Appeal from the United States District Court for the Western District of Pennsylvania. D.C. Docket No. 89-00421.
Before: Hutchinson, Scirica, and Rosenn, Circuit Judges.
In this diversity case, we are called upon to predict whether Pennsylvania law would obligate an insurer under its homeowner's insurance policy to provide coverage for damages incurred by an insured in the sexual molestation of his minor niece. Prior to the commencement of the present action, the insured, Floyd Wiley, Jr. (Floyd), pled guilty in 1988 in a state court of Pennsylvania to one count of indecent assault and one count of corrupting the morals of the minor.
The plaintiffs, Dennis and Elaine Wiley, as parents and next of friend of the minor (the Wileys), citizens of the State of Ohio, then filed the instant civil suit against Floyd, a citizen of Pennsylvania, in the United States District Court for the Western District of Pennsylvania to recover money damages for bodily harm resulting from their daughter's molestation in 1986. The complaint alleged negligent infliction of personal injury, as well as intentional tort.
Floyd tendered defense of the civil action to State Farm Fire and Casualty Co. (State Farm) under the homeowner's policy it issued to him. State Farm accepted the defense subject to a reservation of rights to contest coverage on the ground that Floyd's conduct fell within a standard homeowner's policy coverage exclusion for bodily injury "intended or expected" by an insured (the intended harm exclusion).*fn1 The proper construction of this clause is at the heart of the insurer's defense and is the sole issue on appeal. The parties eventually stipulated to Floyd's culpability, the value of the Wileys' claim should they prevail, and the filing of a declaratory judgment action against State Farm to determine the applicability of the homeowner's policy to the Wileys' claim. Upon the filing of the declaratory judgment action, the plaintiffs dismissed the suit against Floyd.
Both parties filed motions for summary judgment. The district court denied the Wileys' motion and entered judgment granting State Farm's motion. The Wileys timely appealed. We affirm.
In July 1986, Floyd sexually molested his minor niece, then age 13, while she was a visitor at his home. It was undisputed for purposes of summary judgment that Floyd, an admitted alcoholic at the time of these incidents of sexual misconduct, was intoxicated during these episodes. Although the district court found no Pennsylvania law directly on point, it determined that courts in other jurisdictions infer an intent to harm as a matter of law from acts of child molestation and rape, which intent precludes insurance coverage. It also found that other courts consider the sexual molestation of children to be a criminal offense for which public policy precludes a claim that no harm was intended. For these reasons, the court predicted that the Pennsylvania Supreme Court would hold Floyd's sexual abuse of the minor excluded from coverage under his homeowner's policy with State Farm. Wiley v. State Farm Fire & Cas. Co., No. 89-421, slip op. at 2-4 (W.D. Pa. Feb. 24, 1992).
On appeal, the Wileys contend that the district court erred (1) in granting State Farm's motion for summary judgment because a genuine issue of material fact existed as to the intent of the insured at the time of the incidents, and (2) in finding that Pennsylvania public policy insulates the insurer from liability to victims of sexual molestation when the insured's actions are found to be criminal, regardless of the actual existence or non-existence of an intent to harm.
On appeal, the Wileys initially contend that the district court erred in granting State Farm's motion for summary judgment because a genuine issue of material fact existed as to Floyd's intent at the time of the incidents in question. To respond to this contention, we must first determine whether the Pennsylvania Supreme Court would adopt and apply the inferred intent rule when an insured asserts that he or she subjectively intended no harm to his or her victim. We must then consider whether that court would also apply the rule when an insured asserts a lack of capacity to form an intent to harm.
We review the district court's prediction of state law under a plenary standard. Compagnie des Bauxites de Guinee v. Insurance Co. of N. Am., 724 F.2d 369, 371 (3d Cir. 1983). Federal courts sitting in diversity "are required to apply the substantive law of the state whose laws govern the action." Robertson v. Allied Signal, Inc., 914 F.2d 360, 378 (3d Cir. 1990) (citing Erie R.R. Co. v. Tompkins, 304 U.S. 64, 82 L. Ed. 1188, 58 S. Ct. 817 (1938)). We must therefore turn to the substantive law of Pennsylvania to evaluate the propriety of the district court's grant of summary judgment in this case.*fn2
The Pennsylvania Supreme Court, however, has not spoken on the issues raised in this appeal. Therefore, we must predict how the state court would resolve these issues should it be called upon to do so. Id. Although our review of the district court's prediction of Pennsylvania law is plenary, in discharging our function we take into consideration the district Judge's prediction of the law of the state in which he or she sits. Compagnie des Bauxites, 724 F.2d at 371. We also examine:
(1) what the Pennsylvania Supreme Court has said in related areas;
(2) the "decisional law" of the Pennsylvania intermediate courts;
(3) federal appeals and district court cases interpreting the state law;
(4) decisions from other jurisdictions that have discussed the ...