Opinion ID: 2400598
Heading Depth: 1
Heading Rank: 5

Heading: The Penal Act Exclusion

Text: The court also determined that coverage would be denied for all claims based on the language of the policy exclusion for injuries caused by a violation of a penal law. . . committed by or with the knowledge or consent of an insured. Based on this language, the court concluded that Northern Security was not obligated to defend or indemnify the Perrons against the claim of negligent supervision because Kyle's intended actions which violated the penal code preclude coverage for the negligence claims against his parents. Interestingly, on this issue, the court relied for its holding on cases distinguishing language in policies excluding coverage for bodily injury... intentionally caused by an insured (emphasis added) from policies excluding coverage for injuries intentionally caused by the insured. As discussed previously, we agree that the choice of the article an rather than the would preclude coverage for negligent supervision premised on an injury caused by a violation of a penal law by an insured or any insured or a insured. See Patterson, 904 F.Supp. at 1287-89 (Allstate not entitled to summary judgment on issue of coverage for parents facing complaint of negligent supervision of their sons who allegedly sexually abused plaintiffs sons. Criminal act exclusion of policy contained the an insured person language on which Allstate's argument was based. Court remanded the matter for determination of the juveniles intent and whether the juveniles had the requisite mental state for a crime.) The court, however, started from a flawed premise  the record shows no violation of a penal law. It is not clear from the record before us whether any petition was filed in juvenile court against Kyle or whether Kyle was actually adjudicated a delinquent. There is nothing in the record to show that Kyle was convicted of a crime arising out of the incidents at issue in this case. Assuming, for purposes of argument, that there was an adjudication of delinquency, the superior court incorrectly concluded that his actions violated the penal code. Under Vermont law, a juvenile delinquency adjudication is not a violation of penal law. See 33 V.S.A. §§ 5535(a) ([a]n order of the juvenile court in proceedings under this chapter shall not be deemed a conviction of crime); 5501(a)(2) (purpose of juvenile proceedings is to remove from children committing delinquent acts the taint of criminality and the consequences of criminal behaviour and to provide a program of treatment, training, and rehabilitation consistent with the protection of the public interest); In re R.S., 143 Vt. 565, 571, 469 A.2d 751, 755 (1983) ([p]roceedings under the Juvenile Procedure Act are protective, not penal); In re Rich, 125 Vt. 373, 375, 216 A.2d 266, 267-68 (1966) (juvenile proceeding is a protective proceeding entirely concerned with the welfare of the child, and is not punitive .... The inquiry relates to proper custody for the child, not his guilt or innocence as a criminal offender.); In re Hook, 95 Vt. 497, 499, 115 A. 730, 731 (1922) (juvenile proceeding is not penal, but protective). On the record before us, then, the exclusion for injury caused by a violation of a penal law does not apply. Next, Northern Security argues that the insurance policy is void because, when applying for homeowner's insurance, the Perrons stated that they were not conducting business pursuits on the premises. Our decision on the business pursuit exclusion renders this argument moot as to the Dubes. However, the Durenleaus and Parahs note that the superior court made no factual findings, and the facts are in dispute, on this issue. Thus, the Durenleaus and Parahs argue, the issue is inappropriate for summary judgment. We agree. Finally, Northern Security argues that the Perrons did not provide Northern Security with timely notice of the lawsuits, as required by the policy. However, Northern Security did not raise this issue below, and it is therefore waived on appeal. See Myers v. Langlois, 168 Vt. 432, 439, 721 A.2d 129, 133 (1998) (failure to raise claim before trial court precludes this Court from hearing the claim on appeal).