Gearing v. Nationwide Ins. Co.

• Decision Date: 03 July 1996
• Docket Number: No. 94-2732,94-2732
• Citation: 665 N.E.2d 1115,76 Ohio St.3d 34
• Parties: GEARING et al., Appellants, v. NATIONWIDE INSURANCE COMPANY, Appellee.
• Court: Ohio Supreme Court

Page 34

76 Ohio St.3d 34

665 N.E.2d 1115

GEARING et al., Appellants, v. NATIONWIDE INSURANCE COMPANY, Appellee.

No. 94-2732.

Supreme Court of Ohio.

Submitted Jan. 23, 1996.

Decided July 3, 1996.

SYLLABUS BY THE COURT

1. Incidents of intentional acts of sexual molestation of a minor do not constitute "occurrences" for purposes of determining liability insurance coverage, as intent to harm inconsistent with an insurable incident is properly inferred as a matter of law from deliberate acts of sexual molestation of a minor.

2. The public policy of the state of Ohio precludes issuance of insurance to provide liability coverage for injuries resulting from intentional acts of sexual molestation of a minor.

On July 2, 1991, Peter and Catherine Ozog and their three minor daughters filed suit against Henry A. Gearing, a former neighbor and friend the girls called "Grandpa." The Ozogs sought recovery of damages arising from acts of sexual child molestation against the Ozog girls which allegedly occurred on multiple occasions during the period 1987 through 1990. In their complaint, the Ozogs alleged that the girls had suffered actual harm, including permanent physical and emotional injuries and problems, growing out of Ozog's acts of sexual battery. They further alleged that the parents had suffered damages for which Gearing was liable based on a tort theory of negligent infliction of serious emotional distress.

Contemporaneously, in 1991, Gearing pled guilty to three felony counts of gross sexual imposition in violation of R.C. 2907.05 based on his conduct towards the Ozog girls.

In June 1992, Gearing filed a declaratory judgment action against his homeowner's insurance carrier, appellee Nationwide Insurance Company ("Nationwide"). He sought a declaration that Nationwide was obligated to defend him in the civil suit brought by the Ozogs, and indemnify him in the event damages were awarded. The Ozogs intervened in the action asserting, as Gearing himself, that Gearing's homeowner's policy provided liability coverage of their tort claims. The Gearing and Ozog actions were consolidated in September 1992.

During a discovery deposition in February 1993, Gearing admitted that he had intentionally touched the breasts and genital areas of the three girls, and that he knew his actions were deemed morally wrong by his church. He claimed, however, that at the time of his actions, he did not know that his acts of sexual molestation could cause emotional and mental harm to the children. In his response to a request for admissions, dated May 6, 1993, he asserted he never intended to cause injury or harm to the Ozog sisters.

On October 6, 1993, in the declaratory judgment action, ¹ the trial court granted summary judgment in favor of Nationwide. On joint appeal, the court of appeals affirmed, holding that the incidents at issue fell within an "intentional injury" exclusion provision of the Nationwide policy, in that "sexual molestation of a child is per se, an intentional act from which an intent to harm must be inferred as a matter of law * * *."

The cause is now before this court pursuant to the allowance of a discretionary appeal.

Michael F. Farrell, Cleveland, for appellant Henry A. Gearing.

Donald E. Caravona & Associates, Michael W. Czack and Kevin J. Lenhard, Cleveland, for appellants Peter J. Ozog et al.

Gravens & Franey Co., L.P.A., and Terrance P. Gravens, Cleveland, for appellee.

Manley, Burke, Fischer, Lipton & Cook and Andrew S. Lipton, Cincinnati, urging reversal for amicus curiae, Ohio Academy of Trial Lawyers.

MOYER, Chief Justice.

In Physicians Ins. Co. v. Swanson (1991), 58 Ohio St.3d 189, 569 N.E.2d 906, we held, as syllabus law, that "[i]n order to avoid coverage on the basis of an exclusion for expected or intentional injuries, the insurer must demonstrate that the injury itself was expected or intended." (Emphasis added.) In that case, Bill Swanson fired a BB gun in the direction of a group of teenagers sitting at a picnic table seventy to one hundred feet away. He testified, however, that he aimed not at the teenagers, but rather at a sign on a tree ten to fifteen feet from the table. Nevertheless one of the teenagers lost his right eye when a BB fired by Swanson struck the victim. The trial court found the injury to be accidental, and found that the insurer was obligated to defend and indemnify under two policies in which Swanson qualified as an insured. We affirmed that finding.

In the case at bar, Henry Gearing admitted that he did not subjectively intend to hurt or harm his victims, even though he testified that he intentionally engaged in criminal sexual touching of the Ozog children. The Ozogs and Gearing, now aligned together as joint appellants against Nationwide, contend that, pursuant to Swanson and in light of Gearing's denial of a subjective intent to harm the girls, the Nationwide policy must be deemed to provide liability coverage for damages caused by Gearing's acts.

