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Lopez v. New Mexico Public Schools Insurance Authority2/16/1994
n the coverage." Id. at 619, 642 P.2d 605 (quoting >). Finding that the complaint tended to show an occurrence within the coverage of the policy, the Court held that the insurance company had a duty to defend until it could be determined in the primary action whether the exclusionary provision in the policy applied. Id. at 620, 642 P.2d at 606. Thus, under Mullinex, only if this Court can say that all claims arose out of the molestation as a matter of law would we not remand the question to the trial court in the primary lawsuit.
The Bacas' complaint is written in extremely general language. The Bacas allege that "the Board . . . failed to provide evenhanded treatment and reasonable accomodations to [M.B.]," that her "status as an Hispanic person contributed to the failure," that the School District's "actions, customs, practices, policies and usages . . . violated their rights to speech and association, intentionally violated their rights to the enjoyment of family and individual rights." They also allege that "Defendants' actions violated plaintiffs' rights to a free appropriate public education," and that "Defendants violated and did not enforce [M.B.'s] IEP." Although it appears to this Court from the factual allegations supporting the causes of action that these claims most likely arose from the molestation and alleged failure of the School District to respond to or prevent
those acts, we bear in mind the principle from Mullinex that the factual determination is not for this Court but for the court in the primary action. We cannot say as a matter of law that the alleged civil rights violations arose out of the sexual misconduct. Based on the general allegations, it is possible that the Bacas may have intended to prove that the School District failed to enforce the IEP or discriminated against them in some manner unrelated to M.B.'s molestation. Until the Insurance Authority proved to the satisfaction of the federal trial court that all claims arose from the molestation, however, it was under a duty to defend because the general policy offers coverage for personal injury claims. See, e.g., (holding that because complaint alleged facts within coverage, insurer had duty to defend even though own investigation revealed claim not in fact covered; implying that insurer could not seek to establish facts in declaratory judgment action); Horace Mann Ins. Co. v. Barbara B., 4 Cal. 4th 1076, 846 P.2d 792, 797 (Cal. 1993) (in bank) (complaint alleged both sexual and non-sexual acts; insurance company had duty to defend as long as complaint "evinced a possibility that [defendant] would be held liable for damages within the coverage of the policy"). It was for the federal district court to determine whether the claims for discrimination and civil rights violations arose from the molestation upon proper discovery and motion by the Insurance Authority.
Conclusion. We hold that the policy coverage extends only to claims for personal injury and specifically excludes coverage for claims arising from sexual misconduct. We affirm, however, the trial court's grant of summary judgment because the Insurance Authority did not meet its burden of proving as a matter of law that all claims arose out of an excluded act, and the Insurance Authority had a duty to defend until it met that burden.
IT IS SO ORDERED.
RICHARD E. RANSOM, Chief Justice
WE CONCUR:
GENE E. FRANCHINI, Justice
STANLEY F. FROST, Justice
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