Gonzalez v. Fire Insurance Exchange

Opinion

Plaintiff Jessica Gonzalez alleged she was sexually assaulted in 2007 by Stephen Rebagliati and nine other members of the De Anza College baseball team. A year later, Gonzalez filed a civil lawsuit against her purported assailants. Rebagliati sought insurance coverage for his defense against Gonzalez’s claims through his parents’ homeowners and personal umbrella policies, issued by respondents Fire Insurance Exchange (Fire) and Truck Insurance Exchange (Truck). Both companies denied coverage. Eventually, Rebagliati settled with Gonzalez, assigning Gonzalez his rights against Fire and Truck. Gonzalez subsequently filed a complaint against the insurers for breach of the duty of good faith and fair dealing and breach of contract. She also sought recovery of judgment pursuant to Insurance Code section 11580. Fire and Truck moved for summary judgment, arguing they had not owed Rebagliati a duty to defend. The trial court granted their motion for summary judgment.

Factual and Procedural Background

Gonzalez’s Civil Lawsuit Against Rebagliati

On March 3, 2008, Gonzalez filed a civil lawsuit against Rebagliati and nine other individuals. Her complaint contained multiple preliminary allegations that were incorporated by reference in all of her causes of action. These allegations included the following; On March 3, 2007, Gonzalez, who was 17 years old at the time, was invited to a party held by several members of the De Anza College baseball team, including Rebagliati. Upon her arrival, she was given shots of hard liquor in quick succession. Later that night, she was assaulted by an unknown number of men as she lay unconscious in a room. Three women who witnessed the assault attempted to help her but were prevented by men inside the room. Gonzalez’s complaint alleged that Rebagliati, along with several other named defendants, was inside the room where she was assaulted. Eventually, the women broke through the doors and helped Gonzalez to a hospital where she received medical attention. Some of the men in the room took videos, photographs, and cheered while the assault took place.

In total, the complaint alleged 15 causes of action, including causes of action for negligence for failing to rescue Gonzalez from the assault, negligence for inviting her to the party, negligence for serving her alcohol, false imprisonment, invasion of privacy, slander per se, battery, sexual battery, rape, unlawful intercourse, forcible acts, oral copulation, and conspiracy. Her cause of action for slander per se alleged that in the subsequent days and months following the party the defendants had told others that she had consented to the sexual assault. All of the causes of action were pleaded as to Rebagliati “and/or each” of the other named defendants, except for a single cause of action for negligence alleged against Stephen Rebagliati.

Rebagliati was covered by a homeowners policy issued by Fire. The policy contained the following agreement: “We pay those damages which an insured becomes legally obligated to pay because of bodily injury, property damage or personal injury resulting from an occurrence to which this coverage applies. Personal injury means any injury arising from: [¶] (1) false arrest, imprisonment, malicious prosecution and detention, [¶] (2) wrongful eviction, entry, invasion of rights of privacy. [(J[] (3) libel, slander, defamation of character. ['][] (4) discrimination because of race, color, religion or national origin. Liability prohibited by law is excluded. Fines and penalties imposed by law are covered. [(J[] At our expense and with attorneys of our choice, we will defend an insured against any covered claim or suit.” (Boldface omitted.)

As defined by the policy, “[ojccurrence means an accident including exposure to conditions which results during the policy period in bodily injury or property damage. Repeated or continuous exposure to the same general conditions is considered to be one occurrence. ['][] Occurrence does not include accidents or events which take place during the policy period which do not result in bodily injury or property damage until after the policy period.” (Boldface omitted.)

The Fire policy set forth certain exclusions. It specifically provided exclusions for “bodily injury, property damage or personal injury . . . caused intentionally by or at the discretion of an insured” or that resulted “from any occurrence caused by an intentional act of any insured where the results are reasonably foreseeable.”

The policy also stated it would not “cover actual or alleged injury or medical expenses caused by or arising out of the actual, alleged, or threatened molestation of a child by: [¶] 1. any insured; or [¶] 2. any employee of any insured; or [][] 3. any volunteer, person for hire, or any other person who is acting or who appears to be acting on behalf of any insured.” (Boldface omitted.)

Additionally, the policy excluded coverage for personal injury “caused by a violation of penal law or ordinance committed by or with the knowledge or consent of any insured.”

