Court Opinion

ID: 222479
Source: CourtListenerOpinion
Date Created: 2011-08-04 00:01:42+00
Date Added: 2024-06-11T09:54:16.444874
License: Public Domain

FILED
                           NOT FOR PUBLICATION                                AUG 03 2011

                                                                          MOLLY C. DWYER, CLERK
                    UNITED STATES COURT OF APPEALS                          U.S. COURT OF APPEALS

                            FOR THE NINTH CIRCUIT

AMY CATHERINE SCHORNO,                           No. 10-35772

              Plaintiff - Appellant,             D.C. No. 3:09-cv-05778-RBL

  v.
                                                 MEMORANDUM*
STATE FARM FIRE AND CASUALTY
COMPANY, a foreign corporation; JOHN
DOES, 1-10,

              Defendants - Appellees.

                   Appeal from the United States District Court
                     for the Western District of Washington
                   Ronald B. Leighton, District Judge, Presiding

                        Argued and Submitted July 11, 2011
                               Seattle, Washington

Before: CLIFTON and N.R. SMITH, Circuit Judges, and KORMAN, Senior
District Judge.**

        *
             This disposition is not appropriate for publication and is not precedent
except as provided by 9th Cir. R. 36-3.
       **
             The Honorable Edward R. Korman, Senior District Judge for the U.S.
District Court for Eastern New York, Brooklyn, sitting by designation.
      Amy Schorno appeals the district court’s (1) summary judgment orders

eliminating State Farm Fire & Casualty Co.’s duty to defend and Schorno’s bad

faith claim for the refusal to defend and (2) orders denying several motions to

compel discovery. We affirm.

                                            I.

      State Farm properly denied tender of Schorno’s defense. Schorno’s State

Farm homeowner’s policy (1) only covers claims for “bodily injury” caused by an

“accident,” and (2) excludes coverage for bodily injury that is “expected or

intended by the insured.” The Kannadas’ demand letter and counterclaims allege

that Schorno engaged in a pattern of intentional, non-accidental conduct between

2000 and 2005, involving, among other things, rape, molestation, sexual abuse of a

child, sexual grooming, and intentional infliction of emotional distress. Because

Washington courts infer an intent to inflict harm in cases involving sexual abuse,

Rodriguez v. Williams, 729 P.2d 627, 630–31 (Wash. 1986), the alleged conduct

was neither accidental nor unintentional.

      Additionally, it does not matter that Kevin Kannada reached the age of

majority during the period of alleged sexual contact, because that would not have

made the claimed abuse any more of an “accident.” Even if the allegations against

Schorno were not true, as she contends, insurance coverage is based on the claims

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made. That the claims might have been untrue did not trigger coverage because the

acts alleged were still not “accidents.” Further, Schorno’s insurance policy

provides that “[r]epeated or continuous exposure to the same general conditions is

considered to be one occurrence.” Because the Kannadas allege Schorno engaged

in a continuous pattern of abuse running from Kevin’s childhood to his age of

majority, the abuse must be treated as a single, non-accidental occurrence.

      Although Jeff and Katha Kannada raised claims sounding in negligence

—including negligent infliction of emotional distress and negligent supervision of

a minor—these claims are likewise excluded from coverage. First, Schorno’s

insurance policy specifically excludes coverage for claims of “emotional distress.”

Second, where “an abuser’s allegedly negligent acts toward a victim are close in

space and time, or inextricably linked, to a continuous pattern of sexual abuse of

the victim, an intent to injure can be inferred as a matter of law.” Am. Economy

Ins. Co. v. Estate of Wilker, 977 P.2d 677, 681 (Wash. Ct. App. 1999) (emphasis

added). Because the Kannadas alleged that Schorno’s negligent supervision was

both close in space and time to the alleged abuse and inextricably linked to

Schorno’s pattern of grooming and alienating Kevin from his parents, Schorno’s

allegedly negligent conduct must be treated as intentional conduct.

                                         3
      Finally, State Farm’s defense of the negligence claims against Amy

Schorno’s husband, Dan, did not create an obligation to defend the intentional

misconduct claims against Amy. An insurance policy can indemnify one insured

for negligent conduct while excluding coverage for the intentional conduct of

another insured under the same policy. See, e.g., Pac. Ins. Co. v. Catholic Bishop

of Spokane, 450 F. Supp. 2d 1186, 1198–99 (E.D. Wash. 2006); c.f. Unigard Mut.

Ins. Co. v. Argonaut Ins. Co., 579 P.2d 1015, 1018–19 (Wash. Ct. App. 1978),

disagreed with on other grounds by Rodriguez, 729 P.2d at 631.

                                         II.

      The district court did not abuse its discretion in denying Schorno’s motions

to compel discovery. Schorno failed to show (1) how the additional sought-after

evidence would be relevant to the issue of State Farm’s duty to defend, and (2) that

evidence of bad faith actually existed and was not the object of pure speculation.

Chance v. Pac-Tel Teletrac Inc., 242 F.3d 1151, 1161 n.6 (9th Cir. 2001). State

Farm’s duty to defend turned on whether the “complaint against [Schorno],

construed liberally, allege[d] facts which could, if proven, impose liability upon

the insured within the policy’s coverage.” Woo v. Fireman’s Fund Ins. Co., 164

P.3d 454, 459 (Wash. 2007) (citation omitted). Schorno had all the information

necessary for her claim. State Farm had already produced Schorno’s claim file,

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which included correspondence showing the analysis and decision process that led

to the determination of the denial of the claim, a copy of Schorno’s insurance

policy, the Kannadas’ demand letter, and the Kannadas’ counterclaims.

      Additionally, Washington’s attorney work-product privilege protects the

redacted communications between State Farm and Dan Schorno regarding State

Farm’s defense of Dan Schorno from the Kannadas’ negligence claims. See

Heidebrink v. Moriwaki, 706 P.2d 212, 216–17 (Wash. 1985). Likewise,

Washington’s attorney-client privilege protects the redacted communications

between State Farm and its coverage counsel, even in a bad faith denial of

coverage action. See Cedell v. Farmers Ins. Co. of Wash., 237 P.3d 309, 314

(Wash. Ct. App. 2010). Schorno failed to make “a prima facie showing of bad

faith tantamount to civil fraud” to justify in camera review of the disputed

documents for evidence of an alleged fraud. Id.

                                         III.

      Lastly, we deny Schorno’s request for costs and fees.

      AFFIRMED.

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