Mass. Decisions, 1-620 N.E.2d 558 N.E.2d 958, 408 Mass. 393, Worcester In...
Copyright (c) West Publishing Co. 1993 No claim to original U.S. Govt. works.
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408 Mass. 393
WORCESTER INSURANCE COMPANY
v.
FELLS ACRES DAY SCHOOL, INC., et al. (FN1) (and ten
consolidated cases).
Supreme Judicial Court of Massachusetts,
Middlesex.
Argued March 8, 1990.
Decided Aug. 22, 1990.
Children allegedly abused while in care of day-care center and their
parents brought actions against staff members, spouse of staff member, and
corporation which operated day-care center, seeking damages incurred as result
of alleged sexual abuse. Insurers which had issued to corporation "Special
Multi-Peril" policy containing property and liability coverage and homeowner's
policies sought declaratory judgment that injuries sustained by children and
parents were not covered by policies. After report of questions without
decision in 11 consolidated actions by the Superior Court Department,
Middlesex County, Hiller B. Zobel, J., the Supreme Judicial Court, Abrams, J.,
held that: (1) intent to injure would be inferred from alleged acts of child
molestation and rape of children attending day-care center, for purposes of
determining coverage of insurance policies; (2) corporation was not
vicariously liable for assaults and batteries committed by staff members, but
factual inquiry was needed to determine whether wrongful intent of staff
members could be imputed to corporation; (3) "Special Multi-Peril" policies
covered claims of negligence by staff members to extent that the claims did
not seek recovery for the same acts which were basis of assault and battery
claims; and (4) homeowner's policies providing coverage for loss of
consortium injuries would provide coverage for injuries to parents unless
trial demonstrated that homeowner's policies' insureds intended to injure
parents.
Cases remanded.
1. INSURANCE k437.1(1)
217k437.1(1) k. Presumptions and burden of proof.
Mass. 1990.
Intent to injure would be inferred from alleged acts of child molestation
and rape of children attending day-care center by staff members and spouse of
staff member, for purposes of determining coverage of insurance policies for
damage claims, although children and their parents claimed there was no basis
for concluding that abusers knew to a substantial certainty that injuries
would result, where nothing suggested any possibility that it could be
demonstrated the alleged abusers were not criminally responsible.
2. INSURANCE k437.1(1)
217k437.1(1) k. Presumptions and burden of proof.
Mass. 1990.
Intent to injure may be inferred from intentional commission of inherently
injurious act such as forcible sexual abuse, for purposes of determining
extent of insurance coverage.
3. INSURANCE k435(2)
217k435(2) k. Assault and battery.
Mass. 1990.
Allegations of vicarious liability, negligence, and breach of warranty
against corporate day-care center and/or named individual doing business as
day-care center were not actionable or covered under "Special Multi-Peril"
policies containing property and liability coverage that were intended to
provide insurance for corporate day-care center and agreed by parties to
provide coverage to corporate day-care center as if it had been identified as
the named insured; parties stipulated that corporation operated day-care
center at all times relevant to claims of sexual abuse against children in
care of day-care center, policies provided no coverage for any sole
proprietorship, and stipulated facts would not support finding coverage for
purported joint venture of named individual and corporation.
4. PRINCIPAL AND AGENT k159(1)
308k159(1) k. Rights and liabilities of principal.
Mass. 1990.
Employer may be held vicariously liable for intentional tort of agent if
tortious act or acts were committed within scope of employment.
5. MASTER AND SERVANT k302(1)
255k302(1) k. In general.
Mass. 1990.
Corporation which operated child day-care center was not vicariously liable
for assaults and batteries including sexual abuse allegedly perpetrated by
staff members on children in the care of the day-care center; some abuse was
alleged to have been committed off school grounds, the alleged acts were not
of the kind that employees were employed to perform or even partially
motivated by purpose of serving corporate employer, and alleged assaults could
not have been in response to any conduct by children interfering with ability
of staff members to perform their duties.
6. MASTER AND SERVANT k300
255k300 k. Nature of master's liability.
Mass. 1990.
Even if vicarious liability could be imposed on employer when tortious
conduct of employee originated in activities closely associated with
employment relationship, corporation which operated day-care center could not
be held liable for assault and battery including sexual abuse allegedly
committed by staff members on children while in care of day-care center.
7. CARRIERS k283(1)
70k283(1) k. In general.
[See headnote text below]
7. CARRIERS k284
70k284 k. Acts of fellow passengers or third persons.
Mass. 1990.
Common carrier is liable not only for misconduct of its employees, whether
or not within scope of employment, but also for wrongs of strangers, if they
are inflicted on person in carrier's care.
8. ASYLUMS k7
43k7 k. Liabilities of proprietors, officers, and employes.
Mass. 1990.
Corporation which operated day-care center would not be held to common
carrier standard of care with respect to children in care of day-care center,
so as to support imposition of liability on corporation for alleged sexual
abuse of children by day-care staff members.
