United States District Court, D. Vermont
OPINION AND ORDER
William K. Sessions III, District Court Judge
Plaintiffs
Raymond and Marilynn Knutsen brought action against Defendant
State Farm Fire and Casualty Company for breach of its duty
to defend under Plaintiffs' homeowner's insurance
policy. Now before the Court is Defendant's Motion for
Summary Judgment. For the reasons set forth below,
Defendant's Motion for Summary Judgment is
granted.
Background
I.
Undisputed Facts
Since
at least January 2015, Plaintiffs Raymond and Marilynn
Knutsen (collectively, “the Knutsens”) have had a
homeowners insurance policy (“the Policy”) with
State Farm Fire and Casualty Company (“State
Farm”). ECF 16-1 at 1.
In
April, 2015, Karen Cegalis (“Cegalis”) filed a
lawsuit against the Knutsens, claiming that the Knutsens
“conspired to create a campaign to cause severe
estrangement of Leif Cegalis from his mother Karen
Cegalis.” ECF 16-3 at 1-2, ECF 16-1 at 2. Leif Cegalis
is the child of Raymond Knutsen and Karen Cegalis. ECF 16-3
at 1. Cegalis' Complaint alleges that, inter alia, the
Knutsens prevented contact between her and her son, violated
Court Orders to not engage in discussing their Family Court
case with Leif Cegalis, brainwashed Leif Cegalis against
Karen Cegalis, recklessly or knowingly made defamatory
statements about Karen Cegalis to Leif Cegalis, tortuously
interfered with Karen Cegalis' custodial rights, and
“engaged in a crusade to prosecute Karen Cegalis for
unsubstantiated allegations of abuse towards Leif
Cegalis.” ECF 16-3 at 2. The Complaint alleged four
separate claims: Negligence, Breach of Good Faith and Fair
Dealing, Intentional Infliction of Emotional Distress, and
Intentional Torts. ECF 16-3. In terms of damages, Karen
Cegalis sought “damages in an amount sufficient to
compensate her for her damages including but not limited to
past, present and future damages for physical pain, suffering
[sic] emotional damages, economic damages for the cost of
litigating false accusations, counseling costs and other
equivalent out of pocket expenses.” ECF 16-3 at 5.
Damages are for “compensation of medical bills past,
present and future” and “for pain and suffering
past, present and future.” Id.
On
September 23, 2015, the Knutsens contacted State Farm and
requested that State Farm provide insurance coverage for the
claims asserted against them in the Cegalis Complaint. ECF
16-1 at 2. State Farm replied on October 28, 2015, denying
insurance coverage for the claims. Id. State Farm
determined that the claims in the Cegalis Complaint are not
covered by the Policy. ECF 16-4 at 1. The Policy provides
personal liability coverage to the Knutsens as follows:
If a claim is made or a suit is brought against an insured
for damages because of bodily injury or property damage to
which this coverage applies, caused by an occurrence, we
will:
1. Pay up to our limit of liability for the damages for which
the insured is legally liable; and
2. Provide a defense at our expense by counsel of our choice.
We may make any investigation and settle any claim or suit
that we decide is appropriate. Our obligation to defend any
claim or suit ends when the amount we pay for damages, to
effect settlement or satisfy a judgment resulting from the
occurrence, equals our limit of liability.
ECF 16-2 at 24. The Policy defines “bodily
injury” as follows:
1. “Bodily injury” means physical injury,
sickness, or disease to a person. This includes required
care, loss of services and death resulting therefrom.”
Bodily injury does not include:
a. Any of the following which are communicable: disease,
bacteria, parasite, virus, or other organism, any of which
are transmitted by any insured to any other person;
b. The exposure to any such disease, bacteria, parasite,
virus, or other organism by any insured to any other person;
or
c. Emotional distress, mental anguish, humiliation, mental
distress, mental injury, or any similar injury unless it
arises out of ...