Rule 23 order filed
December 16, 2004;
Motion to publish granted
January 20, 2005.


 

JUSTICE HOPKINS delivered the opinion of the court:

Cynthia Cain filed a sexual assault action against Dial Real Estate and Investmentsand David Dial (Dial), and Dial tendered the defense of Cain's action to his insurer, PekinInsurance Company (Pekin). Pekin filed this action seeking a declaration that it had no dutyto defend Dial in the Cain action. The trial court found that Pekin had a duty to defend Dialand that Pekin breached its duty to defend.

On appeal, Pekin argues that the trial court erred in finding that Cain's sexual assaultallegations were covered by Pekin's insurance policy.

We reverse and enter a declaratory judgment for Pekin.

Pekin issued a commercial general liability insurance policy, with an effective policyperiod from January 31, 2000, to January 31, 2001, to Dial as the insured "with respect tothe conduct of [the] business." The policy provided:

"a. We will pay those sums that the insured becomes legally obligated to pay asdamages because of 'bodily injury' or 'property damage' to which this insuranceapplies. We will have the right and duty to defend any 'suit' seeking thosedamages. ***

b. This insurance applies to 'bodily injury' and 'property damage' only if:

(1) The 'bodily injury' or 'property damage' is caused by an 'occurrence'that takes place in the 'coverage territory' ***."

The policy defined the term "bodily injury" as "bodily injury, sickness[,] or diseasesustained by a person, including death resulting from any of these at any time," and definedthe term "occurrence" as "an accident, including continuous or repeated exposure tosubstantially the same general harmful conditions."

The policy excluded the following from coverage:

"a. Expected or Intended Injury

'Bodily injury' or 'property damage' expected or intended from the standpointof the insured."

On October 12, 2001, Cain filed her third amended complaint, alleging, in count I,that between May 20, 2000, and June 26, 2000, Dial negligently touched, fondled, andexposed himself to her with the misapprehension of her desires and wishes. In count II, Cainalleged that Dial repeatedly, willfully, and without provocation touched, fondled, andexposed himself to her. Cain alleged that as a result of Dial's conduct, she suffered an upsetstomach, headaches, and a loss of a normal life.

Dial tendered the defense of Cain's action to Pekin, Pekin refused Dial's tender, andon June 20, 2001, Pekin filed its declaratory judgment action, seeking a declaration that ithad no duty to defend Dial because Dial's alleged conduct was intentional, because Dial'salleged conduct did not arise out of or within the course of his employment, and becauseCain did not seek damages for "bodily injury" as contemplated by the insurance policy.

On January 28, 2002, Dial assigned to Cain any rights he had against Pekin. On May3, 2002, pursuant to the terms of Dial and Cain's joint stipulation, the trial court entered anamended judgment in favor of Cain on count I of her third amended complaint, awarded Cain$300,000, and entered a judgment in favor of Dial on count II.

On October 9, 2002, Cain filed a counterclaim against Pekin alleging that Pekinbreached its duty of good faith in failing to defend Dial against her action. On November18, 2002, Pekin filed a motion for a judgment on the pleadings. On December 13, 2002,Cain filed a motion for summary judgment, requesting that the court order Pekin to pay thejudgment rendered in her tort action against Dial.

On June 9, 2003, the trial court heard arguments on the motions. On October 8, 2003,the trial court found that Cain's complaint pled a cause of action that was potentially coveredby the insurance policy and that Pekin breached its duty to defend Dial. The court deniedPekin's motion for a judgment on the pleadings and granted Cain's motion for a summaryjudgment. On October 16, 2003, Pekin filed its timely notice of appeal.

Although a summary judgment is a drastic means of disposing of litigation, it isappropriate in cases where there are no genuine issues of material fact and the moving partyis entitled to a judgment as a matter of law. Crum & Forster Managers Corp. v. ResolutionTrust Corp., 156 Ill. 2d 384, 390-91 (1993). "The construction of an insurance policy anda determination of the rights and obligations thereunder are questions of law for the courtwhich are appropriate subjects for disposition by way of summary judgment. [Citations.]"Crum & Forster Managers Corp., 156 Ill. 2d at 391. We review de novo the trial court'sdecision to enter a summary judgment. Crum & Forster Managers Corp., 156 Ill. 2d at 390. When construing an insurance policy, the court's primary function is to ascertain andenforce the parties' intentions as expressed in the agreement. Crum & Forster ManagersCorp., 156 Ill. 2d at 391. The court must construe the policy as a whole, considering thetype of insurance for which the parties contracted, the risks undertaken and purchased, thesubject matter insured, and the purposes of the contract. Crum & Forster Managers Corp.,156 Ill. 2d at 391. If the policy's terms are plain and unambiguous, the court affords themtheir plain, ordinary meaning and applies them as written. Crum & Forster Managers Corp.,156 Ill. 2d at 391.

