376 S.E.2d 581 (W.Va. 1988), CC985, Horace Mann Ins. Co. v. Leeber
|Citation:||376 S.E.2d 581, 180 W.Va. 375|
|Party Name:||HORACE MANN INSURANCE COMPANY, a Corporation v. James V. LEEBER, Brian H., An Infant Under the Age of Eighteen Years, David H., Pat H. and the Raleigh County Board of Education.|
|Attorney:||G. Mann, Lynch, Mann, Smith & Mann, Beckley, for appellant., John A. Hutchison, James R. Sheatsley, Earl Kent Hellems, Gorman, Sheatsley & Hutchison, Beckley, for Brian H. et al., John R. Hoblitzell, Jr., Karen Speidel Rodgers, Kay, Casto & Chaney, Charleston, for Raleigh Co. Bd. of Ed.|
|Case Date:||December 20, 1988|
|Court:||Supreme Court of Appeals of West Virginia|
[180 W.Va. 376] Syllabus by the Court
There is neither a duty to defend an insured in an action for, nor a duty to pay for, damages allegedly caused by the sexual misconduct of an insured, when the liability insurance policy contains a so-called "intentional injury" exclusion. In such a case the intent of an insured to cause some injury will be inferred as a matter of law.
Kimberly G. Mann, Lynch, Mann, Smith & Mann, Beckley, for appellant.
John A. Hutchison, James R. Sheatsley, Earl Kent Hellems, Gorman, Sheatsley & Hutchison, Beckley, for Brian H. et al.
John R. Hoblitzell, Jr., Karen Speidel Rodgers, Kay, Casto & Chaney, Charleston, for Raleigh Co. Bd. of Ed.
McHUGH, Chief Justice:
This case presents two related questions of first impression in this jurisdiction, specifically, whether a homeowner's or other liability insurer has a duty to (1) defend and to (2) pay on behalf of its insured when an action has been brought against the insured based upon alleged sexual misconduct and when the insurance policy has an exclusion from coverage for "liability ... caused intentionally by ... the insured." The Circuit Court of Raleigh County (the "trial court") answered these questions in the negative and certified the questions to us. 1 We agree with the answers of the trial court.
James V. Leeber was a teacher employed by the Board of Education of Raleigh County, West Virginia (the "Board"), and was assigned to a certain junior high school in Beckley, West Virginia. Leeber cultivated an abnormal relationship with some of
[180 W.Va. 377] his students, trying to become their friend, confidant and surrogate parent. The relationship between Leeber and one of his students, Brian H., evolved into one wherein Leeber made sexual advances and allegedly took sexual liberties, such as touching Brian's genitalia.
Upon discovering overtly sexual contact between Leeber and their son, the parents of Brian H. sought criminal prosecution of Leeber. Leeber was immediately dismissed from his teaching position. He later pleaded guilty to two counts of sexual abuse in the third degree, misdemeanors under W.Va.Code, 61-8B-9(c) . 2
Brian H.'s parents later filed a civil action ("the underlying action") against Leeber and the Board in which they demanded damages from the defendants based upon the intentional, willful, wanton and negligent acts of Leeber in having sexual contacts with Brian H. and in seducing and enticing him into a relationship which caused emotional distress to Brian H. and his parents. The Board filed a cross-claim against Leeber. The parties undertook some discovery in the underlying action.
Thereafter Horace Mann Insurance Company ("Horace Mann") filed a declaratory judgment action 3 against Leeber, the Board, Brian H. and his parents in the trial court to determine whether Horace Mann had an obligation to defend Leeber in the underlying action and whether it would be required to afford coverage for any judgment which might be rendered against Leeber for the alleged conduct, in light of the so-called "intentional injury" exclusion in the homeowner's insurance policy in question. This exclusion provides: "This policy does not apply to liability ... caused intentionally by or at the direction of any insured[.]" 4
As he had done in the underlying action, Leeber filed an answer in the declaratory judgment action in which he denied the allegations of intentional, willful and wanton acts, as well as denying any actionable negligence.
Upon Horace Mann's motion for judgment on the pleadings in the declaratory judgment action, 5 the trial court granted such motion and certified these questions to this Court, answering them in the negative:
[180 W.Va. 378] Does an insurance company which provides a general liability insurance policy containing a so-called "intentional injury" exclusion have a duty to (1) defend and to (2) pay on behalf of its insured, an adult public school teacher who allegedly had sexual contacts with one of his minor students?
