Court Opinion

ID: 9490538
Source: CourtListenerOpinion
Date Created: 2023-08-05 13:46:16.678347+00
Date Added: 2024-06-11T17:54:09.381817
License: Public Domain

McMILLIAN, Circuit Judge,
dissenting.
I respectfully dissent. Because I believe that the exclusion for “criminal acts” is ambiguous and must be construed in favor of Burrough as a matter of law and, alternatively, that a genuine issue of material fact exists as to Burrough’s reasonable expectations, I would reverse.
To prevail in its declaratory judgment action, Allstate was required to prove that the policy’s criminal acts exclusion applied to exclude Burrough from coverage by showing that: (1) Burrough committed a criminal act to which the criminal acts exclusion applied6 and (2) Burrough could have reasonably expected Williams’s injury to result from the criminal act. See Arkansas Farm Bureau Ins. Fed’n v. Ryman, 309 Ark. 283, 831 S.W.2d 133, 134-35 (1992) (an insurer has the burden of proving that an insured fell within an insurance policy exclusion). To prevail on summary judgment, Allstate was required to show that no genuine issue of material fact exists as to either of those requirements and that it is entitled to judgment as a matter of law. Fed.R.Civ.P. 56(c); see, e.g., Celotex Corp. v. Catrett, 477 U.S. 317, 322-23, 106 S.Ct. 2548, 2552-53, 91 L.Ed.2d 265 (1986); Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 249-50, 106 S.Ct. 2505, 2510-11, 91 *842L.Ed.2d 202 (1986); Get Away Club, Inc. v. Coleman, 969 F.2d 664, 666 (8th Cir.1992); St. Paul Fire & Marine Ins. Co. v. FDIC, 968 F.2d 695, 699 (8th Cir.1992). For the reasons set forth below, I would hold that the term “criminal acts” within the policy’s criminal acts exclusion is ambiguous as applied to minors and, accordingly, should be construed against Allstate as a matter of law to provide coverage for Burrough. See Keller v. Safeco Ins. Co. of Am., 317 Ark. 308, 877 S.W.2d 90, 92 (1994) (Keller) (court construes ambiguous insurance contract to justify recovery for insured). Alternatively, I would hold that a genuine issue of material fact exists as to whether Burrough could have reasonably expected Williams’s injuries to result from his act of giving the handgun to Hauser.
I. Ambiguity in the Policy’s Criminal Acts Exclusion
The criminal acts exclusion is ambiguous because a particular act may be defined as criminal in one part of the Arkansas Code but not criminal in another part of the Arkansas Code by virtue of the alleged wrongdoer’s age. Although furnishing a gun to a minor is a criminal act when committed by an adult, under the Arkansas Juvenile Code of 1989, Ark.Code Ann. §§ 9-27-301 to -368 (Michie Repl.1993) (the juvenile code), it is a delinquent act when committed by a juvenile.
The juvenile code defines, in pertinent part, a juvenile as an individual who “[i]s under the age of eighteen (18) years.” Ark. Code Ann. § 9-27-303(l)(A). A delinquent juvenile is defined as “any juvenile ten (10) years or older who has committed an act ... which, if such act had been committed by an adult, would subject such adult to prosecution for a felony, misdemeanor, or violation under the applicable criminal laws of this state.” Id. § 9-27-303(11). Generally, when such an act occurs, the prosecuting attorney files a delinquency petition in the juvenile division of the chancery court (hereinafter, juvenile court). Id. § 9-27-310. The juvenile court has exclusive and original jurisdiction of all offenses charged against a juvenile who is fourteen or fifteen years old at the time of the commission of those offenses, with the exception of certain offenses enumerated in § 9—27—318(b)(1). Id. § 9-27-318(a)(3); State v. Gray, 319 Ark. 356, 891 S.W.2d 376, 377 (1995). For the limited offenses listed in § 9 — 27—318(b)(1), none of which is involved in this case, the prosecuting attorney may choose either to file a petition in juvenile court alleging delinquency or to file charges in circuit court and prosecute the individual as an adult. See id. § 9 — 27—318(a); see also Boyd v. State, 313 Ark. 171, 853 S.W.2d 263, 264 (1993) (affirming transfer of juvenile proceeding to circuit court based upon § 9 — 27—318(c)). The Arkansas Supreme Court recently disapproved of the extent of discretion given prosecutors in prosecuting a juvenile as an adult and issued a caveat “that in juvenile transfer cases tried after this date, we will consider anew our interpretation of the juvenile code,” Sanders v. State, 326 Ark. 415, 932 S.W.2d 315, 319 (1996), indicating an intention that juveniles be protected under the juvenile code. Cf. McKeiver v. Pennsylvania, 403 U.S. 528, 545, 546 n. 6, 91 S.Ct. 1976, 1986 n. 6, 29 L.Ed.2d 647 (1971) (the ideal of separate treatment for children through an intimate, informal protective juvenile proceeding “is still worth pursuing”); Valdez v. State, 33 Ark.App. 94, 801 S.W.2d 659, 661 (1991) (“The revisions found in the Juvenile Code of 1989 were designed to promote and further safeguard the interests of accused juvenile offenders.”).
Because furnishing a deadly weapon in violation of § 5-73-109 is not an offense which is excepted from the juvenile court’s exclusive jurisdiction under § 9 — 27—18(b)(1), Burrough, who was fourteen years old at the time of his relevant acts, was not subject to criminal charges for giving the handgun to Hauser. In holding that “[t]he criminal acts exclusion applies so long as the insured engages in conduct which is described as criminal in the penal code, ‘regardless of whether or not such insured person is actually charged with, or convicted of a crime,’ ” Allstate Ins. Co. v. Burrough, 914 F.Supp. 308, 312 (W.D.Ark.1996) (Burrough) (quoting Policy, reprinted in App. for Appellee at 7) (emphasis omitted), the district court failed to recognize the distinction between an act for which an individual is actually charged or convicted and an act for which an individual *843can be actually charged or convicted. Under Arkansas law, Burrough cannot be charged in circuit court or convicted criminally of furnishing a handgun to a minor. Because Burrough committed an act which would be a criminal act if committed by an adult but for which he, as a fourteen-year-old, cannot be criminally charged or convicted under state law, the criminal acts exclusion in the policy may be reasonably interpreted as inapplicable to these circumstances. The criminal acts exclusion is therefore ambiguous as applied to Burrough’s act of giving a handgun to Hauser and must be construed to not exclude coverage for Burrough. See Keller, 877 S.W.2d at 92.
