IN THE UNITED STATES DISTRICT COURT 

FOR THE DISTRICT OF OREGON 

ALLSTATE INSURANCE COMPANY, 

Plaintiff, 

v. 

HECTOR CEPEDA, PILAR WRIGHT, 

and ROSALIE DALZELL, 

Defendants. 

DOUGLAS F. FOLEY 

VERNON S. FINLEY 

Douglas Foley & Associates, PLLC 

13115 N.E. 4~ Street 

Suite 260 

Vancouver, WA 98684 

(360) 883-0636 

Attorneys for Plaintiff 

Moloy K. Good 

Good Law Clinic, PLLC 

211 E. 11•• Street, Suite 104 

Vancouver, WA 98660 

360-608-5346 

Attorneys for Defendants 

1 - OPINION AND ORDER 

3:15-CV-01766-BR 

OPINION AND ORDER 

Case 3:15-cv-01766-BR Document 25 Filed 05/06/16 Page 1 of 19
BROWN, Judge. 

This matter comes before the Court on Plaintiff Allstate 

Insurance Company's Motion (#15) for Summary Judgment. For the 

reasons that follow, the Court GRANTS Allstate's Motion and 

DISMISSES this matter with prejudice. 

BACKGROUND 

Defendant Rosalie Dalzell is the owner and operator of a 

rental unit located at 3823 N. Overlook, Portland, Oregon (the 

Unit). 

On October 9, 2011, Dalzell obtained a Homeowners Insurance 

Policy from Plaintiff Allstate Insurance Company related to the 

Unit. 

In March 2012 Defendants Hector Cepeda and Pilar Wright 

submitted an application to rent the Unit through Performance 

Properties, a rental management company. On March 13, 2012, 

Cepeda and Wright's rental application was accepted. At some 

point Cepeda and Wright agreed to rent the Unit, and they signed 

a one-year lease to begin April 22, 2012. 

On May 9, 2012, Cepeda drove to the Unit from Los Angeles to 

drop off "some belongings" before Cepeda and Wright moved 

into the Unit later in May. On May 9, 2012, Cepeda met Dalzell 

for the first time. Cepeda spent the day on May 9, 2012, 

unloading his belongings into the Unit and stayed overnight in 

2 - OPINION AND ORDER 

Case 3:15-cv-01766-BR Document 25 Filed 05/06/16 Page 2 of 19
the Unit. 

On May 10, 2012, Cepeda drove back to Los Angeles. 

On May 17, 2012, Cepeda and Wright received a call from 

Performance Properties advising them that Dalzell no longer 

wanted to rent the Unit to Cepeda and Wright. According to 

Cepeda and Wright, Dalzell accused Cepeda of reversing a deadbolt 

lock on the Unit that caused Cepeda to have access to the attic. 

Performance Properties advised Cepeda and Wright that Dalzell had 

moved all of their belongings into the garage, had changed the 

locks on the Unit, and "had tried to file a police report" 

regarding the allegedly reversed deadbolt. 

Ultimately Cepeda and Wright had to find another place to 

live. 

On April 3, 2015, Cepeda and Wright filed an action in 

Multnomah County Circuit Court against Dalzell in which they 

alleged (1) Dalzell refused to rent the Unit to Cepeda and Wright 

because of their national origin in violation of Oregon Revised 

Statute § 659A.421 ; (2) Dalzell refused to rent the Unit to 

Cepeda and Wright because they have two sons, ages 8 and 11, in 

3 - OPINION AND ORDER 

Case 3:15-cv-01766-BR Document 25 Filed 05/06/16 Page 3 of 19
violation of Oregon Revised Statute § 659A.421; and (3) Dalzell' 

was negligent when she failed in her "duty to use reasonable or 

ordinary care to avoid violating" Oregon Revised Statute 

§ 659A.421 and/or when she failed to "hire, supervise and train 

her agents and employees who were charged with ensuring 

compliance with" Oregon .Revised Statute§ 659A.421. 