The Truck Umbrella Policy

Truck issued an umbrella insurance policy covering Rebagliati, which listed the Fire homeowners policy on its schedule of underlying insurance. Truck’s coverage policy stated it would pay damages resulting from an

“Bodily injury” was defined as “bodily harm to, sickness or disease of any person. This includes death, shock, mental anguish or mental injury that result from such bodily harm, sickness or disease.” “Personal injury” was defined as injury arising out of several enumerated torts, including “a. false arrest, wrongful detention or imprisonment, or malicious prosecution; [(j[] b. wrongful eviction, wrongful entry, or invasion of the right of private occupancy; or [¶] c. libel, slander, defamation of character or invasion of privacy.”

The Truck policy stated “[i]f a claim is made or suit is brought for damages excluded from coverage under this policy, we have no obligation to defend such claim or suit. If underlying insurance does not cover damages covered by this policy, we will: [1] . . . defend the insured against any covered claim or suit.”

The policy included exclusions similar to those set forth in the Fire policy. The Truck policy excluded damages “[e]ither expected or intended from the standpoint of an insured.” The policy also excluded damages “[ajrising out of corporal punishment, molestation or abuse of any person by any” insured individual. It also excluded coverage for “personal injury arising out of oral or written publication of material when a willful violation of a penal statute or ordinance has been committed by or with the consent of the insured.”

Fire and Truck’s Denial of Coverage

On June 19, 2008, Rebagliati’s father sent a copy of the complaint filed by Gonzalez to Farmers Insurance. Lisa Le, a special general adjuster for Fire and Truck, was assigned Rebagliati’s claim. Le pulled copies of the Fire and Truck policies and consulted with coverage counsel.

On July 30, 2008, Le wrote to Rebagliati’s attorney, denying coverage for Rebagliati’s defense on the grounds that “(1) none of the alleged conduct was the result of an ‘accident’ and thus, there was no ‘occurrence’ as required by the [Fire] Homeowners Policy; (2) all of the claims were excluded by the [Fire] Policy’s Sexual Molestation Exclusion because they were all inextricably intertwined with the actual, alleged, or threatened sexual misconduct,

We review the trial court’s grant of summary judgment under a de nova standard of review. (Monticello Ins. Co. v. Essex Ins. Co. (2008) 162 Cal.App.4th 1376 , 1385 [ 76 Cal.Rptr.3d 848 ].) Summary judgment is granted if all the moving papers show there is no triable issue of any material facts, and the moving party is entitled to judgment as a matter of law. (Code Civ. Proc., § 437c, subd. (c).) Defendants are entitled to summary judgment if a necessary element of the plaintiff’s complaint cannot be established or if there is a complete defense to the plaintiff’s cause of action. (Id., subd. (o)(2).) In reviewing a grant of summary judgment in favor of the defendant, as in this situation, we must review the entire record de nova and determine whether the defendant “ ‘conclusively negated a necessary element of the plaintiff’s case or demonstrated that under no hypothesis is there a material issue of fact that requires the process of trial.’ ” (WYDA Associates v. Merner (1996) 42 Cal.App.4th 1702 , 1709 [ 50 Cal.Rptr.2d 323 ].)

Discussion

Gonzalez contends the trial court erred in granting summary judgment in favor of Fire and Truck, because the insurers erroneously refused to defend Rebagliati against the claims asserted in her civil complaint. Whether there was a duty to defend hinges upon the language of the insurance policies in question. Since Rebagliati was covered by two different policies (the homeowners insurance policy issued by Fire and the umbrella insurance policy issued by Track) that do not have identical provisions, we will analyze the insurers’ duty to defend separately.

1. Legal Framework

“ ‘[A] liability insurer owes a broad duty to defend its insured against claims that create a potential for indemnity.’ ” (Quan v. Truck Ins. Exchange (1998) 67 Cal.App.4th 583 , 590 [ 79 Cal.Rptr.2d 134 ] (Quan).) “ ‘ “[T]he carrier must defend a suit which potentially seeks damages within the coverage of the policy.” [Citation.] Implicit in this rule is the principle that the duty to defend is broader than the duty to indemnify; an insurer may owe a duty to defend its insured in an action in which no damages ultimately are awarded. [Citations.]’ [Citation.] ‘The determination whether the insurer owes a duty to defend usually is made in the first instance by comparing the allegations of the complaint with the terms of the policy. Facts extrinsic to the complaint also give rise to a duty to defend when they reveal the possibility that the claim may be covered by the policy.’ ” (Id. at p. 591.)

