Knutsen v. State Farm Fire and Casualty Co.

          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 ...