               In the Missouri Court of Appeals
                                Western District

AMERICAN FAMILY MUTUAL                )
INSURANCE COMPANY,                    )
                           Appellant, )
v.                                    )
                                      )             WD77813
STEPHEN PARNELL, DEANNA               )
PARNELL, C.P., A MINOR,               )
M.S., A MINOR and                     )             FILED: October 27, 2015
K.L. NATURAL MOTHER and NEXT          )
FRIEND OF M.S.,                       )
                        Respondents. )

       APPEAL FROM THE CIRCUIT COURT OF BOONE COUNTY
             THE HONORABLE MARY (JODIE) C. ASEL, JUDGE

          BEFORE DIVISION TWO: MARK D. PFEIFFER, PRESIDING JUDGE,
             LISA WHITE HARDWICK AND JAMES E. WELSH, JUDGES

      American Family Mutual Insurance Company ("American Family") appeals the

circuit court's grant of summary judgment in favor of M.S., by and through her

next friend and mother, K.L. The court determined that two American Family

homeowner's insurance policies issued to Stephen and Deanna Parnell ("the

Parnells") provided coverage for M.S.'s claims of negligent supervision against the

Parnells. On appeal, American Family contends two exclusions applied to bar
coverage and the concurrent proximate cause rule was not applicable. For reasons

explained herein, we affirm.

                          FACTUAL AND PROCEDURAL HISTORY

      The facts underlying this appeal are undisputed. The Parnells operated a

daycare business in their home. M.S. attended the daycare during the summers of

2009 and 2010. Starting in 2009, M.S., who was seven years old, was allegedly

subjected to intentional, unwanted sexual contact by the Parnells' eleven-year-old

son on multiple occasions. This contact continued in the summer of 2010. M.S.,

by and through her next friend and mother, K.L., filed suit against the Parnells for

negligent supervision. In her petition, M.S. asserted that the Parnells, as daycare

providers, had a duty to use ordinary care to protect her against unreasonable risks

of harm. M.S. alleged that the Parnells breached this duty by not supervising her

at the daycare and their breach was the proximate cause of her injuries, which

included economic and non-economic damages, lost enjoyment of life, emotional

distress, depression, anxiety, and post-traumatic stress disorder.

      The Parnells requested that their homeowner's insurance carrier, American

Family, provide a defense to M.S.'s lawsuit against them and indemnify them for

any judgment rendered. American Family then filed a petition for declaratory

judgment. American Family asked the court to declare that the two policies it

issued to the Parnells -- one effective in 2009 and the other effective in 2010 -- did

not provide coverage and did not obligate American Family to defend and indemnify

the Parnells.

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      The policies stated, in pertinent part, that American Family would pay, up to

its limit, compensatory damages for which any insured was legally liable because of

bodily injury caused by an occurrence covered by the policy. American Family also

agreed that it would defend any insured in such circumstances. The Parnells and

their son were "insureds" under the policies. The policies defined an "occurrence"

as "an accident, including exposure to conditions, which results during the policy

period in bodily injury or property damage."

      American Family asserted in its declaratory judgment petition that the

policies' exclusions for intentional injury and abuse excluded coverage. These

exclusions stated:

             1.      Abuse. We will not cover bodily injury or property
                     damage arising out of or resulting from any actual or
                     alleged:

                     a.    sexual molestation or contact;
                     b.    corporal punishment; or
                     c.    physical or mental abuse of a person.
             ....

             10.     Intentional Injury. We will not cover bodily injury or
                     property damage caused intentionally by or at the
                     direction of any insured even if the actual bodily injury or
                     property damage is different than that which was
                     expected or intended from the standpoint of any insured.

American Family alleged that these exclusions applied because the Parnells' son

intentionally caused M.S.'s bodily injuries by subjecting her to unwanted sexual

contact that amounted to abuse.




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      American Family and M.S. filed competing motions for summary judgment.

The court granted M.S.'s motion and denied American Family's motion. In its

judgment, the court found that M.S. met all conditions precedent to coverage and

that American Family failed to carry its burden to demonstrate that either the

intentional injury exclusion or the abuse exclusion applied to exclude coverage.

