2003 D e c i sion s O p inion s of the U nit e d S t a t e s C our t of Appe al s for the Thir d C ir c uit

12-22-2003 

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. S he r id a n P r e c e de n t i al or N on-P r e c e de n t i al : N on-P r e c e de n t i al D ock e t N o . 02-4222

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w . v i l l a no v a . e du/thir dc ir c uit_2003/40NOT PRE CEDENT IAL UNITED STATES COURT OF APPEALS FO R T HE TH IRD CIR CU IT

No. 02-4222

ALLST ATE I NSURANCE COMPANY

v. ROBERT SHERIDAN; EDWARD CO LE; SHIRLEY COLE; THE BLOOMSBURG HO SPITAL; LUZE RNE-W YOM ING CE NTER #1, t/a Community

Counseling Cent er of No rtheas tern P enns ylvania

The Bloo msb urg H ospital,

Appellant App eal from th e Un ited States District Co urt for the M iddle D istrict of P enns ylvania (D.C. Civi l Action No. 00-cv-01381) District Judge: H onorab le John E . Jones, III

Submitte d Under Third Circ uit LAR 34.1(a)

December 12, 2003 Be for e: A M BR O, F UE NT ES and GA RT H, Circuit Judges (Opinion fi led : December 22, 2003)

OPI NION2

AM BR O, Circuit

Judge Bloomsburg Hospital app eals the District Cou rt’s award of summary judgment to Allstate Insuranc e Company on its action f or declaratory judg ment. Allstate sough t a declaration tha t it is not oblig ated to defe nd or ind emnify Robert Sheridan , named as a defendant in a Pennsy

lvania s tate c ourt civi l acti on, for cla ims a rising out of a shooting incident in Bloomsburg, Pennsylvania. The District Court inte rpreted Sheridan’s Renters Insurance Policy

(“Policy ”) to exclude coverage for the conduct at issue a nd concluded that neither Sher

idan nor othe

r parti es to the

action m ay seek inde

mnific ation or contribution from Allstate. Because the Policy , by it s plain language, does not cover intentional acts co mmitted by insured persons, we af firm. I. F act ual and Pr oce dura

l Hi sto ry This feder

al act ion involvesAllsta

te’s pur ported obli gation to defend or indemni fy Robe

rt Sheri dan in an under

lying stat e court a ction ar ising from

an incide nt that occurred on March 2 4, 1998 . That aftern oon Ed ward Cole w as in his car, stopp ed in traffic, outsid e of Sherid an’s apartment. She ridan shot C ole, throug h the wind ow of h is apartm ent, wit h a 20-gauge s hotgun. Cole s ustaine d personal injuriesas a re sult of the shooting

. Prior to the in cident, Sherid an was treated at B loomsburg H ospital for p sychiatric or psychological

illnesses. Upon his discharge, Sheridan received from the Hospital instructions f or out-patien t medical care, as well as drug prescriptions. H e failed to3

follow these instructions and began to self-m edicate. In the state court action, Cole has alleged that the H ospital’s careless, reckless, o r negligent f ailure to rende r appropria te professi onal me

ntal hea lth car e to Sheri dan incre ased the risk of har

m to Cole . The Hospital denies liability

for the shoot

ing. In the

alter native, it conte

nds that a ny finding of liabil ity against the Hospit

al would ent

itle i t to contr ibution or indemnifi cation fr om Sheridan. It furthe

r arguesthat Sher

idan’s fa ilure t o comply with his di scharge instructions an d his practice of self-medication co nstitute neglig ent condu ct that is

co ve re d b y hi s i ns ur an ce po li cy. The Allstate Ren ters Insurance P olicy provides: Subject to the terms, conditio ns, and limitations of this policy, Allstate will pay dam

ages which an insured pe rson becomes legall y obligate d to pay because of bodily injury or property dam age arising from an occurrence to which this policy applies , and is c overed by this par t of the policy. An “occurr

ence,” as define d by t

he Policy , is “a

n accident including continuous or repeated exposure to substantially t he same general

harmful conditions, during the policy period, r esulting in bodily injury or property dam age .” The Policy

specifi cally

excludesfrom cove

rage all dama

ge resul ting from intentional co nduct.