This legal framework shapes a party’s burden when seeking summary judgment. (Vann v. Travelers Companies (1995) 39 Cal.App.4th 1610 , 1614

“The Montrose court reiterated . . . that ‘ “the insurer need not defend if the third party complaint can by no conceivable theory raise a single issue which could bring it within the policy coverage.” ’ [Citations.] [¶] Nevertheless, the obligation to defend is not without limits. ‘Rather, such a duty is limited by “the nature and kind of risk covered by the policy.” ’ [Citations.] ‘ “[T]he duty to defend derives from the insurer’s coverage obligations assumed under the insurance contract.” [Citation.] Thus, “where there is no potential for coverage, there is no duty to defend.” ’ ” (Quan, supra, 67 Cal.App.4th at pp. 591-592, fn. omitted.)

A complaint is to be liberally construed in favor of potential coverage. (Waller v. Truck Ins. Exchange, Inc. (1995) 11 Cal.4th 1 , 23, 44 [ 44 Cal.Rptr.2d 370 , 900 P.2d 619 ].) “Since pleadings are easily amended, the proper focus is on the facts alleged, rather than the theories for recovery. [Citation.] However, the insured ‘ “may not speculate about unpled third party claims to manufacture coverage” ’ [citation], and the insurer has no duty to defend where the potential for liability is ‘ “tenuous and farfetched.” ’ [Citation.] The ultimate question is whether the facts alleged ‘fairly apprise’ the insurer that the suit is upon a covered claim.” (Michaelian v. State Comp. Ins. Fund (1996) 50 Cal.App.4th 1093 , 1106 [ 58 Cal.Rptr.2d 133 ].)

“[W]hen an insurer seeks summary judgment on the ground the claim is excluded, the burden is on the insurer to prove that the claim falls within an exclusion.” (Brodkin v. State Farm Fire & Casualty Co. (1989) 217 Cal.App.3d 210 , 216 [ 265 Cal.Rptr. 710 ].) In contrast, “[a]n insured has the burden of proving its claim falls within the scope of the policy’s basic coverage, even where the insurer brings a motion for summary judgment.” (Roberts v. Assurance Co. of America (2008) 163 Cal.App.4th 1398 , 1407 [ 78 Cal.Rptr.3d 361 ].)

“In determining whether a duty to defend exists, courts look to all the facts available to the insurer at the time the insured tenders its claim for a

The Second Appellate District noted the insurance policy in question unequivocally defined an “occurrence” as an “accident.” (Lyons, supra, 161 Cal.App.4th at p. 887.) “The clause that Lyons focuses upon — ‘which results during the policy period in bodily injury or property damage’ — merely imposes an additional temporal limitation on bodily • injury and property damage, to the effect that any resulting injuries must occur within the policy period. By contrast, although the personal injury coverage is also limited to accidents, it has no temporal limitation. Rather, the specified personal injury torts are covered so long as they involve accidents committed during the policy period, regardless of whether the injury occurred during or after the policy period. Indeed, this is a timing distinction that is well recognized in insurance policies.” (Ibid.)

The court further concluded that Lyons’s interpretation of the policy would “remove a necessary element of the policy’s basic coverage grant, and thus result in improperly rewriting the clear language of the contract. [Citations.] Also, such a reading would be contrary to the rule that all words in a contract are to be given meaning (see Civ. Code, § 1641), with the language in the contract ‘interpreted as a whole.’ ” (Lyons, supra, 161 Cal.App.4th at p. 886.) The court therefore found that an “occurrence” was defined as an “accident,” a definition that applied to bodily injury, property damage, and personal injury. (Id. at pp. 886-887.)