The court further found that the Parnells' negligent acts were a concurrent

proximate cause of M.S.'s injuries such that, even if the exclusions applied, the

Parnells' negligent supervision of M.S. was a separate and distinct cause of her

injuries for which coverage was provided. Therefore, the court ruled that American

Family was obligated to defend and indemnify the Parnells in M.S.'s lawsuit against

them. American Family appeals.

                                STANDARD OF REVIEW

      Appellate review of summary judgment is essentially de novo. ITT

Commercial Fin. Corp. v. Mid-Am. Marine Supply Corp., 854 S.W.2d 371, 376

(Mo. banc 1993). Summary judgment is appropriate where there are no genuine

issues of material fact and the moving party is entitled to judgment as a matter of

law. Id. at 380. We may affirm the circuit court's grant of summary judgment

under any theory that is supported by the record. Renaissance Leasing, LLC v.

Vermeer Mfg. Co., 322 S.W.3d 112, 120 (Mo. banc 2010).

      The interpretation of an insurance policy is also a question of law entitled to

de novo review. Seeck v. Geico Gen. Ins. Co., 212 S.W.3d 129, 132 (Mo. banc

2007). We interpret the policy according to the plain and ordinary meaning of its

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language. Mo. Emp'rs Mut. Ins. Co. v. Nichols, 149 S.W.3d 617, 625 (Mo. App.

2004).

                                      ANALYSIS

      In its sole point on appeal, American Family contends that the intentional

injury and abuse exclusions exclude coverage and that the concurrent proximate

cause rule does not apply. Because it is dispositive, we will address only whether

the concurrent proximate cause rule applies to afford coverage under the policies

despite the intentional injury and abuse exclusions.

      The concurrent proximate cause rule states that "'an insurance policy will be

construed to provide coverage where an injury was proximately caused by two

events--even if one of these events was subject to an exclusion clause--if the

differing allegations of causation are independent and distinct.'" Taylor v. Bar Plan

Mut. Ins. Co., 457 S.W.3d 340, 347 (Mo. banc 2015) (quoting Intermed Ins. Co.

v. Hill, 367 S.W.3d 84, 88 (Mo. App. 2012)). "For the rule to apply, the injury

must have resulted from a covered cause that is truly 'independent and distinct'

from the excluded cause." Id. at 348. To determine whether causes are

independent and distinct, we consider "whether the covered cause and excluded

cause depend[ ] upon each other to establish the necessary elements of each

claim." Gateway Hotel Holdings, Inc. v. Lexington Ins. Co., 275 S.W.3d 268, 282

(Mo. App. 2008). If the excluded cause is merely incidental to the covered cause,

that is, if the covered cause could occur without the excluded cause, then the two




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causes are independent and distinct and the concurrent proximate cause rule

applies. Columbia Mut. Ins. Co. v. Neal, 992 S.W.2d 204, 209 (Mo. App. 1999).

      For example, in Intermed, 367 S.W.3d at 86, a physician's assistant ("PA")

sexually assaulted a patient while conducting an unnecessary medical procedure.

The patient obtained a judgment for damages against the PA for the intentional tort

of sexual assault and battery and against the PA's employer for negligent

supervision, as the PA had a known propensity to engage in unnecessary physical

examinations. Id. at 89. The employer's insurance company asserted the damages

were not covered by its policy because the policy excluded coverage for "'liability

arising from sexual relations, activity, acts or conduct.'" Id. at 86.

      On appeal, the court held that, while the PA's intentional sexual assault was

an excluded cause under the policy, the employer's negligent supervision of the PA

was a non-excluded concurrent cause of the patient's injury. Id. at 89-90. The

court found that the employer's failure to discharge or supervise the PA was an

independent and distinct cause because it was "not inherently related to the

prevention of sexual assault." Id. at 90. The employer's failure to supervise the

PA to prevent him from providing improper medical care could have resulted in

multiple kinds of injuries; it was only incidental that it resulted in an injury excluded

by the policy. See Taylor, 457 S.W.3d at 347 n.8 (discussing Intermed's holding).

See also Bowan ex rel. Bowan v. Gen. Sec. Indem. Co. of Arizona, 174 S.W.3d 1,

6-7 (Mo. App. 2005) (finding coverage for injuries sustained in an auto accident by

a disabled passenger despite policy's auto operation exclusion because commercial

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transportation company's negligent failure to properly secure the passenger was a

distinct act that did not necessarily involve the operation of the vehicle);

Centermark Props., Inc. v. Home Indemn. Co., 897 S.W.2d 98, 101-03 (Mo. App.

