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ALLSTATE INS. CO. v. OLES

November 13, 1993

ALLSTATE INSURANCE COMPANY, Plaintiff,
v.
STANLEY J. OLES, JR., ANTHONY MONTI AND ALEKSANDRA MONTI, individually and as parents with legal custody of MICHELLE MONTI, an infant; MARGARET BACHTELER and RICHARD P. BACHTELER, individually and as parents with legal custody of JANICE M. BACHTELER, an infant; SALLY JOHNSON and RICHARD A. JOHNSON, individually and as parents with legal custody of ERIC JOHNSON, an infant; MARYANN KULIER, individually and as parent with legal custody of TIMOTHY KULIER, an infant; ROMAN MUSINSKI and DANUTA MUSINSKI, individually and as parents with legal custody of DAVID JOSEPH MUSINSKI, an infant; CHESTER MARCIN and SUSAN MARCIN, individually and as parents with legal custody of DIANE MARCIN, an infant; JOHN CONNOLLY and SUSAN CONNOLLY, individually and as parents with legal custody of SHANNON CONNOLLY, an infant; EUGENE McMAHON and MARY McMAHON, individually and as parents with legal custody of HEATHER PATRICIA McMAHON, an infant; JOHN JOSEPH MULDER, JR. and ANDREA MULDER, individually and as parents with legal custody of CATHERINE LAURIE MULDER, an infant; RUSSELL BROUSSEAU and DIANE BROUSSEAU, individually and as parents with legal custody of MATTHEW ANDREW BROUSSEAU, an infant; RICHARD PFAENDER and LORRAINE PFAENDER, individually and as parents with legal custody of KIMBERLY ANN PFAENDER, an infant; JOSEPH VISCONTI and BERNADETTE VISCONTI, individually and as parents with legal custody of ANDREW VISCONTI, an infant; FRANK E. PATRICOLO and GEORGETTE PATRICOLO, individually and as parents with legal custody of MICHAEL THOMAS PATRICOLO, an infant; WILLIAM DAMIAN DELANEY, SR. and LORRAINE JOSEPHINE DELANEY, individually and as parents with legal custody of WILLIAM DAMIAN DELANEY, JR., an infant; RAJAN ABRAHAM and ANN ABRAHAM, individually and as parents with legal custody of KOSHY ABRAHAM, an infant; HARRY SINGLE JR. and SUSAN SINGLE, individually and as parents with legal custody of BRIAN THOMAS SINGLE, an infant; ALLAN GOODWIN and LOIS GOODWIN, individually and as parents with legal custody of TARA BETH GOODWIN and KIMBERLY MARIE GOODWIN, infants; HARRAN TRANSPORTATION COMPANY, INC., HARRAN TRANSPORT SCHOOL BUS COMPANY, HICKSVILLE UNION FREE SCHOOL DISTRICT, DIOCESE OF ROCKVILLE CENTER/ST. IGNATIUS LOYOLA ROMAN CATHOLIC CHURCH, JERRY SPIEGEL, and JERRY SPIEGEL ASSOCIATES, INC., Defendants.



The opinion of the court was delivered by: ARTHUR D. SPATT

 SPATT, District Judge.

 BACKGROUND

 The defendant Oles was insured by an Allstate Deluxe Homeowners Policy, Form AU9601, Policy Number 043425578 ("Homeowners Policy"), which was effective as of June 19, 1985 and renewed annually. In addition Oles was insured by an Allstate Personal Umbrella Policy, Form AU1762 ("Umbrella Policy"), which was effective as of January 25, 1988 and renewed annually.

 The Homeowners Policy specifically provided, in the section titled "Family Liability and Guest Medical Protection", that "we do not cover any bodily injury or property damage which may reasonably be expected to result from the intentional or criminal acts of an insured person or which are in fact intended by an insured person" (Homeowners Policy, at p. 23 [emphasis added]). Additionally, the Umbrella Policy provided that "Allstate will pay when an Insured becomes legally obligated to pay for personal injury or property damage caused by an occurrence. The personal injury or property damage must be unexpected or unintended" (Umbrella Policy, at p. 4).

