State Farm Fire & Casualty Company Intervenor and Appellant, v. James M., a minor, et al., Intervenors and Respondents.

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Court of Appeal, Fourth District, Division 1, California.

JAMES M., a minor, et al., Plaintiffs; State Farm Fire & Casualty Company Intervenor and Appellant, v. SEBESTEN, Defendant; James M., a minor, et al., Intervenors and Respondents.

No. D008197.

Decided: May 24, 1990

Hill, Genson, Even, Crandall & Wade and Tod M. Castronovo and Craig R. Billington, Irvine, Law Offices of Sharon Munson Swanson and Sharon Munson Swanson, Simi Valley, Horvitz and Levy and David M. Axelrad and Peter Abrahams, Encino, for intervenor and appellant. D. Blake Martinson and Louis J. Sebesten, Jr., in pro. per., for defendant. Louisa S. Porter, San Diego, for plaintiffs, intervenors and respondents.

State Farm Fire and Casualty Company (State Farm) appeals from a judgment declaring it had an obligation to both defend and indemnify its insured, Louis J. Sebesten, Jr. (Sebesten), for his repeated acts over a one-and-one-half-year period of sexual molestation of twelve-year-old James M. (Jimmy).

The issue on appeal is whether State Farm has such obligation to both defend and indemnify Sebesten for these repeated acts of sexual molestation where the evidence is undisputed Sebesten intended to commit the acts but did not intend to harm the victims.

Insurance Code 1 section 533 prohibits insurance coverage for an insured's willful acts.   The undisputed evidence establishes Sebesten had the requisite mental capacity to intend the sexual molestation.   Therefore, his subjective intent to injure or harm the victims is irrelevant.   Thus, we conclude section 533 prohibits coverage for these willful acts.   However, the duty to defend is separate and distinct from the duty to indemnify and is not prohibited by section 533.   Because State Farm failed to prove there was no potential for coverage under the policies or under section 533 when its insured was sued, it had a duty to defend.   Accordingly, we affirm the judgment in part and reverse in part.

FACTS

The facts are not disputed, and we need not set forth in great detail the events by which Sebesten gained the trust and confidence of Jimmy and Jimmy's family.   The C.'s—Jimmy, then 12 years old, and his family (his mother Julie, his stepfather Tom and his two stepsiblings, Joey and Kim)—moved into a rental home owned by Sebesten in November 1982.   Sebesten lived in the house next door, which shared a backyard with the C.'s rental home.   Sebesten was 42 years old, single, and living with a young man, Jeff, the son of Sebesten's friends.   Jeff had been living with Sebesten since he was a child, and Sebesten had been having sex with Jeff since Jeff was 13 years old.   Jimmy had a poor relationship with his stepfather, and Sebesten assumed a father-figure role model in Jimmy's life which made Sebesten feel good.

Gradually, Sebesten used this trust and confidence to turn the relationship into one of sex.   Commencing in April 1983, Sebesten started initiating Jimmy into sex by massaging him, leading to mutual masturbation, nude photographs of Jimmy and mutual oral copulation.   Sebesten coerced Jimmy into this sexual relationship and its continuance by claiming he would kill himself if Jimmy left him.   Sebesten bought Jimmy presents, promised him a car and threatened to terminate the relationship if Jimmy did not continue his sexual relationship with Sebesten.   Jimmy felt “uncomfortable” with the sexual aspects of the relationship but wanted to keep his “friendship” with Sebesten.

In November 1983, Julie witnessed Sebesten and Jimmy kissing and embracing with Jimmy lying on top of Sebesten.   The record is unclear whether Julie or Tom forbade Sebesten and Jimmy from seeing each other, but it is undisputed the relationship, including sex, continued surreptitiously.   Finally, Julie sought and received a temporary restraining order prohibiting Sebesten from contacting Jimmy.

CRIMINAL ACTION

Sebesten was charged with 14 violations of Penal Code section 288(a) and 11 counts of violating Penal Code section 288a(c), as well as one count of possession of a billy club (Pen.Code, § 12020(a)).

Penal Code section 288(a) provides:

“Any person who shall willfully and lewdly commit any lewd or lascivious act including any of the acts constituting other crimes provided for in Part 1 of this code upon or with the body, or any part or member thereof, of a child under the age of 14 years, with the intent of arousing, appealing to, or gratifying the lust or passions or sexual desires of such person or of such child, shall be guilty of a felony and shall be imprisoned in the state prison for a term of three, six, or eight years.”

Penal Code section 288a(c) provides:

“Any person who participates in an act of oral copulation with another person who is under 14 years of age and more than 10 years younger than he or she, or when the act is accomplished against the victim's will by means of force, violence, duress, menace, or fear of immediate and unlawful bodily injury on the victim or another person or where the act is accomplished against the victim's will by threatening to retaliate in the future against the victim or any other person, and there is a reasonable possibility that the perpetrator will execute the threat shall be punished by imprisonment in the state prison for three, six, or eight years.”

Sebesten pleaded guilty to one count of violating Penal Code section 288(a) and four counts of violating Penal Code section 288a(c).   Sebesten raised no defenses to the criminal charges, was convicted on his plea and sentenced to 18 years in prison.2

PROCEDURAL BACKGROUND

I. THE COMPLAINT

Jimmy and Julie C. brought an action seeking damages from Sebesten.   The complaint, filed on November 19, 1984, included allegations and causes of action for intentional as well as negligent acts and prayed for $1 million in punitive damages.   Much of the trial testimony focused on Sebesten's subjective state of mind, namely, whether Sebesten intended to harm Jimmy or Julie.   Sebesten was present at trial, having been produced from prison at the plaintiffs' request.   He testified, admitting the sexual acts.   However, Sebesten stated he “loved” Jimmy and still “loves” him and did not believe their sexual relationship harmed him.   According to Sebesten, Jeff had been having sex with him for many years, and Jeff had suffered no harm.3  Jimmy then testified to the sexual molestations and his relationship with Sebesten.