To determine whether an insurer has a duty to defend its insured in a lawsuit, a courtshould generally apply an "eight corners rule"-that is, the court should compare the fourcorners of the underlying tort complaint with the four corners of the insurance policy anddetermine whether the facts alleged in the underlying complaint fall within, or potentiallywithin, the insurance policy's coverage. Crum & Forster Managers Corp., 156 Ill. 2d at 393;West American Insurance Co. v. Vago, 197 Ill. App. 3d 131, 136 (1990). Where theunderlying complaint alleges facts that, if true, would not be covered under the policy, theinsurer has no duty to defend. American Family Mutual Insurance Co. v. Chiczewski, 298Ill. App. 3d 1092, 1094 (1998). The factual allegations of the complaint, rather than the legaltheory under which the action is brought, determine whether there is a duty to defend. Management Support Associates v. Union Indemnity Insurance Co. of New York, 129 Ill.App. 3d 1089, 1097 (1984). The allegations of the complaint must be construed liberally,and any doubts must be resolved in favor of the insured. Vago, 197 Ill. App. 3d at 136.

"[W]hen a complaint against the insured alleges facts potentially within the scope ofthe policy coverage, an insurer taking the position that the complaint is not covered by itspolicy must defend the suit under a reservation of rights or seek a declaratory judgment." (Emphasis in original.) State Farm Fire & Casualty Co. v. Martin, 186 Ill. 2d 367, 374(1999). "An insurer will not be estopped from denying coverage merely because theunderlying case proceeds to judgment before the declaratory judgment action is resolved." Martin, 186 Ill. 2d at 374.

In the present case, the policy provided coverage for bodily injury caused by an"occurrence," and the policy defined "occurrence" as "an accident, including continuous orrepeated exposure to substantially the same general harmful conditions." The policy furtherexcluded coverage for bodily injury "expected or intended from the standpoint of theinsured." To determine coverage, we construe the definition of "occurrence" together withthe policy's specific exclusion for expected or intended injury. See Thornton v. IllinoisFounders Insurance Co., 84 Ill. 2d 365, 371 (1981) ("occurrence" definition and exclusionprovisions are not conflicting merely because they tend to overlap).

"[A]n occurrence which is defined as an accident involves the consideration ofwhether the injury was expected or intended from the standpoint of the insured." State FarmFire & Casualty Co. v. Watters, 268 Ill. App. 3d 501, 506 (1994). In Aetna Casualty &Surety Co. v. Freyer, the reviewing court discussed the term "occurrence," which wasdefined as an accident in the policy issued in that case, as follows:

"An accident has been defined as an unforeseen occurrence, usually of an untowardor disastrous character or an undesigned sudden or unexpected event of an inflictiveor unfortunate character. The natural and ordinary consequences of an act do notconstitute an accident. [Citation.] An injury caused by an assault and batterynormally is not considered to be accidental [citation], even if the specific injury wasnot intended. [Citation.]" Aetna Casualty & Surety Co. v. Freyer, 89 Ill. App. 3d617, 619 (1980).

When construing policy exclusions for bodily injury that is expected or intended bythe insured, courts have held that the injury is "expected" where the damages are " 'of sucha nature that they should have been reasonably anticipated (expected) by the insured.' " Westfield National Insurance Co. v. Continental Community Bank & Trust Co., 346 Ill. App.3d 113, 122 (2003) (quoting Freyer, 89 Ill. App. 3d at 620). If the insured was consciouslyaware that the injuries were practically certain to be caused by his conduct, the injuries areconsidered "expected" from the standpoint of the insured and are excluded from coverageunder the policy. Bay State Insurance Co. v. Wilson, 96 Ill. 2d 487, 494 (1983).