1995) (finding coverage despite auto ownership and use exclusion in policy where

the plaintiff was struck by a vehicle owned by a security company and driven by an

unauthorized third party; auto ownership and use were merely incidental to the

plaintiff's claim that the security company was negligent in supervising, hiring, and

training its employees). Cf. In re Estate of Murley, 250 S.W.3d 393, 400-01 (Mo.

App. 2008) (finding auto use exclusion barred coverage for injuries sustained when

a shower unit fell out of a truck and injured another driver; the truck driver's

negligence in failing to secure the shower unit was dependent upon the operation

of the truck in transporting the unit because the unit posed no risk to anyone while

the truck was stationary); Gateway, 275 S.W.3d at 282-83 (finding athletic

participants' exclusion barred coverage for injuries sustained during a boxing match

at a hotel because the claim against the hotel for negligently failing to provide

medical personnel was dependent upon a finding that boxing is in an inherently

dangerous activity; the failure to provide medical personnel posed no risk of injury

as long as the plaintiff was not participating in the boxing match).

      The distinction between an excluded cause that is merely incidental to the

negligence claim and an excluded cause that is essential to the negligence claim is

readily apparent in claims involving the negligent supervision of a minor, which is

the claim that M.S. asserts against the Parnells. To establish a claim for negligent

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supervision of a minor, a plaintiff must plead and prove: (1) the defendant had a

legal duty to use ordinary care to protect the minor against unreasonable risks of

harm; (2) the defendant breached that duty; (3) proximate cause between the

breach and the resulting injury; and (4) actual damages. O.L. v. R.L., 62 S.W.3d

469, 474 (Mo. App. 2001). "[T]he gravamen of the cause is the supervisor's

obligation and ability to control the child and not the supervisor's control over the

instrumentality (whether human, mechanical or other) which causes the harm." Id.

      Applying this principle, the court in Neal, 992 S.W.2d at 208-09, found that,

despite the auto use exclusion, a homeowner's insurance policy provided coverage

for a negligent supervision claim asserted against the insureds after their grandchild

was struck and killed by their vehicle. The court explained how the use of the

vehicle -- the instrumentality that caused the harm -- was merely incidental, and

not essential, to the negligent supervision claim:

      In this case, it was the grandparents' obligation and ability to
      supervise and control decedent that are the decisive factors in the
      negligent supervision claim against them. The use of the vehicle that
      caused the harm is only incidental to the claim. The claim for
      negligent supervision of a minor is unrelated to and can occur without
      the use of a vehicle. Therefore, the exclusion for use of vehicle does
      not, as a matter of law, apply to the facts in this case.

Id. at 209.

      Neal is analogous to the case before us. In this case, like Neal, the Parnells'

obligation and ability to supervise and control M.S. are the decisive factors in the

negligent supervision claim against them. That M.S.'s harm was caused by the

alleged intentional, unwanted sexual contact by the Parnells' son is only incidental

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to the claim. The claim for negligent supervision of a minor is unrelated to and can

occur without intentional injury or sexual abuse. Indeed, the Parnells' failure to

properly supervise M.S. put her at risk for any number of harms, either self-inflicted

or inflicted by others. On these facts, M.S.'s claim of negligent supervision is a

separate and non-excluded cause of her injuries, apart from the intentional sexual

abuse. See St. Paul Fire & Marine Ins. Co. v. Schrum, 149 F.3d 878, 881 (8th Cir.

1998) (finding that, under Missouri law, sexual act exclusion in policy did not bar

coverage for negligent supervision of a minor claim because the insureds'

negligence was a non-excluded cause, separate from the sexual act). The circuit

court did not err in finding that the concurrent proximate cause rule applies to

afford coverage to the Parnells for M.S.'s negligent supervision claim. Thus,

American Family is obligated to defend and indemnify the Parnells in M.S.'s lawsuit

against them.

                                     CONCLUSION

      We affirm the circuit court's grant of summary judgment in favor of M.S.




                                           ____________________________________
                                           LISA WHITE HARDWICK, JUDGE

ALL CONCUR.




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