 In the present case, the defendant Oles is being sued in state court by the legal representative of minors who allege that the defendant Oles participated in their sexual abuse. It is based upon this alleged intentional conduct by Oles that the plaintiff Allstate seeks a judgment declaring that it is not required to defend or indemnify Oles in the underlying state court actions. The plaintiff moves for summary judgment.

 DISCUSSION

 Motion for Summary Judgment:

 A court may grant summary judgment "only if the evidence, viewed in the light most favorable to the party opposing the motion, presents no genuine issue of material fact," ( Cable Science Corp. v. Rochdale Village, Inc., 920 F.2d 147, 151 [2d Cir. 1990]), and the movant is entitled to judgment as a matter of law (See Anderson v. Liberty Lobby Inc., 477 U.S. 242, 248, 91 L. Ed. 2d 202, 106 S. Ct. 2505 [1986]; see also Fed. R. Civ. P. 56[c] [summary judgment standard]). The Court must, however, resolve all ambiguities and draw all reasonable inferences in the light most favorable to the party opposing the motion (See Twin Laboratories, Inc. v. Weider Health & Fitness, 900 F.2d 566, 568 [2d Cir. 1990]; Liscio v. Warren, 901 F.2d 274, 276 [2d Cir. 1990]; Knight v. U.S. Fire Ins. Co., 804 F.2d 9, 11 [2d Cir. 1986], cert. denied, 480 U.S. 932, 94 L. Ed. 2d 762, 107 S. Ct. 1570 [1987]).

 According to the Second Circuit "summary judgment is a tool to winnow out from the trial calendar those cases whose facts predestine them to result in a directed verdict" ( United National Ins. Co. v. The Tunnel, Inc., 988 F.2d 351, 355 [2d Cir. 1993]). Once a party moves for summary judgment, in order to avoid the granting of the motion, the non-movant must come forward with specific facts showing that a genuine issue for trial exists ( Western World Ins. Co. v. Stack Oil, Inc., 922 F.2d 118, 121 [2d Cir. 1990] [quoting Fed. R. Civ. P. 56[e]; see National Union Fire Ins. Co. v. Turtur, 892 F.2d 199, 203 [2d Cir. 1989]). A genuine issue of material fact exists if "a reasonable jury could return a verdict for the nonmoving party" ( Liberty Lobby, Inc., supra, 477 U.S. at p.248; see Converse v. General Motors Corp., 893 F.2d 513, 514 [2d Cir. 1990]).

 However, mere conclusory allegations, speculation or conjecture will not avail a party resisting summary judgment (See Western World, supra, 922 F.2d at p.121). If there is evidence in the record as to any material fact from which an inference could be drawn in favor of the non-movant, summary judgment is unavailable (see United National, supra, 988 F.2d at pp. 354-55; Rattner v. Netburn, 930 F.2d 204, 209 [2d Cir. 1991]). Finally, the Court is charged with the function of "issue finding", not "issue resolution" ( Eye Assocs., P.C. v. Incomrx Sys. Ltd. Partnership, 912 F.2d 23, 27 [2d Cir. 1990]).

 It is within this framework that the Court addresses the grounds for the present motion for summary judgment.

 Insurance Exclusion Clause:

 The plaintiff bases its motion for summary judgment primarily on a decision by the New York State Court of Appeals which must be applied in this diversity case. The plaintiff asserts that Allstate Insurance Co. v. Mugavero, 79 N.Y.2d 153, 581 N.Y.S.2d 142, 589 N.E.2d 365 (1992), holds that acts of sexual molestation committed by an insured, such as Oles, are "intentional" acts and therefore excluded from coverage under the Homeowners Policy and the Umbrella Policy. Moreover, under such circumstances, the carrier need not defend the insured in such an action (See Mugavero, supra, 581 N.Y.S.2d at pp. 147-48).

 As stated by the court in Mugavero, "Allstate cross-moved for summary judgment based, among other things, on the verified pleadings in the underlying damages action and on the sworn depositions of . . . [the children] depicting in graphic detail acts of sexual child molestation" ( Mugavero, supra, 581 N.Y.S.2d at p. 144). The Court stated that:

 
"although Mugavero denies the allegations of the complaint, we must assume--for the purpose of determining coverage--that what is alleged actually happened. Allstate agrees that it is obligated by its policy to provide a defense unless it can 'demonstrate that the allegations of the complaint cast that pleading solely and entirely within the policy exclusions, and, further, that the allegations, in toto, are subject to no other interpretation" ( Mugavero, supra, 581 N.Y.S.2d at p. 144 [quoting International Paper Co. v. Continental Casualty Co., 35 N.Y.2d 322, 325, 320 N.E.2d 619, 361 N.Y.S.2d 873 (1974)]).

