Is sexual assault ever “accidental” so that insurance is triggered?
This discusses a recent case called Gonzalez v. Fire Insurance Exchange (2015) H039368, 6th Appellate District, emphasizing the need to carefully draft a complaint so that the defendants’ insurance is triggered. It is also critical to locate all potential applicable insurance policies as each may have its own definitions.
In 2007, a seventeen year old girl was invited to a party with baseball players on the De Anza College baseball team. After the players fed her shots of alcohol in rapid succession, nine of them took turns assaulting her after she passed out. Others at the party tried to help, but the assailants pushed them away. The victim brought suit against the assailants. One assailant submitted the lawsuit to his insurance carrier but the carrier denied coverage.
The insurance company claimed “(1) none of the alleged conduct was the result of an ‘accident’ and thus, there was no ‘occurrence’ as required by the Homeowners Policy; (2) all of the claims were excluded by the Policy’s Sexual Molestation Exclusion because they were all inextricably intertwined with the actual, alleged, or threatened sexual misconduct, sexual molestation, or physical or mental abuse of a minor; (3) the Policy excluded coverage for claims for punitive damages; and (4) the claims all involved willful conduct and were excluded pursuant to the Policy’s intentional acts exclusion as well as by Insurance Code section 533.”
The assailant/defendant settled with the victim/plaintiff and in doing so, assigned to her all of his claims against the carrier that denied coverage. In other words, the victim would ironically stand in the shoes of the assailant and could sue the assailant’s insurance company. Strange, but if it works, she deserves the recovery.
She sued Fire Insurance Exchange (Fire) and Truck Insurance Exchange (Truck) for breach of the duty of good faith and fair dealing and breach of contract. She also sued to recover the amount of her judgment directly against the carrier pursuant to Insurance Code section 11580.
Fire and Truck moved for summary judgment, claiming they owed no duty to defend the assailant. Result? Motion for summary judgment granted. No coverage means no breach of contract. If there’s no breach of contract, there is no breach of the implied covenant of good faith and fair dealing.
The victim’s attorney had done everything possible to plead a case which would trigger coverage. The complaint against the assailant is what one would hope would trigger coverage. That complaint alleged (a) negligence for failing to rescue her from the assault, (b) negligence for inviting her to the party, (c) negligence for serving her alcohol, (d) false imprisonment, (e) invasion of privacy, (f) slander per se, (g) battery, (h) sexual battery, (i) rape, unlawful intercourse, forcible acts, oral copulation, and (j) conspiracy. But the trial court agreed with the insurance company and found there was no coverage.
In reviewing the matter de novo, the Court agreed that no “accident” had been alleged in the complaint. The opinion highlights the difference between “accidental” and “negligence”. Merely alleging “negligence” is not sufficient to trigger coverage for accidental conduct. “‘An accident . . . is never present when the insured performs a deliberate act unless some additional, unexpected, independent, and unforeseen happening occurs that produces the damage.'”
The Court of Appeal also examined whether there was coverage under the umbrella policy which covered: “[D]amages caused by an occurrence in excess of the retained limit on the insured’s behalf,” and stated the company would “defend any insured for any claim or suit that is covered by this insurance but not covered by other insurance.” The policy further asserted that “[i]f a claim or suit is made for damages excluded from coverage under this policy, we have no obligation to defend such claim or suit.”
The umbrella policy’s definition of a “occurrence” is the following: “Occurrence means: [¶] a. with regard to bodily injury or property damage, an accident, including continuous or repeated exposure to substantially the same general harmful conditions, which results in bodily injury or property damage during the policy period; or [¶] b. with regard to personal injury, offenses committed during the policy period, even if the resulting injury takes place after the policy expires.” (Italics added.) “Personal Injury” is defined under the policy as “injury arising out of: [¶] a. false arrest, wrongful detention or imprisonment, or malicious prosecution; [¶] b. wrongful eviction, wrongful entry, or invasion of the right of private occupancy; or [¶] c. libel, slander, defamation of character or invasion of privacy.”
To trigger coverage, the umbrella policy had no requirement that the personal injury arise out of an “accident.” Since the complaint alleged causes of action for false imprisonment, slander per se, and invasion of privacy, these claims raised the potential for coverage under the umbrella policy’s provision providing coverage for damages from an “occurrence” resulting in “personal injury.”
The Court discussed the potential exclusions in the umbrella policy (sexual molestation exclusion, expected or intended damages, criminal acts, sexual acts). The carrier had the burden prove the exclusion in the motion for summary judgment. The Court of Appeal held that the carrier had not met that burden and reversed the trial court with regard to the umbrella policy. The trial court was reversed.