The district court also reasoned that, because the policy does not cover mental incompetents for their criminal acts for which they cannot be prosecuted, it should be construed as excluding minors for their criminal acts for which they cannot be prosecuted. Burrough, 914 F.Supp. at 312. However, under the district court’s reasoning, the mental incompetents provision of the criminal acts exclusion is susceptible to more than one meaning as to which individuals are included within the classification of mental incompetents. Specifically, an insured cannot determine whether the term “mental incompetents” includes only individuals adjudicated mentally incompetent, or whether it includes minors based on their legal incapacity. Therefore, the ambiguous mental incompetents provision must not be construed to include minors, see Keller, 877 S.W.2d at 92, and, thus, cannot be used to justify application of the criminal acts exclusion to minors.
In addition to the inherent ambiguity in the phrase “criminal acts” as applied to minors, I would also hold that the criminal acts exclusion is ambiguous insofar as it excludes coverage for “any bodily injury ... which may reasonably be expected to result from the intentional or criminal acts ... of, any insured person ... even if ... such bodily injury ... is of a different kind or degree than that ... reasonably expected.” Policy, reprinted in App. for Appellee at 6 (emphasis omitted). This provision creates a virtually limitless category of acts for which the insured will not be covered under the policy by excluding not only bodily injury which an insured may reasonably expect to result from his intentional or criminal act, but also, bodily injury of a different kind or degree than that which the insured reasonably expected. I doubt this interpretation represents the reasonable expectations of an insured who enters into this insurance contract. See Enterprise Tools, Inc. & E.B. v. Export-Import Bank, 799 F.2d 437, 442 (8th Cir.1986), cert. denied, 480 U.S. 931, 107 S.Ct. 1569, 94 L.Ed.2d 761 (1987). This provision is susceptible of more than one meaning as to when bodily injury may be reasonably expected to result from the intentional or criminal acts of an insured and, therefore, must be construed in favor of the possible interpretation that Burrough be denied coverage only for injuries resulting directly from his act of giving the gun to Hauser and not from Beck’s subsequent acquisition of the gun and accidental shooting of Williams. See Keller, 877 S.W.2d at 92.
Finally, my construction of the policy in favor of coverage for Burrough does not unduly burden Allstate because, as the insurer and drafter of the policy, Allstate could have expressly included minors within the criminal acts exclusion. See Foremost Ins. Co. v. Sheppard, 610 F.2d 551, 557 (8th Cir. 1979) (interpreting Arkansas insurance law). Allstate failed to do so, and I would not read such a meaning into the policy.
II. Burrough’s Reasonable Expectations
Alternatively, I would reverse on the basis that Burrough could not have reasonably expected Williams’s injury to result from his act because the relationship between Bur-rough’s giving the gun to Hauser and Beck’s accidental shooting of Williams is too tenuous to qualify for exclusion.7 I believe the *844district court’s disposition of this issue on summary judgment was erroneous because Burrough’s deposition testimony, Exhibit C, reprinted in App. for Appellee at 12-27, creates a genuine issue of material fact as to whether Burrough could have reasonably expected Williams’s injury to result from his act. See Talley v. MFA Mut. Ins. Co., 273 Ark. 269, 620 S.W.2d 260, 262 (1981) (where insurance policy excluded from coverage “bodily injury ... which is either expected or intended from the standpoint of the insured,” evidence that insured did not intend or expect resulting injury raised a question of fact and precluded summary judgment for insurer). Furthermore, Burrough’s reasonable expectations must be assessed in the eyes of a reasonable fourteen-year-old. Allstate Ins. Co. v. Dillard, 859 F.Supp. 1501, 1503 (M.D.Ga.1994) (while contract’s language excluding coverage for bodily injuries which may “reasonably be expected to result from the intentional or criminal acts of an insured person” focuses on objective conduct and not merely on the subjective expectations or intentions of the insured, “the excluded injuries must be those expected by a reasonable 13-year-old”), aff'd, 70 F.3d 1285 (11th Cir.1995) (table).
Accordingly, I would reverse the district court’s grant of summary judgment in favor of Allstate and remand the case to the district court with directions to enter judgment in favor of Bell. Alternatively, I would remand the case to the district court for a trial on the issue of Burrough’s reasonable expectations.

. As noted in the majority's opinion, supra at 838 n. 4, Allstate did not, at any point, claim that Burrough's conduct fell within the “intentional acts” clause of the exclusion.

. I caution that the majority opinion’s conclusion that “once Burrough handed over a loaded, malfunctioning gun to Hauser, Burrough should have expected that an incident like the one that took place would happen,” supra at 839, may have a preclusive effect on the issue of causation in Bell's state court action. Accordingly, I offer no opinion on the issue of causation, but only express my belief that a genuine issue of material *844fact exists as to Burrough’s reasonable expectations.