At some point Dalzell tendered defense of Cepeda and 

Wright's state-court action to Allstate pursuant to Dalzell's 

Homeowners Policy. 

On September 18, 2015, Allstate filed a Complaint for 

Declaratory Relief in this Court in which Allstate seeks a 

declaration that it does not have a duty to defend or to 

indemnify Dalzell in the underlying action. 

On January 5, 2016, Allstate filed a Motion for Summary 

Judgment as to both the duty to defend and the duty to indemnify. 

The Court took Allstate's Motion under advisement on February 18, 

2016. 

1 In their state-court complaint Cepeda and Wright assert 

their negligence claim against "Defendant Bostik and Defendant 

Contractor." Those Defendants are not in the case caption, there 

are not any allegations against either of them in the complaint, 

and the facts underlying Cepeda and Wright's negligence claim do 

not involve anyone but Dalzell. The Court, therefore, assumes 

Plaintiffs' assertion of the negligence claim against "Defendant 

Bostik and Defendant Contractor" is a typographical error, and 

the Court analyzes this claim as asserted against Dalzell. 

4 - OPINION AND ORDER 

Case 3:15-cv-01766-BR Document 25 Filed 05/06/16 Page 4 of 19
DISCUSSION 

Allstate seeks summary judgment on the ground that 

discrimination in the rental of property is an intentional act, 

and, therefore, it is not an occurrence under the policy. In 

addition, or in the alternative, Allstate asserts the actions of 

Dalzell alleged in the state-court complaint are excluded from 

coverage by the Intentional Acts Exclusion in Dalzell's policy. 

Allstate, therefore, seeks a declaration that it is not obligated 

to defend or to indemnify Dalzell and requests the Court to issue 

an order permitting Allstate to withdraw from the defense of 

Dalzell in the underlying action. 

Dalzell asserts Cepeda and Wright do not allege any "intent 

to harm" in their state-court complaint. According to Dalzell, 

therefore, Cepeda and Wright's claims allege an occurrence under 

the policy and are not excluded from coverage by the Intentional 

Acts Exclusion. Thus, Dalzell asserts Allstate is not relieved 

from the obligation to defend or to indemnify Dalzell in the 

underlying action. 

I. Insurance Contract Interpretation 

Under Oregon law the construction of a contract is a 

question of law for the court. Holloway v. Republic Indem. Co. 

of Am., 341 Or. 642, 649 (2006) (citing Hoffman Const. Co. of 

Alaska v. Fred S. James & Co. of Ore., 313 Or. 464, 470 (1992)). 

The Court's task is to "ascertain the intention of the parties to 

5 - OPINION AND ORDER 

Case 3:15-cv-01766-BR Document 25 Filed 05/06/16 Page 5 of 19
the insurance policy." Id. at 649-50 (citing Or. Rev. Stat. 

§ 742.016). The Court accomplishes this task "based on the terms 

and conditions of the insurance policy." Id. 

"If an insurance policy explicitly defines the phrase in 

question, [the Court] appl[ies] that definition.'' Id. at 650. 

See also Joseph Educ. Ass'n v. Joseph Sch. Dist. No. 6, 180 Or. 

App. 461, 467 (2002). 

Id. 

If the policy does not define the phrase in 

question, [the Court] resort[s] to various aids of 

interpretation to discern the parties' intended 

meaning. Under that interpretive framework, we 

first consider whether the phrase in question has 

a plain meaning, i.e., whether it is susceptible 

to only one plausible interpretation. If the 

phrase in question has a plain meaning, we will 

apply that meaning and conduct no further 

analysis. If the phrase in question has more than 

one plausible interpretation, we will proceed to 

the second interpretive aid. That is, we examine 

the phrase in light of 'the particular context in 

which that [phrase] is used in the policy and the 

broader context of the policy as a whole. If the 

ambiguity remains after the court has engaged in 

those analytical exercises, then any reasonable 

doubt as to the intended meaning of such [a] 

term[] will be resolved against the insurance 

company. However, . a term is ambiguous 

. only if two or more plausible interpretations of that term withstand scrutiny, i.e., 

continue[] to be reasonable despite our resort to 

the interpretive aids outlined above. 

