Case Title: Concord Mutual Insurance Co. v. Madore

Citation: 178 Vt. 281, 2005 VT 70, 882 A.2d 1152

Docket Number: 

State: vermont

Court: Vermont Supreme Court

Date: 2005-07-01T00:00:00Z

Document:
Concord Mutual Insurance Co. v. Madore  (2004-291); 178 Vt. 281; 
882 A.2d 1152

2005 VT  70

[Filed 01-Jul-2005]

  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.

                                 2005 VT  70

                                No. 2004-291

 Concord Mutual Insurance Company                       Supreme Court
 
                                                        On Appeal from
   v.                                                   Windham Superior Court

  Leo Madore, Linda Madore on behalf of T.M. (a minor)  April Term, 2005
  and Tracy Dion on behalf of T.S. (a minor)

  Karen R. Carroll, J.

  Richard J. Holmes of Robert A. Mello & Associates, PLC, South Burlington,
  for  Plaintiff-Appellee.
       
  Thomas C. Bixby of McCarty Law Offices, P.C., Brattleboro, for
  Defendants-Appellants Dion and T.S. (a minor).

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

        
       ¶  1.   JOHNSON, J.   Plaintiff Concord General Mutual Insurance
  Company brings this declaratory judgment action claiming that it does not
  owe its insureds a duty to defend or indemnify them in an underlying tort
  suit arising from minor-on-minor sexual molestation.  Plaintiff moved for
  and was granted judgment against all parties to the underlying tort suit on
  grounds that the homeowners' policy at issue expressly excluded from
  coverage personal liability arising out of the sexual molestation of any
  person, whether intentional or unintentional.  On appeal, defendants argue
  that the court impermissibly resolved a genuine issue of material fact on
  summary judgment when it determined that the molestation exclusion applied
  to the facts of this case.  Specifically, defendants argue that the
  exclusion applies only to intentional acts of sexual molestation and,
  therefore, the court also erred in failing to permit discovery on the
  question of whether the minor perpetrator in this case was capable of
  forming the requisite intent.  We affirm because the court properly
  interpreted the dispositive policy exclusion at issue, and such
  interpretation presented a question of law that was within the court's
  power to resolve on summary judgment.

       ¶  2.    In September 2003, defendant Tracy Dion filed a complaint
  in superior court on behalf of herself and her minor son T.S. seeking
  damages from defendants Leo Madore, Linda Madore, and their minor son T.M.
  for injuries sustained as a result of T.M.'s alleged sexual molestation of
  T.S.  Paragraph six of the underlying complaint states, "T[.]S[.] was
  sexually molested by T[.]M[.] from the Summer of 1998 through the Fall of
  2001."  (Emphasis added).  All ten counts of the underlying complaint
  "repeat and reallege" the sexual molestation allegation contained in
  paragraph six.  In January 2004, Dion amended each count of the complaint
  adding the allegation that T.M.'s conduct also "constituted a violation of
  Vermont statutes lewd or lascivious conduct with a child 13 V.S.A. §§ 2601,
  2602, and 2631."  
   
       ¶  3.   During the period covered by the allegations in the
  underlying complaint, the Madore defendants were the insureds on a
  homeowners' insurance policy issued by plaintiff.  The policy provided
  personal liability coverage for suits brought against an insured for
  damages because of bodily injury.  The policy required plaintiff to supply
  insureds a defense against lawsuits seeking damages for occurrences that
  fall within the policy coverage.  The policy coverage contains, among
  others, an exclusion in subsection (a) for bodily injury resulting from
  acts which are "expected or intended by one or more 'insureds' "; an
  exclusion in subsection (b) for bodily injury that "aris[es] out of or in
  connection with a 'business' engaged in by an 'insured' " including any act
  or omission "regardless of its nature or circumstance, involving a service
  or duty rendered"; an exclusion in subsection (g) for bodily injury
  "[a]rising out of . . . [t]he ownership, maintenance, use, loading, or
  unloading of an excluded watercraft"; an exclusion in subsection (i) for
  bodily injury "[c]aused directly or indirectly by war"; an exclusion in
  subsection (j) for bodily injury "[w]hich arises out of the transmission of
  a communicable disease by an " 'insured' " and; an exclusion in subsection
  (1) for bodily injury "[a]rising out of sexual molestation of any person." 

       ¶  4.   In response to a dispute that arose between the parties
  about whether the Madores' homeowners insurance policy provided coverage
  for Dion's claim, plaintiff filed this declaratory judgment action naming
  the Madores, Tracy Dion, and T.S. as defendants.  In its complaint,
  plaintiff alleged five independent reasons that it felt justified a denial
  of coverage, including the intentional acts exclusion and the sexual
  molestation exclusion cited above.  

       ¶  5.   Plaintiff subsequently moved for judgment on the pleadings
  under V.R.C.P. 12(c).  Of the grounds alleged in its complaint, plaintiff's
  motion relied solely on the sexual molestation exclusion.  Plaintiff argued
  that the exclusion applied to bar coverage for defendant Dion's claims in
  the underlying tort suit, all of which derived from the allegation that the
  insureds' son had sexually molested T.S.
   
       ¶  6.   Defendants responded by filing a motion for summary judgment
  pursuant to V.R.C.P. 56.  In their statement of facts, defendants note that
  the policy does not define the term "sexual molestation" as used in the
  exclusion.  Defendants argued that they were entitled to judgment as a
  matter of law because, in their view, the undefined term includes only
  sexual molestation that was intentional.  Defendants asserted that the
  minor perpetrator in question should be presumed incapable of forming the
  requisite intent as a matter of law.  Defendants argued, therefore, that
  the policy exclusion at issue would not bar coverage for the underlying
  complaint because it alleges unintentional sexual molestation for which
  coverage is not specifically excluded.  The parties then traded pleadings
  in opposition to each other's respective motions. 
   
       ¶  7.    The court granted plaintiff's motion for judgment on the
  pleadings and denied defendants' motion for summary judgment.  The court
  identified the "pivotal issue" as "whether there is any possibility that
  Plaintiff insurer might be obligated to indemnify Defendants Madore and
  T.M. on any of the claims asserted in the underlying suit."  Consistent
  with our precedent, the court analyzed the issue by comparing the
  allegations in defendant Dion's tort complaint to the terms of coverage in
  the policy.  See Hardwick Recycling & Salvage Co. v. Acadia Ins. Co., 2004
  VT 124, ¶ 15, 15 Vt. L. Wk. 397,