9. CORPORATIONS k423
101k423 k. Wrongful acts or omissions.
Mass. 1990.
In some circumstances, there may be reason to impute to corporation
wrongful intent of officers, directors, or stockholders even without
disregarding corporate form.
10. CORPORATIONS k493
101k493 k. Willful or malicious act.
Mass. 1990.
If alleged acts of sexual abuse of children attending day-care center were
in any way performed on behalf of corporation operating center, abuse would be
attributable to corporation; for example, if it were shown that individual
defendant staff members and spouse of staff member were engaged in sale of
child pornography and that corporation were financially implicated in such
activity, intentions of wrongdoing individuals could properly be imputed to
corporation.
11. CORPORATIONS k493
101k493 k. Willful or malicious act.
Mass. 1990.
If it could be shown that sexual abuse of children attending day-care
center was so routine as to constitute general practice or policy, that abuse
could be imputed to corporation which operated day-care center, even if the
abuse were not committed for benefit of corporation.
12. CORPORATIONS k519(3)
101k519(3) k. Weight and sufficiency.
Mass. 1990.
Factual inquiries were required to determine whether wrongful intent on
part of day-care center's staff members who allegedly abused children in care
of day-care center could be imputed to corporation which operated day-care
center; uncontroverted record evidence would not permit determination of
whether corporation expected or intended injuries to children.
13. CORPORATIONS k493
101k493 k. Willful or malicious act.
Mass. 1990.
Fact that officers and shareholders of corporation which operated day-care
center committed intentional torts on children in care of day-care center
would not by itself be sufficient to warrant imputing expectations or
intentions of corporate officers and shareholders to the corporation.
14. INSURANCE k435(2)
217k435(2) k. Assault and battery.
Mass. 1990.
Children who were allegedly sexually abused while in care of day-care
center and their parents could not recover in negligence from the same
individuals they had sued for assault and battery for the same acts which were
basis of assault and battery claims, for purposes of determining insurance
coverage; negligent conduct could not be intentional.
15. INSURANCE k435(2)
217k435(2) k. Assault and battery.
Mass. 1990.
Day-care center's staff members' knowledge of abusive acts committed by
others on children in care of day-care center would not nullify coverage for
negligence claim asserted against staff members under "Special Multi-Peril"
policy issued to corporation which operated day-care center; complaint
alleged that staff members knew or should have known of assault, rape, and
sexual molestation of children, but failed to exercise care to prevent those
acts.
16. INSURANCE k435(2)
217k435(2) k. Assault and battery.
Mass. 1990.
Day-care center staff member's participation in or act of facilitation of
abuse by others of children in care of day-care center would constitute
"intended" injury of children for which coverage would not be provided under
"Special Multi-Peril" policy providing coverage for corporation which operated
day-care center.
17. INSURANCE k435(2)
217k435(2) k. Assault and battery.
Mass. 1990.
Knowledge of day-care center staff member concerning abuse by others of
children in care of day-care center, coupled with failure to protect children
from such abuse, renders such staff member's conduct reckless, not willful, so
"Special Multi-Peril" policies providing coverage for corporation which
operated day-care center covered claims of negligence by staff members to
extent the claims did not seek recovery for same acts that were basis of
assault and battery claims against staff members themselves.
18. INSURANCE k435(1)
217k435(1) k. In general.
Mass. 1990.
Generally, injuries resulting from reckless conduct did not fall into
category of "expected or intended" injuries for which coverage is excluded,
but are considered "accidental" and thus covered.
19. INSURANCE k435.36(5)
217k435.36(5) k. Business or professional pursuits.
Mass. 1990.
Business pursuits exclusions of homeowner's policies for staff members of
day-care center excluded coverage for staff members' allegedly negligent
failure to perform responsibilities incident to day-care center and prevent
assault, rape, and sexual molestation of children in care of day-care center.
20. INSURANCE k512(5)
217k512(5) k. Husband and wife or parent and child, injuries to.
Mass. 1990.
Homeowner's policy's definition of "bodily injury" as bodily injury,
sickness or disease, including care, loss of services and death resulting
therefrom, includes consortium-type injuries.
See publication Words and Phrases for other judicial constructions and
definitions.
21. INSURANCE k435.36(6)
217k435.36(6) k. Injuries expected or intended; "accident" or
"occurrence.".
Mass. 1990.
Homeowner's policies' exclusions of expected or intended injury compelled
exclusion from coverage of bodily injuries suffered by children allegedly
sexually abused while in care of day-care center, but associated injuries to
children's parents in form of "care and loss of services" remained within
scope of coverage, unless it were demonstrated that homeowner's insureds
intended to injure parents.
22. INSURANCE k512(5)
217k512(5) k. Husband and wife or parent and child, injuries to.
Mass. 1990.
Homeowner's policies' insureds who allegedly sexually abused children while
in care of day-care center would not be found to have intended injury to
parents, so as to exclude coverage of parents' loss of consortium claims from
scope of homeowner's policies.
