Liability Insurance Policies Invariably Exclude Intentional Acts
When a teacher abuses a minor student, rapes the minor student, and has constant sexual acts on a minor he or she acts intentionally to harm the minor as a matter of law. When a teacher sought insurance protection from the liability claims made by the student he abused his insurer sought a judgment from the court that it owed nothing to the teacher or the school district for whom the abuser worked.
In Old Republic Insurance Company v. Matthew Stevens And Alexandra Kobrick, Appeal Of: Alexandra Kobrick, J-A15018-17, No. 1903 MDA 2016, Superior Court Of Pennsylvania (November 14, 2017) Alexandra Kobrick (Kobrick) – the victim – appealed from the default judgment entered in favor of Old Republic Insurance Company in a declaratory judgment action regarding insurance coverage for defendant Matthew Stevens in a federal civil rights action that Kobrick brought against Stevens (“the Kobrick Suit”).
On November 25, 2013, Kobrick sued Stevens. Stevens was a music teacher and band director in the Lakeland School District. In addition to Stevens, Kobrick’s complaint named Lakeland as a defendant, along with Lakeland’s superintendent (Dr. Margaret Billings-Jones) and principal (Thomas Kameroski).
In the complaint, Kobrick averred that Stevens sexually assaulted her. Such sexual contact occurred in the drum closet, back stage in the auditorium and other locations on Defendant Lakeland School District property.
Defendant Stevens’ abuse of the Plaintiff occurred during school hours and when Plaintiff stayed after school on the premises owned, controlled and maintained by the Lakeland School District. The inappropriate activity and abuse continuously occurred approximately 2-3 times per week from January 2012 until the end of the school year, and beyond.
Lakeland has insurance coverage under a Leaders’ Legal Liability Policy that was issued to it by Old Republic (“Policy”). The Policy states that Old Republic “will pay on behalf of the INSURED all sums . . . that the INSURED becomes legally obligated to pay for LOSS as a result of a CLAIM against the INSURED by reason of WRONGFUL ACT(S) to which this insurance applies.” It defines the “INSURED” to include “All EMPLOYEES . . . while acting within the scope of their duties for [Lakeland] and under its direction and control[.]”
The parties do not dispute that Stevens was employed by Lakeland, though they do dispute whether his actions relevant to this case occurred “while acting with the scope of [his] duties” at Lakeland.
The Policy contains several exclusions, including the following:
This Insurance does not apply to and WE shall not be obligated to make any payment of LOSS, defend any SUIT or pay SUPPLEMENTARY PAYMENTS in connection with any Claim for, arising out of, caused by, resulting from, in consequence of, in connection with or in any way involving any of the following: “Any WRONGFUL ACT that is committed with an improper purpose or intended to cause LOSS; . . . . 4. For any CLAIM other than an EMPLOYMENT CLAIM, bodily injury, sickness, disease, death, disability, shock, humiliation, embarrassment, mental injury, mental anguish, emotional distress; … 5. False arrest, detention or imprisonment; malicious prosecution; … assault; battery; false or improper service of process; trespass; nuisance; or violation of any natural person’s right to person’s or organization’s intellectual property rights. . . .”
Old Republic appointed counsel to represent Lakeland, Billings-Jones, and Kameroski, and separate counsel to represent Stevens under strict reservations of rights.
While the Kobrick Suit proceeded, Stevens pled guilty to one count of corruption of minors in connection with his misconduct regarding Appellant. Upon learning of the guilty plea, Old Republic sent an updated reservation of rights letter to Stevens that advised that Old Republic would not defend or indemnify him in connection with Appellant’s lawsuit and thereafter filed a declaratory judgment action, naming as defendants Stevens, Lakeland, Billings-Jones, Kameroski, and Kobrickppellant. The action sought a declaration that Old Republic had no obligation to defend or indemnify Stevens in connection with the Kobrick Suit and that it should be allowed to withdraw its defense of Stevens in that action.
