upon the acts giving rise to the
claims, not necessarily the language of the complaint. Burns v.
Underwriters Adjusting Co. (1988), 234 Mont. 508, 510, 765 P.2d
712, 713. We affirm the District Court's summary judgment in favor
of New Hampshire. 1