United States District Court, W.D. Kentucky, Louisville
MEMORANDUM OPINION AND ORDER
JOHN G. HEYBURN, II, Senior District Judge.
Pursuant to 28 U.S.C. § 2201(a), State Auto Property & Casualty Insurance Company ("State Auto") seeks a declaration of rights between it and Defendants, J.R.E.; C.A.E.; and E.E., as an individual and as a parent and next friend of E.M.E., a minor. Specifically, State Auto requests a declaration that it has no duty to defend or indemnify its insureds, J.R.E. and C.A.E., in an underlying civil action brought by E.M.E., by and through E.E., stemming from acts of sexual misconduct allegedly committed against E.M.E.
After State Auto moved for summary judgment, J.R.E. and C.A.E. each filed a crossmotion for summary judgment. The question presented here is whether the homeowners' insurance policy issued by State Auto to J.R.E. and C.A.E. (the "Policy") requires State Auto to defend and indemnify the insureds in the underlying action. While all parties agree that there is no question of fact in this case, J.R.E. argues, in the alternative, that a question of fact does preclude entry of summary judgment in favor of State Auto.
These questions certainly present some interesting issues. For the reasons that follow, the Court will grant State Auto's motion for summary judgment and deny the cross motions for summary judgment filed by J.R.E. and C.A.E.
Briefly summarized, the relevant facts are these. In March 2013, Defendant E.M.E. filed suit against her grandparents, J.R.E. and C.A.E., in Jefferson Circuit Court, by and through her mother and next friend, E.E., alleging that her grandfather, J.R.E., had sexual contact with her between February 20, 2001, and February 19, 2004. She further asserts that his conduct was intentional, willful, negligent, grossly negligent, reckless, malicious, oppressive, and or wanton, causing her to sustain serious permanent personal injuries in and about her body, and other damages.
Although E.M.E. alleges no intentional wrongdoing by her grandmother, C.A.E., she claims that C.A.E. had a responsibility to protect her; that C.A.E. knew her husband, J.R.E., was molesting E.M.E.; and that C.A.E. did nothing to prevent the alleged sexual abuse. E.M.E. claims that C.A.E.'s conduct was "negligent and/or grossly negligent, and/or reckless, and/or wanton."
At the time these events arose, State Auto provided homeowners' insurance for J.R.E. and C.A.E. Its relevant portions provide the following:
"Coverage E" of the Policy requires State Auto to defend and indemnify when
a claim is made or a suit is brought against an "insured" for damages because of "bodily injury" or "property damage" caused by an "occurrence" to which this coverage applies....
The Policy defines an "occurrence" as
an accident, including continuous or repeated exposure to substantially the same general harmful conditions, which results, during the policy period, in:
(a) "Bodily injury"....
A series of exclusions in the Policy limit the scope of this personal liability coverage. Specifically, the Policy contains the following provisions:
Coverage E - Personal Liability And
Coverage F - Medical Payments to Others
Coverages E and F do not apply to the following:
1. Expected Or Intended Injury
"Bodily injury" or "property damage" which is expected or intended by an "insured"....
7. Sexual Molestation, Corporal Punishment Or Physical or Mental Abuse
"Bodily injury" or "property damage" arising out of sexual molestation, corporal punishment or physical or mental abuse....
Based upon these provisions, State Auto argues that (1) the claims against the insureds in the underlying action do not allege "occurrences" for which State Auto owes coverage, (2) the Policy's intentional act exclusion precludes coverage, and (3) ...