Majority
Opinion
The plaintiff in a personal injury suit, Christine Studley (hereafter Studley), appeals from an adverse judgment in a suit in intervention brought by the defendants’ insurer.
On June 4, 1987, Studley filed a complaint alleging causes of action for negligence and wrongful death against Benicia Unified School District, Daniel R., and Leonard R. A potential plaintiff, Daryl D., was also named as a defendant pursuant to Code of Civil Procedure section 382 but was never served. On October 2, 1987, Fire Insurance Exchange (hereafter FIE), an interinsurance exchange, filed a complaint in intervention against Studley and each defendant alleging that Daniel R. and Leonard R. had tendered to it the defense of the action under a homeowner’s package policy issued to Daniel R. Acknowledging it had accepted the defense of Daniel R., FIE asked for the declaration that its policy did not provide coverage for Leonard R. and that it was under no obligation to defend him against any potential liability in the case.
A hearing on May 4, 1988, achieved a series of settlements: Benicia Unified School District settled with Studley for the payment of $15,000; FIE agreed to dismiss its complaint in intervention against the school district and Daryl D.; and Daniel R. and Leonard R. entered into a settlement with Studley that will be discussed later in this opinion.
At the same hearing, the trial court bifurcated the complaint in intervention from the underlying complaint and set it for trial on May 9, 1988. FIE
It is undisputed that on September 18, 1986, Leonard R. shot and killed Studley’s teenage daughter, Heather D., on the premises of Benicia High School. At the time, Leonard resided at the home of his father, Daniel R., who was insured by FIE under a homeowner’s insurance policy. During school hours, he took a loaded .38-caliber revolver from the nightstand in his father’s bedroom and carried it to the high school. Finding Heather D. in the school yard, he killed her with a single shot of the gun.
Leonard R. contended that he loved Heather D. and intended only to frighten her. Before carrying the gun to the high school, he removed two bullets from the chamber, lying in a clockwise direction from the hammer, believing that the cylinder moved in a clockwise motion and that it would not fire with the two bullets removed. In fact, the cylinder rotated in a counterclockwise motion. The girl’s death resulted from this fatal error.
In the statement of decision, the trial court made a finding generally consistent with Leonard R.’s account: “A preponderance of the evidence, and the reasonable inferences to be drawn therefrom, show that Leonard formed a preconceived design to point a partially loaded revolver at Heather at point blank range and to pull the trigger to terrorize her and thereby to inflict extreme emotional distress on her, knowing she was afraid of guns. He intended to do these things to intimidate Heather, and thereby preclude her from seeing another boy who had been writing notes to her; and he carried out this intention by grabbing Heather, pushing her against a wall, pulling the gun from where he had concealed it in the waistband of his shorts to avoid its being detected, and immediately pressing the gun into Heather’s chest and pulling the trigger.”
The trial court proceeded to find that Leonard’s conduct amounted to extreme infliction of emotional distress within the meaning of tort law: “Leonard’s deliberately intended conduct was extreme, outrageous and clearly unprivileged and done with the preconceived intent to cause emotional distress to Heather by terrifying her and attempting to intimidate her and influence her conduct. ... It was preconceived intentional conduct toward Heather ‘no reasonable person in a civilized society should be
The trial court ruled “that coverage of Leonard herein by Insurer’s policy is precluded by the provisions of Insurance Code section 533 and of Civil Code section 1668.” Both statutes prohibit insurance coverage for wilful conduct. The court did not reach the issues presented by the language of the policy itself. Two exclusions, however, have possible relevance. The policy provided generally: “We do not cover bodily injury, property damage or personal injury: ... 3. Either: a. caused intentionally by or at the direction of an insured, or b. resulting from any occurrence caused by an intentional act of an insured person where the results are reasonably foreseeable.” A separate provision more specifically excluded: “Personal injury caused by a violation of penal law or ordinance committed by or with the knowledge or consent of any insured.”
The trial court’s application of Insurance Code section 533 raises difficult issues. As an implied term in all insurance contracts (Nuffer v. Insurance Co. of North America (1965) 236 Cal.App.2d 349 , 356 [ 45 Cal.Rptr. 918 ]), Insurance Code section 533 provides: “An insurer is not liable for a loss caused by the wilful act of the insured; . . .” The statute is a specific application of the policy of Civil Code section 1668 invalidating contracts that “exempt anyone from the responsibility for his own fraud, or willful injury to the person or property of another, or violation of law, . . .” “The exclusion of intentional injury from [insurance] coverage [in the two statutes] stems from a belief that an individual should not be exempt from the financial consequences of his own intentional injury to another.” (Congregation of Rodef Shalom v. American Motorists Ins. Co. (1979) 91 Cal.App.3d 690 , 697 [ 154 Cal.Rptr. 348 ].) To allow insurance coverage for intentional injuries would be an “encouragement of wilfull tort” (Tomerlin v. Canadian Indemnity Co. (1964) 61 Cal.2d 638 , 648 [ 39 Cal.Rptr. 731 , 394 P.2d 571 ]) by giving wrongdoers “a license to wreak havoc at will.” (7A Appleman, Insurance Law and Practice (Berdal ed. 1979) § 4501.09, p. 267.)