 Allstate asserts that Oles sought from Allstate, pursuant to his insurance policies, indemnification and defense in the state court proceedings involving the following infants: Janice M. Bachteler, Eric Johnson, Timothy Kulier, and Michelle Monti. To determine whether the plaintiff is entitled to disclaim coverage in this situation, the Court must start its analysis by examining the pleadings in the underlying state court actions ( Mugavero, supra, 581 N.Y.S.2d at p. 144). The pertinent portion of the underlying complaints are as follows:

 
Janice M. Bachteler
 
"81. Upon information and belief, between September, 1988, and, May 22, 1989, the Defendant, OLES, while in the course of his employment for the Defendant HARRAN, sexually and physically abused, assaulted and threatened the Infant Plaintiff, while the Infant Plaintiff was being transported upon the vehicle owned, maintained and/or leased by the Defendant, HARRAN, and operated by the Defendant IZZO.
 
82. That at such times that the Defendant OLES, so occupied the motor vehicle as aforementioned, he sexually and physically abused, assaulted, and threatened the Infant Plaintiff, while the Infant Plaintiff wa [sic] being transported upon the vehicle owned, maintained and/or leased by the Defendant HARRAN, and operated by the Defendant IZZO and/or OLES.
 
84. Upon information and belief, the Defendant OLES, did not intend for the infant to suffer the consequences the infant suffered from his intentional acts; the Defendant OLES was negligent in committing acts against the infant resulting in an injury unintended to the infant" (Complaint of Janice M. Bachteler, at PP 81-84).
 
Eric Johnson
 
82. That at such times that the Defendant, OLES, so occupied the motor vehicle as aforementioned, he sexually and physically abused, assaulted, and threatened the Infant Plaintiff, while the Infant Plaintiff was being transported upon the vehicle owned maintained and/or leased by the Defendant, HARRAN, and operated by the Defendant, IZZO and/or OLES.
 
84. Upon information and belief, the Defendant OLES, did not intend for the infant to suffer the consequences the infant suffered from his intentional acts; the Defendant OLES was negligent in committing acts against the infant resulting in an injury unintended to the infant" (Complaint of Eric Johnson, at PP 81-84).
 
Timothy Kulier
 
"81. That at such times that the Defendant OLES, so occupied the motor vehicle as aforementioned, he sexually and physically abused, assaulted, and threatened the Infant Plaintiff, while the Infant Plaintiff was being transported upon the vehicle owned, maintained and/or leased by the Defendant HARRAN, and operated by the Defendant IZZO and/or OLES.
 
82. Upon information and belief, and at all times hereinafter mentioned the Defendant, OLES, although not authorized by the Defendant, HARRAN, did occupy a motor vehicle commonly known as a school bus, which motor vehicle was being operated by the Co-Defendant, IZZO.
 
83. Upon information and belief, the Defendant OLES, did not intend for the infant to suffer the consequences the infant suffered from his intentional acts; the Defendant OLES was negligent in committing acts against the infant resulting in an injury unintended to the infant" (Complaint of Timothy Kulier, at PP 80-83).
 
Michelle Monti
 
"76. That upon information and belief and between September 1988 and May 22, 1989, the Defendant, OLES, while in the course of his employment for the Defendant, HARRAN, sexually and physically abused, assaulted, raped, sodomized and otherwise threatened the infant Plaintiff while the infant Plaintiff was upon the vehicle owned, maintained, and/or leased by the Defendant, HARRAN, and operated by the Defendant, OLES.
 
* * *
 
. . . The Infant was caused to be sexually abused, raped, sodomized, and otherwise physically injured. The infant was further threatened and placed in fear of bodily harm to the infants person and to family members by the Defendants ROBERT IZZO and STANLEY OLES, and other persons unknown to the Infant" (Complaint of Michelle Monti, at P 76 and p. 31).

