Steven Berns v. Sentry Select Ins. Co. , 656 F. App'x 326 ( 2016 )

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NOT FOR PUBLICATION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.
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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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