The Ninth Circuit has certified a question to the California Supreme Court regarding a policy's severability-of-interests clause. See Minkler v. Safeco Ins. Co., No. 07-56689 (9th Cir. April 8, 2009) [here].
Minkler sued Betty Schwartz and her son, David, who allegedly molested Minkler over a period of years while serving as Minkler's little league coach. Minkler asserted multiple causes of action against David and sued Betty for negligent supervision, alleging David molested Minkler in Betty's home with Betty's knowledge.
Betty sought a defense under her homeowner's policy with Safeco. The policy excluded coverage for intentional acts. The policy also had a severability-of-interests clause providing, "This insurance applies separately to each insured. This condition will not increase our limit of liability for any one occurrence." Safeco refused to defend both Betty and David based on the intentional acts exclusion. Betty entered a settlement with Minkler and assigned her claims against Safeco to Minkler.
Minkler then sued Safeco. Minkler contended the severability-of-interests clause excepted Betty's coverage from the exclusion either expressly or because the policy was ambiguous. The district court dismissed the suit.
On appeal, the Ninth Circuit certified the following issue to the California Supreme Court:
Where a contract of liability insurance covering multiple insureds contains a severability-of-interests clause in the "Conditions" section of the policy, does an exclusion barring coverage for injuries arising out of the intentional acts of "an insured" bar coverage for claims that one insured negligently failed to prevent the intentional acts of another insured?
The Ninth Circuit noted the California Supreme Court had never addressed this issue, which was of exceptional importance. To date, the California Supreme Court has not acted on the petition.
