An insurance company won’t have to defend the wife of an accused sexual abuser who is being sued over claims that she negligently allowed her husband to continue abusing a young girl in their home, the South Carolina Supreme Court has ruled.
The court held in a Nov. 21 opinion answering a certified question from U.S. District Judge David Norton in South Carolina that nothing in existing case law or the public policy of the state would alter Norton’s conclusion that the homeowner’s policy denied coverage to the wife where the husband was barred from coverage because of his intentional acts.
Jane Doe, a minor, is suing Rose Hunter, the wife of Joseph Stephen Hunter, who is accused of sexually abusing Doe over the course of several years. Doe alleges negligence, defamation, and breach of fiduciary duty based on Rose’s non-intentional inaction in the face of evidence of “her husband’s sexual proclivities concerning young girls,” and her intentional post-abuse social media comments.
The Hunters had a homeowner’s policy with Allstate, which asked Norton to declare that it wasn’t obligated to defend Rose due to an intentional acts exclusion in the policy. Norton ruled that the policy clearly barred coverage to Joseph for his intentional acts of sexual abuse, and as a result barred coverage to Rose as well.
But before granting Allstate’s motion, Norton certified a question asking whether that conclusion would be altered by any public policy or the South Carolina Court of Appeals’ 1998 ruling in Manufacturers & Merchants Ins. Co. v. Harvey.
Justice John Few, writing for a unanimous court, said that they did not.
In Harvey, a man pleaded guilty to sexually abusing his five grandchildren, and his wife pleaded guilty to unlawful neglect of children. The Court of Appeals ruled that intentional acts were excluded from insurance coverage, but negligence claims were not, and forced the insurance company to honor the policy.
Few explained that the holding in Harvey was limited to that specific insurance policy, and the policy in Harvey was different in that it didn’t contain a joint obligations provision. Few said Harvey “does not stand for the general proposition that a negligence claim—or other claim of unintentional conduct—against a non-abusing named insured is always an ‘occurrence,’ nor that an intentional acts exclusion is never effective, in the context of a sexual abuse coverage case.”
Aaron Edwards and Lawrence Richter Jr. of The Richter Firm in Mount Pleasant represented Jane Doe and her mother. Edwards said his clients opposed Allstate’s motion because it limits the possibility for larger damages and he was disappointed by the ruling.
“The practical effect is a denial of the ability for a child victim of sexual abuse and her mother to recover adequate damages against those who are legally responsible for it,” Edwards said. “If you interpret it the way Allstate wants, you run the risk of excluding negligent non-abusing insureds for the acts of someone else.”
He said the decision, if taken further, could justify denying the president of a large company insurance coverage in a case of a janitor’s sexual abuse, due to his being several steps removed from the person who committed the acts.
Johnston Cox and Janice Holmes of Gallivan White & Boyd in Columbia represented Allstate, and Benjamin Coppage of the Coppage Law Firm in Beaufort represented Rose Hunter. None of the attorneys responded to requests for comment.
The three-page decision is Allstate Vehicle and Property Insurance Company v. Hunter (Lawyers Weekly No. 010-103-18). The full text of the opinion is available online at sclawyersweekly.com.
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