Allstate Ins. Co. v. Mugavero, 79 N.Y.2d 153 (1992)
In cases of child sexual abuse, intent to cause harm can be inferred as a matter of law, thereby triggering the ‘intentional act’ exclusion in homeowner’s insurance policies.
Summary
Allstate sought a declaratory judgment that it had no duty to defend or indemnify the Mugaveros in a lawsuit alleging Edward Mugavero sexually abused two children under his wife’s care. The homeowner’s policy excluded coverage for “bodily injury intentionally caused by an insured person.” The New York Court of Appeals held that intent to harm is inherent in the act of child sexual abuse. Therefore, the intentional act exclusion applied, relieving Allstate of its duty to defend and indemnify both Edward and Ann Mugavero, even for Ann’s alleged negligence in supervising the children.
Facts
Ellen B. sued Edward and Ann Mugavero, alleging Edward sexually assaulted her children, Christian and Theresa, while in Ann’s care as a babysitter. The complaint included causes of action for intentional assault, unintended injuries from intentional conduct, and negligence. Edward Mugavero denied the allegations. Allstate, the Mugaveros’ homeowner’s insurance carrier, disclaimed coverage, citing the policy exclusion for bodily injury “intentionally caused by an insured person.” Ellen B. submitted a statement by Edward to the police that he was “comforting the children when he was hugging them”.
Procedural History
The Supreme Court denied Allstate’s motion for summary judgment, holding Allstate was obligated to provide a defense. The Appellate Division affirmed, relying on the rule that an insurer’s duty to defend is broader than the duty to indemnify. The Appellate Division found Allstate couldn’t be relieved of their duty because the complaint contained causes of action in negligence and for unintentional injuries resulting from intentional conduct. Allstate appealed, and the Court of Appeals reversed.
Issue(s)
1. Whether harm resulting from the alleged sexual assaults on children could be other than harm “intentionally caused” within the meaning of the policy exclusion.
2. Whether the allegations of negligence in Ellen B.’s third cause of action require Allstate to defend the Mugaveros.
3. Whether there should be coverage for the claim asserted against Ann Mugavero in Ellen B.’s fourth cause of action based on her separate acts of negligence in caring for the children.
Holding
1. No, because harm to the children was inherent in the nature of the acts alleged, and any resulting injuries were “intentionally caused” as a matter of law. The court stated, “We believe, moreover, that the ordinary person would be startled, to say the least, by the notion that Mugavero should receive insurance protection for sexually molesting these children, and thus, in effect, be permitted to transfer the responsibility for his deeds onto the shoulders of other homeowners in the form of higher premiums.”
2. No, because the factual allegations of intentional assault, sodomy, and sexual abuse contradicted the conclusory assertion of negligence. The court stated that “the third cause of action contains nothing which brings the complaint within the coverage of the policy.”
3. No, because the policy excluded coverage for injury intentionally caused by “an insured person”. Since Edward Mugavero was an insured person, the exclusion applied to all claims arising from his intentional acts.
Court’s Reasoning
The court reasoned that the harm resulting from child sexual abuse is inseparable from the act itself. Legislative policy reflects a heightened awareness of the serious consequences of child sexual abuse, making it nearly impossible to perceive molestation without harm. The court highlighted the seriousness with which the legislature treats sex crimes involving young children, where guilt is established merely by proving the actions occurred, irrespective of intent to harm. The court distinguished Public Serv. Mut. Ins. Co. v. Goldfarb, because that case involved a professional liability policy with unusual language covering assault during dental treatment, whereas this case involves a standard homeowner’s policy with a specific exclusion for intended injuries. Regarding the negligence claim, the court emphasized that conclusory assertions of negligence are insufficient when the underlying facts allege intentional conduct. The court interpreted the policy language “intentionally caused by *an* insured person” to mean that if *any* insured person intentionally caused harm, the exclusion applies to all insureds under the policy, even those who were merely negligent. The court stated, “the exclusion * * * clearly and unambiguously excludes from coverage all claims which arise out of the intentional acts of *any one* of the insureds.”