23. INSURANCE k512(5)
217k512(5) k. Husband and wife or parent and child, injuries to.
Mass. 1990.
Homeowner's policy providing coverage for sums which insured shall become
legally obligated to pay as damages because of bodily injury, including care
and loss of services resulting therefrom, did not provide coverage for loss of
consortium only if there was coverage for bodily injury from which loss of
consortium resulted; policy provides coverage for bodily injury and for care
and loss of services resulting therefrom, subject to later limiting
phrase--"to which this insurance applies"--but only initial bodily injury was
excluded by that limitation.
24. INSURANCE k512(5)
217k512(5) k. Husband and wife or parent and child, injuries to.
Mass. 1990.
Coverage for loss of consortium under homeowner's policy was not derivative
of coverage for underlying bodily injury; policy coverage explicitly included
loss of consortium as independent injury through policy definition of bodily
injury.
25. INSURANCE k512(5)
217k512(5) k. Husband and wife or parent and child, injuries to.
Mass. 1990.
Under "Special Multi-Peril" policy, loss of consortium injuries were
covered as "damages because of bodily injury" so long as bodily injuries were
ones to which insurance applied, caused by occurrence.
26. INSURANCE k512(5)
217k512(5) k. Husband and wife or parent and child, injuries to.
Mass. 1990.
"Special Multi-Peril" policy's limitation of coverage for consortium
injuries covered by provision for damages because of bodily injury to
situation in which bodily injuries are ones to which insurance applies, caused
by occurrence, excluded coverage of consortium injuries arising out of
assaults and batteries allegedly perpetrated on children while in care of
day-care center, but did not exclude consortium injuries relating to bodily
injuries suffered by children as result of negligence or breach of warranty.
27. INSURANCE k512(4.1)
217k512(4.1) k. In general.
Formerly 217k512(4)
Mass. 1990.
Alleged numerous discrete acts of abuse of children in care of day-care
center, negligence, and breach of duty by different individual defendants and
corporate defendant, at different locations, could not be considered single
occurrence limiting insurance coverage to applicable per occurrence amount.
------------------------- Page 558 N.E.2d 962 follows --------------------------
[408MASS394] Cynthia J. Cohen, Boston, for Worcester Ins. Co.
Regina E. Roman, Boston, for Merrimack Mut. Ins. Co.
[408MASS395] Saul A. Schapiro (Michael Hays, Boston, with him), for Jane
Doe, et al.
Daniel C. Crane, Cambridge, for Paul A. Bennett, et al.
Juliane Balliro, for Fells Acres Day School, Inc., Ronald A. Pressman, for
Lareina Hurley, Leonard Glazer & William Kahn, for William B. Cronin et al., &
Frank J. Ciano, for Barbara Miller, et al., were present but did not argue.
[408MASS393] Present: LIACOS, C.J., and WILKINS, ABRAMS, LYNCH and
GREANEY, JJ.
ABRAMS, Justice.
Pursuant to Mass.R.Civ.P. 64, 365 Mass. 831 (1974), a judge of the Superior
Court has reported to us, without decision, eight questions (see Appendix)
concerning whether certain insurance policies provide coverage for damage
claims arising from sexual abuse allegedly perpetrated at the Fells Acres Day
School (school). Two of the eleven consolidated cases before us are
declaratory judgment actions brought by insurance companies (FN2) seeking a
judgment that the injuries sustained by the tort plaintiffs in the nine
underlying tort actions are not covered by various policies of insurance. The
other nine cases are the underlying tort actions, brought by parents
individually and as next friends of their children, against one or more of the
tort defendants, seeking damages incurred as a result of sexual abuse that the
children are alleged to have suffered while they were attending the school.
We allowed the insurance companies' joint application for direct appellate
review.
The parties' stipulation of agreed facts is substantially as follows.
Fells Acres Day School, Inc. (Fells Acres), is a duly organized, for-profit
Massachusetts corporation that operated the school, a group daycare facility.
The school enrolled as many as 48 children, ranging in age from fifteen months
to five years. At all relevant times, the directors, officers, and
shareholders of Fells Acres were Violet Amirault (Violet), [408MASS396] Gerald
Amirault (Gerald), and Cheryl Amirault LeFave (Cheryl). Fells Acres employed
up to seven staff members in addition to Violet, Gerald, and Cheryl. It
maintained books and accounts as a corporation, paid Federal and State taxes
and F.I.C.A. contributions as a corporation, maintained a corporate checking
account from which expenses were paid, and filed annual reports of condition
with the Office of the State Secretary.