When "evaluating whether an insurer has a duty to defend[,] 

the court looks only at the facts alleged in the complaint" and 

the terms of the policy. Ledford v. Gutoski, 319 Or. 397, 400 

(1994). See also Nat'l Union Fire Ins. Co. of Pittsburgh v. 

6 - OPINION AND ORDER 

Case 3:15-cv-01766-BR Document 25 Filed 05/06/16 Page 6 of 19
Starplex Corp., 220 Or. App. 560, 573 (2008) ("[w]hether an 

insurer has a duty to defend an action against its insured 

depends on two documents: the complaint and the insurance 

policy. ") . 

The duty to indemnify "is independent of the duty to 

defend." Ledford, 319 Or. at 403 (citation omitted). "Even when 

an insurer does not have a duty to defend based on the 

allegations in the initial complaint, the facts proved at trial 

on which liability is established may give rise to a duty to 

indemnify if the insured's conduct is covered." Id. (citation 

omitted). "In order for summary judgment to be appropriate on 

the duty to indemnify, there must be no genuine issue of material 

fact, and the moving party must be entitled to judgment as a 

matter of law." Id. (citations omitted). 

II. Insurance Policy Language 

Dalzell's insurance policy with Allstate provides in 

pertinent part: 

Section II - Family Liability and Guest Medical 

Protection 

Coverage X 

Family Liability Protection 

Losses We Cover Under Coverage X: 

Subject to the terms, conditions and limitations 

of this policy, Allstate will pay damages which an 

insured person becomes legally obligated to pay 

because of bodily injury or property damage 

arising from an occurrence to which this policy 

7 - OPINION AND ORDER 

Case 3:15-cv-01766-BR Document 25 Filed 05/06/16 Page 7 of 19
applies, and is covered by this part of the 

policy. 

Compl., Ex. 2 at 34 (emphasis in original). The policy also 

provides the following limitation of coverage: 

Losses We Do Not Cover under Coverage X: 

1. We do not cover any bodily injury or property 

damage intended by, or which may reasonably 

be expected to result from the intentional or 

criminal acts or omissions of, any insured 

person. This exclusion applies even if: 

a) such insured person lacks the mental 

capacity to govern his or her conduct; 

b) such bodily injury or property damage is 

of a different kind or degree than 

intended or reasonably expected; or 

c) such bodily injury or property damage is 

sustained by a different person than 

intended or reasonably expected. 

This exclusion applies regardless of whether or 

not such insured person is actually charged with, 

or convicted of a crime. 

Id (emphasis in original). The policy contains the following 

definitions: 

4. "Bodily injury" - means physical harm to the 

body, including sickness or disease, and 

resulting death, except that bodily injury 

does not include: 

a) any venereal disease; 

b) Herpes; 

c) Acquired Immune Deficiency Syndrome 

(AIDS) ; 

d) AIDS Related Complex (ARC); 

e) Human Immunodeficiency Virus (HIV); or 

any resulting symptom, effect, 

condition, disease or illness related to 

(a) through (e) listed above. 

* * * 

8 - OPINION AND ORDER 

Case 3:15-cv-01766-BR Document 25 Filed 05/06/16 Page 8 of 19
9. "Occurrence" - means an accident, including 

continuous or repeated exposure to 

substantially the same general harmful 

conditions during the policy period, 

resulting in bodily injury or property 

damage. 

10. "Property damage" - means physical injury to 

or destruction of tangible property, 

including loss of its use resulting from such 

physical injury or destruction. 