Gonzalez contends the Lyons decision is flawed because it ignored the language in the policy that provided an occurrence “does not include accidents or events” that take place during the policy period that do not result in bodily injury or property damage. We disagree, and find the reasoning in Lyons persuasive. Gonzalez’s interpretation of the policy language misreads the terms. The policy language indicating that an occurrence “does not include” certain “accidents or events” does not mean that an occurrence does include both accidents and events. Given our conclusion that the Fire policy only requires the company to indemnify — and therefore defend— “occurrences,” which are defined as accidents, we turn next to Gonzalez’s contention that her complaint alleged covered accidental acts.

b. Duty to Defend “Accidental” Acts of the Insured

Gonzalez contends her complaint against Rebagliati broadly alleged negligent and accidental conduct that raised the potential for coverage under the

In Quan, the Second Appellate District contemplated a similar issue after a trial court sustained an insurance company’s demurrer to an insured’s complaint alleging causes of action for bad faith. (Quan, supra, 67 Cal.App.4th at pp. 586-587.) The underlying complaint alleged the insured assaulted and raped the claimant, and also alleged causes of action for negligence and negligent infliction of emotional distress. (Id. at p. 593.)

The Quan court noted “[i]t is common to hear the argument that if the underlying complaint alleges negligence, there must be a duty to defend. This is not necessarily true. The duty to defend depends upon the coverage provided by the policy — the ‘nature and kind of risk covered’ — which in turn depends upon the wording of the coverage clauses.” (Quan, supra, 67 Cal.App.4th at p. 595.) The Quan court determined the insurance policy’s coverage of bodily injuries was restricted to damages arising from an “occurrence,” which was defined as an “accident.” (Ibid.) The court further explained that “[t]o avoid the consequences of the conclusion that no ‘accident’ has been alleged, the insured argues he might be found merely ‘negligent,’ or may be found to have mistakenly believed the claimant had ‘consented.’ ” (Id. at p. 596.)

The Second Appellate District rejected this argument, noting there was a “ ‘misapprehension that all claims for negligence must at least potentially come within the policy and therefore give rise to a duty to defend. That is not so. . . . “Negligent” and “accidental” are not synonymous ....’” (Quan, supra, 67 Cal.App.4th at p. 596, quoting American Internat. Bank v. Fidelity & Deposit Co. (1996) 49 Cal.App.4th 1558 , 1572-1573 [ 57 Cal.Rptr.2d 567 ].) “ ‘An accident... is never present when the insured performs a deliberate act unless some additional, unexpected, independent, and unforeseen happening occurs that produces the damage.’ ” (Quan, supra, at p. 598, italics omitted, quoting Merced Mutual Ins. Co. v. Mendez (1989) 213 Cal.App.3d 41 , 50 [ 261 Cal.Rptr. 273 ].) Intentional acts are not accidents, even if the act causes unintended harm. (Quan, supra, at p. 600.)

Importantly, “coverage turns not on ‘the technical legal cause of action pleaded by the third party’ but on the ‘facts alleged in the underlying complaint’ or otherwise known to the insurer. (Barnett v. Fireman’s Fund Ins. Co. [(2001)] 90 Cal.App.4th [500,] 510 [ 108 Cal.Rptr.2d 657 ], italics added.) A general boilerplate pleading of ‘negligence’ adds nothing to a complaint otherwise devoid of facts giving rise to a potential for covered liability. (See Michaelian v. State Comp. Ins. Fund[, supra,] 50 Cal.App.4th 1093 , 1107 [ 58 Cal.Rptr.2d 133 ] . . . .)” (Swain v. California Casualty Ins. Co. (2002) 99 Cal.App.4th 1 , 8-9 [ 120 Cal.Rptr.2d 808 ].) Therefore, to determine whether Gonzalez’s complaint sufficiently alleged accidental conduct that would give rise to coverage, we must look at what acts were alleged in her complaint.

Gonzalez’s complaint simply does not allege a possibility that Rebagliati “accidentally” falsely imprisoned her based on a mistake as to the objective facts. Gonzalez’s argument that her complaint alleged the possibility that Rebagliati only committed accidental acts — such as mistakenly blocking her exit — is not asserted in her underlying complaint, which plainly alleged Rebagliati and the other men in the room engaged in intentional acts. Gonzalez’s attempt to parse out the complaint for accidental conduct that may give rise to coverage is unavailing; the entirety of her allegations involved intentional conduct.