Three expert witnesses testified.   John Van Dyke, a clinical psychologist who treated Sebesten from September 1984 through March 1985, testified Sebesten felt he was “helping Jimmy and did not realize the sexual relationship could cause harm.”   Van Dyke diagnosed Sebesten as a secondary pedophile, someone who forms long-term sexual relationships with children.   According to Van Dyke, pedophiles usually do not intend to harm their child victims.   However, the adult and child are in very unequal “bargaining positions” and the child is virtually powerless in these situations to prevent the molestations.4

Spencer Letcher, the staff psychologist who treated Sebesten at the California Mens' Colony in San Luis Obispo, interviewed Sebesten and testified Sebesten was a pedophile with mildly ego-dystonic homosexuality.   Letcher further testified he believes Sebesten still feels both “fatherly” love and sexual love for Jimmy.   Sebesten, according to Letcher, did not intend to harm Jimmy nor did Sebesten realize Jimmy would suffer any harm as a result of this sexual relationship.   Letcher also testified Sebesten HAD NO DIMINISHED CAPACITY.   SEBESTEN UNDERSTOOD HIS SEXUAL RELATIONSHIP WITH JIMMY WAS AGAINST THE LAW AND KNEW OTHER PEOPLE WOULD OBJECT TO THIS SEXUAL RELATIONSHIP AND THUS KEPT IT SECRET.

The court admitted a report by the third expert, Dr. Naftulin.   In Naftulin's opinion, Sebesten HAD THE MENTAL CAPACITY TO GOVERN HIS OWN CONDUCT AND WAS NOT ACTING BECAUSE OF DELUSION OR IRRESISTIBLE IMPULSE.

Therefore, it is undisputed Sebesten had the mental capacity to understand his acts and had the requisite intent to commit the sexual molestation.   It is similarly undisputed Sebesten did not “subjectively” intend to harm or injure either Jimmy or Julie.

II. THE COMPLAINT–IN–INTERVENTION

Because the complaint alleged the molestations occurred at Sebesten's homes (the home Sebesten lived in as well as two rental properties Sebesten owned, including that rented by the C.'s), State Farm intervened, seeking a declaration it had no duty to defend or indemnify Sebesten's acts of sexual molestations or the injury resulting from such acts.5  State Farm alleged it had no such duties pursuant to section 533, public policy and the terms of the insurance policies themselves.   The complaint-in-intervention named Julie C., Jimmy and Sebesten as defendants-in-intervention.6  The complaint-in-intervention was severed from the complaint, and the parties stipulated the declaratory relief action would be tried to the court after the main action was tried to the jury.7  At the conclusion of Sebesten's and Jimmy's testimony, Julie and Jimmy waived their claims for punitive damages.   Following the plaintiffs' argument that the evidence demonstrated Sebesten intended the acts but did not “subjectively” intend to harm either Jimmy or Julie, the trial court directed a verdict for Sebesten on the causes of action for intentional infliction and directed a verdict in Jimmy's favor on the negligence cause of action.   The jury found Jimmy free from any contributory fault, found Julie negligent by a vote of nine to three, but found her negligence was not the cause of any damage.   The jury awarded Jimmy $273,380 in damages on his causes of action for assault and battery, negligence and negligent infliction of emotional distress, and awarded Julie $110,415 on her action for negligent infliction of emotional distress.   Of these amounts, $17,380 was awarded to Jimmy for medical treatment and $10,415 for Julie's economic damages.   The remainder of both awards were for noneconomic damages.

Before the court on its action for declaratory relief, State Farm argued acts of sexual molestation are willfully inflicted injury excluded from coverage by section 533, public policy and the specific terms of the insurance policies.   C.'s argued the evidence adduced at trial demonstrated Sebesten, a pedophile, had no intent to injure or to harm either Julie or Jimmy.   According to their argument, section 533, public policy and the policies' exclusions require Sebesten to have had a preconceived design to inflict injury evidenced by proof Sebesten had a subjective intent to injure or harm Jimmy and Julie, which must be proven by the insurer.

The court agreed with C.'s and found State Farm had both an obligation to defend and to indemnify Sebesten because Sebesten had no intent to harm Jimmy.8  The court ruled it was Sebesten's subjective state of mind to cause harm which controlled the coverage question.   Noteworthy is the trial court's finding “that Louis J. Sebesten's intentional sexual molestation of plaintiff, James A. [M.], did not constitute willful conduct as contemplated by Insurance Code § 533.”   The court entered judgment against State Farm, and this appeal followed.9

DISCUSSION

I. STAY

 State Farm requests we stay this appeal pending a decision by the California Supreme Court in a case decided by two members of this court in April 1989.10  We decline State Farm's request because the trial court ruled Sebesten's subjective intent to injure or harm was dispositive, and the proceedings in this case were held more than one year before that case was decided.   Therefore, it is apparent trial courts need guidance regarding the irrelevancy of this subjective intent to harm or injure victims in the context of section 533 and Civil Code section 1668.11

II. STANDARD OF REVIEW

 The issue before us is the interpretation and application of section 533, Civil Code section 1668, and the exclusionary clause in the insurance policies.   The interpretation of a written instrument, in this case the exclusionary clause in the insurance policies, even though such interpretation involves what might be called questions of fact, is essentially a judicial function.  (Parsons v. Bristol Development Co. (1965) 62 Cal.2d 861, 44 Cal.Rptr. 767, 402 P.2d 839.)   Interpretations and applications of statutes are clearly questions of law.  (Estate of Madison (1945) 26 Cal.2d 453, 456, 159 P.2d 630.)   Thus, we exercise our independent judgment on review of the trial court's interpretation of the policies' exclusion clause as well as the interpretation of section 533.

III. EXCLUSIONARY CLAUSE IN THE POLICIES

 State Farm argues its policies exclude coverage for the damages caused by Sebesten's sexual molestation.   The trial court disagreed and so do we.   All three insurance policies exclude coverage for personal liability “resulting from bodily injury expected or intended by the insured.”   State Farm's contention that footnote 2 in Congregation of Rodef Sholom v. American Motorists Ins. Co. (1979) 91 Cal.App.3d 690, 695, 154 Cal.Rptr. 348, holds this exclusion in an insurance policy is “identical in meaning and effect to the prohibition contained in section 533” is unwarranted.   This footnote does not support the statement attributed to it by State Farm.12  We agree with the court in United States Fid. & Guar. Co. v. American Employers Ins. Co. (1984) 159 Cal.App.3d 277, 284, 205 Cal.Rptr. 460 which addressed this precise contention.   The court in United States Fid. & Guar. Co. concluded this contention “appears to be based on a misperception of the holding of Evans, supra, that section 533 is equivalent to an exclusionary clause in the policy itself.   This does not mean that section 533 is the same as the express policy exclusion but rather that it is itself an implied exclusionary clause which by statute is read into all insurance policies.”  (Ibid.)

