Result of alleged hazing ‘unintended,’ so insurer had duty to defend claim

Allstate Insurance Co. had a duty to defend a swimmer from the University of Virginia in a lawsuit claiming he and four of his teammates forced a first-year swimmer to drink milk and prune juice until he vomited, a South Carolina federal judge ruled last month.

Judge Bruce Hendricks’ March 14 ruling in Allstate Insurance Co. v. Ingraham said that while the alleged hazing incident involved intentional conduct, an intentional conduct exclusion had not been triggered because the upperclassmen overseeing the alleged hazing had not intended to make Anthony Marcantonio vomit.

Allstate issued the policy to the parents of David Ingraham. After they filed a claim arguing the company had a duty to defend their son in the underlying hazing case, Allstate sued the Ingrahams in the federal court in Spartanburg, seeking a court order saying the company had no such duty.

But Hendricks determined that the company should have provided Ingraham with legal representation. Hendricks awarded partial summary judgment to the Ingrahams.

“The underlying complaint includes no allegation that Ingraham, or any of the other underlying defendants intended Marcantonio to suffer this particular injury,” Hendricks said. “Even if the pleading had included such an allegation, it would not have precluded the negligence claim as an alternative theory of liability and source of possible coverage.”

However, Hendricks said it was still unclear whether Allstate had a duty to indemnify David Ingraham in the underlying case.

A troubled initiation

Court records say the incident in question occurred on Aug. 27, 2014. After receiving what is described as a hostile email from one of the UVA swim team’s upperclassmen, Marcantonio arrived for a “Welcome Week” event at a designated location.

Once there, Marcantonio’s complaint says the upperclassmen allegedly ordered first-year swimmers to do a number of degrading acts, including forcing them to drink large quantities of milk, prune juice and alcohol with the threat of being sodomized if they did not comply. The first-year swimmers were also allegedly ordered to eat a live goldfish and to complete a scavenger hunt that required stealing items from retail stores, the school and other students.

The complaint summarized the event by saying, “[Marcantonio] and the other first years on the swim team had been thus tormented, harassed, assaulted, held captive, threatened and terrorized for over five hours. During the entire time [Marcantonio] had been subjected to the hazing described above, he had felt captive and not free to leave [the Swim House].”

Marcantonio’s complaint alleged 10 individual claims, which included assault and battery, false imprisonment, hazing and, importantly, negligence.

The defendants’ answer to the complaint in the underlying case argued that many of the events Marcantonio described occurred differently than what was described in the complaint. The answer said no one was forced to drink alcohol and that Marcantonio and other first-year swimmers volunteered to eat a live goldfish.

Under the settlement reached by the two sides, Marcantonio was required to issue a public statement denying that he was forced to drink alcohol, that he was subjected to sexual assault and sexual battery and that items were stolen during the scavenger hunt.

Covered occurrence?

Based on Marcantonio’s claims, Allstate argued the alleged hazing incident was not a covered occurrence under the Ingraham’s homeowners’ insurance policy because all allegations stemmed from intentional conduct that could amount to criminal behavior.

Hendricks went to some length to describe why Allstate’s reading of the underlying complaint was “overly simplistic.”

Hendricks noted that none of the upperclassmen intended for Marcantonio to vomit — a bodily injury under Virginia law.

Hendricks also said many of Marcantonio’s claims were based on actions that could not be construed as accidental. But since he also included a claim of negligence, Marcantonio had stated a cause of action that satisfies the “occurrence” requirement and invoked a possibility of coverage under the policy, Hendricks said.

Hendricks said that after reviewing the underlying complaint, she had determined that the negligence claim was not simply a repetition of his intentional tort allegations cloaked in negligence claims. Therefore, Allstate had a duty to defend, Hendricks said.

However, Hendricks said the Ingrahams’ motion to compel Allstate to turn over documents related to the case had been rendered moot because it had been filed in support of the motion for summary judgment. Hendricks denied the motion without prejudice, saying the documents in question might be relevant in any effort the Ingrahams pursue to seek indemnity from Allstate.

Henry Parr of the Wyche Law Office in Greenville, who represented the Ingrahams in the Allstate case, said, “We are really gratified by the careful analysis of Judge Hendricks, and we appreciate how she applied well established insurance laws of South Carolina.”

Parr said the next step in the case will likely be a petition for attorney’s fees, in light of Hendricks’ ruling. The Ingrahams were also represented by William Wilson, also of the Wyche Law Office.

Allstate’s attorneys, Alfred Cox and Janice Holmes of Gallivan, White & Boyd in Columbia, did not respond to requests for comment.

Further consideration

Roy Willey of the Anastopoulo Law Firm in Charleston said the Allstate case highlights the differences between homeowners’ insurance policies and those that are issued to organizations that often face allegations of hazing, such as fraternities and sororities.

“Of course all insurance policies are different. Policies developed for Greek organizations often include specific hazing exclusions, and in fact, if this case had only involved hazing allegations the court may have found differently on the coverage issue,” Willey said.  “However, the defendants plead that the acts and/or injuries were negligent. That gets them into coverage as it was not only plausible, but in the case also established through the trial court in its upholding the negligence cause of action.”

Willey serves on the national insurance law executive council for the American Association of Justice.

Wesley Sawyer of Murphy & Grantland in Columbia, who has represented insurance carriers in hazing lawsuits, said he would have liked to see Hendricks go into more detail about why the doctrine of inferred intent did not apply. Sawyer was referring to the idea that an insured’s intentional act and the harm it causes are intrinsically tied, so that the act has necessarily resulted in the harm.

That said, Sawyer said Hendricks’ opinion did a good job of laying out the established law on cases like these.

“It’s a close case, but the court reached the right conclusion,” Sawyer said. “The court could have looked more closely at the inferred intent doctrine, but this may not have been a good test case for that, given the physical harm suffered by the underlying plaintiff was not terribly severe.”

The 40-page opinion is Allstate v. Ingraham (Lawyers Weekly No. 002-086-17). An opinion digest is available at sclawyersweekly.com.

Follow Jeff Jeffrey on Twitter @SCLWJeffrey