Opinions of the United
2003 Decisions                                                                                                             States Court of Appeals
                                                                                                                              for the Third Circuit


12-22-2003

Allstate Ins Co v. Sheridan
Precedential or Non-Precedential: Non-Precedential

Docket No. 02-4222




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"Allstate Ins Co v. Sheridan" (2003). 2003 Decisions. Paper 40.
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                                               NOT PRECEDENTIAL

      UNITED STATES COURT OF APPEALS
           FOR THE THIRD CIRCUIT


                    No. 02-4222


       ALLSTATE INSURANCE COMPANY

                          v.

     ROBERT SHERIDAN; EDWARD COLE;
 SHIRLEY COLE; THE BLOOMSBURG HOSPITAL;
       LUZERNE-WYOM ING CENTER #1,
        t/a Community Counseling Center of
             Northeastern Pennsylvania

                               The Bloomsburg Hospital,

                                            Appellant


     Appeal from the United States District Court
       for the Middle District of Pennsylvania
        (D.C. Civil Action No. 00-cv-01381)
     District Judge: Honorable John E. Jones, III


     Submitted Under Third Circuit LAR 34.1(a)
                December 12, 2003

Before: AMBRO, FUENTES and GARTH, Circuit Judges

         (Opinion filed : December 22, 2003)




                     OPINION
AM BRO, Circuit Judge

       Bloomsburg Hospital appeals the District Court’s award of summary judgment to

Allstate Insurance Company on its action for declaratory judgment. Allstate sought a

declaration that it is not obligated to defend or indemnify Robert Sheridan, named as a

defendant in a Pennsylvania state court civil action, for claims arising out of a shooting

incident in Bloomsburg, Pennsylvania. The District Court interpreted Sheridan’s Renters

Insurance Policy (“Policy”) to exclude coverage for the conduct at issue and concluded

that neither Sheridan nor other parties to the action may seek indemnification or

contribution from Allstate. Because the Policy, by its plain language, does not cover

intentional acts committed by insured persons, we affirm.

                           I. Factual and Procedural History

       This federal action involves Allstate’s purported obligation to defend or

indemnify Robert Sheridan in an underlying state court action arising from an incident

that occurred on March 24, 1998. That afternoon Edward Cole was in his car, stopped in

traffic, outside of Sheridan’s apartment. Sheridan shot Cole, through the window of his

apartment, with a 20-gauge shotgun. Cole sustained personal injuries as a result of the

shooting.

       Prior to the incident, Sheridan was treated at Bloomsburg Hospital for psychiatric

or psychological illnesses. Upon his discharge, Sheridan received from the Hospital

instructions for out-patient medical care, as well as drug prescriptions. He failed to


                                             2
follow these instructions and began to self-medicate. In the state court action, Cole has

alleged that the Hospital’s careless, reckless, or negligent failure to render appropriate

professional mental health care to Sheridan increased the risk of harm to Cole. The

Hospital denies liability for the shooting. In the alternative, it contends that any finding

of liability against the Hospital would entitle it to contribution or indemnification from

Sheridan. It further argues that Sheridan’s failure to comply with his discharge

instructions and his practice of self-medication constitute negligent conduct that is

covered by his insurance policy.

       The Allstate Renters Insurance Policy provides:

              Subject to the terms, conditions, and limitations of this policy, Allstate
              will pay damages which an insured person becomes legally obligated
              to pay because of bodily injury or property damage arising from an
              occurrence to which this policy applies, and is covered by this part of
              the policy.

An “occurrence,” as defined by the Policy, is “an accident including continuous or

repeated exposure to substantially the same general harmful conditions, during the policy

period, resulting in bodily injury or property damage.”

       The Policy specifically excludes from coverage all damage resulting from

intentional conduct.

              We do not cover any bodily injury or property damage intended by,
              or which may reasonably be expected to result from the intentional or
              criminal acts or omissions of, any insured person. This exclusion
              applies even if:

       a) such insured person lacks the mental capacity to govern his or her own

                                              3
       conduct;

       b) such bodily injury or property damage is of a different kind or degree
       than intended or reasonably expected; or

       c) such bodily injury or property damage is sustained by a different person
       than intended or reasonably expected.

       This exclusion applies regardless of whether or not such insured person is
       actually charged with or convicted of a crime.

       In June 2000 Sheridan pled guilty but mentally ill to one count of Aggravated

Assault and two counts of Recklessly Endangering Another Person. He admits to having

“shot at the individual in the car” and “aim[ed] at the driver.”

       Sheridan is a named defendant in a civil action pending in the Court of Common

Pleas of Columbia County, Pennsylvania. Allstate filed this action in the United States

District Court for the Middle District of Pennsylvania, seeking a declaration that it is not

obligated to indemnify Sheridan in the underlying state action. The District Court

granted Allstate’s motion for summary judgment in October 2002. Bloomsburg Hospital

appeals.