The undisputed evidence in this case is that Sebesten, State Farm's insured, did not expect or intend to injure his victims.  “ ‘[T]he burden of bringing itself within any exclusionary clause contained in the policy is on the insurer [citation].’ ”  (Clemmer v. Hartford Insurance Co. (1978) 22 Cal.3d 865, 880, 151 Cal.Rptr. 285, 587 P.2d 1098, citations omitted.)   State Farm failed to sustain its burden of proving coverage was excluded for these damages “resulting from bodily injury expected or intended” by Sebesten.   Thus, if we were reviewing the question of insurance coverage solely based on our interpretation of these policies, we would conclude Sebesten is entitled to coverage.   However, State Farm alleges coverage is prohibited by section 533, and we agree.

IV. STATUTES

Section 533 prohibits coverage for willful acts by an insured:  “An insurer is not liable for a loss caused by the wilful act of the insured;  but he is not exonerated by the negligence of the insured, or of the insured's agents or others.”   This section and Civil Code section 1668 together “establish a public policy to prevent insurance coverage from encouragement of wilful tort.”  (Tomerlin v. Canadian Indemnity Co. (1964) 61 Cal.2d 638, 648, 39 Cal.Rptr. 731, 394 P.2d 571.)

 Civil Code section 1668 provides, “All contracts which have for their object, directly or indirectly, to exempt anyone from the responsibility for his own fraud, or willful injury to the person or property of another, or violation of law, whether willful or negligent, are against the policy of the law.”   An insurance policy, a contract, indemnifying an insured against liability resulting from the insured's own willful wrong is void as against public policy.  (Arenson v. Nat. Automobile & Cas. Ins. Co. (1955) 45 Cal.2d 81, 84, 286 P.2d 816.)

Notwithstanding these clear statutory prohibitions against coverage for willful acts, violation of laws or willful wrongs, the trial court found Sebesten's “intentional molestation did not constitute willful conduct as contemplated by Insurance Code § 533.”   The court ignored Sebesten's acts and focused on Sebesten's subjective intent to injure or harm the victims, Jimmy and Julie.   As was succinctly stated in United States Fid. & Guar. Co. v. American Employers Ins. Co., supra, 159 Cal.App.3d at page 284, 205 Cal.Rptr. 460, “The focus of Insurance Code section 533 is on the intention to do the act which causes the damage rather than the intention to cause the resulting damage, a significant distinction.”   Sebesten's subjective intent to harm or injure the victims is irrelevant in interpreting section 533.

V. CASE LAW

In finding that Sebesten's subjective intent was dispositive on the issue of coverage and sexual molestation did not constitute willful acts as contemplated by section 533, the court cited Allstate Ins. Co. v. Kim W. (1984) 160 Cal.App.3d 326, 206 Cal.Rptr. 609.   The court's statement of decision distinguishes Kim W. as a pleading case in which the insured admitted in his answer he intended to harm or injure his victim.   This distinction disregards Kim W.'s holding “that an act which is a violation of Penal Code section 288 is a wilful act within the meaning of Insurance Code section 533.”  (Id. at p. 333, fn. omitted.)

Further, in footnote 3 at page 333, 206 Cal.Rptr. 609 Kim W. noted this holding was irrelevant to whether the insured had actually been convicted of violating Penal Code section 288 so long as the insured admitted committing conduct which included all the elements of a violation of Penal Code sections 288 or 288a because intent to injure or harm is not an element of Penal Code section 288 or Penal Code section 288a.

Addressing the parties' claims in that case, Kim W. stated the “preconceived design to inflict injury” statement in Clemmer v. Hartford Insurance Co., supra, 22 Cal.3d 865, 151 Cal.Rptr. 285, 587 P.2d 1098, and in Congregation Rodef Sholom v. American Motorists Ins. Co., supra, 91 Cal.App.3d 690, 154 Cal.Rptr. 348 was of no assistance to the insured and his victims.  Kim W. explained

“[B]oth cases involve issues relating to the capacity of the insured to form the requisite intent, rather than the difference between the intent to act and the intent to injure;  [the insured's] answers in this case raised no issue as to his mental capacity.”  (Allstate Ins. Co. v. Kim W., supra, 160 Cal.App.3d at p. 334, 206 Cal.Rptr. 609.)

 Kim W. is, therefore, directly on point and favors State Farm.   However, “[a] decision of a court of appeal is not binding in the courts of appeal.   One district or division may refuse to follow a prior decision of a different district or division.”  (McCallum v. McCallum (1987) 190 Cal.App.3d 308, 315, fn. 4, 235 Cal.Rptr. 396.)   We need not follow a decision from the same district and division.   Nevertheless, when one appellate court decides an issue, stare decisis compels another court to carefully review and consider the court's decision before it reaches a contrary result.   Therefore, we have carefully reviewed and considered Kim W. and concur in its analysis of Clemmer and its holding that acts which violate Penal Code sections 288 or 288a are “willful” under section 533 and barred from coverage.   To the extent Kim W. can be interpreted as permitting an inquiry into a criminal actor's 13 subjective intent to injure or harm his/her victim(s), we disagree with that interpretation.

We do not interpret Clemmer v. Hartford Insurance Co., supra, 22 Cal.3d 865, 151 Cal.Rptr. 285, 587 P.2d 1098 as requiring or even permitting an inquiry into the subjective intent of a criminal actor to intend to injure or harm his/her victim(s).   The inquiry in Clemmer was limited to the unresolved mental capacity, i.e., legal sanity of the criminal actor, Lovelace, to intend the criminal act of SHOOTING AND KILLING his employer, Clemmer.   Lovelace had pleaded not guilty by reason of insanity (NGI) to the criminal charge.   He did not testify at his criminal trial, and he withdrew his NGI plea after the jury returned its second degree murder verdict.   The Supreme Court affirmed the trial court's denial of a judgment notwithstanding the verdict as well as the grant of a new trial to Hartford in a subsequent civil action brought by Clemmer's widow and son against Hartford to enforce a default judgment obtained by them against Lovelace for wrongful death.

Evidence of Lovelace's criminal conviction for second degree murder was not admitted in the Clemmers' civil action against Hartford.  (Clemmer v. Hartford Insurance Co., supra, 22 Cal.3d at pp. 878–879, 151 Cal.Rptr. 285, 587 P.2d 1098.)   Further, the court rejected Hartford's contention the Clemmer plaintiffs were estopped by Lovelace's criminal conviction for second degree murder from denying the WILLFULNESS OF LOVELACE'S ACT IN KILLING CLEMMER concluding, “[I]t cannot be said that Lovelace had the same interests in fully litigating the issue of the willfulness of his act in killing Dr. Clemmer as do the plaintiffs herein.”  (Id. at p. 877, 151 Cal.Rptr. 285, 587 P.2d 1098.)   Because the conviction for second degree murder was not dispositive of the legal sanity of Lovelace and because Lovelace had placed this issue in dispute before his criminal trial, the Supreme Court did not find the issue of Lovelace's legal sanity resolved by the criminal conviction.

