John Doe v. Onebeacon Am. Ins. Co.
| Decision Date | 09 October 2014 |
| Docket Number | CASE NO. 1:11-cv-00275-MP-GRJ |
| Parties | JOHN DOE, Plaintiff, v. ONEBEACON AMERICA INSURANCE COMPANY, Defendant. |
| Court | U.S. District Court — Northern District of Florida |
This matter is before the Court on the parties' cross Motions for Summary Judgment (docs. 76 and 77) and Responses in Opposition thereto (docs. 89 and 92). The parties have also filed statements of material facts (docs. 78, 79) and responses thereto (docs. 87 and 93). Defendant OneBeacon America Insurance Company ("OneBeacon") has also filed a Reply to Plaintiff's Response to Defendant's motion, to which Plaintiff filed a Sur-Reply. (Docs. 103 and 104). Plaintiff, John Doe ("Doe"), prevailed in a related state court action and obtained judgments against the following parties: the Roman Catholic Diocese of Savannah; Raymond W. Lessard; J. Kevin Boland (collectively "the Diocese");1 and Wayland Yoder Brown. Doe claims that these parties held a contract of insurance with Onebeacon and that they assigned to Doe any and all rights thereunder.
Doe seeks a declaratory judgement that these parties were insured by OneBeacon and that OneBeacon owed them duties of defense and indemnification in the underlying action. (Doc. 1, Count I). Doe also claims that OneBeacon breached the insurance policy and acted in bad faith. (Doc. 1, Counts II-IV).2 For the reasons stated herein, the Court finds that the cross-motions for summary judgment should each be granted in part and denied in part, and that final judgment should be entered in OneBeacon's favor.
BACKGROUND3
Because this matter is before the Court on the parties' cross motions, the Court must evaluate each individual motion on its own merits, viewing the evidence in favor on the nonmoving party in each instance. See Shaw Constructors v. ICF Kaiser Eng'rs, Inc., 395 F.3d 533, 538-39 (5th Cir. 2004); Avocent Huntsville Corp. v. ClearCube Tech., Inc., 443 F. Supp. 2d 1284, 1293-94 (N.D. Ala. 2006). However, the following facts are uncontroverted.
Beginning on February 10, 1976 and lasting through February 10, 1979, OneBeacon, known previously as Commercial Union Insurance Company, provided liability insurance coverage to the Diocese, pursuant insurance policy No. CZ9745-001 ("the Policy"). See Doc. 4, Exs. A1-A3; Doc. 79, Ex. A. The Policy listed the "named insured" as "Most Rev. Raymond W. Lessard[,] Roman Catholic Bishop of Savannah and/or His Successors in Office[,] Savannah,Georgia." Doc. 79, Ex. A at 1. It also listed the Diocese as a named insured. Id. It further stated that "[i]f the named insured is designated in the declarations as other than an individual," the Policy would insure "the organization so designated and any executive officer . . . [or] directors . . . thereof while acting within the scope of his duties as such." Id. at 9-10. Brown was not explicitly listed in the Policy as an insured; regardless, the parties do not dispute that the Policy insured Brown, and the Court finds that, based on the language quoted above, the Policy did in fact insure Brown as an executive officer of the Diocese of Savannah.
Concerning coverage, the Policy provided that OneBeacon would "pay on behalf of the insured all sums, which the insured shall become legally obligated to pay as damages because of bodily injury or property damage to which this insurance applies, caused by an occurrence . . . ." Id. at 9, 35. It further provided that OneBeacon "shall have the right and duty to defend any suit against the insured seeking damages on account of such bodily injury . . . and may make such investigation and settlement of any claim or suit as it deems expedient." Id. It defined "occurrence" as "an accident, including continuous exposure to conditions, which results in bodily injury or property damage neither expected nor intended from the standpoint of the insured." Id. at 60. The Policy provided bodily injury liability limits of $300,000.00 per occurrence. Id. at 8.
The Policy also imposed a cooperation agreement on the insureds. The Policy required that the insureds "cooperate with the Company and, upon the Company's request, assist in making settlements [and] in the conduct of suits . . . ." Id. at 64. It further specified that an "insured shall not, except at his own cost, voluntarily make any payment, assume any obligation or incur any expense other than for first aid to others at the time of the accident." Id.
On or about March 4, 2010, Doe brought action against OneBeacon's insureds, includingthe Diocese of Savannah, Lessard, Bolland, and Brown, in Case No. 16-2010-CA-3300, in the Circuit Court of the Fourth Judicial Circuit in and for Duval County, Florida. See Doc. 77, Ex. A; Doc. 79, Ex. B (the "Underlying Complaint"). According to the Underlying Complaint, sometime around 1972, Brown requested to be accepted as a seminarian for the Diocese. Id. at ¶ 45. Sometime thereafter, the Diocese "conducted an investigation before accepting Brown as a seminarian." Id. at ¶ 46.
