that if "conduct [is] calculated and deliberate, [then] no accident occurred" (emphasis in original), Id. at 560, the Ahls' cannot claim that Mr. Tankovich's misconduct was an accident because the resulting injury was unintended.
The court in, Merced Mutual Ins. Co. v.Mendez, 213 Cal. App. 3d 41, 261 Cal. Rptr. 273 (1989), stated that "where the insured intended all of the acts that resulted in the victim's injury, the event may not be deemed an 'accident' merely because the insured did not intend to cause injury." Id. at 50. Although Merced Mutual involved child molestation, Mr. Tankovich's acts of racial harassment were similar in that "all of the acts, the manner in which they were done, and the objective accomplished occurred exactly as [the insured] intended. No additional, unexpected, independent, or unforeseen act occurred." Id.
Since there is no claim that Mr. Tankovich did not intend each of his acts which resulted in the Ahls' injuries, the Ahls cannot establish that his purposeful conduct was accidental. The burden of proving that the underlying action alleges an "accident" rests with the party seeking coverage, the Ahls, and not the insured, Allstate. Zuckerman v. Underwriters at Lloyds, 42 Cal. 2d 460, 474, 267 P.2d 777 (1954).
C. Whether Mr. Tankovich's Misconduct is Excluded from Coverage by the Intentional Act Exclusion or is Precluded From Coverage by California Insurance Code Section 533
Mr. Tankovich's misconduct is excluded from coverage by the intentional act exclusion and is precluded from coverage by California Insurance Code Section 533 ("Section 533"). The intentional act exclusion and Section 533 will be considered together because Section 533 is "an implied exclusionary clause which by statute is to be read into all insurance policies." United States Fid. & Guar. Co. v. American Employer's Ins. Co., 159 Cal. App. 3d 277, 284, 205 Cal. Rptr. 460 (1984).
Allstate's Homeowner's Policy "does not cover bodily injury or property damage resulting from . . . an act . . . intended or expected to cause bodily injury or property damage. . . even if the bodily injury or property damage is of a different kind or degree, or is sustained by a different person or property, than that intended or expected (emphasis added)." Section 533 provides that "an insurer is not liable for a loss caused by the wilful act of the insured" (emphasis added). Cal. Ins. Code § 533 (West Supp. 1991).
The plain meanings of the intentional act exclusion and Section 533 are not apparent from their text alone. Allstate and the Ahls rely on different case law to support their positions.
Defendants Ahls rely on the California Supreme Court case which first addressed the meaning of the term "willful," Clemmer v. Hartford Ins. Co., 22 Cal. 3d 865, 151 Cal. Rptr. 285, 587 P.2d 1098 (1978). Clemmer and subsequent cases held that the test for willfulness consisted of two co-equal elements: 1) the intent to perform the act; and 2) the intent to inflict injury. State Farm Fire & Casualty Co. v. Ezrin, 764 F. Supp. 153, 155 (1991). Defendants allege that Mr. Tankovich did not intend to injure the Ahls although he did intend to perform each of the acts which caused injury to the Ahls.
Plaintiff Allstate relies on the recent California Supreme Court ruling in J.C. Penny Cas. Ins. Co. v. M.K., 52 Cal. 3d 1009, 278 Cal. Rptr. 64, 804 P.2d 689 (1991), which excluded from coverage of a homeowners policy the insured's act of child molestation. In J.C. Penny, the Court held that the Clemmer test was not applicable here since "the wrongful act of child molestation is itself the harm, section 533 does not require a showing of the insured's subjective intent to harm" (emphasis in original). Id. at 73. Allstate claims that, like child molestation, Mr. Tankovich's racially motivated hate crimes are themselves the harms and, therefore, no showing of his subjective intent to harm the Ahls is required.
J.C. Penny was extended to a harmful act other than child molestation in State Farm Casualty Co. v. Ezrin, 764 F. Supp. 153 (N.D.Cal. 1991), decided by this court. In Ezrin, this court held "that non-consensual sexual assault is a wrongful act that is precluded by coverage by California Insurance Code section 533." Id. at 158. The court found that the physical and emotional injuries caused by non-consensual sex were so similar to those caused by child molestation that there is "no logical basis for applying different rules of coverage." Id. at 156.
Given the analysis in J.C. Penny, it would appear that racially motivated hate crimes are themselves the harm. In J.C. Penny, the court found that "child molestation is always intentional, it is always wrongful, and it is always harmful" (emphasis in original). J.C. Penny, 278 Cal. Rptr. at 73. The court went on to note that:
By admitting that [a defendant] intended to arouse, appeal to, or gratify sexual desire with a child, a molester necessarily admits that he intended to harm the child. 'Implicit in the [Legislature's] determination that children must be protected from such acts is a determination that at least some harm is inherent in and inevitably results from those acts.'. . . Child molestation is not the kind of act that results in emotional and psychological harm only occasionally (emphasis added).