We do not cover an y bodily injury or property dam age in te nd ed by, or which ma

y r easonabl y be expecte d to resul

t from t he intent ional or cr iminal ac ts or om is si on s o f, an y insured pe rson . This e xclusio n appli es e ven if: a) such insured person lacks the men tal capa cit y to gove rn hisor her

own1 “Summary judgment i s appropri ate when ‘ there i s no genuine i ssue asto any material fact and . . . the mov ing party is entitled to a ju dgment as a matter of law .’ While the rec ord on appeal

must be viewed in t

he light m

ost favora ble to the party who lost on summary judgment in the District Court, an appell ate court may only review the record as 4 conduct; b) such bodi ly in

jur y or pr ope rty damage

is of a different kind or degree than intended or reasonably expected; or c) such bodily inj ury or property dam age is sust ained by a different person than intend ed or reason ably expected. This excl usion appli es r egar dles s of w hether or

not such insured pe rson is actually charged with o r convicted o f a crime. In June 2000 Sheridan pled guilty but mentally ill to one count of Aggravated Assault and two countsof Reckles sly Endangering Anot

her Pers on. He adm

its to ha ving “shot at the ind ividual in th e car” and “aim[ed] at the driver.” Sheridan i s a nam

ed defendant

in a civi l acti on pending in the Court of Comm

on Pleas of Columbia County, Pennsy lvania. Allstate

filed this action in the United State s Distri ct Court for

the Middle

Distri ct of Pennsy

lvania, seeking a

declar ation tha t it isnot obligated to indemnify

Sheridan in the underlying state action. The Distri ct Court granted Allstate’smotion for summar y judgment in October 2002. Bloomsburg Hospital appeals. The Distr ict Court exerci sed juris diction pur suant to 28 U. S.C. § 1332, bas ed on diversity of citiz enship and a

mount in c ontrovers y. We have jur isdict ion pursuant

to 28 U.S.C . § 1291. We r

evie w de novo the District Cou rt’s award of summary judgment. 1it existed at the t ime summ

ary judgment was entered.” Union Pac. R.R. Co. v. Greentree Transp. Truc

king Co. , 293 F.3d 120, 125 -26 (3d Cir. 2002) (citations omitte d).

2 The standard for interpre ting the Po licy under Pennsylvania law is we llestablished. Th e terms of the Policy are to be g iven their ord inary meaning. While ambiguousterm s are c onstrued a gainst t he insure r, a te rm will be consi dered am biguous only if rea sonably intelligent persons would “honestly ” differ as to its m eaning, when considering it in the contex t of the entire p olicy. Finally, in determining the parties’ intent, the court

must c onsider not

only the langua

ge of the Poli cy , but als o the surround ing circumstances. United Servs. Auto Ass’n v. Ellitz ky , 517 A.2d 982, 986 (Pa. Super. 19 86). 5 Union Pacific R. Co. v. Greentr ee Transp. Trucking Co. , 293 F.3d 120, 125 -26 (3d Cir. 2002). II. Dis cussion The disagree ment between the parties in this case turn s on a logic g ame. It is undisputed t

hat Sheri dan’s ac t of shooting Col e was int entional within the

meaning of the Polic y. It nece ssari ly follows tha

t Allst ate isnot obligat

ed to indem

nify Sheridan for liabil ity he incursas a re sult of hisact of shoot ing Cole; by

the expre ss ter

ms of the policy, Sheridan’s pu rported lack of mental capacity at the time of the sh ooting is irrelevant. 2 In an attempt to avo id this result, the H ospital cleverly suggests that A llstate is liable based on Sheridan’s “n egligent” failu re to comply with his discharg e instructions. In other words, the Hospital contends that Allstate may be exempt from financial responsibility

for damages that stem from the shooting but nonethel ess li able for t he

same damage s to the extent the y m ay be trac ed to Sheri dan’s pri or act of di sregar ding the6

