Amy Schorno v. State Farm Fire and Casualty C , 445 F. App'x 956 ( 2011 )

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NOT FOR PUBLICATION AUG 03 2011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.
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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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