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Sixth Circuit Holds Coverage Unavailable for Perpetrator of Sexual Misconduct
By Traub Lieberman
JD Supra
July 12, 2016
http://www.jdsupra.com/legalnews/sixth-circuit-holds-coverage-19278/
In its recent decision in Clifford v. Church Mutual Ins. Co., 2016 Fed. Appx. 0373N (6th Cir. July 5, 2016), the United States Court of Appeals for the Sixth Circuit, applying Ohio law, had occasion to consider the coverage available under a sexual misconduct liability policy for the perpetrator of the wrongful acts.
Church Mutual insured Licking Baptist Church under a liability policy affording several different coverage parts, including one for sexual misconduct and molestation. This coverage part contained an exclusion for “any person who personally participated in any act of ‘sexual misconduct or sexual molestation.’” Licking Baptist and one of its individual members, who at various times served as a deacon and a choir director, were named as defendants in a suit alleging that the individual had molested and raped two minors, both of whom were church members. Licking Baptist was eventually dismissed from the suit on motion summary judgment based on a finding that the perpetrator was not acting in his official capacity as an employee or volunteer of the church at the time of the alleged acts. This left the perpetrator as the sole remaining defendant in the lawsuit.
The underlying victims, suing to recover a judgment, argued that the perpetrator was insured for his misconduct and thus Church Mutual should be responsible for paying the underlying multimillion dollar verdict. The Sixth Circuit disagreed, concluding that because the underlying suit arose out of sexual misconduct and sexual molestation, the perpetrator was not entitled to coverage per the plain and unambiguous terms of the policy. The court further observed that under Ohio law, public policy prohibits the insurability for sexual assault of minors.
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