Hospital’s instru ctions. While we appreci ate the

Hospital ’s ingenuity , we decline to depr ive Alls tate of t

he benefit of its bargain in th is fashion. T he plain lang uage of th e Policy absolves Allstate of responsibility

for intentional acts, such asthe shooting at issue in this cas e, even when the insur ed lacksmenta

l capac ity or injuresan unintende d victim . We will not perm it the Hospital to en d-run this ex clusion by identifying an atten uated, albeit po tentially proximate, cause o f Cole’s inj ury. After all, every insurance policy is susceptible to circumvention of this kind. An insured held liable for an intenti onal injury m ight argue, by s imil ar rea soning, tha

t he or she

negligent

ly failed t o seek psychological treatment. We need not , however, rest on policy consider ations. The Hospita

l’s ar gument suffers f rom a fatal logical inf irmity. To be sure, the state court co mplaint against Bloosmburg is premise d on the Hospital’s allegedly negligent disseminat

ion of medical treat ment. The Distr

ict Court noted that

the part ies did not

dispute “that Sher

idan not only faile d to adhere to the Bloomsburg Hospital’s dischar ge instructions, but also began to self-medica

te subsequent to his releas e from the hospital.” The Hospital concludes therefr om that the part ies agr ee that Sheridan negligently failed t o follow the instruct

ions of his treating healthcare pro viders. This step we can not make. The H ospital’s allegedly negligen t failure to sup ervise Sheridan doe s not rende

r Sherida n’s disr uption of his t

reatm ent als o negligent . Put simply , the Hospital may

be correct that “t

he trial court in the underly ing civil action has7

alrea dy held that Edwa

rd and Shirl ey

Cole have s tated a

claim for injurie s agains t the Bloomsbur

g Hospital

that isnot based on intentiona l and/or criminal act s.” It does not follow, h owever, tha t the Hospital’s en titlement to indemnificatio n from Sherid an is also based on n egligence—n or that Allstate is thereb y required to indemnify Sherida n. The Hosp ital’s strongest theo ry for pursuing in demnification from Sheridan is h is intervening act of shooting Cole. Less likely , but nonetheless plausible, isSheridan’s failure to follow hismedic al regimen. The re is no indicati on that either ac t was any thing but intent ional, a s that t

erm i s defined in the Polic y. The Hospita l admits that

the shooting wasintenti onal and, c onsequentl y, that All state

need not reimburs e Sherida n for the r esul ting damag es. B ut th e Ho spit al’s a ltern ativ e stra tegy su ffe rs fr om th e same defect. While She

ridan may

not have been acting with full m ental c apacit

y whe n he chose to s elf-m

edicat e, the intentiona

l act exclusion “ applieseven if [the insured] l acks the me ntal ca pacity to govern hisor her own conduc t.” Sher idan did not s elf-m

edicat e by accident. Cf. Allstate Ins. Co. v. Fis cher , No. 97-4806, 1998 WL 2 05693, at *3 (E.D. Pa. Apr. 28, 1998) (defining accident as a “fortuitous, untoward or unexpected happening[].” ). There

is no indic ation in t

his cas e that She

ridan ac ted in any

way but intentionally , within the meaning of the Policy , when he discontinued his prescribed treatment. Cf. Acceptan ce Ins. Co. v. Se ybert , 757 A.2 d 380, 3 83 (Pa. Su per. 2000 ).III. Conc lusion Sheridan’ s Policy

specifi cally

excludesfrom cove

rage li abilit

y for damage resulting from intentional a cts by the insured. Because we find that Sheridan acte d intenti onally

(as the Policy defines t hat ter m) both whe

n he began to s elf-m

edicat e and when he sh ot Cole, we af firm the judg ment of the District C ourt.

TO THE C LERK:

Please fi le the foregoing Opini on. By the C ourt,

/s/ Thomas L. Ambro Circuit Judge