                                                                        F I L E D
                                                                 United States Court of Appeals
                                                                         Tenth Circuit
                 UNITED STATES COURT OF APPEALS                          June 7, 2005

                                 TENTH CIRCUIT                      PATRICK FISHER
                                                                             Clerk


 NAUTILUS INSURANCE
 COMPANY,

          Plaintiff-Appellee,

 v.
                                                       No. 03-8091
 OUR CAMP INC., a Wyoming                        (D.C. No. 02-CV-156-D)
 corporation,                                          (Wyoming)

          Defendant,

 MICHAEL MACCONNELL,

          Defendant-Appellant.



                          ORDER AND JUDGMENT *


Before SEYMOUR, HENRY, and LUCERO, Circuit Judges.


      Defendants Michael MacConnell and Our Camp, Inc. appeal a grant of

summary judgment to Nautilus Insurance Company on whether Nautilus has a

duty under Wyoming law to defend or indemnify its insured, Our Camp, in an

underlying lawsuit brought by Michael. We affirm.

      *
       This order and judgment is not binding precedent, except under the
doctrines of law of the case, res judicata, and collateral estoppel. The court
generally disfavors the citation of orders and judgments; nevertheless, an order
and judgment may be cited under the terms and conditions of 10th Cir. R. 36.3.
      We review a grant of summary judgment de novo and apply the same legal

standard as the district court. Simms v. Okla. ex rel. Dep’t of Mental Health &

Substance Abuse Servs., 165 F.3d 1321, 1326 (10th Cir. 1999). Summary

judgment is appropriate “if the pleadings, depositions, answers to interrogatories,

and admissions on file, together with the affidavits, if any, show that there is no

genuine issue as to any material fact and that the moving party is entitled to a

judgment as a matter of law.” F ED . R. C IV . P. 56(c). In applying this standard,

“we view the evidence and draw reasonable inferences therefrom in the light most

favorable to the nonmoving party.” Simms, 165 F.3d at 1326.

      The insurance policy issued to Our Camp provides coverage for certain

bodily injury, personal injury, and medical payments, but excludes coverage

related to abuse or molestation:

             This insurance does not apply to “bodily injury,” “personal
      injury” or medical payments arising out of:
             (1) The actual or threatened abuse or molestation by anyone of
             any person while in the care, custody or control of any insured;
             or
             (2) The negligent:
                  (a) employment;
                  (b) investigation;
                  (c) supervision;
                  (d) reporting to the proper authorities, or failure to so
                  report; or
                  (e) retention;
             of a person for whom any insured is or ever was legally
             responsible and whose conduct would be excluded by (a)
             above.
App., vol. I at 182.

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      In the underlying lawsuit, Michael sued Our Camp claiming he was

subjected to sexual acts by a co-camper in July 1993 when he was ten years old

and attending Our Camp’s one-week summer camp for mentally or physically

disabled youth. He alleged, in part, that Our Camp was negligent in supervising

and training camp counselors, supervising the young campers, and failing to

disclose to his parents what had occurred. He asserted that “[a]s a result of these

incidents and the fact that they went untreated, [he] suffered extreme emotional

harm, humiliation and bodily injury.” Id. at 51.

      Defendants contend the district court erred in concluding that the policy

exclusion for abuse or molestation was incorporated into the policy because the

exclusion was not “clearly indicated” on the declarations page. They argue that

the number of the exclusion, “CG 21 46 01 87,” should have been stated

specifically on the declarations page. The district court held instead that the

exclusion was incorporated because it is located within an endorsement numbered

“S 051,” and the S 051 endorsement is referenced on the declarations page.

      The cases defendants rely on, Pribble v. State Farm Mut. Auto. Co., 933

P.2d 1108, 1112 (Wyo. 1997), and Essex Ins. Co. v. The Fieldhouse, Inc., 506

N.W.2d 772 (Iowa 1993), do not mandate the result they urge. The courts in

Pribble and Essex, in fact, approved exclusions that were not specifically listed

on declarations pages but were instead contained in larger documents that, in turn,


                                         -3-
were referenced on the pages. Pribble, 933 P.2d at 1112 (exclusion contained in

policy booklet; policy booklet referenced on declarations page); Essex, 506

N.W.2d at 777 (exclusion set forth in endorsement; endorsement clearly

referenced on declarations page). We agree with the district court that the abuse

or molestation exclusion was properly incorporated through its inclusion in the S