An insurance company is under no duty to defend or indemnify an insured whosexually abuses a minor, because the nature of the conduct itself establishes as a matter oflaw that the insured expected or intended to injure the victim. Westfield National InsuranceCo., 346 Ill. App. 3d at 119-20. Coverage is not triggered because the insured's child sexualabuse does not fall within the definition of "occurrence" and because the abuse is excludedas an "expected or intended" act under the policy. Westfield National Insurance Co., 346Ill. App. 3d at 119-20; see also Watters, 268 Ill. App. 3d at 507 (even though a sexualoffender had diminished capacity and could not form the intent to harm the children, hisintent to harm was inferred as a matter of law and coverage of his sexual misconduct wasprecluded under the homeowner's policy); Scudder v. Hanover Insurance Co., 201 Ill. App.3d 921, 929 (1990) (the insurer had no duty to defend or indemnify the insured for allegedlysexually assaulting four minors, because that activity was intentional as a matter of law andtherefore excluded under the insurance policy).

In Vago, a country club waitress filed the underlying tort complaint, alleging that,while she was working, the insured grabbed her from behind, locked his arms around herwaist, prevented her from escaping, and thrust his pelvis against her buttock several timeswhile he had an erection. Vago, 197 Ill. App. 3d at 133. Two insurance policies issued tothe insured excluded coverage for bodily or personal injury " 'which is expected or intendedby the insured.' " Vago, 197 Ill. App. 3d at 134. The court held that, even though theunderlying complaint was couched in terms of negligence, the insurer had no duty to defendor indemnify the insured because the complaint alleged a course of conduct that was clearlyintentional, and not merely negligent or accidental, because the insured would have beenconsciously aware that he was practically certain to cause emotional injuries to the waitress. Vago, 197 Ill. App. 3d at 137. The court concluded that the insured should have reasonablyanticipated the waitress's injuries and that, therefore, the injuries were "expected" and notcovered because of the exclusionary clauses in the two policies. Vago, 197 Ill. App. 3d at137; see also Hartford Insurance Co. of Illinois v. Kelly, 309 Ill. App. 3d 800, 807 (1999)(in cases where adults have been charged with having sex with minors or sexually assaultingadults, specific intent to harm is inferred as a matter of law and insurance coverage isexcluded under the policy).

In the present case, Cain alleged that Dial fondled and touched her and exposedhimself to her with the misapprehension of her desires and wishes. Similar to Vago, eventhough count I of Cain's complaint was couched in terms of negligence, the complaint allegeda course of conduct that was clearly intentional and not merely negligent or accidental. SeeVago, 197 Ill. App. 3d at 137. If Dial engaged in the conduct alleged in Cain's complaint,he would have been consciously aware that he was practically certain to cause emotionalinjuries to Cain. See Vago, 197 Ill. App. 3d at 137. Cain's injuries were a natural andprobable result of Dial's alleged conduct, whether or not he anticipated the precise injuryCain would suffer. See Westfield National Insurance Co., 346 Ill. App. 3d at 122 (theinsurer had no duty to defend an aunt for her participatory conduct resulting in her husband'schild sexual abuse because the aunt should have anticipated or "expected" the minor'sinjuries, which were a natural and probable result of her enabling acts, regardless of whethershe could anticipate their precise injury). Similarly, Dial should have reasonably anticipatedCain's injuries, and therefore, Cain's injuries were "expected" and not covered under thepolicy. See Vago, 197 Ill. App. 3d at 137; see also Watters, 268 Ill. App. 3d at 511 (theintent of the parties to the insurance contract was not to provide coverage for unintended badconsequences resulting from intentional sexual acts). Cain's allegations of negligence werea transparent attempt to trigger insurance coverage. See Watters, 268 Ill. App. 3d at 510.

Cain failed to allege facts to bring her cause within or potentially within the coverageof the policy. See Chiczewski, 298 Ill. App. 3d at 1094 (where the underlying complaintalleges facts that, if true, would not be covered under the policy, the insurer has no duty todefend). Because the allegations in Cain's tort complaint were clearly excluded fromcoverage under the policy, Pekin had no duty to defend Dial. We therefore reverse the trialcourt's decision and enter a declaratory judgment that Pekin had no duty to defend Dial withrespect to Cain's tort litigation.

Based on our conclusion, we reject Cain's argument that Pekin had a duty to defendDial because it failed to include a specific exclusion for sexual misconduct, and we need notaddress Cain's argument that Pekin is estopped from asserting contractual defenses becauseit breached its duty to defend.

For the foregoing reasons, the judgment of the circuit court of Marion County isreversed, and we enter a declaratory judgment for Pekin.

Reversed; judgment entered.

WELCH and CHAPMAN, JJ., concur.