N O T FO R PUB L ICAT IO N UNITED STATES C OUR T OF APPEALS FOR THE NINTH C IR C UIT
AM E R IC AN RELIAB L E INSUR ANC E C OM PANY,

Pla i ntiff-Appe lla

nt,
v. LAW RENC E LOC KARD; KAR EN JANE NELSON, De fe nda

nts-Appe lle e s. No. 18-35758 D.C . No. 9:17-c v-00004-DLC
M EM O R ANDUM *

AM E R IC AN RELIAB L E INSUR ANC E C OM PANY,

Pla i ntiff-Appe lle e , v. LAW RENC E LOC KARD,

De fe nda nt,
and KAREN JANE NELSON, No. 18-35786 D.C . No. 9:17-c v-00004-DLC



# FIL ED DEC 03 2019 M OLLY C. DW Y ER, CLERK U
. S. CO URT O F APPEALS

* This disposition is not a ppropria te for public at ion a

nd is not pre c e de nt e xc e pt a s provide d

by Ninth C irc uit R

ule 36-3.De fe nda nt-Appe l la

nt. Appe a l from

the Unite d

Stat e s Distric t C ourt for the Distric t of M o nta

na Dana L. C hriste nse n, Distric t Judge , Pre siding Argue d a nd Subm itte d Oc tobe r 23, 2019 Portla nd, Ore gon B e fore : FAR

R IS, B EA, a

nd C H R ISTEN, C irc u it Judge s. Am e ric an R e lia

b le Insura nc e C om pa ny an d Ka re n Ne lson c ross-a

ppe a l the distric t c o urt’ s judgm e nt tha t Am e ric an R e l ia

ble owe d c ove ra g e to La

w re n c e Loc ka rd for one of five inc i de nts re lat e d to Loc ka rd’ s se xua l a ssa

ult a ga inst Ne lson. Am e ric an R e l ia

ble a ppe a ls the finding of c ove ra g e for Loc k ard’ s sta te m e nts to W a de Fre de n

be rg, a nd Ne lson a

ppe a ls the de nia l of c o ve ra ge for the
a ssa ult itse l f. W e hav e jurisdic tion pursua nt to 28 U.S.C . § 1291, a

nd we a ffirm

in pa rt a nd re ve rse in pa

rt. B e c a use the pa rtie s a re fam ilia r with thefa c ts, we re c ite only those ne c e ssa

ry to re solve the issue s on a ppe a l
. 1. The distric t c ourt e rre d by c onc luding tha

t Am e ric an R e lia

ble owe d
c ove ra ge to Loc ka

rd for dam a ge s c a

u se d by his instruc tions to Fre de n be rg, whic h
we re to te ll U.S. Fish &W ildlife Se rvic e (USFW S) c olle a gue s at the annua l Am e ric an Fishe rie s Soc ie ty m e e ting tha

t the e n c o unte r be twe e n Loc ka rd and Ne lson wa s c onse nsua l. W e a gre e with thedistric t c ourt tha t Loc ka rd’ s sta te m e nts 2we re inte ntiona l a c ts, but the distric t c ourt e rre d by c onc luding tha

t the
c onse q ue nc e s of those sta

te m e nts we re “ obje c tive ly uninte nde d

and une xpe c te d by Loc ka rd.” W e re vie w de novo c onc lusions of la w a fte r a be nc h tria l. De moc ratic N at’l C omm. v . Re agan , 904 F.3d 686, 701 (9th C ir. 2018). B y June 2016, whe n Loc ka

rd instruc te d Fre de nbe rg to te ll the ir c olle a gue s

“ his sideof the story ,” a

re a sona ble pe rson in his position would be we ll a ware of the h arm that

he ha d a lre a d

y c a use d Ne lson. Thedistric t c ourt found tha t Loc ka rd ha d be e n told to sta

y away from he r at work im

m e diate ly following the inc ide nt,
and he re tire d

from USFW S shortly

the re a fte r. Furthe r, Loc ka rd wa s c rim ina lly indic te d in Nove m

be r 2015, a

nd it is undispute d tha

t he wrote an unprom

pte d
a pology l e tte r to Ne lson in Ja n ua ry 2016, ple a de d guilty

to c rim ina l a

busive se xua l
c onta c t in Fe brua

ry , a nd wa s se nte nc e d to six mo nths in prison in M ay . Ne lson
and he r husba

nd, both of whom

c ontinue d to work for USFW S, spoke at the
se nte nc ing he aring a

bout theim

pa c t of the a ssa

ult. Afte r a ll tha

t, a ny re a sona ble pe rson in Loc ka

rd’ s position c ould e xpe c t tha t Ne lson would be

ha rm e d by instruc ting Fre de nbe rg to te l l Loc ka rd’ s form e r c olle a gue s—

who we re a lso Ne lson’ s c urre nt c olle a gue s— that the e nc ounte r wa s c onse n sua l . B e c a use the ha rm wa s obje c tive ly

e xpe c te d, Loc ka

rd’ s sta te m e nts to Fre de n

be rg we re not a

n

“ oc c urre nc e ” c ove re d by

his insura

nc e polic y . Se eEmp’rs Mut. C as. C o. v . Fishe r 3Builde rs, Inc
. , 371 P.3d 375, 380 (M ont. 2016) (“ [P] olic y la ngua ge de fining