051 endorsement, which in turn was referenced on the declaration page. 1

      Defendants also contend the special events endorsement, which does not

include an abuse and molestation exclusion, supercedes conflicting terms in the

policy. They cite to Capitol Indem. Corp. v. Especially for Children, Inc., 2002

WL 31002849, at *8 (D. Minn. Aug. 29, 2002), where a conflict between an

endorsement and the policy was found and the endorsement was determined to

govern. Here, the district court noted that the special events endorsement

contains “ ‘additional exclusions’ to ‘COVERAGES A, B and C,’ and specifically



      1
        It is undisputed that the S 051 endorsement was physically attached to the
policy. Nautilus Insurance directs us to the principle that although “[g]enerally,
an endorsement will be referenced in the policy declarations,” “[t]o be effective
the endorsement must be attached to the policy.” E RIC M ILLS H OLMES , H OLMES ’
A PPLEMAN ON I NSURANCE 2 D , §20.1 at 153 (1998). The exclusion’s physical
attachment to the policy further supports a conclusion that the exclusion is
effective.
       Defendants note for the first time in their reply brief that a table at the top
of the S 051 endorsement was left blank, creating a lack of clarity about whether
the endorsement is incorporated into the policy. Issues not raised in the opening
appellate brief, however, are considered waived. State Farm Fire & Cas. Co. v.
Mhoon, 31 F.3d 979, 984 n.7 (10th Cir. 1994) (citations omitted).

                                          -4-
states ‘All other Terms and Conditions of this Policy remain unchanged.’” App.,

vol. II at 502. We agree that the express terms of the special events endorsement

give it an additive, not preclusive, effect, and present no terms that conflict with

the abuse or molestation exclusion.

      Defendants argue the district court further erred in ruling that any

negligence of Our Camp arose out of the abuse of Michael and coverage was

therefore excluded. Defendants claim Michael’s bodily injuries may properly be

characterized as arising out of Our Camp’s negligence, not the actions of the

abuser. In the alternative, defendants argue that even if Our Camp’s negligence

was a concurrent cause of Michael’s injuries, the negligence claims should be

covered. Finally, they contend Michael’s injuries were exacerbated, or that he

suffered additional injury, because Our Camp concealed the sexual incidents and

failed to disclose to his parents what had occurred.

      The express language of the exclusion is worded broadly: “This insurance

does not apply to ‘bodily injury,’ ‘personal injury’ or medical payments arising

out of: (1) The actual or threatened abuse or molestation by anyone of any person

while in the care, custody or control of any insured . . . .” App., vol. I at 182.

“The parties to an insurance contract, like any other contract, are free to

incorporate therein whatever lawful terms they desire, and the courts are not at

liberty to rewrite the policy under the guise of judicial construction.”


                                          -5-
Worthington v. State, 598 P.2d 796, 806 (Wyo. 1979). In Worthington, the court

analyzed an automobile insurance contract containing the phrase “arising out of . .

. use” of a car, and characterized the words as “broad, general and comprehensive

terms . . . understood to mean originating from, growing out of or flowing from

the use.” Id. at 807. The court cautioned that the language did not require “direct

and proximate causation in the strict legal sense or as would arise in tort cases,

but only that the injury or loss arose out of use.” Id. The court ruled that “[i]n

determining whether an injury arose out of use, the evidence must demonstrate

that it was the natural and reasonable incident or consequence of the use . . . , the

causal connection being reasonably apparent.” Id.; see also Marathon Ashland

Pipe Line LLC v. Maryland Cas. Co., 243 F.3d 1232, 1239 (10th Cir. 2001)

(“Under Wyoming law, ‘arising out of’ language as used in insurance contracts

carries a ‘natural consequence’ level of causation”). Language of an insurance

contract should not be “tortured” to create an ambiguity. Gainsco Ins. Co. v.

Amoco Prod. Co., 53 P.3d 1051, 1056 (Wyo. 2002).

      Applying these principles to the language of the exclusion, we agree with

the district court that Michael’s alleged injuries

      clearly originated from, grew out of or flowed from the alleged abuse and
      molestation. The exclusion at issue unambiguously excludes coverage for
      all types of negligent conduct arising out of the abuse or molestation by
      anyone of any person while in the care, custody or control of any insured.

