Court Opinion

ID: 4019431
Source: CourtListenerOpinion
Date Created: 2016-07-27 20:01:07.219027+00
Date Added: 2024-06-11T14:50:14.520575
License: Public Domain

FILED
                           NOT FOR PUBLICATION
                                                                            JUL 27 2016
                    UNITED STATES COURT OF APPEALS                      MOLLY C. DWYER, CLERK
                                                                         U.S. COURT OF APPEALS

                            FOR THE NINTH CIRCUIT

STEVEN J. BERNS, an individual                   No. 14-55996
residing in the State of California,
                                                 D.C. No. 2:13-cv-01611-DSF-
              Plaintiff - Appellant,             AGR

 v.
                                                 MEMORANDUM*
SENTRY SELECT INSURANCE
COMPANY, an Illinois corporation,

              Defendant - Appellee.

                    Appeal from the United States District Court
                       for the Central District of California
                     Dale S. Fischer, District Judge, Presiding

                        Argued and Submitted May 4, 2016
                              Pasadena, California

Before: W. FLETCHER and GOULD, Circuit Judges and LEMELLE,** 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 Ivan L.R. Lemelle, Senior District Judge for the U.S.
District Court for the Eastern District of Louisiana, sitting by designation.
      Plaintiff Steven Berns appeals the district court’s grant of summary

judgment to Sentry Select Insurance Company. We reverse and remand for further

proceedings.

      In order to prevail on appeal, Sentry must show that Exclusion 1

unambiguously precludes coverage. See MacKinnon v. Truck Ins. Exch., 73 P.3d
1205, 1213 (Cal. 2003). Ambiguities in the language of the exclusion must be

construed in favor of the insured (Berns). See Producers Dairy Delivery Co. v.

Sentry Ins. Co., 718 P.2d 920, 924 (Cal. 1986). In light of the language of

Exclusion 1 and of California precedent interpreting the term “intentional,”

Sentry’s position that the term “intentional” unambiguously means “voluntary and

deliberate” is untenable.

      The exclusion at issue in this case precludes coverage for “[a]ny dishonest,

malicious, fraudulent, criminal or intentional ‘act.’” Sentry’s contention that the

term “intentional” broadly applies to any “voluntary” or “deliberate” act conflicts

with the interpretive principle of ejusdem generis. “Under the rule of ejusdem

generis, where general words follow an enumeration of specific items, the general

words are read as applying only to other items akin to those specifically

enumerated.” Harrison v. PPG Indus., Inc., 446 U.S. 578, 588 (1980). Here, the

term “intentional” follows four more specific words (“dishonest,” “malicious,”

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“fraudulent,” and “criminal”) that describe particularly blameworthy conduct. The

term “intentional” should be read in light of these terms and therefore should be

read as requiring some sort of wrongful conduct, not just any purposeful act.

      Additionally, California law has inconsistently interpreted the term

“intentional” in insurance policies. Some cases have adopted Sentry’s broad

interpretation of the term. See, e.g., Delgado v. Interinsurance Exch. of Auto. Club

of S. Cal., 211 P.3d 1083, 1088 (Cal. 2009); B & E Convalescent Ctr. v. State

Comp. Ins. Fund, 9 Cal. Rptr. 2d 894, 907 (Cal. Ct. App. 1992). Other cases,

however, have adopted Berns’s view that “intentional” requires a specific intent to

cause harm. See, e.g., Gray v. Zurich Ins. Co., 419 P.2d 168, 174 (Cal. 1966) (in

bank); Gonzalez v. Fire Ins. Exch., 184 Cal. Rptr. 3d 394, 410 (Cal. Ct. App.

2015); State Farm Fire & Cas. Co. v. Eddy, 267 Cal. Rptr. 379, 386 (Cal. Ct. App.

1990); see also Allstate Ins. v. Calloway, 936 F.2d 576 (9th Cir. 1991) (affirming

the district court’s conclusion that an intentional acts exclusion “was ambiguous

because it did not make clear whether the phrase ‘intentional act’ referred merely

to the intent to act, or to the intent to cause the consequences of the act”). The

California Supreme Court has written that the word “intentional” may have a

“built-in ambiguity.” Gray, 419 P.2d at 174.

                                          -3-
      We therefore reject Sentry’s interpretation of the exclusion. Construing the

ambiguity in favor of Berns, we conclude that the “intentional” acts exclusion

applies only to intentionally wrongful acts; in other words, the exclusion applies

only if the insured acted with a specific intent to wrongfully inflict injury. As

applied to this case, there is evidence suggesting that Porter misappropriated

company files, in which case Berns would have been justified in scolding and

terminating her. Because Berns may not have acted with the requisite intent to

come within the exclusion, Sentry had a duty to defend. See Shade Foods, Inc. v.

Innovative Prods. Sales & Mktg., Inc., 93 Cal. Rptr. 2d 364, 387 (Cal. Ct. App.

2000) (noting that an insurer has a duty to defend any lawsuit that potentially falls

within the coverage of the policy). We reverse the district court’s order granting

summary judgment to Sentry and remand for further proceedings consistent with

this decision.

      REVERSED and REMANDED.

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