Insurance Code section 533 has been regarded as an implied exclusionary clause subject to the rules applying to other exclusionary clauses. (Clemmer
Consistent with the rule of strict construction of exclusionary insurance clauses, the courts have construed narrowly the meaning of a “wilful act” under Insurance Code section 533. The term does not encompass reckless conduct involving “conscious disregard of the rights or safety of others.” (Peterson v. Superior Court (1982) 31 Cal.3d 147 , 158 [ 181 Cal.Rptr. 784 , 642 P.2d 1305 ].) Moreover, “an act which under the traditional terminology of the law of torts is denominated ‘intentional’ or ‘wilful’ does not necessarily fall outside insurance coverage.” (Gray v. Zurich Insurance Co. (1966) 65 Cal.2d 263 , 273, fn. 12 [ 54 Cal.Rptr. 104 , 419 P.2d 168 ].) An intentional action “will not exonerate the insurer from liability under Insurance Code section 533 unless it is done with a ‘preconceived design to inflict injury.’ ” (Clemmer v. Hartford Insurance Co., supra, 22 Cal.3d 865 , 887; Fire Ins. Exchange v. Abbott (1988) 204 Cal.App.3d 1012 , 1019-1021 [ 251 Cal.Rptr. 620 ].)
Leonard R.’s conduct here went beyond merely reckless conduct; it displayed a level of intentionality that satisfied the requirements of the offense of murder. We hold that conduct actuated by implied malice, as defined in the criminal law relating to murder, involves a “preconceived design to inflict injury” that will exonerate an insurer from liability under Insurance Code section 533. Leonard R. intentionally exposed the victim to a high probability of injury in such an egregiously wrongful manner that his conduct came within the statutory policy of Insurance Code section 533 that an individual should not be exempt from the consequences of his intentional wrongdoing. For the purpose of the statute, we see no significant distinction between conduct involving an actual intention to kill and conduct involving a “high probability” of the victim’s death, performed with “a base antisocial purpose and with wanton disregard for human life.”[1]
As we conclude that coverage is excluded under Insurance Code section 533, we do not reach the issues presented by the exclusionary provisions of the insurance policy itself.
1 Studley vigorously argues that the case is governed by a line of decisions dealing with insurance coverage of damage caused by two or more concurrent causes. (E.g., Garvey v. State Farm Fire & Casualty Co. (1989) 48 Cal.3d 395 [ 257 Cal.Rptr. 292 , 770 P.2d 704 ].) Her theory is that the insured’s conduct can be divided into two parts—an intentional assault and an accidental firing—and the latter was covered by the insurance policy. This interpretation of the facts is inconsistent with the finding of implied malice, which attributes intentionality to the killing itself, not merely to the preliminary assault.
Studley advances three theories to avoid the obvious conclusion that the stipulation did not affect FIE. First she contends that condition 9d of the policy, providing that it would be bound by judgments against an insured, obliged FIE to respect the settlement. But this provision must be read in the context of other policy provisions stating that the insurer would indemnify only for damages “which the insured is legally liable to pay," that it reserved the right to control settlement negotiations, and that the insured’s rights under the contract could not be assigned without its consent. The policy plainly did not give the insured the power to subject the insurer to liability. Secondly, she contends that FIE is bound to the stipulation under Code of Civil Procedure section 1908 as a nonparty controlling the proceedings. But the trial court found that FIE did not exert the control required by Code of Civil Procedure section 1908, and we find substantial evidence in support of this finding. Thirdly, citing Casa de Valley View Owner’s Assn. v. Stevenson (1985) 167 Cal.App.3d 1182 [ 213 Cal.Rptr. 790 ], she argues that FIE is bound by the settlement presented to the court because of its participation in the settlement hearing. The Casa de Valley View decision, however, concerned an effort of two nonparties to rescind a stipulation. As the trial court found, FIE here “entered into no stipulation it later attempted to rescind >5
2 We note that, during the pendency of this appeal, the stipulation was reduced to judgment at defendant’s request and over Studley’s opposition. While this dispels any suggestion of collusion, it does not affect our analysis.
Stein, J., concurred.
Appellant’s petition for review by the Supreme Court was denied August 21, 1991.
Cases cited
- People v. Dellinger 49 Cal.3d 1212 p. 458
- Nuffer v. Insurance Co. of North America 236 Cal.App.2d 349 at 356 p. 458
- Congregation of Rodef Sholom of Marin v. American Motorists Insurance 91 Cal.App.3d 690 at 697 p. 458
- Tomerlin v. Canadian Indemnity Co. 61 Cal.2d 638 at 648 p. 458
- Clemmer v. Hartford Insurance 22 Cal.3d 865 at 880, at 887 p. 459
- Evans v. Pacific Indemnity Co. 49 Cal.App.3d 537 at 541-542 p. 459
- State Farm Mutual Automobile Insurance v. Partridge 10 Cal.3d 94 at 102 p. 459
- Allstate Insurance v. Overton 160 Cal.App.3d 843 at 849 p. 459
- Peterson v. Superior Court 31 Cal.3d 147 at 158 p. 459
- Gray v. Zurich Insurance 65 Cal.2d 263 at 273, at 279 p. 459, p. 460
- Fire Insurance Exchange v. Abbott 204 Cal.App.3d 1012 at 1019-1021 p. 459
- Carlyle v. Stevenson 167 Cal.App.3d 1182 p. 460