App., vol II. at 474. To conclude otherwise would torture the plain language of

                                          -6-
the parties’ agreement. Indeed, Michael himself alleged in the underlying lawsuit

that he was subjected to sexual acts and that “as a result of these incidents and the

fact that they went untreated,” he “suffered extreme emotional harm, humiliation

and bodily injury.” App., vol. I at 198. His allegations clearly link the abuse to

his injuries. Our conclusion that his negligence claims are excluded is supported

by the analysis in Harper v. Gulf Ins. Co., 2002 U.S. Dist. LEXIS 24492 (D. Wyo.

Dec. 20, 2002). There, id. at *30, the court reviewed the same abuse or

molestation exclusion and held:

      It is impossible for [the insurance company] to anticipate every claim
      that creative counsel will craft in order to draft a complaint that will
      trigger coverage . . . . Here, the abuse or molestation clause makes it
      crystal clear that no coverage is provided to employers for their
      negligence relating to any abuse or molestation.

      Defendants rely on St. Paul Fire & Marine Ins. Co. v. Schrum, 149 F.3d

878 (8th Cir. 1998), in urging us to conclude the negligence claims are covered.

The court in Schrum, applying Missouri law, examined an exclusion of injury or

damage “arising out of any sexual act, including but not limited to molestation,

incest or rape.” Id. at 880. It concluded that negligence claims against

homeowners, with whom two children were residing when they were sexually

abused, were not precluded because they asserted separate causes of the

children’s injuries. See id. at 880-81. We are not persuaded. Even if a tort

analysis might indicate separate or concurrent causes of Michael’s injuries, we


                                         -7-
must view the causes in this insurance contract dispute as “originating from,

growing out of or flowing from” the abuse that occurred. Worthington, 598 P.2d

at 807. See also Houg v. State Farm Fire & Cas. Co., 509 N.W.2d 590, 593

(Minn. Ct. App. 1993) (holding “claims against [church] for respondeat superior,

negligent employment, and negligent supervision arose directly out of the alleged

sexual conduct” where parishioner alleged sexual misconduct by pastor and

negligence by church.). Moreover, even assuming that Our Camp’s actions

resulted in additional injury to Michael, the exclusionary language is broadly

written and the underlying complaint itself links Michael’s injuries to the abuse.

Thus, any additional injury in this case “arose out of” the original abuse. 2

      Defendants assert the exclusion by its very terms does not apply to the co-

camper who committed the abuse because he is not an insured or agent of the

camp. As the district court concluded, however, the plain language of the



      2
       Defendants’ reliance on Cox v. Executive Risk Indem. Inc., 59 P.3d 721,
726 (Wyo. 2002), is misplaced. Unlike this case, Cox involved a household
member exclusion, which did not include the “arising out of” language. Id. at
727-29. The case does not shed light on the interpretation of the exclusion here.
       Defendants also argue there was no abuse or molestation because the co-
camper who allegedly committed the abuse could not form an intent to abuse or
molest because he was mentally impaired. We disagree. As Nautilus points out,
the exclusion at issue here, as well as the common definitions of “abuse” and
“molestation,” do not require an element of intent. Aple. Br. at 35. Indeed, these
terms have been interpreted to include any “unwanted contact of a sexual nature.”
See Cmty. Action for Greater Middlesex County, Inc. v. Am. Alliance Ins. Co., 757
A.2d 1074, 1082 (Conn. 2000).

                                          -8-
exclusion encompasses the co-camper: “This insurance does not apply to ‘bodily

injury’ . . . arising out of: (1) The actual or threatened abuse or molestation by

anyone of any person while in the care, custody or control of any insured.” App.,

vol. I at 182 (emphasis added).

      Finally, defendants contend the exclusion is ambiguous because the second

paragraph lists negligence claims related to “a person for whom any insured is or

ever was legally responsible and whose conduct would be excluded by (a) above.”

App., vol. II at 182. Paragraph (a) does not exist; the two paragraphs in this

exclusion are actually numbered “1” and “2.” In context, the reference to (a)

appears to be a typographical error that does not obscure the meaning of the

exclusion by lack of clarity or double meaning. See Pribble, 933 P.2d at 1112. It

thus does not rise to the level of ambiguity. Id.

      For the foregoing reasons, we AFFIRM. 3

                                        ENTERED FOR THE COURT


                                        Stephanie K. Seymour
                                        Circuit Judge




      3
       Because of our decision today, we deny as moot Nautilus’ motion seeking
leave to file supplemental briefs.

                                          -9-
