State Farm Fire and Casualty Company, an Illinois Corporation v. April Pickard

State Farm Fire and Casualty Company (State Farm) appeals a declaratory judgment by the district court that State Farm’s homeowner policy provides coverage for emotional harm caused by negligent care and intentional sexual abuse. State Farm argues that either the policy (1) does not cover emotional harm; or (2) excludes coverage for household members. We agree with the latter argument and reverse.

FACTS AND PRIOR PROCEEDINGS

The insured in this case, Richard Warren, pleaded guilty to statutory sexual seduction of his fifteen-year-old stepdaughter, April Pickard. See Nev.Rev.Stat. § 200.364(3) (1987). Pickard thereafter brought a state civil action against Richard Warren and her mother, Donna Warren. Pickard alleged that the Warrens acted negligently in caring for her and that Richard Warren’s acts constituted battery and intentional infliction of emotional distress.

State Farm brought this declaratory judgment action to determine if it has a duty to defend and indemnify the Warrens in Pickard’s state action. State Farm’s policy provides general liability coverage to the insured, subject to exclusions for household members and intentional injury. The district court found that…