Between 1972 and Brown's ultimate ordination and employment in 1977 as a Roman Catholic Priest, clergy and others repeatedly warned, notified, and advised the Diocese of "grave concerns regarding . . . BROWN's danger to children." Id. at ¶ 48. For example, in 1974, the Diocese was allegedly "informed and/or notified of questionable sexual misconduct between BROWN and young boys." Id. at ¶ 51. In 1975, Brown himself allegedly admitted to Lessard that he had committed "various indiscretions with minor boys." Id. at ¶ 53. Finally, sometime prior to Brown's ordination as a Priest, the Diocese received reports and/or notifications of incidents involving Brown and minor boys. According to the alleged reports, one boy was "traumatized" by Brown while another required psychological care as a result. Id. at ¶ 59.
In short, Doe alleged that the Diocese "knew or should have known" of information concerning Brown's "inappropriate conduct and dangerous propensities regarding young boys." Id. at ¶¶ 47, 122, 130, 131. "Despite this knowledge and information, [the underlying defendants] took no action to remove BROWN from the seminary program, to otherwise deter or prevent him from moving forward with his goal and plans of priesthood, to warn those children that were reasonably foreseeable to be in danger or their parents of such knowledge, or to control and/or supervise BROWN in any way." Id. at ¶ 51.
While Doe was a minor, he and his family attended Catholic churches, schools, services,and programs offered by the Diocese. Id. at ¶¶ 65, 66. At all relevant times, Brown acted as a confessor, counselor, and moral and spiritual advisor to Doe, and Doe allegedly admired, trusted, revered, and respected Brown. Id. at ¶¶ 73, 75, 76. In the summer of 1978, Brown offered to take Doe on what became a month-long trip through Georgia, South Carolina, and Florida. While on the trip, Brown sexually molested Doe on multiple occasions. See Doc. 79, Ex. B at ¶¶ 91, 95, 96, 98, 110, 111. "Prior to, during, and after various episodes of sexual molestation[,] . . . BROWN would perform his priestly duties with [Doe] and would have on his priestly attire, collar, and/or cross, pray with [Doe] and discuss confession, the sacraments, Catholicism, and the morals and teachings of the Catholic faith." Id. at ¶¶ 96, 99, 101. As a result of the acts and omissions of Brown, Doe allegedly suffered severe emotional distress resulting in bodily injury. See id. at ¶¶ 114, 116.
Based on these factual allegations concerning Brown and the Diocese, Doe pursued the following eight counts against the insureds: (Count I) Intentional Infliction of Emotion Distress/Outrage; (Count II) Negligent Hiring and Retention; (Count III) Negligent Supervision; (Count IV) Fraud (Non-Disclosure of Material Facts/Fraudulent Concealment); (Count V) Negligence/Gross Negligence/Recklessness; (Count VI) Breach of Fiduciary Duty; (Count VII) Civil Conspiracy; and (Count VIII) Loss of Consortium by Doe's wife.
On November 18, 2011, the state court entered an order ("Brown Final Judgment") granting Doe's motion for final summary judgment and awarding Doe $50 million against Brown. See Doc. 4, Ex. C. The court found that Brown repeatedly engaged in various acts of sexual molestation of Doe while on the trip; however, rather than basing damages on the sexual molestation, the court concluded that "Brown's negligent counseling, failure to warn, and failure to provide adequate safeguards to protect Doe" constituted "the sole proximate cause of Doe'sdamages." Id. at 5-6, 8-9. In other words, the sexual abuse was simply a result brought about "naturally and unavoidably from Brown's negligent failure to warn, safeguard, or otherwise take appropriate action under the circumstances." Id. at 8.
Turning to OneBeacon's involvement, on January 26, 2010, prior to the filing of the Underlying Complaint, OneBeacon, through its third-party administrator, Resolute Management ("Resolute"), sent a letter to Joseph Brennan, attorney for the Diocese. See Doc. 79, Ex. C. OneBeacon agreed to participate in the investigation of Doe's claims under a reservation of rights. If the investigation revealed that the allegations did not constitute a claim under the Policy, OneBeacon would not provide coverage. Id. at 1-2. Further, the letter cautioned that "[a]ny voluntary payments made by the insured" would be "at the sole cost to the insured." Id. at 4.
On April 30, 2010, after Doe filed the Underlying Complaint, Resolute sent a second letter to Brennan, reiterating these points and offering to provide a defense subject to a complete reservation of rights. The letter further reiterated that the defense would be limited by the terms, exclusions, and conditions of the Policy. See Doc. 79, Ex. D at 1. The letter also reiterated the voluntary payments provision of the Policy. Id. at 3-4. Resolute also explained that OneBeacon had no duty to defend Brown. OneBeacon maintained that the allegations against Brown...
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