Id., quoting Allstate Ins. Co. v. Kim W., 160 Cal. App. 3d 326, 206 Cal. Rptr. 609 (1984). Although no cases appear to exist which interpret Section 533 as it relates to racial hate crimes, such conduct appears to involve harm that is inherent and an inevitable result of such acts.
The District Court of Oregon applying Oregon law held that injuries were "certain to follow" from acts of racial hate which were similar to Mr. Tankovich's misconduct. Allstate Ins. Co. v. Browning, 598 F. Supp. 421, 424 (D.C.Ore. 1983). In Browning, the insured's son harassed a black family by "burning a cross in their front yard and shouting racial epithets at them." Id. at 422. The insured's son testified that, despite his acts, he harbored no racial hate and was unaware that his acts would cause emotional distress to the people living in the house. The insured's son also asserted that he did not intend to harm the black family in any manner. Id. Mr. Tankovich's acts of leaving racially offensive and threatening telephone messages, spray painting racially offensive words, and driving his truck onto the lawn and shouting threats of violence are just as disturbing as the acts in Browning.
Based on J.C. Penny and Browning, it appears that injury is either inherently or certain to follow from Mr. Tankovich's acts of racial hatred. Therefore, coverage should be excluded based on both the intentional acts exclusion of the policy and Section 533 of the California Insurance Code.
D. Whether Mr. Tankovich's Misconduct is Excluded from Coverage by the Criminal Act Exclusion or is Precluded From Coverage by California Civil Code Section 1668
Mr. Tankovich's misconduct is excluded from coverage by the criminal act exclusion and is precluded from coverage by California Civil Code Section 1668 ("Section 1668"). The criminal act exclusion and Section 1668 will be considered together because Section 1668 is "implied by law as an integral part of an insurance policy." State Farm Fire & Cas. Co. v. Robin R., 227 Cal. App. 3d 190, 196, -- - Cal. Rptr. -- - (1989).
Allstate's Homeowner's Policy "does not cover bodily injury or property damage resulting from . . . a criminal act. . . . This exclusion applies regardless of whether the insured person is actually charged with, or convicted of, a crime" (emphasis added). Section 1668 provides that an insurance contract which indemnifies conduct involving a "violation of law, whether willful or negligent" is prohibited. Cal. Civ. Code § 1668.
The Ahls only objection to the criminal act exclusion and Section 1668 is that it violates the Federal Rules of Evidence because "a plea of nolo contendere" is not "admissible against the defendant who made the plea." Fed. R. Evid. 410 (West 1984). However, at his deposition in the underlying case, Mr. Tankovich admits to leaving the racially offensive messages on the answering machine, to spray painting racially offensive words on the home, and to driving the truck on the front lawn and making threatening remarks. Even if Rule 410 is applicable here, Mr. Tankovich's admissions are sufficient to establish his criminal acts and preclude coverage of his civil liability for racial harassment. Allstate Ins. Co. v. Gilbert, 852 F.2d 449, 453 (9th Cir. 1988).
II. Plaintiff Allstate's Motion and Application for Default Judgment Against Defendant Frank Tankovich
Allstate's motion for default judgment against Frank Tankovich is granted. Plaintiff Allstate has complied with all procedural requirements of Rule 55 and 50 U.S.C. App. § 520. The declaration of Jack D. Eskridge states that defendant Tankovich is not an infant, an incompetent, or a military servant. Although it appears that Mr. Tankovich has failed to make an appearance in this action, he has been provided with at least three days notice of this application for default judgment hearing. For purposes of this motion and application for default judgment, the factual allegation of Allstate's complaint that they are neither obligated to defend nor indemnify Frank Tankovich for his alleged racial harassment is taken as true. Dundee Cement Co. v. Howard Pipe & Concrete Products, 722 F.2d 1319, 1323 (7th Cir. 1983). Therefore, the declaratory relief which Allstate seeks against Frank Tankovich should be granted.
Accordingly, the court finds that Allstate Insurance Company owes neither a duty to defend nor a duty to indemnify Frank Tankovich for any losses suffered by the Ahls.
IT IS SO ORDERED.
JUDGMENT - October 3, 1991, Filed
The court having ruled in its order dated October 3, 1991, that plaintiff's motions for summary judgment and application for default judgment be granted,
IT IS HEREBY ORDERED that judgment be entered accordingly.
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