       The District Court exercised jurisdiction pursuant to 28 U.S.C. § 1332, based on

diversity of citizenship and amount in controversy. We have jurisdiction pursuant to 28

U.S.C. § 1291. We review de novo the District Court’s award of summary judgment.1


       1
        “Summary judgment is appropriate when ‘there is no genuine issue as to any
material fact and . . . the moving party is entitled to a judgment as a matter of law.’ While
the record on appeal must be viewed in the light most favorable to the party who lost on
summary judgment in the District Court, an appellate court may only review the record as

                                              4
Union Pacific R. Co. v. Greentree Transp. Trucking Co., 

, 125-26 (3d Cir.

2002).

                                         II. Discussion

         The disagreement between the parties in this case turns on a logic game. It is

undisputed that Sheridan’s act of shooting Cole was intentional within the meaning of

the Policy. It necessarily follows that Allstate is not obligated to indemnify Sheridan for

liability he incurs as a result of his act of shooting Cole; by the express terms of the

policy, Sheridan’s purported lack of mental capacity at the time of the shooting is

irrelevant.2

         In an attempt to avoid this result, the Hospital cleverly suggests that Allstate is

liable based on Sheridan’s “negligent” failure to comply with his discharge instructions.

In other words, the Hospital contends that Allstate may be exempt from financial

responsibility for damages that stem from the shooting but nonetheless liable for the

same damages to the extent they may be traced to Sheridan’s prior act of disregarding the



it existed at the time summary judgment was entered.” Union Pac. R.R. Co. v. Greentree
Transp. Trucking Co., 

, 125-26 (3d Cir. 2002) (citations omitted).
         2
         The standard for interpreting the Policy under Pennsylvania law is well-
established. The terms of the Policy are to be given their ordinary meaning. While
ambiguous terms are construed against the insurer, a term will be considered ambiguous
only if reasonably intelligent persons would “honestly” differ as to its meaning, when
considering it in the context of the entire policy. Finally, in determining the parties’
intent, the court must consider not only the language of the Policy, but also the
surrounding circumstances. United Servs. Auto Ass’n v. Ellitzky, 

, 986 (Pa.
Super. 1986).

                                                5
Hospital’s instructions.

       While we appreciate the Hospital’s ingenuity, we decline to deprive Allstate of the

benefit of its bargain in this fashion. The plain language of the Policy absolves Allstate

of responsibility for intentional acts, such as the shooting at issue in this case, even when

the insured lacks mental capacity or injures an unintended victim. We will not permit the

Hospital to end-run this exclusion by identifying an attenuated, albeit potentially

proximate, cause of Cole’s injury. After all, every insurance policy is susceptible to

circumvention of this kind. An insured held liable for an intentional injury might argue,

by similar reasoning, that he or she negligently failed to seek psychological treatment.

       We need not, however, rest on policy considerations. The Hospital’s argument

suffers from a fatal logical infirmity. To be sure, the state court complaint against

Bloosmburg is premised on the Hospital’s allegedly negligent dissemination of medical

treatment. The District Court noted that the parties did not dispute “that Sheridan not

only failed to adhere to the Bloomsburg Hospital’s discharge instructions, but also began

to self-medicate subsequent to his release from the hospital.” The Hospital concludes

therefrom that the parties agree that Sheridan negligently failed to follow the instructions

of his treating healthcare providers.

       This step we cannot make. The Hospital’s allegedly negligent failure to supervise

Sheridan does not render Sheridan’s disruption of his treatment also negligent. Put

simply, the Hospital may be correct that “the trial court in the underlying civil action has


                                              6
already held that Edward and Shirley Cole have stated a claim for injuries against the

Bloomsburg Hospital that is not based on intentional and/or criminal acts.” It does not

follow, however, that the Hospital’s entitlement to indemnification from Sheridan is also

based on negligence—nor that Allstate is thereby required to indemnify Sheridan.

       The Hospital’s strongest theory for pursuing indemnification from Sheridan is his

intervening act of shooting Cole. Less likely, but nonetheless plausible, is Sheridan’s

failure to follow his medical regimen. There is no indication that either act was anything

but intentional, as that term is defined in the Policy. The Hospital admits that the

shooting was intentional and, consequently, that Allstate need not reimburse Sheridan for

the resulting damages. But the Hospital’s alternative strategy suffers from the same

defect. While Sheridan may not have been acting with full mental capacity when he

chose to self-medicate, the intentional act exclusion “applies even if [the insured] lacks

the mental capacity to govern his or her own conduct.” Sheridan did not self-medicate by

accident. Cf. Allstate Ins. Co. v. Fischer, No. 97-4806, 

, at *3 (E.D. Pa.

Apr. 28, 1998) (defining accident as a “fortuitous, untoward or unexpected

happening[].”). There is no indication in this case that Sheridan acted in any way but

intentionally, within the meaning of the Policy, when he discontinued his prescribed

treatment. Cf. Acceptance Ins. Co. v. Seybert, 

, 383 (Pa. Super. 2000).




                                             7
                                    III. Conclusion

      Sheridan’s Policy specifically excludes from coverage liability for damage

resulting from intentional acts by the insured. Because we find that Sheridan acted

intentionally (as the Policy defines that term) both when he began to self-medicate and

when he shot Cole, we affirm the judgment of the District Court.



TO THE CLERK:

             Please file the foregoing Opinion.


                                                  By the Court,




                                                  /s/ Thomas L. Ambro
                                                   Circuit Judge