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In re Doe

United States District Court, D. Utah

November 1, 2017

IN THE MATTER OF JANE DOE, a minor, by and through her mother, GERI BACON, Plaintiff,
v.
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

          JILL N. PARRISH, UNITED STATES DISTRICT COURT JUDGE.

         Before 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 MOOT.

         I. INTRODUCTION

         This is 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 Jane.

         Neither 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 summary judgment.

         II. UNDISPUTED FACTS

         A. The Underlying Lawsuit

         In 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 home.

         On July 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:

         FACTUAL ALLEGATIONS

         5. In 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 bodily injury.

         6. Neil 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.

         7. On 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 general damages.

         . . .

         FIRST CAUSE OF ACTION

         (Childhood Sexual Abuse - All Defendants)

         11. Plaintiffs incorporate all of the allegations in the preceding paragraphs into their first cause of action and further allege as follows:

         12. Defendants' conduct was intentional and constitutes childhood sexual abuse.

         13. As 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.

         14. In committing the acts described herein, defendants acted with malice, oppression and fraud, justifying an award of punitive damages against each of them.

         SECOND CAUSE OF ACTION

         (Negligence - All Defendants)

         15. As 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.

         16. As 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.

         B. The Farm Bureau ...


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