Violet was the holder of a license to operate the school, issued by the
Office for Children of the Commonwealth of Massachusetts. Operation of the
school was subject to regulations promulgated by the Office for Children, 102
Code Mass.Regs. Sec. 7.00 (1987). At all relevant times, Violet was a
salaried employee of Fells Acres, holding the title of "director" of the
school. As such, pursuant to Office for Children regulations, Violet was
responsible for staff supervision and training. Gerald, Violet's son, was a
salaried employee of Fells Acres, employed as the school's "program
coordinator." For at least one year before the revocation of Violet's
license to operate the school and the school's closing in 1984, Gerald also
held the title "assistant director." Gerald was responsible for setting up
and monitoring programs at the school and for assisting Violet in the
administration of the school's programs. Cheryl, Violet's daughter, also was
a salaried employee of Fells Acres, employed as an "assistant director" and a
teacher. Cheryl was responsible for assisting Violet in the administration of
the school's programs. Cheryl's husband, Albert LeFave (Albert), was not
employed by Fells Acres.
------------------------- Page 558 N.E.2d 963 follows --------------------------
In 1980, the Worcester Insurance Company (Worcester) issued to Fells Acres
(FN3) a "Special Multi-Peril" (SMP) policy [408MASS397] of insurance,
containing both property and liability coverages, for the period from October,
1980, to October, 1983. In 1983, Worcester issued another SMP policy for the
period from October, 1983, to October, 1986. Worcester also issued to Violet
a homeowner's insurance policy for her residence in Malden, for the period
from June, 1979, to June, 1982. In September, 1983, Merrimack Mutual Fire
Insurance Company (Merrimack) issued to Cheryl and Albert a homeowner's policy
for their residence in Melrose, for the period from September, 1983, to
September, 1984.
The nine underlying tort actions seek damages from one or more of the
following tort defendants: Fells Acres, Violet, Gerald, Cheryl, and Albert.
The claims of the plaintiffs in the underlying tort actions are set forth in a
Uniform Complaint and individual complaints that adopt parts of the Uniform
Complaint. The Uniform Complaint alleges claims of assault and battery by the
individual tort defendants; vicarious liability of Fells Acres; negligence
of Violet, Gerald, Cheryl, and Fells Acres; and breach of warranty by Fells
Acres. The facts underlying the tort complaints are the acts of sexual abuse
that are alleged to have occurred while the child tort plaintiffs were
attending and in the care of the school.
Some of these alleged acts of abuse formed the basis for criminal
prosecutions against some of the tort defendants. Gerald was tried and
convicted of rape and indecent assault and battery on six of the child tort
plaintiffs. He also was convicted of indecent assault and battery on another
of the child tort plaintiffs. (FN4) We affirmed those convictions. See
Commonwealth v. Amirault, 404 Mass. 221, 535 N.E.2d 193 (1989). Violet was
convicted of rape and indecent assault and battery on two of the child tort
plaintiffs and convicted of indecent assault and battery on another child tort
plaintiff. Cheryl was convicted of rape and indecent assault [408MASS398] and
battery on three of the child tort plaintiffs and convicted of indecent
assault and battery on another of the child tort plaintiffs. We affirmed
those convictions. Commonwealth v. LeFave, 407 Mass. 927, 556 N.E.2d 83
(1990). Some of the child tort plaintiffs allege acts of abuse for which the
tort defendants were not tried. The tort defendants deny that they abused the
children and deny that the children were sexually abused by anyone while the
children were in attendance at or in the care of the school.
[1] 1. Assault and battery. The Uniform Complaint alleges that each of
the four tort defendants "did assault the minor plaintiffs with great force,
raped and sexually molested the minor plaintiffs." The insurance companies
contend that, under the terms of any of the policies, there can be no coverage
(FN5) for assault and battery of the child tort plaintiffs because the
injuries were "expected or intended from the standpoint of the insured."
(FN6) The tort plaintiffs contend that there is insufficient information in
the record to permit any conclusion
------------------------- Page 558 N.E.2d 964 follows --------------------------
concerning the intent of the tort defendants and that the issue is a factual
one to be determined at trial.
The parties' stipulation of facts includes an assertion that, at the trial
of the declaratory judgment actions, the tort plaintiffs would seek to offer
the opinion of a psychiatrist, Dr. Bernard Yudowitz, on the intent issue.
(FN7) Dr. Yudowitz would testify that it is impossible to draw conclusions
about the intent[408MASS399] of a child abuser without extensive evaluation
and testing and that child abusers act from a variety of motives. Dr.
Yudowitz's research yields examples of the variety of sex abuse offenders,
including "highly sociopathic individual[s]," "mentally deranged
individual[s]," "sadistic individual[s]," individuals "who [have] never
socially matured and can only have sexual intimacy with children," and several
other types. Moreover, it is stipulated, Dr. Yudowitz's review of the Uniform
Complaint convinces him that "it is impossible to state ... that the
perpetrators in this case intended harm or injury." Dr. Yudowitz has not
examined the tort defendants. The stipulation also states that "the tort
defendants do not consent to be psychiatrically tested, evaluated, or
diagnosed, nor do they consent to the release of any medical or other
confidential records in connection with this case."