Gonzalez appears to assert that her complaint could be hypothetically construed to state a claim regarding accidental conduct. However, this argument is not based on any facts alleged in her complaint, and “[a]n insured may not trigger the duty to defend by speculating about extraneous ‘facts’ regarding potential liability or ways in which the third party claimant might amend its complaint at some future date.” (Gunderson v. Fire Ins. Exchange (1995) 37 Cal.App.4th 1106 , 1114 [ 44 Cal.Rptr.2d 272 ].)

In sum, Gonzalez has failed to carry her burden to show any of her causes of action may fall within the scope of the policy coverage. (Montrose Chemical Corp. v. Superior Court, supra, 6 Cal.4th at p. 300.) Accordingly, the trial court did not err in granting Fire’s motion for summary judgment. Based on our foregoing conclusion, we need not address whether the alleged causes of action would have fallen within the Fire policy’s exclusions for child molestation and intentional conduct.

3. The Truck Umbrella Policy

a. Personal Injury Coverage

Next, Gonzalez insists the court erred in granting summary judgment in favor of Truck because its umbrella policy provided broader coverage than the Fire homeowners insurance policy. Specifically, she argues the umbrella policy’s definition of “personal injury” did not require covered incidents to be “accidental” in nature. Given the wording of the policy’s definitions, we agree.

The Truck policy provided coverage for “damages caused by an occurrence in excess of the retained limit on the insured’s behalf,” and stated the company would “defend any insured for any claim or suit that is covered by this insurance but not covered by other insurance.” The policy further asserted that “[i]f a claim or suit is made for damages excluded from coverage under this policy, we have no obligation to defend such claim or suit.”

Gonzalez points to the policy’s definition of an “occurrence”: “Occurrence means: [(J[] a. with regard to bodily injury or property damage, an accident, including continuous or repeated exposure to substantially the same general harmful conditions, which results in bodily injury or property damage during the policy period; or H] b. with regard to personal injury, offenses committed during the policy period, even if the resulting injury takes place after the policy expires.” (Italics added.) “Personal Injury” is defined under the policy

Accordingly, the Truck umbrella policy sets forth no requirement that a personal injury arise out of an “accident” in order for there to be coverage. As a result, Gonzalez’s complaint, which alleged causes of action for false imprisonment, slander per se, and invasion of privacy, raised the potential for coverage under the umbrella policy’s provision providing coverage for damages from an “occurrence” resulting in “personal injury.”

b. Exclusions

Finding that Gonzalez’s complaint raised the potential for personal injury coverage, we next turn to Truck’s claim that coverage would have been properly denied under the policy’s exclusions for damages that are “[ejither expected or intended from the standpoint of an insured,” arise “out of corporal punishment, molestation or abuse of any person by any” insured, or arise “out of oral or written publication of material when a willful violation of a penal statute or ordinance has been committed by or with the consent of the insured.”

Determining whether an exclusion applies is unlike our earlier analysis of the Fire policy, which centered on the initial question of coverage. Here we are faced with an issue of exclusion. While an insured bears the initial burden to demonstrate a claim may be covered by a policy, when it comes to exclusions the burden is switched. It is up to the insurer to conclusively show an exclusion to the policy applies barring coverage. (Atlantic Mutual Ins. Co. v. J. Lamb, Inc. (2002) 100 Cal.App.4th 1017 , 1034 [ 123 Cal.Rptr.2d 256 ] [“Once that possibility of coverage has been raised . . . then the insurer may defeat such claim of coverage by extrinsic evidence, but only where ‘ “such evidence presents undisputed facts which conclusively eliminate a potential for liability.” ’ ”].) “First- and third party coverage is today typically provided in a single policy, and under both types of coverage, once the insured shows that an event falls within the scope of basic coverage under the policy, the burden is on the insurer to prove a claim is specifically excluded. [Citations.] Moreover, exclusionary clauses are interpreted narrowly, whereas clauses identifying coverage are interpreted broadly.” (Garvey v. State Farm Fire & Casualty Co. (1989) 48 Cal.3d 395 , 406 [ 257 Cal.Rptr. 292 , 770 P.2d 704 ].)

