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Pekin Insurance Co. v. Dial1/20/2005
Rule 23 order filed December 16, 2004; Motion to publish granted January 20, 2005.
Cynthia Cain filed a sexual assault action against Dial Real Estate and Investments and David Dial (Dial), and Dial tendered the defense of Cain's action to his insurer, Pekin Insurance Company (Pekin). Pekin filed this action seeking a declaration that it had no duty to defend Dial in the Cain action. The trial court found that Pekin had a duty to defend Dial and that Pekin breached its duty to defend.
On appeal, Pekin argues that the trial court erred in finding that Cain's sexual assault allegations were covered by Pekin's insurance policy.
We reverse and enter a declaratory judgment for Pekin.
FACTS
Pekin issued a commercial general liability insurance policy, with an effective policy period from January 31, 2000, to January 31, 2001, to Dial as the insured "with respect to the conduct of business." The policy provided:
"a. We will pay those sums that the insured becomes legally obligated to pay as damages because of 'bodily injury ' or 'property damage' to which this insurance applies. We will have the right and duty to defend any 'suit' seeking those damages. *
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 disease sustained by a person, including death resulting from any of these at any time," and defined the term "occurrence" as "an accident, including continuous or repeated exposure to substantially 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 standpoint of 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, and exposed himself to her with the misapprehension of her desires and wishes. In count II, Cain alleged that Dial repeatedly, willfully, and without provocation touched, fondled, and exposed himself to her. Cain alleged that as a result of Dial's conduct, she suffered an upset stomach, headaches, and a loss of a normal life.
Dial tendered the defense of Cain's action to Pekin, Pekin refused Dial's tender, and on June 20, 2001, Pekin filed its declaratory judgment action, seeking a declaration that it had no duty to defend Dial because Dial's alleged conduct was intentional, because Dial's alleged conduct did not arise out of or within the course of his employment, and because Cain 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 May 3, 2002, pursuant to the terms of Dial and Cain's joint stipulation, the trial court entered an amended 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 Pekin breached its duty of good faith in failing to defend Dial against her action. On November 18, 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 c
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