Much emphasis is placed on the statement in Clemmer “that even an act which is ‘intentional’ or ‘willful’ within the meaning of traditional tort principles will not exonerate the insurer from liability under Insurance Code section 533 unless it is done with a ‘preconceived design to inflict injury.’ ”   (Clemmer v. Hartford Insurance Co., supra, 22 Cal.3d at p. 887, 151 Cal.Rptr. 285, 587 P.2d 1098, citations omitted.)

The reliance on the phrase “preconceived design to inflict injury” is misplaced because it ignores both the context in which Clemmer uses the phrase as well as the fact a “subjective intent to injure or harm” is not synonymous with the “preconceived design to inflict injury” cases cited by the Supreme Court.   First, Clemmer's entire focus is on the willfulness of Lovelace's act.  Clemmer specifically rejected Hartford's challenge to the jury instruction defining “willful” in terms of Lovelace's mental capacity and mental state.   The court rejected Hartford's assertion the instruction given “had the effect of requiring the jury to find the existence of what amounted to a specific intent to kill in order to find willfulness.”  (Clemmer v. Hartford Insurance Co., supra, 22 Cal.3d at p. 887, 151 Cal.Rptr. 285, 587 P.2d 1098.)  Clemmer stated:

“It is clear, however, that this argument not only ignores the specific language of the instruction—which speaks in terms of intent to ‘shoot and harm,’ not in terms of intent to kill—but refuses to recognize the clear line of authority in this state to the effect that even an act which is ‘intentional’ or ‘willful’ within the meaning of traditional tort principles will not exonerate the insurer from liability under Insurance Code section 533 unless it is done with a ‘preconceived design to inflict injury.’ ”   (Ibid., citations omitted, italics added.)

Next, the court cited two cases as approving this “preconceived design to injure” defining whether an act is willful.   In Walters v. American Ins. Co. (1960) 185 Cal.App.2d 776, 783, 8 Cal.Rptr. 665, the court originated this phrase in reversing a judgment for an insurance company which refused to defend its insured, Walters, against a claim for damages on the ground Walters intended the act which resulted in damages.  Walters held as follows:  “If [Walters] acted in self-defense then although he ‘intended the act,’ [Walters] acted by chance and without a preconceived design to inflict injury just as though he were acting intentionally, although negligently, and injured someone.”  (Ibid.)  Walters went on to explain:  “Acts committed in self-defense are not unlawful” (ibid.) and “the injuries were inflicted by [Walters] in the act of resisting a threatened assault.”  (Id. at p. 784, 8 Cal.Rptr. 665.)

In the second case cited in Clemmer the exact phrase, “preconceived design to inflict injury,” is not found.  Meyer v. Pacific Employers Ins. Co. (1965) 233 Cal.App.2d 321, 43 Cal.Rptr. 542 dealt with a policy exclusion where the insureds sought indemnity for damages on adjacent property resulting from their “indirect trespass”—vibrations from their drilling activities.   The court held:

“Further, if by applying the presumption [Code Civ.Proc., § 1963, subd. 3,[[[[[[14]—not Ins. Code, § 533], an injury caused by an intentional act of an insured, other than one designed to cause injury, is to be found one intentionally caused, then, under section 533 of the Insurance Code there could be no valid coverage of the driver's liability to a guest․”  (Id. at p. 327, 43 Cal.Rptr. 542, fn. omitted.)

As used in this context, the design to cause injury relates back to the act itself.

Returning to Clemmer, the court went on to state:  “The instruction given by the trial court simply applied this principle [on the issue of willfulness] to a situation in which the actor's capacity to harbor the requisite ‘design’ was placed in issue through evidence bearing upon his mental state.   There was no error in this respect.”  (Clemmer v. Hartford Insurance Co., supra, 22 Cal.3d at p. 887, 151 Cal.Rptr. 285, 587 P.2d 1098.)   Then, in footnote 14 at page 887, 151 Cal.Rptr. 285, 587 P.2d 1098, Clemmer references “cases in other jurisdictions considering the mental condition of the actor in determining the willfulness of his act for insurance purposes.” 15  The design referred to in Clemmer is the mental state or mental condition of the criminal actor, not his/her subjective intent to harm or injure.

Thus, we interpret Clemmer to support the proposition a criminal actor's mental capacity to form the requisite intent to commit a willful or intentional act is a litigable issue when an insurance company denies coverage for damages from the willful act of its insured under section 533.

 We reject any contention Clemmer supports the proposition a criminal actor's subjective intent to injure or harm victims is a litigable issue for purposes of section 533.   A criminal actor's subjective intent to injure or harm his/her victim(s) is irrelevant to section 533's prohibition against coverage for willful acts.

 Similarly, we reject the contention coverage should be provided by insurance companies for the willful acts of their insureds because “[t]hose who cause damage or injury frequently cannot afford to compensate the victim[s] for their loss and depend on their insurance for coverage.”   As was held in Clemmer, “[T]hat innocent victims of intentional torts should be able to recover from an insurer without regard to the willfulness of the insured runs contrary to the policy expressed in Insurance Code section 533 ․ [an insurer] may not be held liable ․ for any willful act of [its insured].”  (Clemmer v. Hartford Insurance Co., supra, 22 Cal.3d at pp. 889–890, 151 Cal.Rptr. 285, 587 P.2d 1098.)

By pleading guilty to Penal Code sections 288(a) and 288a(c), Sebesten admitted he committed a lewd or lascivious act upon a part of the body of a child (Jimmy) under the age of 14 with the intent of arousing, applying to, or gratifying the lust or passion or sexual desires of either himself or Jimmy, and he participated in at least four acts of oral copulation with Jimmy, a person under the age of 14 and more than 10 years younger than he.   Sebesten raised no defense of insanity or even diminished capacity to the criminal charges.   The evidence presented in this civil trial is undisputed Sebesten was not legally insane nor did he lack the mental capacity to govern his own conduct.   Sebesten was not acting because of delusion or irresistible impulse.

A person can commit intentional or willful acts which are not necessarily unlawful or criminal.   There is no such crime as negligent sexual molestation.

