Insurer won’t have to pay for hazing settlement

The insurer for a South Carolina fraternity chapter will not be on the hook to pay a settlement reached between a former pledge hurt while enduring a hazing and the fraternity alum who owned the home where the ritual took place.

A federal judge rebuffed the attempt by the alum’s homeowners carrier to get the fraternity’s insurer to indemnify the man.

Daniel McElveen suffered kidney damage and renal failure after he was paddled by members of the Francis Marion University chapter of Phi Beta Sigma during a 2011 initiation ritual. The hazing occurred at the Florence home of Maurice Robinson, a fraternity alumnus.

McElveen sued the national fraternity, its local chapter and Robinson. Admiral Insurance Company settled all claims against the fraternity and its chapter before trial, but refused to defend Robinson, citing an exclusion in its insurance policy for injuries resulting from hazing. A Florence County jury awarded McElveen a $1.6 million verdict against Robinson in 2014, and the parties later settled the suit for $975,000.

State Farm, which provided Robinson’s homeowner’s liability insurance, sued Admiral, contending that Admiral had a duty to indemnify Robinson. On Jan. 25, U.S. District Court Judge Richard Gergel granted Admiral’s motion for summary judgment, finding that the injuries clearly fell within the scope of its anti-hazing exclusion.

The exclusion applied “only to insureds who participate in or direct others to participate in the hazing.” State Farm argued that Robinson did not fall within the exclusion because he did not personally paddle McElveen or instruct anyone at his house to do so. Gergel ruled that State Farm’s argument was without merit because Robinson admitted in his deposition testimony that he had control over the event, and so therefore he also legally a participant in it.

“Mr. Robinson testified that the hazing occurred at his home, that he observed the hazing, and that he could have stopped the hazing at any time,” Gergel wrote. “To invite something to occur in one’s home and then to observe that thing occurring while having power to stop it at any time is to have control over that thing.”

J.R. Murphy, Timothy Newton and Wesley Sawyer of Murphy and Grantland in Columbia represented Admiral. Kevin Barth of Ballenger Barth and Hoefer in Florence, Linda Gangi of Thompson and Henry in Conway and W. James Hoffmeyer of Florence represented State Farm.

The seven-page decision is State Farm Fire & Casualty Co. v. Admiral Insurance Co. (Lawyers Weekly No. 002-036-17). An opinion digest is available online at sclawyersweekly.com.

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