 The actions alleged in the above four complaints clearly describe intentional conduct on the part of the defendant Oles. Although the complaints in the Bachteler, Johnson, and Kulier actions allege, in the alternative, that Oles did not intend the results of his actions and that he was acting negligently, the Court finds, as a matter of law that, notwithstanding the wording in the complaints, this verbiage could not properly allege a viable cause of action in negligence, within the coverage of the policy.

 This same purported "negligence" argument was raised before the Court in Mugavero which disposed of the contention as follows:

 "Ellen B's third cause of action--after repleading the factual allegations of intentional, forceful and violent assault, sodomy and sexual abuse contained in the first and second causes of action--sets forth the totally inconsistent assertion that these intentional acts were committed 'negligently and carelessly, and with wanton disregard of others.' No different or additional facts are pleaded. Nor do any of defendants' motion papers suggest that there is the least evidentiary support for the conclusory characterization of Mugavero's conduct as negligent or provide an explanation of how the intrinsically intentional acts of assault, sodomy and sexual abuse could be negligently performed. We agree with plaintiff Allstate that the third cause of action contains nothing which brings the complaint within the coverage of the policy" ( Mugavero, supra, 581 N.Y.S.2d at p. 148 [emphasis added]).

 In the present case, as in Mugavero, there are no additional allegations suggesting that there is any claim of negligent conduct on the part of the defendant Oles. In fact, additional documentation supplied by the plaintiff presents substantial evidentiary support vitiating any "negligence" claim:

 
Eric Johnson - Bill of Particular
 
"The Infant was caused to be sexually abused, raped, sodomized, and otherwise physically injured. The infant was further threatened and placed in fear of bodily harm to the infants person and to family members by the Defendants ROBERT IZZO and STANLEY OLES, and other persons unknown to the Infant Plaintiff" (Bill of Particulars for Eric Johnson, at p. 31).
 
Timothy Kulier - Bill of Particulars
 
"The Infant was caused to be sexually abused, raped, sodomized, and otherwise physically injured. The infant was further threatened and placed in fear of bodily harm to the infants person and to family members by the Defendants ROBERT IZZO and STANLEY OLES, and other persons unknown to the Infant Plaintiff" (Bill of Particulars for Timothy Kulier, at p. 31).
 
Michelle Monti - Bill of Particulars
 
"The acts of sexual abuse, rape, sodomy and other acts were performed by the co-defendants, ROBERT IZZO and STANLEY OLES" (Bill of Particulars for Michelle Monti, at p. 6).
 
* * *
 
"Said co-defendant STANLEY OLES drove the school bus while the co-defendant ROBERT IZZO performed the immoral sexual acts upon the infants and aided and abetted the said co-defendant ROBERT IZZO in the performance of said sexual acts" (Id. at p. 90).
 
* * *
 
23. The co-defendants IZZO and OLES were involved in the sexual abuse of the infant plaintiff herein" (Id. at p. 97).
 
Michelle Monti - Supplemental Bill of Particulars
 
"The events described herein consisted of the co-defendant, ROBERT IZZO and/or co-defendant, STANLEY OLES, sexually touching, raping, sodomizing, slapping, hitting and otherwise physically and verbally abusing the infant Plaintiff and the other infants upon the school bus upon the Defendant SEARS premises. Co-Defendants, IZZO and OLES, caused the children to have sexual interplay amongst each other and with the Defendants IZZO and OLES, while the bus was upon the premises of SEARS ROEBUCK & CO. The aforementioned school bus would park upon the Defendant's premises between the hours of 12:05 P.M. and 1:00 P.M. on school days and, more specifically, on the dates previously set forth herein when the said acts would be perpetrated upon the children. The Defendant, OLES, would park the school bus in various locations within the parking lot, between tractor-trailer trucks and other vehicles, thereby attempting to isolate the school bus where some of the acts ere performed" (Supplemental Bill of Particulars of Michelle Monti, at p. 4).
 
Janice M. Bachteler - Examination Before Trial
 
Q Did he take all of the children off the bus or some of the children?
 
A All of the children.
 
Q Once you were inside the house, what did you do?
 
A We started taking our pants off.
 
Q Did someone tell you to do this?
 
A Yes.
 
Q Who told you to do this?
 
Q Do you know what Stanley looked like?
 
A I forget.
 
Q Did you at some point know what he looked like?
 
A No.
 
* * ...

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