 Therefore, we conclude the trial court erred in finding these intentional sexual molestations did not constitute willful acts as contemplated by section 533.   We hold these intentional acts constituted willful acts within the meaning of section 533 for which insurance coverage is prohibited.   Further, we hold section 533 prohibits coverage for damages resulting from willful acts of sexual molestation regardless of what legal theories of civil liability are creatively pleaded.   The focus of the inquiry is on the acts themselves.

VI. DUTIES OF AN INSURER

 Conceding under the authority of Gray v. Zurich Insurance Co. (1966) 65 Cal.2d 263, 54 Cal.Rptr. 104, 419 P.2d 168 an insurer's duty to defend is broader than its duty to indemnify, State Farm contends it has no duty to defend Sebesten “because as a matter of law this conduct is not covered under an insurance policy and no potential for coverage exists.”   State Farm's position ignores the language in its policies.   The policies in the present case provide coverage as well as a defense except “bodily injury or property damage which is expected or intended by an insured.”   There is no reference in these policies to conduct at all.   Having concluded these policies do not exclude coverage, a fortiori, the policies do not exclude the duty to defend.

We have determined coverage is prohibited by section 533 because the sexual molestation acts were “willful.”   In Gray, the court held section 533 and Civil Code section 1668 forbid “only contracts which indemnify for ‘loss' or ‘responsibility’ resulting from wilful wrongdoing.”  (Gray v. Zurich Insurance Co., supra, 65 Cal.2d at p. 277, 54 Cal.Rptr. 104, 419 P.2d 168, italics original.)   The purpose of these public policy prohibitions is to prevent insurance coverage from encouraging willful torts.  Gray saw no reason to extend these prohibitions to a contract which provides for legal defense against an action, even one which charges an intentional tort.   Consequently, Gray rejected the insurer's contention the insurance contract could not be read to require the insurer to defend an action seeking damages for an intentional wrong because such an obligation would violate public policy.

In Ohio Casualty Ins. Co. v. Hubbard (1984) 162 Cal.App.3d 939, 208 Cal.Rptr. 806, the court was presented with a case where the insurer clearly had no duty to indemnify the remaining action between its insured, Hubbard, and a third party, because the only claims remaining were for punitive damages.   Arguing it had no duty to indemnify and therefore no duty to defend, Ohio sought a declaration relieving it from the duty to defend.   The trial court agreed;  the appellate court reversed holding public policy against indemnification of punitive damages is not weakened by requiring an insurer to defend an action seeking such damages where an insured could reasonably expect such defense from the policy language.   Since Gray was decided in 1966, whether a duty to defend exists depends on whether there is a potential for recovery covered by the policy.   Here, the policies (as distinguished from section 533) provided coverage because the exclusions only excluded damages “expected” or “intended” and the undisputed evidence showed Sebesten did not intend or expect to injure Jimmy and/or Julie.

This is not to imply an insurer must defend its insured for willful acts.   If State Farm had presented evidence that Sebesten was not potentially covered under the policies and could not be potentially covered under section 533 because his acts were willful, or if State Farm had clearly, plainly and conspicuously excluded defense for this action, then State Farm would have been relieved of its duty to defend.   State Farm never argued it had investigated Sebesten's mental capacity at the time this action was filed or at anytime thereafter until trial to ascertain facts which would have established Sebesten had the requisite mental capacity to commit a willful act.   It fails to make this argument on appeal.   Although we have determined Sebesten's acts were, in fact, willful within the meaning of section 533, we have done so after trial and after State Farm has provided Sebesten with a defense.   The duty to defend arises when the third party action is filed, not after an appellate court reverses a judgment finding coverage for the damages suffered by the third parties.   Therefore, State Farm had a duty to defend Sebesten.

CONCLUSION

In summary, the exclusion in the policies before us is not identical in meaning and effect to the prohibition against coverage contained in section 533.   A policy exclusion is an express exclusion and section 533 is an implied exclusion.   In denying coverage, an insurer bears the burden of proving there is no coverage under either or both the policies' express exclusion or section 533's implied exclusion.   Here, State Farm did not bear its burden of proving there was no coverage under the policies.   Therefore, the express exclusion in the policies does not exclude coverage, and the trial court did not err in ruling on this issue.   Because an insurer's duty to defend is premised on the insurance policy and not on public policy grounds, State Farm had a duty to defend Sebesten.

State Farm did sustain its burden that coverage was prohibited under section 533.   Sebesten admitted violating Penal Code sections 288(a) and 288a(c) by pleading guilty to those charges.   Further, Sebesten admitted at this civil trial committing and intending to commit acts which included all of the elements of violations of both those sections.   There was no evidence disputing Sebesten's mental capacity to commit these willful and intentional acts.   Therefore, section 533 prohibits coverage for these willful acts.   Thus, the trial court erred in finding the acts did not constitute willful acts for purposes of prohibiting coverage.

DISPOSITION

The judgment is affirmed declaring State Farm has a duty to defend Sebesten;  it is reversed declaring State Farm has a duty to indemnify Sebesten for the damages caused by his willful acts of sexual molestation.   Parties to bear their own costs on appeal.

I agree with the conclusion of the lead opinion that State Farm did not sustain its burden of proving coverage was excluded under the language of the policy excluding coverage for personal liability “resulting from bodily injury expected or intended by the insured.”   Also, I agree with the conclusion of the lead opinion that State Farm had a duty to defend Sebesten.   However, I cannot agree with the majority's additional conclusion stated as a matter of law that Insurance Code section 533 prohibits coverage for Sebesten's willful acts.

In my view the majority's conclusion on coverage under Insurance Code section 533 is not reconcilable with the straightforward statement in Clemmer v. Hartford Insurance Co. (1978) 22 Cal.3d 865, 887, 151 Cal.Rptr. 285, 587 P.2d 1098, “even an act which is ‘intentional’ or ‘willful’ within the meaning of traditional tort principles will not exonerate the insurer from liability under Insurance Code section 533 unless it is done with a ‘preconceived design to inflict injury.’ ”  Clemmer describes this statement as “the clear line of authority in this state.”  (Ibid.)  The Clemmer statement carries controlling force when read in the context of the particular facts of that case involving liability insurance coverage with respect to the crime of second degree murder, an offense having malice aforethought as an element, and Clemmer 's clearly implied legal conclusion that Insurance Code section 533 does not as a matter of law preclude insurance coverage for a wrongful death judgment in such a case.1

The facts of the underlying offense in Clemmer, as described by the court, were:

“Plaintiffs, Marjorie Clemmer and Hugh Clemmer, are respectively the widow and minor son of Dr. Hugh Clemmer, deceased.   Dr. Daniel Lovelace had worked for Dr. Clemmer, and he was shocked when the latter on January 29, 1971, advised him that the employment relationship would be terminated.   The next day Dr. Clemmer was shot and killed by Dr. Lovelace, the Hartford Insurance Company's insured.   Just prior to the shooting Dr. Lovelace, from his apartment window, had observed Dr. Clemmer in a nearby gas station.   Dr. Lovelace placed a pistol in a shoe box, went to his car, placed the box and pistol on the seat, and drove across the street (from his apartment) to the gas station.   He pulled next to a gas pump and spoke to the attendant.   He then left the car and, carrying the gun, approached Dr. Clemmer.   He greeted Dr. Clemmer, then shot him twice.   These shots were followed by two more shots.   Finally, Dr. Lovelace knelt close to the victim and at close range shot him in the head.   The gun was placed on the ground.   Dr. Lovelace remarked that he knew what he was doing and that Dr. Clemmer was destroying him professionally.”  (Clemmer, supra, 22 Cal.3d at pp. 871–872, 151 Cal.Rptr. 285, 587 P.2d 1098.)

After Clemmer, in reaching conclusions that Insurance Code section 533 does not preclude coverage for compensatory damages, courts have made statements such as the following:

“In Peterson v. Superior Court (1982) 31 Cal.3d 147, 159 [181 Cal.Rptr. 784, 642 P.2d 1305], [concluding that Insurance Code section 533 prohibits indemnification by insurers only for punitive damages, not for compensatory damages, in cases of intoxicated drivers causing personal injury] the court stated section 533's concept of a ‘willful act’ does not extend to an act ‘performed without intent to harm ․ [but which] nevertheless result[s] in injury and possible exposure to punitive damages because it was done with conscious disregard for the rights or safety of others.’  (Italics added.)  ․ [¶] These expressions by our high court establish that the species of ‘willfulness ’ contemplated by section 533 not only transcends recklessness but is something in the nature of specific intent to injure. ”   (Allstate Ins. Co. v. Overton (1984) 160 Cal.App.3d 843, 849, 206 Cal.Rptr. 823, emphasis added.)

Overton held the mere fact of the insured's conviction of misdemeanor battery arising out of the incident that is the subject of the personal injury plaintiff's action against the insured does not conclusively relieve the insurer of its duties to defend and indemnify the insured.  (See Overton, supra, 160 Cal.App.3d at p. 845, 206 Cal.Rptr. 823.)   Thus, Overton upheld an order requiring the insurer to defend in the context of the underlying action being as yet undetermined and there being no conclusive showing the insured's conduct falls within the policy's exclusions.  (Id. at p. 852, 206 Cal.Rptr. 823.)

Similarly, in California Shoppers, Inc. v. Royal Globe Ins. Co. (1985) 175 Cal.App.3d 1, 33, 221 Cal.Rptr. 171, it is said:

“[I]nsurance Code section 533 clearly excludes coverage of those ‘wilful’ acts committed with the specific intent to injure, but not those nonmalicious acts committed with the sole intent to do the act which caused the harm.”  (Emphasis added.)

In my view the precedent established in the Clemmer, Overton and California Shoppers cases requires similar application in the child molesting cases, with the matter of the insured's “preconceived design to inflict injury” submitted to a trier of fact subject to ordinary rules of evidence before the coverage determination is made.   Unlike the majority, I do not believe Clemmer properly is to be read as limited to making a determination only of the insured's mental capacity to form the requisite intent to commit a willful or intentional act.2  Nor do I agree with the majority that under Clemmer the insured's subjective intent to injure or harm the victim is irrelevant to Insurance Code section 533's prohibition against coverage for willful acts.

In sum, I believe no feature of the elements or nature of child molesting vis-a-vis the elements or nature of second degree murder warrants a different rule of exclusion as a matter of law under Insurance Code section 533 in the case of child molesting.  (See Fire Insurance Exchange v. Abbott (1988) 204 Cal.App.3d 1012, 251 Cal.Rptr. 620;  Allstate Ins. Co. v. Kim W. (1984) 160 Cal.App.3d 326, 206 Cal.Rptr. 609.)   If, as in Clemmer, a second degree murder case calls for trial of the issue of preconceived design to inflict injury, so also in a child molesting case is that issue properly to be tried.

Here, the trial court conducted a trial on that issue and on the basis of substantial evidence presented found that Sebesten had no intent to harm James M. and that Sebesten's conduct did not constitute willful conduct as contemplated by Insurance Code section 533.   Under Clemmer, on the basis of those findings, I would affirm the judgment entered against the insurer.

I concur in Justice Nares's well-reasoned opinion dealing with the central issue of this case, which is whether a standard homeowner's liability insurance policy indemnifies against damages inflicted by the homeowner upon a visitor when such damages constitute criminal child molestation under Penal Code section 288, subdivision (a).   As the lead opinion cogently articulates, Insurance Code section 533 precludes contractual indemnification for damages which result from criminal sexual molestation.   I subscribe completely to the lead opinion's analysis of the holding in Clemmer v. Hartford Insurance Co. (1978) 22 Cal.3d 865, 151 Cal.Rptr. 285, 587 P.2d 1098.   As stated in Allstate Ins. Co. v. Kim W. (1984) 160 Cal.App.3d 326, 334, 206 Cal.Rptr. 609, and now reaffirmed by the lead opinion, the question in Clemmer was the capacity of the person inflicting damage to form an intent to perpetrate the act itself, rather than to distinguish between an intent to act and an intent to injure.   I agree with the lead opinion's suggestion (pp. 106–107) that Kim W. stands for the principle that child molestation which violates Penal Code section 288 is as a matter of law a willful act, barred from coverage by Insurance Code section 533, regardless of the subjective purpose of the perpetrator with respect to harm or lack of harm to the victim.

I write solely to express my disagreement, however, to the extent the opinion holds this result would not also be reached by an interpretation of the exclusions of the insurance policy.   Since the law of this case is that there can be no indemnification for child molestation because of public policy set forth in the Insurance Code, the exclusions of the policy are of no moment in terms of its basic coverage.   As the lead opinion points out, however, the duty to defend is broader than the duty to indemnify;  and also the public policy against indemnification for criminal acts does not necessarily preclude protection in the form of legal defense.   Justice Nares therefore concludes that although Mr. Sebesten, as a matter of law and based upon the evidence of this case, can expect no indemnification for his criminal acts, the policy language provides he nevertheless can require his insurance company to defend the civil action against him based upon the same acts.   I believe this is illogical and has the potential of leading to impractical and undesirable results.   Although a criminal defendant will be precluded from using his insurance protection to compensate his victim, he nevertheless will be in a position to extract tribute from the insurance company by demanding that it defend him.