Therefore, our analysis is focused on whether Truck met its burden to establish that all of Gonzalez’s claims were excluded from coverage. (See

Sexual Molestation Exclusion

From the face of the complaint, it is clear that some of Gonzalez’s claims would be excluded from coverage as arising from sexual molestation by the insured. For example, Gonzalez’s causes of action for battery and unlawful intercourse, which alleged the defendants engaged in sexual intercourse with her without her consent, would be excluded. Rebagliati’s liability for damages would necessarily have arisen from his acts of molestation.

However, whether the sexual molestation exclusion bars coverage of Gonzalez’s other claims is not quite as clear. The Truck policy excludes coverage for damages resulting from any acts of “molestation” by the insured (Rebagliati), an employee of any insured, or by a person performing volunteer services on behalf of an insured, or any other person who is acting or who appears to be acting on behalf of an insured. Gonzalez’s complaint was pleaded using the disjunctive “and/or,” specifically alleging that Rebagliati “and/or each” of the defendants caused her injury. Therefore, her complaint raised the possibility that the other defendants — and perhaps not Rebagliati— committed the physical act of assaulting Gonzalez.

In fact, her complaint suggests the possibility that Rebagliati may not have engaged in the sexual assault, but was present in the room while the assault took place and may have thereafter disparaged Gonzalez’s reputation by slandering her after the incident. The complaint indicates Rebagliati may be held liable for damages resulting from his alleged slander, false imprisonment, or invasion of Gonzalez’s privacy arising from molestation undertaken by the other named defendants in the civil lawsuit. Therefore, the sexual molestation exclusion does not necessarily apply, because it only excludes coverage for damages arising from an act of molestation by the insured, an individual acting on behalf of the insured, an individual performing volunteer services on behalf of an insured, or an employee of an insured. There is no evidence the other defendants acted on behalf of Rebagliati such that their molestation of Gonzalez would fall under this exclusion.

In the trial court the insurers asserted that there was no possibility that any damages could arise out of a covered occurrence because Rebagliati later admitted to touching Gonzalez at the party. However, there is nothing to indicate this fact was known to the insurance company at the time Rebagliati tendered his defense. In a declaration submitted by Gonzalez to the trial court, Rebagliati’s attorney asserted his client denied responsibility and

Notably, the insurance companies’ declarations in support of their motion for summary judgment assert an investigation was conducted into Rebagliati’s claim before he was denied coverage. However, the companies failed to attach any documents detailing the results of this investigation, and the letter denying Rebagliati coverage relied solely on comparing the allegations of the complaint against the language of the policies. Perhaps there was extrinsic evidence known to Truck that affirmatively showed Rebagliati engaged in the sexual assault, thereby excluding coverage for all of Gonzalez’s claims and foreclosing any duty to defend. Nonetheless, no evidence of this type was submitted to the trial court. Therefore, Truck has failed to meet its burden to conclusively show the policy’s exclusion for damages incurred from molestation by the insured would have precluded coverage for all claims.

Expected or Intended Damages

Next, we examine whether the policy’s exclusion for damages that are “[ejither expected or intended from the standpoint of an insured” obviate Truck’s duty to defend. Indeed, Insurance Code section 533 provides a statutory exclusion that “[a]n insurer is not liable for a loss caused by the willful act of the insured; but he is not exonerated by the negligence of the insured, or of the insured’s agents or others.” Courts have held that “[t]he appropriate test for ‘expected’ damage is whether the insured knew or believed its conduct was substantially certain or highly likely to result in that kind of damage.” (Shell Oil Co. v. Winterthur Swiss Ins. Co. (1993) 12 Cal.App.4th 715 , 748 [ 15 Cal.Rptr.2d 815 ].) “ ‘[E]yen an act which is “intentional” or “willful” within the meaning of traditional tort principles will not exonerate the insurer from liability under Insurance Code section 533 unless it is done with a “preconceived design to inflict injury.” ’ ” (Republic Indemnity Co. v. Superior Court (1990) 224 Cal.App.3d 492 , 500-501 [ 273 Cal.Rptr. 331 ].) Therefore, it is the insured’s subjective belief as to whether his or her conduct would cause the type of damage claimed that excludes coverage.