All of the insurance policies provide coverage for "occurrences," defined
to include "accidents." Generally, an injury "which ensues from the
volitional act of an insured is still an 'accident' within the meaning of an
insurance policy if the insured does not specifically intend to cause the
resulting harm or is not substantially certain that such harm will occur."
Quincy Mut. Fire Ins. Co. v. Abernathy, 393 Mass. 81, 84, 469 N.E.2d 797
(1984). In Quincy Mut. Fire, we applied this standard to a situation in
which an insured intentionally threw a large piece of "blacktop" at an
automobile, injuring its occupants. In concluding that the insurer was not
entitled to summary judgment on the question whether the injuries to the
automobile's occupants were accidental, we concluded that the injuries would
be covered only if "the insured knew to a substantial certainty that the
bodily injury would result." Id. at 86, 469 N.E.2d 797. The tort
plaintiffs contend that, although the alleged acts of sexual abuse are
intentional in nature, there is no basis to conclude that the tort defendants
"knew to a substantial certainty" that injuries would result. We disagree.
Forceful sexual molestation and rape are unlike the defendant's actions in
Quincy Mut. Fire. There, it was possible that the injuries resulting from
the insured's intentional act were accidental. This case more closely
resembles Newton v. [408MASS400] Krasnigor, 404 Mass. 682, 536 N.E.2d 1078
(1989), in which we determined that the actions of an insured who
intentionally started a fire in a building necessitated the inference that,
"as matter of law, [the insured] intended to cause some property damage
Y(4)27" Id. at 687, 536 N.E.2d 1078. In this case, as in Krasnigor, the
nature of the acts alleged is such that we must conclude, as a matter of law,
that the insureds intended to cause at least some injury to the tort
plaintiffs. "Child molestation and the injury caused by it are so closely
tied as to be virtually inseparable. Except in the strongest of factual
situations, intent to commit this act carries with it the intent to inflict
the injury." Roe v. State Farm Fire & Casualty Co., 259 Ga. 42, 42, 376
S.E.2d 876 (1989). Accord Harpy v. Nationwide Mut. Fire Ins. Co., 76 Md.App.
474, 484, 545 A.2d 718 (1988); K.A.G. v. Stanford, 148 Wis.2d 158, 164-165,
434 N.W.2d 790 (Ct.App.1988). Sexual assault and rape are, in this respect,
indistinguishable from any other deliberate assault and battery. "[T]he act
of striking another in the face is one which we recognize as an act so certain
to cause a particular kind of harm that we can say a person who performed the
act intended the resulting harm, and his statement to the contrary does
nothing to refute that rule of law."
------------------------- Page 558 N.E.2d 965 follows --------------------------
CNA Ins. Co. v. McGinnis, 282 Ark. 90, 93, 666 S.W.2d 689 (1984), quoting
Clark v. Allstate Ins. Co., 22 Ariz.App. 601, 602, 529 P.2d 1195 (1975). See
Bowen v. Lloyds Underwriters, 339 Mass. 627, 629, 162 N.E.2d 65 (1959);
Terrio v. McDonough, 16 Mass.App.Ct. 163, 169, 450 N.E.2d 190 (1983);
Lipson v. Queen Ins. Co., 2 Mass.App.Ct. 901, 319 N.E.2d 915 (1974). Rape
and sexual assault, too, because of their direct and forcible nature, are acts
of the same inherently injurious kind. "[R]eason mandates that from the very
nature of the act, harm to the injured party must have been intended." United
States Fidelity & Guar. Co. v. American Employer's Ins. Co., 159 Cal.App.3d
277, 291 n. 9, 205 Cal.Rptr. 460 (1984), quoted in Krasnigor, supra 404 Mass.
at 686 n. 7, 536 N.E.2d 1078.
