## Facts

- S.S. contracted genital herpes after consensual sexual intercourse with G.W. at G.W.’s home.
- G.W. held a homeowner’s policy issued by State Farm Fire & Casualty Company.
- After S.S. sought compensation, G.W. notified State Farm; State Farm investigated and initially provided defense counsel under a nonwaiver/reservation arrangement.
- The policy contained an exclusion for bodily injury “expected or intended” by the insured, and State Farm questioned whether the claim was covered.
- State Farm rejected S.S.’s settlement offers within policy limits.
- G.W. later declined State Farm’s provided counsel and retained his own attorney.
- S.S. sued G.W., alleging negligent transmission of genital herpes.
- S.S. and G.W. entered an agreement for a $1 million agreed judgment, coupled with a covenant not to execute against G.W., in exchange for an assignment of a portion of G.W.’s potential extra-contractual claims against State Farm.
- After learning of the agreed judgment, State Farm filed a declaratory judgment action asserting no duty to pay, based on the intentional-injury exclusion and alleged breach of the policy’s notice/cooperation obligations.

## Issues

1. Whether the insurer conclusively established, for summary judgment purposes, that the insured intended or expected bodily injury so that the intentional-injury exclusion barred coverage as a matter of law.
2. Whether the insured’s alleged failure to notify the insurer of the lawsuit and entry into an agreed judgment without the insurer’s consent relieved the insurer of obligations as a matter of law.

## Decision

- The Texas Supreme Court affirmed the court of appeals’ judgment reversing the trial court’s summary judgment for State Farm and remanding.
- State Farm did not carry its summary-judgment burden to conclusively prove the applicability of the intentional-injury exclusion.
- The summary-judgment record did not conclusively establish that G.W. intended to transmit herpes or otherwise intended to injure S.S., as required to negate coverage as a matter of law.
- The Court did not render a final coverage determination; it held only that summary judgment for the insurer was improper on the record presented.

## Legal Principles

- An insurer seeking summary judgment based on a policy exclusion bears the burden to conclusively prove the exclusion applies and that no genuine issue of material fact exists.
- For an “expected or intended” injury exclusion, intent to engage in conduct is not, by itself, conclusive proof of intent to cause bodily injury; the insurer must show intent to injure (or facts permitting intent to injure to be inferred as a matter of law).
- Intent to injure may be inferred as a matter of law only in limited circumstances where the conduct is inherently injurious; absent conclusive proof meeting that standard, summary judgment on the exclusion is improper.
- A reversal and remand following an erroneous summary judgment resolves only whether the movant proved entitlement to judgment as a matter of law, not whether coverage ultimately exists.

## Conclusion

The Texas Supreme Court held that State Farm could not obtain summary judgment denying coverage under the homeowner’s intentional-injury exclusion because the evidence did not conclusively establish that G.W. intended to injure S.S. by transmitting herpes; the case was remanded for further proceedings.


State Farm Fire & Cas. Co. v. S.S. & G.W., 858 S.W.2d 374 (Tex. 1993)