Since Rebagliati denied any wrongdoing at the time of tender and because Truck has not submitted any evidence to the contrary, we cannot find that the insurer has met its burden on this exclusion. Based on the complaint, Rebagliati could have been found liable for damages incurred by Gonzalez

c. Inseparably Intertwined with Sexual Acts

Fire and Truck also broadly claim that the allegations in Gonzalez’s complaint, including her causes of action for negligence and slander, were inseparably intertwined with the underlying sexual assault and should therefore be excluded from coverage on that basis.

In part, the insurers cite to Horace Mann Ins. Co. v. Barbara B. (1993) 4 Cal.4th 1076 [ 17 Cal.Rptr.2d 210 , 846 P.2d 792 ] (Horace Mann). Horace Mann considered whether an insurance carrier was required to defend its insured, a teacher, under an educator’s liability policy after a minor student filed an action seeking damages stemming from the teacher’s alleged sexual and nonsexual misconduct. (Id. at p. 1078.) Earlier, the teacher had pleaded nolo contendere in a separate criminal case to a count of violating Penal Code section 288, subdivision (a). (Horace Mann, supra, at p. 1079.) The insurance company accepted tender of the teacher’s defense of the minor’s suit, reserving its rights to disclaim coverage or an obligation to defend. Thereafter, the insurance company filed a declaratory relief action seeking a determination of its duty to defend. (Id. at p. 1080.) The insurance company moved for summary judgment, arguing its policy did not provide coverage as a matter of law, because the teacher’s conduct was intentional within the meaning of Insurance Code section 533 and was unrelated to educational activities. (Horace Mann, supra, at p. 1080.) The trial court granted the motion, concluding that all of the teacher’s acts were either sexual or intentional, and entered judgment in favor of the insurance company. The appellate court affirmed, and our Supreme Court reversed. (Id. at p. 1081.)

The Horace Mann court noted that it had previously decided that a liability insurer does not possess “a duty to indemnify an insured in an action for damages arising out of child molestation” in J. C. Penney Casualty Ins. Co. v. M. K. (1991) 52 Cal.3d 1009 [ 278 Cal.Rptr. 64 , 804 P.2d 689 ]. (Horace Mann, supra, 4 Cal.4th at p. 1081.) However, the court determined “the flaw in [the insurance company’s] reasoning is its unsupported assumption that the other alleged misconduct necessarily was part of the molestation and not in the course of [the teacher’s] educational activities.” (Id. at p. 1082.) At the time of the summary adjudication proceeding, the teacher had admitted violating Penal Code section 288, thereby establishing at least one act of sexual misconduct that would be excluded from policy coverage. (Horace Mann,

The Horace Mann court underscored that this was so even if the admitted molestation was the “ ‘dominant factor’ ” in the case. (Horace Mann, supra, 4 Cal.4th at p. 1084.) Nonetheless, the court also reiterated that there may be cases where a plaintiff’s allegations of molestation are “inseparably intertwined,” eliminating the duty to defend. (Id. at p. 1085.)

Many appellate courts have distinguished the unique factual circumstances presented in Horace Mann and have determined insurers have no duty to defend certain claims involving sexual assault or molestation. For example, in Coit Drapery Cleaners, Inc. v. Sequoia Ins. Co. (1993) 14 Cal.App.4th 1595 [ 18 Cal.Rptr.2d 692 ] (Coit), the appellate court concluded that a defendant in a sexual harassment case was properly denied insurance coverage because the alleged incidents were intentional in nature and barred under Insurance Code section 533. (Coit, supra, at p. 1599.) Coit concluded that unlike the allegations of negligence in Horace Mann, the case at bench presented a clear picture that “the conduct of the defendants was inseparably intentional” and was “part of a consistent course of sexual harassment of an unconsenting victim, in an employment setting.” (Id. at p. 1608.) Furthermore, the harassed employee did not allege a claim for negligent supervision, and no claim of negligence could have been supported based on the facts. (Id. at p. 1609.)