The exclusion in the policy is for “bodily injury ․ which is expected or intended by the insured.”   We accept the uncontroverted evidence that although Sebesten had full mental capacity, knew the nature of the acts he was perpetrating, and knew these acts were illegal and unacceptable to society or the child's parents, he nevertheless did not intend, subjectively, to injure the child.   Since the policy exclusion is for injury “intended” to occur, and Sebesten in his warped approach to neighborly relations did not “intend” injury, the lead opinion finds the exclusion is not applicable.   This analysis, to my thinking, overlooks the difference between the actor's intention to do the act which will result in a known impact, and the actor's subjective belief that the knowingly and intentionally inflicted impact, defined by law as detrimental, is in fact beneficial.   On this analysis the act of the mercy killer who gives the suffering patient a lethal dose knowing and intending to inflict death would not be excluded from insurance coverage if the mercy killer devoutly believed early passing was in the patient's best interests.

Fortunately, extended analysis of the philosophical or jurisprudential distinctions among the concepts of “intent,” “purpose,” “motive” and “expectation” is not necessary for the resolution of this matter.   A very recent case of the Court of Appeal has dealt fully and effectively with the precise issue.  Fire Insurance Exchange v. Abbott (1988) 204 Cal.App.3d 1012, 251 Cal.Rptr. 620 involved claims upon liability policies based upon damage resulting from the insureds' molestation of children, established by their guilty pleas.   As in the case at bench, the insurance exclusions were for “injuries ‘expected’ or ‘intended by the insured.’ ”  (Id. at p. 1021, 251 Cal.Rptr. 620.)

The Abbott court, analyzing Clemmer and other cases which have construed the meaning of “willful act” under Insurance Code section 533, concluded such phrase “involves a specific intent to injure or harm, not merely a general intent to perform the act.”  (Id. at p. 1020, 251 Cal.Rptr. 620.)   It also concluded “[t]he same interpretation is given to express policy exclusions for injuries caused ‘intentionally’ by the insured.”  (Ibid.)  Apparently treating the statutory preclusion and the typical policy exclusion as parallel, the court summarized its discussion by concluding the definition of an accident “ ‘resulting in bodily injury ․ neither expected nor intended by the insured’ excludes from insurance coverage only conduct by the insured which was subjectively intended to harm or injure.”  (Id. at p. 1021, 251 Cal.Rptr. 620.)

Nevertheless, the Abbott court found the policy exclusion to be effective and denied coverage even though it accepted the contention that, in its case as in ours, “neither insured intended to injure his victim by his sexual misconduct.”  (Id. at p. 1023, 251 Cal.Rptr. 620.)   The court reached this result by accepting the principle enunciated in Kim W. that harm from sexual child molestation is found as a matter of law—that “ ‘an intent to cause at least some harm can be inferred as a matter of law’ [citing Kim W., supra, 160 Cal.App.3d at p. 332, 206 Cal.Rptr. 609].”  (Fire Insurance Exchange v. Abbott, supra, 204 Cal.App.3d at p. 1023, 251 Cal.Rptr. 620.)

Citing, as does our lead opinion, the proposition that one district of the Court of Appeal is not bound by the opinion of another district, the Abbott court elected to follow the presumption of harm established by Kim. W. on the basis of stare decisis and to “serve[ ] the important goals of stability in the law and predictability of decision.”  (Ibid.)  This adherence to Kim W. was affirmed after an exhaustive analysis of authorities on the issue not only from California but from other jurisdictions.  (Id. at pp. 1021–1029, 251 Cal.Rptr. 620.)   Dealing specifically with the issue of subjective intent of the perpetrator, the Abbott court enforced its conclusion that subjective intent was irrelevant by also concluding that psychiatric testimony about the insured's state of mind would be relevant only to show lack of the specific criminal intent required by Penal Code section 288, subdivision (a) or to show the insured never intended to perform the acts constituting the criminal sexual misconduct.  (Id. at p. 1029, 251 Cal.Rptr. 620.)

While I would thus hold that the policy exclusions and the statutory bar of section 533 be given parallel effects and interpretations insofar as the duty to indemnify is concerned, I must concur that Insurer had a duty to defend the underlying civil action for damages until such time as it became clear there was no possibility of coverage.   On the facts of this case there apparently remained at least a possibility of coverage throughout the course of the underlying civil action.   The guilty plea in the prior criminal action did not necessarily preclude coverage (because plaintiff might have shown for example that Sebesten was insane at the time of his acts (see Clemmer, supra, 22 Cal.3d at pp. 872–877, 151 Cal.Rptr. 285, 587 P.2d 1098)), and, unlike Abbott (see 204 Cal.App.3d at p. 1029), the declaratory relief complaint by insurer here remained unresolved until after trial of the underlying civil action was completed.   Hence, it was not possible to determine that Sebesten's acts fell within the policy exclusions and statutory bar.

The duty to defend exists so long as there is potential that the third party's injury resulted from insured's conduct, even though the injured party pleads conduct which would be facially barred by the intentional act exclusion.  (Gray v. Zurich Insurance Co. (1966) 65 Cal.2d 263, 275–277, 54 Cal.Rptr. 104, 419 P.2d 168.)   Thus, even though common sense would convince most people an injury suffered as a result of conduct constituting child molestation would be barred (it being difficult to imagine “negligent” child molestation), the insurer must nevertheless supply its insured a defense.   Furthermore, it can only safely relieve itself of the costs of such defense by filing a declaratory relief action, joining the insured and the injured third party (see Allstate Ins. Co. v. Kim W., supra, 160 Cal.App.3d at pp. 330, 334–335, 206 Cal.Rptr. 609;  Clemmer v. Hartford Insurance Co., supra, 22 Cal.3d at pp. 873–877, 151 Cal.Rptr. 285, 587 P.2d 1098), and prosecuting that declaratory relief action to a successful conclusion before the underlying civil action has concluded.  (Abbott, supra, 204 Cal.App.3d at p. 1029, 251 Cal.Rptr. 620.)   Because Insurer here failed to pursue that course, its duty to defend remained extant during the course of the civil action.

