NOT FOR PUBLICATION

UNITED STATES COURT OF APPEALS

 FOR THE NINTH CIRCUIT

AMERICAN RELIABLE INSURANCE

COMPANY,

Plaintiff-Appellant,

 v.

LAWRENCE LOCKARD; KAREN JANE

NELSON,

Defendants-Appellees.

No. 18-35758

D.C. No. 9:17-cv-00004-DLC

MEMORANDUM*

AMERICAN RELIABLE INSURANCE

COMPANY,

Plaintiff-Appellee,

 v.

LAWRENCE LOCKARD,

Defendant,

 and

KAREN JANE NELSON,

No. 18-35786

D.C. No. 9:17-cv-00004-DLC

FILED

DEC 03 2019

MOLLY C. DWYER, CLERK

U.S. COURT OF APPEALS

* This disposition is not appropriate for publication and is not precedent

except as provided by Ninth Circuit Rule 36-3.
Defendant-Appellant.

Appeal from the United States District Court

for the District of Montana

Dana L. Christensen, District Judge, Presiding

Argued and Submitted October 23, 2019

Portland, Oregon

Before: FARRIS, BEA, and CHRISTEN, Circuit Judges.

American Reliable Insurance Company and Karen Nelson cross-appeal the

district court’s judgment that American Reliable owed coverage to Lawrence

Lockard for one of five incidents related to Lockard’s sexual assault against

Nelson. American Reliable appeals the finding of coverage for Lockard’s

statements to Wade Fredenberg, and Nelson appeals the denial of coverage for the

assault itself. We have jurisdiction pursuant to 28 U.S.C. § 1291, and we affirm in

part and reverse in part. Because the parties are familiar with the facts, we recite

only those necessary to resolve the issues on appeal.

1. The district court erred by concluding that American Reliable owed

coverage to Lockard for damages caused by his instructions to Fredenberg, which

were to tell U.S. Fish & Wildlife Service (USFWS) colleagues at the annual

American Fisheries Society meeting that the encounter between Lockard and

Nelson was consensual. We agree with the district court that Lockard’s statements

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were intentional acts, but the district court erred by concluding that the

consequences of those statements were “objectively unintended and unexpected by

Lockard.” We review de novo conclusions of law after a bench trial. Democratic

Nat’l Comm. v. Reagan, 904 F.3d 686, 701 (9th Cir. 2018).

By June 2016, when Lockard instructed Fredenberg to tell their colleagues

“his side of the story,” a reasonable person in his position would be well aware of

the harm that he had already caused Nelson. The district court found that Lockard

had been told to stay away from her at work immediately following the incident,

and he retired from USFWS shortly thereafter. Further, Lockard was criminally

indicted in November 2015, and it is undisputed that he wrote an unprompted

apology letter to Nelson in January 2016, pleaded guilty to criminal abusive sexual

contact in February, and was sentenced to six months in prison in May. Nelson

and her husband, both of whom continued to work for USFWS, spoke at the

sentencing hearing about the impact of the assault. After all that, any reasonable

person in Lockard’s position could expect that Nelson would be harmed by

instructing Fredenberg to tell Lockard’s former colleagues—who were also

Nelson’s current colleagues—that the encounter was consensual. Because the

harm was objectively expected, Lockard’s statements to Fredenberg were not an

“occurrence” covered by his insurance policy. See Emp’rs Mut. Cas. Co. v. Fisher

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Builders, Inc., 371 P.3d 375, 380 (Mont. 2016) (“[P]olicy language defining

‘accidents’ may include intentional acts if the damages were not objectively

intended or expected by the insured.”). 

2. We affirm the district’s conclusion that the sexual assault was not an

“occurrence” under the insurance policy, and therefore not covered. In Montana,

“[t]he interpretation of an insurance contract presents a question of law,” Landa v.

Assurance Co., 307 P.3d 284 (Mont. 2013), which we review de novo. The district

court correctly determined that the sexual contact was an intentional act, but the

court misconstrued the Montana Supreme Court’s decision in New Hampshire

Insurance Group v. Strecker, 798 P.2d 130, 132 (Mont. 1990). Strecker does not

stand for the proposition that intentional touching of a sexual nature is never an

occurrence. To the contrary, Strecker involved a wholly distinguishable set of

facts, involving a man who sexually abused his daughter for ten years. The court

concluded that, on those facts, and in light of the defendant’s guilty plea, “it would

fly in the face of reason to hold that [he] did not intend to harm [his daughter] by

continuing his course of conduct.” Id. at 131–32. Notably, Strecker was decided

long before Fisher, which defined the relevant test for when an intentional act may

be an “accident” and therefore an “occurrence” for purposes of insurance coverage.

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The circumstances leading up to the sexual contact in this case were such

that a reasonable person in Lockard’s position could objectively expect his actions

to cause Nelson harm. See Fisher, 371 P.3d at 379 (“[C]ourts are well equipped to

determine objectively what injuries could reasonably be expected to result from an

intentional act.”). The district court made factual findings that Nelson and Lockard

drank wine that evening, and that Lockard knew Nelson took Ambien, a

prescription strength sleep medication, and went to sleep. The district court also

found that “Lockard’s first indication that his conduct was not consensual” was

when Nelson jumped out of the bed. Notably, the district court did not find that

Lockard believed he had Nelson’s consent. Given the court’s finding that Nelson

had consumed both alcohol and Ambien, a reasonable person in Lockard’s position

could expect that proceeding without confirming Nelson’s consent could cause her

harm.

1

 Because the harm was objectively expected, the district court correctly

determined that Lockard’s sexual contact with Nelson was not an “occurrence” for

purposes of insurance coverage.

1

 Lockard pleaded guilty to 18 U.S.C. § 2244(b), which criminalizes

knowingly engaging in sexual contact with another person without the other

person’s permission. See United States v. Price, 921 F.3d 777, 784 (9th Cir. 2019)

(holding that § 2244(b) requires only proof that the defendant knowingly engaged

in sexual contact, not that the defendant subjectively knew he or she lacked

consent).

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AFFIRMED IN PART, REVERSED IN PART.

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