Compl., Ex. 2 at 17-18 (emphasis in original). 

III. Duty to Defend 

As noted, "[w]hether an insurer has a duty to defend an 

action against its insured depends on two documents: the 

complaint and the insurance policy." Starplex Corp., 220 Or. 

App. at 573. Cepeda and Wright allege three claims in their 

complaint: two for discrimination in violation of Oregon Revised 

Statute § 659A.421 and one claim for negligence. 

A. Cepeda and Wright's First and Second Claims for Housing 

Discrimination in Violation of § 659A.421 

As noted, Cepeda and Wright do not specifically allege 

in their First and Second Claims for violation of § 659A.421 that 

Dalzell intended to cause them harm when she allegedly refused to 

rent the premises to them because of either their national origin 

or their familial status. The Oregon Supreme Court, however, has 

recognized the nature of certain acts necessarily gives rise to a 

mandatory inference that there was the intent to harm. See 

Nielsen v. St. Paul Co., 283 Or. 277, 281 (1978) ("There are some 

9 - OPINION AND ORDER 

Case 3:15-cv-01766-BR Document 25 Filed 05/06/16 Page 9 of 19
intentional acts the nature of which is such that it must 

necessarily be concluded that there was an intention to 

injure."). In addition, the Oregon Court of Appeals has held 

when the intent to injure is inferred, the insured's conduct is 

not an "accident" or "occurrence" under a liability policy. See 

Falkenstein's Meat Co. v. Maryland Cas. Co., 91 Or. App. 276, 

279-80 (1988). 

In Falkenstein's Meat an employee sued the insured 

alleging the insured company changed the employee's job position 

and reduced his hours of work in retaliation for his complaints 

that the insured "was not providing a safe place of employment 

and that the vehicle which he was assigned to operate was 

unsafe." 91 Or. App. at 278. The insured tendered defense of 

the employee's action to its insurance company. The insurance 

company refused to defend on the ground that the alleged conduct 

by the insured was not an occurrence and was specifically exempt 

from coverage under an intentional-acts exclusion. Id. The 

insured brought a declaratory judgment action "to determine 

whether [the insurance company] had a duty to defend" the 

employee's action. The insured asserted the employee's complaint 

"involve[d] an occurrence" within the meaning of the policy 

because the complaint did not allege the insured "intended the 

harm which occurred as a result of the conduct." Id. at 279. 

The insurance company, in turn, asserted the allegation of 

10 - OPINION AND ORDER 

Case 3:15-cv-01766-BR Document 25 Filed 05/06/16 Page 10 of 19
retaliation by the employer "involve[d] intentional rather than 

accidental conduct and, therefore, [was] not within the policy 

definition of 'occurrence.'" Id. The Oregon Court of Appeals 

concluded plaintiff's complaint did "not allege a specific type 

of intentional harm. However, retaliatory and discriminatory 

conduct pursuant to [Oregon's Whistleblower statute,] ORS 

654. 0 62 ( 5) (a) [,] are acts from which an intention to cause harm 

must necessarily be inferred." Id. at 280. The court, 

therefore, concluded the conduct alleged in the employee's 

complaint was not an "occurrence," and, therefore, the insurer 

did not have a duty to defend the employer. Id. 

In Groshong. v. Mutual of Enumclaw Insurance Company, 

143 Or. App. 450 (1996), the court examined the holding of 

Falkenstein's Meat in the context of a claim for housing 

discrimination based on familial status in violation of the Fair 

Housing Act (FHA), 42 U.S.C. § 3601. Specifically, the plaintiff 

in the underlying FHA action alleged she inquired about renting a 

second-floor apartment in an apartment complex owned by the 

insured. The apartment manager informed the plaintiff that the 

apartment complex "did not allow small children on the second 

floor because of safety concerns." Id. at 452. As a result, the 

plaintiff was unable to rent a unit in the apartment complex. 

