In a sexual abuse case an intentional acts exclusion in an insurance policy could be extended to a negligence claim against a non-abusing party named in the same policy as the abuser.
We find no general proposition that a negligence claim against a non-abusing named insured is always an “occurrence” or that an intentional acts exclusion is never effective in a sexual abuse coverage case, particularly where the policy includes a joint obligations provision.
We accept a certified question from the U.S. District Court for the District of South Carolina, raising the question of whether plaintiff’s intentional or criminal acts exclusion and the joint obligations provision in its policy barred coverage for claims of negligent supervision and breach of fiduciary duty.
The question arose from an action alleging sexual abuse against minor Jane Doe by defendant’s husband. Doe brought suit against defendant alleging negligence and breach of fiduciary duty based on defendant’s alleged non-intentional inaction in the face of evidence of her husband’s “sexual proclivities concerning young girls” and defendant’s intentional post-abuse social media comments disparaging Doe’s mother as a “sorry mother.”
Plaintiff issued a homeowner’s policy to defendant and her husband, who were both named insured under the policy. Plaintiff filed suit asking the district court to declare that plaintiff was not required to defend or provide coverage to defendant. The district court concluded that plaintiff’s policy unambiguously barred coverage to defendant’s husband for his alleged intentional acts of sexual abuse; the district court further concluded that the policy also denied coverage to one named insured where the other named insured was barred from coverage. However, the district court certified the question for defendant’s negligence and breach of fiduciary duty claims.
We find that the district court’s certified question requires us to decide whether the South Carolina Court of Appeals’ ruling in Manufacturers & Merchants Inc. Co. v. Harvey, 330 S.C. 152 altered the lack of duty to defendant that would flow from the district court’s interpretation of defendant’s and her husband’s policy or whether public policy prohibited application of defendant’s policy to deny coverage.
We rule that Harvey does not stand for the general proposition that, in a sexual abuse case, a negligence claim against a non-abusing insured is an “occurrence” or that an intentional acts exclusion is never effective. We note that the intentional acts exclusion in Harvey is different from the exclusion in the parties’ policy because the policy in Harvey did not contain a joint obligations provision.
Certified question answered.
Allstate Vehicle and Prop. Ins. Co. v. Hunter (Lawyers Weekly No. 010-103-18, 3 pp.) (Few, J.) On Certification from the U.S. District Court for the District of South Carolina (David C. Norton, J.) Alfred Johnston Cox and Janice Holmes for plaintiff; Aaron Eric Edwards and Lawrence E. Richter, Jr., and Benjamin Terrell Coppage for defendants. S.C. Sup. Ct.