It is axiomatic that an insurance company is under no obligation to its insured, or to others harmed by the actions of an insured, unless the conduct alleged of the insured falls within the coverage of the policy. Coverage is provided if the conduct falls within the scope of coverage defined in the policy, and not within an exception thereto.

The Nationwide policy at issue provided personal liability coverage to the insured, Henry Gearing, as follows:

"COVERAGE E--PERSONAL LIABILITY

"We will pay damages the insured is legally obligated to pay due to an occurrence."

The policy specifically defined "occurrence" as:

" * * * bodily injury or property damage resulting from:

"a. one accident; or

"b. continuous or repeated exposure to the same general condition." (Emphasis added.)

The Nationwide policy contained an "intentional injury exclusion," which provided:

"Coverage E-Personal Liability * * * do[es] not apply to bodily injury or property damage:

"a. which is expected or intended by the insured." (Emphasis added.)

The court of appeals resolved this case on the basis of this exclusion. Nationwide urges us to affirm that court's reasoning, and to adopt the "inferred intent" rule for purposes of applying intentional injury exclusions to cases such as this where homeowner's insurance coverage is asserted for claims arising out of alleged sexual abuse of minors.

Under the inferred intent rule, intent to injure is inferred as a matter of law from the act of sexual abuse of a child itself, as harm is deemed inherent in the sexual molestation, regardless of the offender's expression of subjective intent, and regardless of whether the sexual abuse was "nonviolent" or unaccompanied by penetration, or whether the abuse took place over a long or short period of time. Wiley v. State Farm Fire & Cas. Co. (C.A.3, 1993), 995 F.2d 457, 463. The rule is based on the premise that acts of sexual molestation and the fact of injury caused thereby are "virtually inseparable," Worcester Ins. Co. v. Fells Acres Day School, Inc. (1990), 408 Mass. 393, 400, 558 N.E.2d 958, 964, in that, in a case of child molestation, "to do the act is necessarily to do the harm which is its consequence; and * * * since unquestionably the act is intended, so also is the harm." Allstate Ins. Co. v. Mugavero (1992), 79 N.Y.2d 153, 160, 581 N.Y.S.2d 142, 146, 589 N.E.2d 365, 369.

By 1990, the Supreme Judicial Court of Massachusetts described the inferred intent rule as having been adopted by the "overwhelming majority" of jurisdictions considering the issue. Worcester Ins. Co., supra, 408 Mass. at 401, 558 N.E.2d at 965. By 1993, the inferred intent standard in cases of sexual molestation of a minor was characterized as the "unanimous" rule. B.B. v. Continental Ins. Co. (C.A.8, 1993), 8 F.3d 1288, 1293, and at fns. 7 and 8. See, also, Florig, Insurance Coverage for Sexual Abuse or Molestation (1995), 30 Tort & Ins. L.J. 699; Annotation, Construction and Application of Provision of Liability Insurance Policy Expressly Excluding Injuries Intended or Expected by Insured (1995 Supp. at 100-105), 31 A.L.R.4th 957, Section 12[a]; 7A Appleman, Insurance Law and Practice (1995 Supp.), at 68, 73-75, fn. 10.10, Section 4501.09.

Appellants and amicus urge us to follow a minority approach, which provides that acts of sexual molestation create, at best, only an inference of intent to injure, rebuttable by evidence showing lack of subjective intent to injure. See, e.g., State Farm Fire & Cas. Co. v. Estate of Jenner (C.A.9, 1989), 874 F.2d 604, 607. The minority approach has, however, largely been abandoned, having been criticized as " 'logically untenable.' " Wiley, supra, at 995 F.2d at 464, in that " 'a completely subjective test would virtually make "it impossible to preclude coverage for intentional [injuries] absent admissions by insureds of specific intent to harm or injure. Human nature augurs against any viable expectation of such admissions." ' * * * Assertions by insured adults that they did not intend the harm resulting from their intentional sexual misconduct with minors have been described as 'def[ying] logic,' * * * 'little short of absurd,' * * * and 'fl[ying] in the face of all reason, common sense and experience' * * *." Id. (Citations omitted.)

We accept the premises upon which the inferred intent rule is based, and hold that intent to harm is properly inferred as a matter of law from deliberate acts of sexual molestation of a minor. However, rather than using the rule in the context of determining the applicability of intentional injury exclusions to homeowner's coverage, we believe that a better analytical use of the rule is in determining whether coverage may be deemed provided in the first instance. That is, we find the rule to be of value in determining whether intentional acts of child molestation may be deemed to constitute "occurrences," for which insurance may be obtained, or instead conduct in the nature of an intentional...