The United States Department of Justice brought an action on 

behalf of the plaintiff against the apartment-complex owner for 

11 - OPINION AND ORDER 

Case 3:15-cv-01766-BR Document 25 Filed 05/06/16 Page 11 of 19
housing discrimination in violation of the FHA. The apartmentcomplex owner tendered defense of the action to his insurance 

company. The insurance company, however, declined to defend the 

apartment-complex owner. The apartment-complex owner entered 

into a settlement and consent order with the Department of 

Justice and the plaintiff. The insurance company declined to 

indemnify the apartment-complex owner. The apartment-complex 

owner then filed an action against his insurance company 

asserting the company had breached its insurance contract by 

failing to defend and to indemnify the apartment-complex owner. 

The insurance company asserted it had declined to defend and to 

indemnify the apartment-complex owner on the ground that, among 

other things, it "would be against public policy to provide 

insurance coverage for a claim of intentional housing 

discrimination." Id. at 454. The trial court entered a judgment 

for the insurance company on other grounds, and the apartmentcomplex owner appealed. The Oregon Court of Appeals affirmed the 

judgment for the insurance company and concluded Oregon public 

policy "preclude[d] insurance coverage" for the discrimination 

claim. Id. The Court of Appeals noted Oregon's frequently 

reiterated policies that "[i]nsurance coverage for the protection 

of one who intentionally inflicts injury upon another is against 

public policy," and "[t]here are some intentional acts the nature 

of which is such that it must necessarily be concluded that there 

12 - OPINION AND ORDER 

Case 3:15-cv-01766-BR Document 25 Filed 05/06/16 Page 12 of 19
was an intention to injure." Id. at 457 (quotations omitted). 

The court noted it had previously concluded "disparate treatment" 

discrimination claims like the claim at issue in Groshong 

"necessarily allege[] intentional injury," and, therefore, 

disparate-treatment discrimination claims did not fall within an 

insurance policy's express coverage for "any negligent act, error 

or omission of the insured." Id. (quotation omitted). The court 

noted it had not, however, resolved "whether intentional 

discrimination would be uninsurable as a matter of policy." Id. 

at 458 (quotation omitted). The court then 

reach[ed] the question expressly reserved in 

School District No. 1 and conclude[d] that public 

policy precludes insurance coverage of claims 

alleging "disparate treatment" discrimination. 

Such discrimination necessarily implicates an 

intention to injure. As we noted in School 

District No. 1, such discrimination "means 

treating an individual less favorably because" of 

some legally protected status. 58 Or. App. at 701 

(emphasis in original). Falkenstein's Meat Co. v. 

Maryland Casualty Co., 91 Or. App. 276, 280 

(1988), is instructive. There, we held that a 

claim that the insured employer had engaged in 

retaliatory and discriminatory conduct against an 

employee in violation of ORS 654. 062 (5) (a), the 

occupational safety "whistle blower" statute, was 

not covered under the terms of the employer's 

comprehensive general liability insurance policy. 

We so concluded despite the fact that the 

employee's complaint did not explicitly allege 

that the employer intended the harm that occurred 

as a result of the discriminatory conduct. 

* * * 

The same is true of a claim of "disparate 

treatment" housing discrimination. The "natural 

and intended consequence" of such discrimination 

13 - OPINION AND ORDER 

Case 3:15-cv-01766-BR Document 25 Filed 05/06/16 Page 13 of 19
is to "cause some type of harm" to the putative 

renter or purchaser based on his or her legally 

protected status. Such a claim alleges conduct 

"from which an intention to cause harm must 

necessarily be inferred." Id. Thus, public 

policy precludes insurance coverage of such 

claims. 

Id. at 458-59. Although Groshong involved a claim of housing 

discrimination based on familial relations under the FHA, the 

court's holding in Groshong is equally applicable to the claims 

of Cepeda and Wright for housing discrimination based on national 

origin or familial relations in violation of § 659A.421. See 

McGary v, City of Portland, 386 F.3d 1259, 1270-71 (9th Cir. 

