Lyons v. Fire Insurance Exchange
Filed April 3, 2008, Second District, B196695

Denial of Claims against Intentional Act Not Covered by Insurance Sustained

The case stemmed from a complaint of sexual attack and false imprisonment made by Stacey Roy against Stephen Lyons. Stacey Roy is a client of the Fire Insurance Exchange.

According to Stacey Roy, she met Stephen Lyons while they were both vacationing with their families at a hotel in Hawaii. Lyons followed Roy to her hotel room after a poolside conversation and grabbed her by the wrist to a hallway alcove where the alleged sexual attack happened.

On the other hand, Lyons denied the allegations. As a result, Roy sued Lyons for claims relating to the alleged sexual attack, including a cause of action for false imprisonment. Lyons tendered defense of the action to Fire Insurance Exchange, but denied coverage under his homeowner’s policy because the facts did not meet the prerequisite of damages caused by an accident.

Lyons settled Roy’s claim, and sued Fire Insurance for breach of contract and bad faith for its failure to defend Roy’s action.

Consequently, Fire Insurance moved for summary judgment, arguing it owed no duty to defend because Lyons’s alleged acts were intentional, not accidental, and thus not within the policy provisions.

During hearing, the trial court granted the motion, finding that there was no possibility of coverage for grabbing Roy’s wrist because that action was not an accident, but was an intentional act. Lyons appealed.

In review, the Second District court of appeal affirmed the decision, holding that there was no possibility of coverage for Lyons’s intended act of false imprisonment because it was not an accident.

The court noted that the policy’s provision clearly defined “occurrence” as an “accident,” and applied to all coverage, bodily injury, property damage, and personal injury. Hence, the limitation applied to the personal injury torts enumerated, and false imprisonment would be covered only to the extent it was an accident.

Further, the court declared that false imprisonment is an intentional tort because it entails intentional action resulting in confinement. However, it can arise through negligence, “when the conduct resulting in confinement was intended, but the ultimate result was not because the actor was misinformed of the objective facts”.

However, in this case, the court explained, Lyons grabbed Roy’s wrist in the context of his sexual advances, although she did not consent to his actions, and his conduct restrained her. Moreover, Lyons admitted that his conduct with Roy was intentional and deliberate.

Further, the court said regardless of his misperception of Roy’s consent, Lyons intended his sexual advance and its accompanying unwanted detention that was the subject of her claim. Thus, there was no accident within the scope of the policy’s coverage for personal injury.

The Second Appellate District therefore affirmed the judgment of the trial court that coverage under a homeowners insurance policy was properly denied to an insured on the ground that the incident was “intentionally caused and therefore not an accident”.