Fire and Truck also argue that a case from this court, State Farm Fire & Casualty Co. v. Century Indemnity Co. (1997) 59 Cal.App.4th 648 , 662 [ 69 Cal.Rptr.2d 403 ] (State Farm Fire), stands for the proposition that there is no duty to defend when sexual and nonsexual claims overlap. In State Farm Fire, three former students sued four teachers and a school district, alleging that one of the teachers sexually molested them, and the other defendant teachers failed to report the offending teacher to the proper authorities. (Id. at p. 652.) The teacher accused of molestation tendered his defense to the district’s insurer, and the insurer declined to defend. Thereafter, the teacher tendered his defense to State Farm Fire, which accepted the defense under the teacher’s homeowners policy. (Ibid.) State Farm Fire thereafter filed suit against the district’s insurer to recover the cost of defending the teacher. The trial court granted summary judgment in favor of State Farm Fire, and this court reversed. (Ibid.)

Similarly, in Jane D. v. Ordinary Mutual (1995) 32 Cal.App.4th 643 [ 38 Cal.Rptr.2d 131 ] (Jane D.), the Third Appellate District considered a case where a plaintiff brought suit against a priest, alleging the priest had induced her into having sexual relations after she sought counseling from him when she was only 15 years old. (Id. at p. 645.) The priest did not oppose the plaintiff’s lawsuit and the plaintiff obtained a default judgment against him. Thereafter, the plaintiff brought an action against the defendant insurance company, seeking a declaration that the priest was covered by the policy and the company was therefore obligated to pay the full policy limit in satisfaction of the default judgment against the priest. (Id. at p. 646.)

The policy at issue provided insurance coverage for bodily injury and property damage, and “ ‘persons insured’ ” was defined as employees acting within the scope of their employment. (Jane D., supra, 32 Cal.App.4th at p. 646.) The “named insured” was the diocese. (Ibid.) The policy provided exclusions for “ ‘licentious, immoral or sexual behavior intended to lead to or culminating in any sexual act.’ ” (Id. at p. 647.) The policy also provided a sexual misconduct endorsement, which provided the insurance company would pay a maximum of $1 million on behalf of the named insureds for damages due to “ ‘any claim made against such Named Insureds arising out of sexual misconduct, sexual abuse, sexual harassment or sexual molestation of or by any person,’ subject to certain conditions. It also provided: ‘No other endorsement to the policy is intended to provide coverage for any claims concerning sexual misconduct, sexual abuse, sexual harassment, or sexual molestation of or by any person.’ ” (Ibid.) On a motion for summary judgment, the trial court determined the accused priest was not a “named insured” under the policy and entered judgment in favor of the defendant insurance company. (Id. at p. 648.)

We disagree with the insurers that these cases set forth a blanket rule that if a cause of action is related to sexual molestation it must be excluded from insurance coverage. This interpretation would gloss over the finer nuances of the law governing an insurer’s duty to defend. For example, Horace Mann reiterated that “[i]f the parties to a declaratory relief action dispute whether the insured’s alleged misconduct should be viewed as essentially a part of a proven sexual molestation, or instead as independent of it and so potentially within the policy coverage, . . . then factual issues exist precluding summary judgment in the insurer’s favor. Indeed, the duty to defend is then established . . . .” (Horace Mann, supra, 4 Cal.4th at p. 1085.)

Unlike the scenarios contemplated in Jane D. and Coit, Gonzalez’s complaint did not necessarily set forth allegations that were inseparably intertwined with Rebagliati’s purported sexual assault. The aforementioned cases involved only one defendant, with causes of actions based upon the one defendant’s alleged acts. Here, Gonzalez’s complaint raised the possibility that other individuals — and not Rebagliati — perpetrated the assault. Perhaps if it was known to Truck that Rebagliati had admitted to the molestation, any cause of action for slander based on the assault might have “arisen” out of his molestation of Gonzalez and would therefore be properly excluded from coverage. However, we have no such admission before us here; therefore, we decline to address whether all of Gonzalez’s claims would necessarily be inseparably intertwined with the underlying sexual molestation and would therefore be subject to exclusion on that ground.

Furthermore, in Horace Mann, Coit, and Jane D., the underlying molestation allegations were either admitted by the accused or otherwise proved by extrinsic evidence. Here the insurers have not demonstrated they had conclusive proof that molestation by their insured, Rebagliati, occurred prior to refusing the defense. Nor did Rebagliati admit he committed any of the alleged acts prior to tendering his defense.

The insurers argue that Rebagliati’s denial of wrongdoing is irrelevant to determine coverage. We agree, as it is the facts alleged in the complaint, and