2004) (Section 659A.421 should be interpreted "in the same manner 

as [its] federal counterpart," the FHA). In their First and 

Second Claims Cepeda and Wright allege conduct from which an 

intention to cause harm must be inferred because the "natural and 

intended consequence" of such discrimination is to cause some 

type of harm to the putative renter. The Court, therefore, 

concludes public policy precludes a duty to defend those claims. 

B. Negligence Claim of Cepeda and Wright 

Dalzell asserts Allstate has a duty to defend in this 

matter because Cepeda and Wright also allege a claim for 

negligence, which, by definition, is not an intentional tort and, 

therefore, may be an occurrence under the policy and/or is not 

excluded by the Intentional Acts Exclusion. 

In their negligence claim Cepeda and Wright allege in 

14 - OPINION AND ORDER 

Case 3:15-cv-01766-BR Document 25 Filed 05/06/16 Page 14 of 19
pertinent part that 

[Dalzell] had a duty to operate her affairs in a 

manner free from unlawful discrimination. 

[Dalzell] further had a duty to hire, train, 

supervise and discipline her employees or agents 

in a fashion that assures compliance with state 

laws. 

[Dalzell] had a duty to use reasonable or ordinary 

care to avoid violating Plaintiffs right to rent a 

dwelling unit free from discrimination. 

[Dalzell] breached her duties to Plaintiffs by 

refusing to rent to them in violation of their 

rights. [Dalzell] further breached her duties to 

Plaintiffs by failing to hire, supervise and train 

her agents and employees who were charged with 

insuring compliance with Plaintiffs' rights. 

[Dalzell] created a foreseeable risk of harm to 

Plaintiffs through, among other things, by 

refusing to rent to Plaintiffs due to their 

national origin and familial status. 

Compl., Ex. A at 9-10. Dalzell asserts courts have held 

violations of the FHA do not require discriminatory intent, and, 

in any event, Cepeda and Wright have not alleged any intent in 

their negligence claim. According to Dalzell, therefore, in 

their Third Claim for negligence Cepeda and Wright allege an 

"occurrence" under the policy, and, thus, coverage is not 

excluded under the Intentional Acts Exclusion. 

The Ninth Circuit has repeatedly held FHA claims 

alleging disparate-treatment discrimination in housing such as 

those at issue here require a "showing of discriminatory intent." 

Massbaum v. WNC Mgmt, 361 F. App'x 904, 905 (9th Cir. 2010) 

(citing McDonald v. Coldwell Banker, 543 F.3d 498, 505 n.7 (9th 

15 - OPINION AND ORDER 

Case 3:15-cv-01766-BR Document 25 Filed 05/06/16 Page 15 of 19
Cir. 2008)). See also Green v. Ca. Court Apartments, LLC, 321 F. 

App'x 589, 591 (9'h Cir. 2009). That same element is required 

for a claim of disparate-treatment discrimination under 

§ 659A.421 and Oregon does not recognize a claim for negligent 

discrimination in housing. 

Even though Cepeda and Wright couch their Third Claim 

in the rubric of negligence, they are, in fact, asserting a claim 

for discrimination in housing under§ 659A.421. The Oregon 

Supreme Court has made clear that when analyzing the duty to 

defend, "a court's focus should be on the conductn alleged in the 

claim rather than the label given to the claim. See, e.g., 

Ledford, 319 Or. 397. Here Cepeda and Wright allege Dalzell had 

a duty to "abide by§ 649A.421" and to avoid violating that 

statute and Dalzell created the risk of harm by refusing to rent 

to Cepeda and Wright due to their national origin and/or familial 

status. Under the cloak of negligence Cepeda and Wright's Third 

Claim is, in fact, one for violation of § 659A.421, and, as with 

their First and Second Claims, the Court must infer an intent to 

discriminate. The Court, therefore, concludes public policy also 

precludes a duty to defend as to the Third Claim of Cepeda and 

Wright. 

