United States District Court, D. Utah
IN THE MATTER OF JANE DOE, a minor, by and through her mother, GERI BACON, Plaintiff,
FARM BUREAU PROPERTY & CASUALTY INSURANCE COMPANY, formerly known as FARM BUREAU MUTUAL INSURANCE COMPANY, and DOES 1 through 10, inclusive, Defendants.
MEMORANDUM DECISION AND ORDER GRANTING
DEFENDANT'S MOTION FOR SUMMARY JUDGMENT
N. PARRISH, UNITED STATES DISTRICT COURT JUDGE.
the Court is Plaintiff's Motion for Partial Summary
Judgment on First Cause of Action for Breach of Contract (ECF
No. 28) and Defendant's Motion for Summary Judgment (ECF
No. 31). For the reasons set forth below, Defendant's
motion is GRANTED and Plaintiff's motion is DENIED AS
an insurance case. Plaintiff Jane Doe was sexually abused by
Neil Pace. She sued Mr. Pace for negligence, among other
things. Mr. Pace sought indemnification from his insurer,
Defendant Farm Bureau Property and Casualty Insurance Company
(“Farm Bureau”). But Farm Bureau denied coverage
on the grounds that Mr. Pace's insurance policies
excluded coverage for claims arising out of sexual abuse or
molestation. Mr. Pace paid for his own defense and settled
the lawsuit. Mr. Pace admitted to sexually abusing Jane and
agreed to submit the issue of damages to arbitration. But Mr.
Pace and Jane stipulated that Mr. Pace's personal
liability would be capped at $50, 000, despite the fact that
Mr. Pace owned over $1.5 million in assets. Simultaneously,
Mr. Pace assigned his rights under his insurance policies to
Mr. Pace nor Jane appeared at the arbitration. The arbitrator
considered a single expert report and awarded Jane $4 million
in damages. The arbitration award was reduced to $3.95
million due to a $50, 000 “credit” for the amount
that Pace had agreed to pay. The $3.95 million arbitration
award was then converted into a judgment against Pace, even
though he was personally liable for only $50, 000. Jane then
sued Farm Bureau for breach of contract and breach of the
implied covenant of good faith and fair dealing. Farm Bureau
has moved for summary judgment on the grounds that its
decision to deny coverage was proper. The Court agrees and
therefore grants Farm Bureau's motion for summary
judgment and denies as moot Jane's motion for partial
The Underlying Lawsuit
October 2008, Geri Bacon and her daughter Jane Doe began
living at the home of Neil and Alberta Pace. Between October
2008 and July 2009, Mr. Pace repeatedly engaged in lewd
conduct with Jane. When Ms. Bacon grew suspicious of Mr.
Pace's conduct, she and Jane were evicted from the Pace
19, 2012, Ms. Bacon, on behalf of Jane, filed a lawsuit
against Mr. and Mrs. Pace (the “Underlying
Lawsuit”). The complaint from the Underlying Lawsuit
(the “Underlying Complaint”) alleged three causes
of action: (1) childhood sexual abuse (against Mr. and Mrs.
Pace); (2) negligence (against Mr. and Mrs. Pace); and (3)
wrongful eviction (against Mrs. Pace). The relevant portions
of the Underlying Complaint are set forth below:
or about October, 2008, plaintiffs became tenants at a home
owned by Neil and Alberta Pace and where Neil and Alberta
Pace also resided. Between October, 2008 and July, 2009
defendant, Neil Pace, repeatedly sexually abused Jane Doe.
Defendant, Alberta Pace, had knowledge that her husband, Neil
Pace, was sexually abusing Jane Doe and assisted Neil Pace
with his acts of sexual abuse. The abuse included the showing
of child pornography, unwanted stroking, groping, grabbing,
penetrating and molesting Jane Doe in a painful and
threatening manner, with the intent to cause harm and severe
and Alberta Pace would watch Jane Doe while her mother was
away from the home. Neil Pace accomplished his sexual abuse
of plaintiff by using his position of authority over Jane Doe
to manipulate her and by emotionally and physically
intimidating her. This intimidation had a coercive effect on
plaintiff, such that she remained in great fear of Neil Pace.
or about August 1, 2007, Plaintiffs commenced living at the
home of Neil and Alberta Pace. Plaintiffs became the
Pace's tenants. Rent was paid through work Geri Bacon did
for the Pace's [sic] at their discretion. On or about
July 3, 2009, after the defendants suspected Geri Bacon may
have become suspicious of Neil Pace's conduct towards her
daughter, and in retaliation therefore [sic], the
Plaintiffs' [sic] were immediately evicted from their
tenancy at defendants [sic] home, without any cause or
notice, which required Plaintiffs to seek shelter and live in
a tent that night and thereafter.
8. As a
proximate result of the unlawful and intentional sexual abuse
of Jane Doe by defendants, she has sustained physical and
mental injuries and has incurred general pain and suffering.
9. As a
proximate result of the wrongful and retaliatory eviction by
Alberta Pace, Geri Bacon and Jane Doe have suffered emotional
distress, lost their prospective tenancy and have suffered
. . .
CAUSE OF ACTION
Sexual Abuse - All Defendants)
Plaintiffs incorporate all of the allegations in the
preceding paragraphs into their first cause of action and
further allege as follows:
Defendants' conduct was intentional and constitutes
childhood sexual abuse.
a direct and legal result of the acts of defendants, as
alleged herein, plaintiff, Jane Doe, suffered injuries
including, but not limited to, physical and mental pain and
suffering, physical injuries, past and future costs of
medical care and treatment, future loss of earning capacity,
in an amount not yet ascertained, but which exceeds the
minimum jurisdictional limits of this court.
committing the acts described herein, defendants acted with
malice, oppression and fraud, justifying an award of punitive
damages against each of them.
CAUSE OF ACTION
- All Defendants)
the landlords to Plaintiffs, Neil and Alberta Pace owed Jane
Doe a duty of care. By committing the acts alleged herein
defendants breached that duty of care.
a direct and legal result of the acts of the negligence of
defendants, as alleged herein, plaintiff, Jane Doe, suffered
injuries including, but not limited to, physical and mental
pain and suffering, physical injuries, past and future costs
of medical care and treatment, future loss of earning
capacity, in an amount not yet ascertained, but which exceeds
the minimum jurisdictional limits of this court.
The Farm Bureau ...