The proffered testimony of Dr. Yudowitz does not alter our conclusion,
particularly because the tort defendants deny the abuse and refuse to submit
to any medical examination. The mere fact that, as a group, child abusers
have a variety of motives does not render their harmful actions
unintentional.[408MASS401] * Nowhere in the record is there a jot of evidence
suggesting that the tort defendants were suffering from a mental disease or
defect that would render them incapable of forming an intent to harm the child
plaintiffs. (FN8) Thus, Baker v. Commercial Union Ins. Co., 382 Mass. 347,
416 N.E.2d 187 (1981), cited by the tort plaintiffs, is inapposite. Baker
stands only for the "well-established rule that '[i]f the insured was insane
at the time that he wilfully or intentionally caused the [damage or injury],
the insurer remains liable on the policy' ...." Id. at 350, 416 N.E.2d
187. Cf. Clemmer v. Hartford Ins. Co., 22 Cal.3d 865, 151 Cal.Rptr. 285,
587 P.2d 1098 (1978). Nothing in the stipulation of facts, including the
proffered testimony of Dr. Yudowitz, who has not examined the tort defendants,
suggests any possibility that the tort plaintiffs will be able to demonstrate
that the tort defendants were not criminally responsible at the time of the
alleged sexual abuse. (FN9)
[2] In concluding that an intent to injure may be inferred as a matter of
law from acts of child molestation and rape, we join the overwhelming majority
of the jurisdictions that have considered the issue. (FN10) See Foremost
Ins. Co. v. Weetman, 726 F.Supp. 618 (W.D.Pa.1989) (Pennsylvania law);
Allstate Ins. Co. v. Roelfs, 698 F.Supp. 815 (D.Alaska 1987) (Alaska law);
Allstate Ins. Co. v. Thomas, 684 F.Supp. 1056 (W.D.Okla.1988) (Oklahoma law);
Twin City Fire Ins. Co. v. Doe, 163 Ariz. 388, 788 P.2d 121 (Ct.App.1989);
CNA Ins. Co. v. McGinnis, supra; Allstate Ins. Co. v. Troelstrup, 789 P.2d
415 (Colo.1990) (en banc); Landis v. Allstate Ins. Co., 546 So.2d 1051
(Fla.1989); Roe v. State Farm Fire & Casualty Co., supra; Altena v. United
Fire & Casualty Co., 422 N.W.2d 485 (Iowa 1988) (sexual abuse of adult by
victim's landlord); Harpy v. Nationwide Mut. Fire Ins. Co., supra;
Auto-Owners Ins. Co. v. Gardipey, 173 Mich.App. 711, 434 N.W.2d 220 (1988);
Estate of Lehmann v. Metzger, 355 N.W.2d 425 (Minn.1984); Vermont Mut. Ins.
Co. v. Malcolm, 128 N.H. 521, 517 A.2d 800 (1986) (overruling sub silentio
MacKinnon v. Hanover Ins. Co., 124 N.H. 456, 471 A.2d 1166 [1984] );
Rodriguez v. Williams, 107 Wash.2d 381, 729 P.2d 627 (1986) (en banc); Horace
Mann Ins. Co. v. Leeber, 376
------------------------- Page 558 N.E.2d 966 follows --------------------------
S.E.2d 581 (W.Va.1988); N.N. v. Moraine Mut. Ins. Co., 153 Wis.2d 84, 450
N.W.2d 445 (1990). (FN11) Only three cases lend any support to the
proposition that inquiry into the sexual abuser's motivations is necessary.
See State Auto Mut. Ins. Co. v. McIntyre, 652 F.Supp. 1177, 1219
(N.D.Ala.1987) ("whether a bodily injury is expected or intended by an insured
is a question of fact for the jury or judge and a purely subjective standard
governs such factual determination"). Cf. Allstate Ins. Co. v. Jack S, 709
F.Supp. 963 (D.Nev.1989) (court would not infer intent to injure when
perpetrator of sexual abuse was only fourteen years old); Public Serv. Mut.
Ins. Co. v. Goldfarb, 53 N.Y.2d 392, 442 N.Y.S.2d 422, 425 N.E.2d 810 (1981)
(holding that insurance company had duty to defend dentist, who allegedly
sexually molested his patients, under policy covering liability for injury
resulting from "undue familiarity"). We are unconvinced by these authorities
and consider it the better rule that intent to injure may be inferred from the
intentional commission of an inherently injurious act [408MASS403] such as
forcible sexual abuse. These policies provide no coverage for such acts.
[3] 2. Claims against Fells Acres. Apparently because of the confusion
concerning the identity of the insured under the SMP policies, see note 3,
supra, the Uniform Complaint makes identical allegations of vicarious
liability, negligence, and breach of warranty against both "Fells Acres Day
School, Inc." and "Fells Acres Day School, Inc. and/or Violet Amirault d/b/a
Fells Acres Day School." The parties' stipulation states that "[i]t was
intended by Worcester, Fells Acres and Violet that the policies ... would
provide liability insurance for Fells Acres.... Worcester, Fells Acres and
Violet have therefore agreed that coverage will be provided to 'Fells Acres
Day School, Inc.' to the same extent as if it had been identified as the named
insured." On the basis of this agreement, Worcester argues that the claims
against "Fells Acres Day School, Inc. and/or Violet Amirault d/b/a Fells Acres
Day School" are neither actionable nor covered under Worcester's SMP
policies. We agree.
According to the parties' stipulation of facts, Fells Acres (the
corporation) operated the school at all times relevant to the cases before
us. The school had ceased operation as a sole proprietorship by Violet in
1975. Thus, there is no factual foundation for claims against "Violet
Amirault d/b/a Fells Acres Day School." Under the terms of the SMP policies,
there also is no coverage for any sole proprietorship. The policies provide
that "if the named insured is designated in the Declarations as an individual,
the person so designated [is an insured] but only with respect to the conduct
of a business of which he is the sole proprietor" (emphasis supplied).