Based upon the factual setting of this case, my analysis and that of the lead opinion add up to the same practical result:  Since the insurer's duties were not determined until after termination of the related third party action against the insured, a duty to defend throughout the period of the third party trial existed.   Our difference of theories could have important impact in other cases, however.   It is my assertion that the policy language effectively precludes both the obligation of indemnity and the duty to defend, and that any ineffectiveness of the preclusion against the duty to defend is temporary only.   It exists only until the time of a judicial declaration of nonliability for indemnification for the intentional act.   If the insurer can achieve an early determination of the intentional nature of the act causing damage, I contend the insurer is thereafter free of the duty to defend.   If this is the case it will be appropriate for insurers to attempt early determination of their policy obligations by declaratory relief actions, rather than joining the declaratory relief action as a third party claim in the liability action, as was done here.

FOOTNOTES

FN1. All statutory references are to the Insurance Code unless otherwise specified.   When referring to statutory subparts we omit repetition of the word “subdivision.”.  FN1. All statutory references are to the Insurance Code unless otherwise specified.   When referring to statutory subparts we omit repetition of the word “subdivision.”

2.   The guilty plea was entered into evidence in the declaratory relief action as an admission of a party over Jimmy's, Julie's and Sebesten's objection.

3.   We note that during his testimony, Sebesten showed no remorse for the sexual molestation despite having been in state prison for many years.   Sebesten believes his sexual relationship with Jimmy was a private matter.

4.   We find “bargaining” to be an inappropriate word because in our society a child does not “bargain” to be molested by an adult.   However, in light of this testimony and the evidence regarding pedophiles not intending to harm their child victims, we are surprised at the trial court's statement that it was unaware of any evidence “that most child molestors don't believe they are going to harm their victims.”

5.   State Farm issued insurance policies as to all three residences.   It did not insure Sebesten's truck, where other acts allegedly occurred during a trip to certain national parks.

6.   For convenience we refer to the named defendants-in-intervention as “C.'s.”

7.   Sebesten also filed a cross-complaint naming both Jimmy and Julie as cross-defendants.   This cross-complaint seeking indemnity and contribution was dismissed as to Jimmy at trial and the court granted Julie's motion for nonsuit.   It is not the subject of this appeal.

8.   The trial court made no distinction between the duty to defend and the duty to indemnify.

9.   Neither party addresses the issue of coverage in the context of whether an insured “reasonably expects” to be insured for acts of sexual molestation and whether an insurer “reasonably expects” to insure for these acts.

10.   This case, cited and relied upon by C.'s, was granted review by the California Supreme Court on July 26, 1989.   We note C.'s violation of California Rules of Court, rules 976(d) and 977(a), by the citation to this case, as well as that of a vacated opinion of the Ninth Circuit.

11.   C.'s request we consider a bill pending in the Legislature is denied.   Proposed legislation does not reflect public policy.  (Moradi–Shalal v. Fireman's Fund Ins. Companies (1988) 46 Cal.3d 287, 300, 250 Cal.Rptr. 116, 758 P.2d 58.)

12.   This footnote states:  “Insurance Code section 533 has been described as ‘a part of every insurance contract and is equivalent to an exclusionary clause in the contract itself.’  (Evans v. Pacific Indemnity Co. (1975) 49 Cal.App.3d 537, 540 [122 Cal.Rptr. 680].) ․  In Evans the court stated that section 533 reflects the very sound and long standing public policy, also contained in Civil Code section 1668, which disapproves of contracts which directly or indirectly exempt anyone from personal responsibility for his own willful injury to another.   The statutory exclusion (Ins.Code, § 533) provides the same exclusion as provided for in respondent American's policy of insurance.   The words ‘willful’ as used in the statute and ‘intentional’ as used in the insurance policy are synonymous.  (Clemmer v. Hartford Insurance Co. [1978] 22 Cal.3d [865] at p. 880 [151 Cal.Rptr. 285, 587 P.2d 1098].)”  (Congregation of Rodef Sholom v. American Motorists Ins. Co. (1979) 91 Cal.App.3d 690, 695, fn. 12, 154 Cal.Rptr. 348.)

13.   We use the word “actor” to include the male and female gender, and we use the term “criminal actor” to incorporate and emphasize Kim W.'s statement in footnote 3.   A “criminal actor,” therefore, is one who commits an act rising to the level of being considered “criminal” or “unlawful” irrespective of whether the actor has actually been convicted of a crime.

14.   This section, upon which the trial court relied in granting judgment for the insurance company, read there is a presumption “that a person intends the ordinary consequences of his voluntary act.”   This section has since been repealed and superseded by Evidence Code section 665.

15.   It is noteworthy C.'s state in their brief:  “This includes the purpose for the policy behind the exclusion of intentional injury from coverage (to preclude and dissuade persons from obtaining insurance to cover PRECONCEIVED INTENDED ACTS) [citation omitted].”  (Emphasis added.)

1.   The insurer's arguments in Clemmer derived from its defense that the “insured's” killing of the victim and jury-tried conviction of second-degree murder for that killing demonstrated a willful act for which coverage was precluded under Insurance Code section 533.   The Supreme Court was presented with the opportunity to rule there could be no coverage as a matter of law.   Yet, the court affirmed an order granting a limited new trial on the issue of the substantiality of the evidence on whether the death in question was caused by a willful act.  (Clemmer, supra, 22 Cal.3d at pp. 888–889, 890, 151 Cal.Rptr. 285, 587 P.2d 1098.)   Moreover, the court addressed several contentions on appeal dealing with the trial of the willful act issue including sufficiency of the evidence to support a conclusion the killing was not willful (in the context of reviewing a denial of the insurer's motion for judgment notwithstanding the verdict), exclusion of the record of the criminal case, burden of proof on the issue of willfulness and jury instructions on the insured's capacity to harbor the requisite “design.”  (22 Cal.3d at pp. 877–881, 886–887, 151 Cal.Rptr. 285, 587 P.2d 1098.)The court stated the principle of law requiring a preconceived design to inflict injury before Insurance Code section 533 excludes coverage during its discussion of the jury instruction issue, also stating the given instruction “simply applied this principle to a situation in which the actor's capacity to harbor the requisite ‘design’ was placed in issue through evidence bearing upon his mental state.”  (22 Cal.3d at p. 887, 151 Cal.Rptr. 285, 587 P.2d 1098.)

2.   Certainly, if substantial evidence supports the conclusion the insured lacked the mental capacity to form the requisite intent to commit a willful or intentional act, as was sought to be proved in Clemmer, then a fortiori it is established the insured did not act with a preconceived design to inflict injury.   However, if such a lack of capacity is not established, then under Clemmer it still must be established that the insured acted with a preconceived design to inflict injury.

NARES, Associate Justice.