‘ a c c ide nts’ m ay

inc l ude inte ntiona l a c t s if the dam a ge s we re not obje c tive ly inte nde d or e xpe c te d by the insure d.” ). 2. W e a ffirm

the distric t’ s c onc l usion tha t the se xua l a ssa

u lt wa s not a

n

“ oc c urre nc e ” unde r the insura nc e polic y , a

nd the re fore not c ove re d. In M onta na ,

“ [t] he inte rpre t ation of a

n insura nc e c ontra c t pre se nt s a

que stion of la

w,” Landa v
. Assuranc eC

o. , 307 P.3d 284 (M ont. 2013), which we re vie w de novo. Thedistric t c ourt c orre c tly

de te rm ine d tha

t the se xua l c onta c t wa s a n inte ntiona l a c t, but the
c ourt m isc o nstrue d the M onta na Supre m e C ourt’ s de c ision in N e w Hampshire Insuranc e Group v . Stre c k e r , 798 P.2d 130, 132 (M ont. 1990). Stre c k e r doe s not sta nd for the proposition tha t inte ntiona l touc hing of a se xua l na ture is ne ve r an oc c urre nc e . To the c ontra ry , S tre c k e r involve d a

wholly distinguisha

ble se t of fa c t s, involving a

m an who se xua lly

a buse d his da

ughte r for te n y e ars. The c ourt c onc lude d tha

t, on thosefa c ts, a

nd in light of the de fe n d ant’ s guilty ple a , “ it would fly in the fa c e of re a son to hold tha t [he ] did not intend to ha rm [his da u ghte r] by
c ontinuing his c o urse of c o nduc t.” Id. at 131–32. Nota bly , S tre c k e r wa s de c ide d long be fore Fishe r , whic h de fine d the re le va nt te st for whe n a

n inte ntiona l a c t m ay be an “ a c c ide nt” and the re fore an “ oc c urre nc e ” for purpose s of insura nc e c ove ra ge .

4The c irc um sta n c e s le a ding up to the

se xua l c onta c t in this c a se we re suc h that a re a sona ble pe rson in Loc ka

rd’ s position c ould obje c tive ly e xpe c t his a c tions to c a use Ne lson ha

rm . Se eFishe r , 371 P.3d a t 379 (“ [C ] ourts a

re we ll e quippe d to de te rm i ne obje c tive ly

what injurie s c ould re a s ona bly be e xpe c te d to re sult from an inte ntiona l a c t.” ). The distric t c ourt m a d e fa c tua l findings tha t Ne lson a

n d Loc ka rd drank wine tha

t e ve ning, a

nd tha t Loc ka rd kne wNe lson took Am bie n, a pre s c ription strength sle e p m e d ic ation, a nd we nt to sle e p. The distric t c ourt a lso found tha t “ Loc k a rd’ s first indic ation tha

t his c onduc t wa s not c o nse nsua l” wa s whe n Ne lson jum

pe d out of thebe d. Nota

bly , the distric t c ourt did not find tha t Loc ka rd be lie ve d he ha d Ne lson’ s c onse nt. Give n the c ourt’ s finding tha t Ne lson ha d c onsum e d both a lc ohol a nd Am bie n, a re a sona ble pe rson in Loc ka

rd’ s position
c ould e xpe c t tha

t proc e e d i ng without c onfirm ing Ne lson’ s c onse nt c ould c a use he r ha rm . 1 B e c a

use the ha rm wa s obje c t ive ly

e xpe c te d, the distric t c ourt c o rre c tly de te rm i ne d tha

t Loc ka rd’ s se xu a l c onta c t with Ne lson wa s not a n “ oc c urre nc e ” for purpose s of insura

nc e c o ve ra ge .

1 Loc ka rd ple a de d

guilty to 18 U.S.C . § 2244(b), whic h c rim ina liz e s knowingly

e nga ging in se xua l c onta c t with a n othe r pe rson without the othe r pe rson’ s pe rm ission. S

e eUnite d State

s v . Pric e , 921 F.3d 777, 784 (9th C ir. 2019) (holding tha

t § 2244(b) re quire s only

proof tha t the de fe nda

nt knowingly e nga ge d in se xua l c onta c t , not tha

t the de fe nda

nt subje c t ive ly

kne w he or she la c ke d c onse nt). 5AFFIRM E D IN PART , RE V E RSE D IN PART .

6