Accordingly, the Court grants Allstate's Motion for 

Summary Judgment as to the issue of the duty to def end, declares 

Allstate is not obligated to defend Dalzell in the underlying 

16 - OPINION AND ORDER 

Case 3:15-cv-01766-BR Document 25 Filed 05/06/16 Page 16 of 19
action, and declares Allstate may withdraw from the defense of 

Dalzell in the underlying action. 

IV. Duty to Indemnify 

Allstate also moves for summary judgment as to its alleged 

duty to indemnify Dalzell in the underlying action. As noted, 

the duty to indemnify "is independent of the duty to defend." 

Ledford, 319 Or. at 403 (citation omitted). "Even when an 

insurer does not have a duty to defend based on the allegations 

in the initial complaint, the facts proved at trial on which 

liability is established may give rise to a duty to indemnify if 

the insured's conduct is covered." Id. (citation omitted). "In 

order for summary judgment to be appropriate on the duty to 

indemnify, there must be no genuine issue of material fact, and 

the moving party must be entitled to judgment as a matter of 

law." Id. (citations omitted). 

As noted, in Groshong the Oregon Court of Appeals also 

addressed whether the insurer had a duty to indemnify the 

apartment-complex owner against the claims of housing 

discrimination in violation of the FHA. The court first 

concluded the allegations in the complaint "facially state[d] a 

claim of 'disparate treatment'" even though the underlying 

complaint did not specifically state it was a claim for disparate 

treatment: 

[The apartment-complex owner's] policy [of not 

renting second-floor apartments to families with 

17 - OPINION AND ORDER 

Case 3:15-cv-01766-BR Document 25 Filed 05/06/16 Page 17 of 19
children] was not framed in facially neutral 

terms, such as refusing to rent to persons who 

presented safety or noise concerns. Instead, the 

policy was applied, without distinctions for 

individual circumstances, to all persons falling 

within a statutorily protected class. That is the 

essence of "disparate treatment" discrimination. 

Id. at 461. The Court of Appeals then concluded: "Because 

public policy precludes insurance coverage of such 

discrimination, [the insurer] cannot be liable for failing to 

defend or indemnify [the apartment-complex owner] against [the 

underlying plaintiff's] claims." Id. (citing Isenhart v. Gen. 

Cas. Co. of Am., 233 Or. 49, 53 (1962) ("We hold that a clause in 

a contract of insurance purporting to indemnify the insured for 

damages recovered against him as a consequence of his intentional 

conduct in inflicting injury upon another is unenforceable by the 

insured on the ground that to permit recovery would be against 

public policy. Therefore, the insurance policy in the present 

case must, in effect, be regarded as excluding such coverage.") 

Cepeda and Wright allege Dalzell refused to rent the Unit to 

them on the basis of their national origin or familial status. 

As in Groshong, Dalzell's refusal was not "framed in facially 

neutral terms," but instead applied to "persons falling within a 

statutorily protected class." Cepeda and Wright's state-court 

complaint, therefore, alleges disparate-treatment housing 

discrimination. Thus, as in Groshong, the Court concludes 

Allstate "cannot be liable for failing to . . indemnify" 

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Case 3:15-cv-01766-BR Document 25 Filed 05/06/16 Page 18 of 19
because ftpublic policy precludes insurance coverage of such 

discrimination." 

Accordingly, the Court grants Allstate's Motion for Summary 

Judgment as to the issue of its duty to indemnify Dalzell. 

CONCLUSION 

For these reasons, the Court GRANTS Plaintiff Allstate 

Insurance Company's Motion (#15) for Summary Judgment and 

DISMISSES this matter with prejudice. 

IT IS SO ORDERED. 

DATED this 6th day of May, 2016. 

ANNA J. BROWN 

United States District Judge 

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