The appellate court concluded that Stevens’ alleged actions must be determined as intentional. Defendant Stevens was, as a result, barred from coverage based on the Policy’s clearly stated intentional wrongful acts exclusion, the bodily injury or emotional distress exclusion and the assault and battery exclusion.
Moreover, any sexual assault or corruption of Kobrick did not occur while Stevens was acting within the scope of his duty as Lakeland’s band director, which is required to be included as an insured under the Policy. In other words, no causal connection exists between teaching band students and the injuries suffered by Kobrick, who was sexually assaulted by Stevens while she was his student. None of the allegations raised in the Kobrick Suit pertain to injuries which are actually or potentially within the scope of the Policy or his employment as a band director.
The appellate court concluded that the trial court correctly interpreted and applied Pennsylvania insurance decisions regarding the intentional nature of sexual assault. Pennsylvania law on the question of intent that the intent to harm is an irrebuttable presumption.
The criminalization of child abuse additionally serves to place the insured on notice of the societal understanding that the harm from such conduct is inseparable from its performance. The court concluded that harm to children in sexual molestation cases is inherent in the very act of sexual assault committed on a child, regardless of the motivation for or nature of such assault, and that the resulting injuries are, as a matter of law, intentional.
Pursuant to the inferred intent rule, injuries resulting from sexual assault committed on children in cases of sexual molestation are intentional as a matter of law.
Under the clear terms of the Old Republic’s Policy, such intentional conduct was excluded from coverage. Kobrick’s claims against Stevens are not covered, including the exclusions for “assault” and “battery” and for non-employment claims seeking recovery for “bodily injury,” “mental anguish,” and “emotional distress.” The clear applicability of the exclusions made it unnecessary to explore questions about Stevens’ status as an “INSURED” who was “acting within the scope of [his] duties” for Lakeland.
Finally, because the dispositive terms of the Policy are clear and lack of coverage can be determined as a matter of law, the trial court’s decision was affirmed.
It is amazing that this case needed appellate help since even the most jaded of individuals must conclude that injuries resulting from sexual assault committed on children are intentional as a matter of law. Since insurance, by definition, can only provide defense and indemnity to an insured who fortuitously injures a third person there can never be coverage for the facts Kobrick alleged against Stevens.
© 2017 – Barry Zalma
This article, and all of the blog posts on this site, digests and summarizes cases published by courts of the various states and the United States. The court decisions have been modified from the actual language of the court decisions, were condensed for ease of reading, and convey the opinions of the author regarding each case.
Barry Zalma, Esq., CFE, now limits his practice to service as an insurance consultant specializing in insurance coverage, insurance claims handling, insurance bad faith and insurance fraud almost equally for insurers and policyholders. He also serves as an arbitrator or mediator for insurance related disputes. He practiced law in California for more than 44 years as an insurance coverage and claims handling lawyer and more than 50 years in the insurance business. He is available at http://www.zalma.com and firstname.lastname@example.org.
Mr. Zalma is the first recipient of the first annual Claims Magazine/ACE Legend Award.
Look to National Underwriter Company for the new Zalma Insurance Claims Library, at www.nationalunderwriter.com/ZalmaLibrary The new books are Insurance Law, Mold Claims Coverage Guide, Construction Defects Coverage Guide and Insurance Claims: A Comprehensive Guide The American Bar Association, Tort & Insurance Practice Section has published Mr. Zalma’s book “The Insurance Fraud Deskbook” available at http://shop.americanbar.org/eBus/Store/ProductDetails.aspx?productId=214624, or 800-285-2221 which is presently available and “Diminution of Value Damages” available at http://shop.americanbar.org/eBus/Store/ProductDetails.aspx?productId=203226972 Mr. Zalma’s three new e-books were recently added and are available at http://zalma.com/zalma-books/
The author and publisher disclaim any liability, loss, or risk incurred as a consequence, directly or indirectly, of the use and application of any of the contents of this blog. The information provided is not a substitute for the advice of a competent insurance, legal, or other professional. The Information provided at this site should not be relied on as legal advice. Legal advice cannot be given without full consideration of all relevant information relating to an individual situation.