At the outset we set forth a few general principles, also set forth by this Court in Aetna Casualty & Surety Co. v. Pitrolo, 176 W.Va. 190, 194, 342 S.E.2d 156, 160 (1986). First, any ambiguity in the language of an insurance policy is to be construed liberally in favor of the insured, as the policy was prepared exclusively by the insurer. This principle applies to policy language on the insurer's duty to defend the insured, as well as to policy language on the insurer's duty to pay. Second, the duty of an insurer to defend an insured is generally broader than the obligation to provide coverage, that is, to pay a third party or to indemnify the insured, in light of the language in the typical liability policy which obligates the insurer to defend even though the suit is groundless, false or fraudulent. 6 Third, an insurer's duty to defend is normally tested by whether the allegations in the complaint against the insured are reasonably susceptible of an interpretation that the claim may be covered by the terms of the insurance policy. Consequently, there is no requirement that the facts alleged in the complaint against the insured specifically and unequivocally delineate a claim which, if proved, would be within the insurance coverage.
Donnelly v. Transportation Insurance Co., 589 F.2d 761, 765 (4th Cir.1978), as amended on denial of rehearing, Jan. 30, 1979, recites other general principles with which we agree. First, if part of the claims against an insured fall within the coverage of a liability insurance policy and part do not, the insurer must defend all of the claims, although it might eventually be required to pay only some of the claims. Second, an insured's right to a defense will not be foreclosed unless such a result is inescapably necessary. Thus, third, a liability insurer need not defend a case against the insured if the alleged conduct is entirely foreign to the risk insured against.
There is a split of authorities on the specific questions involved in this case, namely, whether there is a duty to (1) defend the insured in an action for, and to (2) pay for, damages allegedly caused by the sexual misconduct of the insured, when the liability insurance policy contains a so-called "intentional injury" exclusion. The majority of the jurisdictions deciding these questions hold that there is neither a duty to defend nor to pay under such circumstances. 7 Most courts deny liability insurance
[180 W.Va. 379] coverage for alleged sexual misconduct by applying an objective test to an intentional injury exclusion in the policy. They hold that the insured must have intended not only the act (the alleged sexual contact) but also must have intended to cause some kind of injury. However, the intent to cause some injury will be inferred as a matter of law in a sexual misconduct liability insurance case, due to the nature of the act (the alleged sexual contact), which is so inherently injurious, or "substantially certain" to result in some injury, that the act is considered a criminal offense for which public policy precludes a claim of unintended consequences, that is, a claim that no harm was intended to result from the act. Once the intent to cause some injury is inferred as a matter of law in a sexual misconduct liability insurance case, the majority view is that it is immaterial that the actual injury caused is of a different character or magnitude than that subjectively intended. See, e.g., Western National Assurance Co. v. Hecker, 43 Wash.App. 816, 824-25, 719 P.2d 954, 959-60 (1986); Harpy v. Nationwide Mutual Fire Insurance Co., 76 Md.App. 474, 483, 545 A.2d 718, 723 (1988). See generally 7A J. Appleman,Insurance Law and Practice § 4492.02, at 29, § 4501.09 (rev.1979); 11 G. Couch, Cyclopedia of Insurance Law §§ 44:289, 44:298 (rev. 2d ed. 1982); 12 G. Couch, Cyclopedia of Insurance Law § 44A:133 (rev. 2d ed. 1981); annotation,Construction and Application of Provision of Liability Insurance Policy Expressly Excluding Injuries Intended or Expected by Insured, 31 A.L.R. 4th 957 (1984).
Under the majority view, a liability insurer would have no duty to defend a civil action against the insured based upon alleged sexual misconduct because, as seen, there is, under such view, definitely, as a matter of law, no duty to pay.
As seen from the great variety of sexual contacts involved in the cases following the majority rule, see supra note 7, the application of the majority rule rejecting an alleged duty to defend or to pay in sexual misconduct liability insurance cases is not
[180 W.Va. 380] restricted to those cases involving "violence," or penetration or a lengthy period of time during which the sexual contacts have occurred. See Allstate Insurance Co. v. Thomas, 684 F.Supp. 1056, 1059-60 (W.D.Okla.1988).
As in Western National Assurance Co. v. Hecker, 43 Wash.App. 816, 719 P.2d 954 (1986), a case applying the majority rule, we note that the insurance policy in question contains an exclusion from coverage for "liability ... caused intentionally by ... any insured." (emphasis added by us) "Clearly, one does not normally intend to cause liability." 43 Wash.App. at 824, 719 P.2d at 959 (emphasis in original). A literal reading of certain language in an insurance policy will not be applied when it results in an absurdity. We read "the phrase to mean that the injury must be intentionally caused by the insured." 43...
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