October 14, 2009
Previously published on October 8, 2009
Brandon S. v. State of California, 174 Cal.App.4th 815 (2009).
BACKGROUND FACTS
Plaintiff was placed in a licensed foster home operated by Monique M. Monique M.’s 13-year old stepson sexually molested the plaintiff and was subsequently arrested. He admitted to committing lewd acts on a child under 14 years of age and Monique M.’s license was revoked. Plaintiff filed a claim with the Fund seeking damages for emotional and physical injuries arising from the molestation. The Fund denied the claim, relying on the exclusion in § 1527.3(a) for criminal acts. Plaintiff then filed suit in superior court, seeking declaratory relief against the Fund arising out of Monique M.’s negligence. The Trial Court concluded that the statutory exclusion for loss arising out of a criminal act precluded the Fund’s liability because the plaintiff’s damages directly arose from criminal sexual molestation. The plaintiff appealed.
THE COURT’S RULING
In affirming the trial court, the Court of Appeal concluded that because the Legislature had specifically provided that the Fund would not be liable for “any” loss arising out of criminal acts, there was no indication that it intended to limit this exclusion to only criminal acts by a foster parent. Furthermore, because the statute contained other exclusions which specifically referred to conduct by foster parents, the court found it reasonable to conclude that the Legislature consciously chose not to condition the criminal acts exclusion on conduct solely by a foster parent.
The court also noted that at the same time the Legislature created the Fund, it created a second way to address the insurance crisis facing foster parents – namely, by adding what is now § 676.7 to the Insurance Code. That section prohibits insurers from refusing to issue and from canceling policies of homeowners or tenants for the sole reason that the insured engages in licensed foster care activities. Although the section precludes such policies from covering “licentious, immoral, or sexual behavior on the part of a foster parent” or any loss arising out of criminal conduct, the statute permits insurers to provide, by separate policy, for some or all of the claims arising out of the foster family relationship and otherwise excluded from a homeowners or tenants policy by virtue of the statute.
THE EFFECT OF THE COURT’S RULING
Although neither the Fund nor a homeowners policy can cover criminal acts, an insurer may issue a separate foster care liability policy which provides coverage for a foster parent’s negligent supervision that results in a foster child being injured by the criminal conduct of a third party.
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