Because the school was operated by Fells Acres beginning in 1975, there can be
no coverage under the policy terms for the sole proprietorship of "Violet
d/b/a Fells Acres Day School." Certainly the facts as stipulated indicate no
factual basis from which to conclude that there is coverage for (or any basis
for tort claims against) the purported joint venture of Violet and Fells
Acres. The parties have agreed that Fells [408MASS404] Acres is the insured,
and there is no reason to disturb their agreement.
3. Vicarious liability. The Uniform Complaint alleges that the assaults
and batteries "were performed by one or more agents, servants, and/or
employees of the defendant school while they were acting within the course and
scope of their employment." On this issue, the parties have directed their
arguments not at the question of insurance coverage, but at the question
whether there can be any vicarious liability claim or claims under the
stipulated facts. In their arguments, the parties divide the question into
two parts: (a) whether, under traditional concepts of vicarious
------------------------- Page 558 N.E.2d 967 follows --------------------------
liability, the assaults and batteries were outside the scope of employment;
and (b) whether the facts alleged are sufficient to support an extension of
vicarious liability under the theory that Fells Acres assumed a nondelegable
duty akin to that imposed on common carriers to protect the children in its
care. (FN12)
[4] a. "Traditional" vicarious liability. An employer may be held
vicariously liable for the intentional tort of an agent if the tortious act or
acts were committed within the scope of employment. Miller v. Federated
Dep't Stores, Inc., 364 Mass. 340, 304 N.E.2d 573 (1973). "[C]onduct of an
agent is within the scope of employment if it is of the kind he is employed to
perform ...; if it occurs substantially within the authorized time and space
limits ...; and if it is motivated, at least in part, by a purpose to serve
the employer ..." (citations omitted). Wang Laboratories, Inc. v. Business
Incentives, Inc., 398 Mass. 854, 859, 501 N.E.2d 1163 (1986). See
Commonwealth v. L.A.L. Corp., 400 Mass. 737, 742, 511 N.E.2d 599 (1987). The
essential element that must be shown "is that the employee's assault was in
response to the plaintiff's conduct which was presently interfering with the
employee's ability to perform his duties successfully. This interference may
be in the form of an affirmative attempt to prevent an employee from carrying
out [408MASS405] his assignments ... in the failure to do acts necessary to
enable the employee to begin or continue his assignments.... Assaults arising
in either of these contexts constitute acts committed within the scope of
employment, in that they stem from and directly relate to the frustration of
the ability to perform on the assignments for which the employee is presently
responsible." (Citations omitted.) Miller, supra 364 Mass. at 350, 304
N.E.2d 573. Under this standard, the conduct alleged here does not trigger
vicarious liability.
[5][6] The only factor even arguably supporting the tort plaintiffs'
claims under this theory is that some of the abuse is alleged to have occurred
"within the authorized time and space limits." Wang Laboratories, Inc.,
supra 398 Mass. at 859, 501 N.E.2d 1163, i.e., at the school during school
hours. Because some of the abuse is alleged to have been committed off the
school grounds, even this factor does not support the plaintiffs. Moreover,
these acts obviously were not "of the kind [the employees were] employed to
perform," nor were they "motivated, at least in part, by a purpose to serve
the employer." Id. Certainly the individual tortfeasors' assaults could not
have been in response to any conduct by the child tort plaintiffs that was in
any way "interfering with [the tort defendants'] ability to perform" their
duties. Miller, supra 364 Mass. at 350, 304 N.E.2d 573. On the basis of
the stipulated facts, then, Fells Acres is not vicariously liable for the
assaults and batteries. (FN13)
[7][8] b. Extension of "common carrier" liability. Common carriers,
innkeepers, and the like are held liable for the negligence or the wilful
wrongs of their employees, under the rule that "[a] carrier is under an
obligation 'to use a very high [408MASS406] degree of care to prevent injuries
that might be caused by the ... wilful misconduct of others.... In the
application of the rule to injuries caused by servants of the carrier while
engaged in the performance of his contract of carriage, it is held that he is
liable absolutely for their misconduct.' " Gilmore v. Acme Taxi Co., 349
Mass. 651, 653, 212 N.E.2d 235 (1965), quoting
------------------------- Page 558 N.E.2d 968 follows --------------------------
Hayne v. Union St. Ry., 189 Mass. 551, 552, 76 N.E. 219 (1905). Accord
Carey v. New Yorker of Worcester, Inc., 355 Mass. 450, 452, 245 N.E.2d 420
(1969). Liability is imposed regardless of negligence. Gilmore, supra 349
Mass. at 652, 212 N.E.2d 235. Accord Bryant v. Rich, 106 Mass. 180, 188
(1870). Indeed, a common carrier is liable not only for the misconduct of its
employees, whether or not within the scope of employment, but also for the
wrongs of strangers, if they are inflicted on a person in its care. Quigley
v. Wilson Line of Mass., Inc., 338 Mass. 125, 128, 154 N.E.2d 77 (1958). The
tort plaintiffs in this case argue that we should hold Fells Acres to the
standard of care to which common carriers are held. This we decline to do.
Although our law recognizes a variety of special relationships that impose
affirmative duties of care, see generally Irwin v. Ware, 392 Mass. 745, 467
N.E.2d 1292 (1984), the standard to which common carriers are held is the very
highest, approaching that of an insurer. See O'Malley v. Putnam Safe Deposit
Vaults, Inc., 17 Mass.App.Ct. 332, 340, 458 N.E.2d 752 (1983). Although in
some jurisdictions, hospitals have been held to this standard, see Stropes v.
Heritage House Childrens Center of Shelbyville, Inc., 547 N.E.2d 244, 253
(Ind.1989), (FN14) we are aware of no cases imposing common carrier-type
liability on [408MASS407] an enterprise such as a group day-care center.
(FN15) Moreover, the tort plaintiffs have not pleaded this theory in the
Uniform Complaint, nor have they argued the issue fully and completely in
their briefs. In these circumstances, and because the imposition of common
carrier liability on group day care centers would constitute a significant
extension of current Massachusetts law, we decline to adopt such a rule in
this case.
4. Negligence and breach of warranty claims against Fells Acres. The
Uniform Complaint contains counts of negligence and breach of warranty against
Fells Acres. The tort plaintiffs argue that Fells Acres may be liable in
negligence and breach of warranty under a variety of theories. See, e.g.,
Doe v. Blandford, 402 Mass. 831, 525 N.E.2d 403 (1988) (negligent hiring and
retention of employee who assaulted plaintiff); Mullins v. Pine Manor
College, 389 Mass. 47, 449 N.E.2d 331 (1983) (negligent failure to provide
adequate security to protect students at residential college); Brown v.
Knight, 362 Mass. 350, 285 N.E.2d 790 (1972) (negligent supervision of
children by day camp operator); Vannah v. Hart Private Hosp., 228 Mass. 132,
117 N.E. 328 (1917) (breach of contract for failure of hospital to protect
patient). Worcester asserts that there is no coverage for these claims,
because "the children's injuries were not accidental from the standpoint of
Fells Acres" and the corporation "expected or intended" the injuries resulting
from the assaults and batteries on the plaintiffs.
Worcester grounds this argument in part on the contention that we should
disregard the corporate form and impute to the corporation the intentions of
its corporate officers and stockholders, Violet, Gerald, and Cheryl.
Generally, we have been reluctant to disregard the corporate fiction. We
disregard the corporate fiction and impute to the corporation the [408MASS408]
intentions of its principals only in "rare particular situations in order to
prevent gross inequity." Gurry v.
------------------------- Page 558 N.E.2d 969 follows --------------------------
Cumberland Farms, Inc., 406 Mass. 615, 626, 550 N.E.2d 127 (1990), quoting My
Bread Baking Co. v. Cumberland Farms, Inc., 353 Mass. 614, 620, 233 N.E.2d 748
(1968). SeeGordon Chem. Co., Inc. v. Aetna Casualty & Sur. Co., 358 Mass.
632, 638, 266 N.E.2d 653 (1971). See also Osvaldo Varane, Inc. v. Liberty
Mut. Ins. Co., 362 Mass. 864, 284 N.E.2d 923 (1972). The stipulation of facts
includes little to persuade us that under traditional principles the corporate
form should be disregarded, although further factual inquiry might yield facts
that would convince us otherwise.
[9] Our discussion whether we should disregard the corporate fiction does
not exhaust the question, however. In some circumstances, there may be reason
to impute to a corporation the wrongful intent of officers, directors, or
stockholders even without disregarding the corporate form. We have considered
this issue in the context of criminal prosecutions of corporations, where the
critical question is how the Commonwealth may establish the requisite criminal
intent on the part of a corporation. In Commonwealth v. Beneficial Fin. Co.,
360 Mass. 188, 275 N.E.2d 33 (1971), cert. denied sub nom. Farrell v.
Massachusetts, 407 U.S. 910, 92 S.Ct. 2433, 32 L.Ed.2d 683, and sub nom.
Beneficial Fin. Co. v. Massachusetts, 407 U.S. 914, 92 S.Ct. 2433, 32 L.Ed.2d
689 (1972), we approved instructions to the effect that when "the conduct for
which the corporation is being held accountable [is] performed on behalf of
the corporation," "the acts and the intent of the individuals [are] the acts
and intent of the corporation " (emphasis in original). Id. 360 Mass. at
258, 273, 255, 275 N.E.2d 33. Accord Commonwealth v. L.A.L. Corp., 400
Mass. 737, 742 and 744, 511 N.E.2d 599 (1987) (same principles apply to close
corporations).
[10] This theory of when the intentions of corporate principals may be
attributed to the corporation has been applied in the insurance context as
well. See Cora Pub. Inc. v. Contentinal Casualty Co., 619 F.2d 482, 486 (5th
Cir.1980) (where arson is "committed for the benefit of the corporation by an
officer ... courts have often imputed the arson of the individual to the
corporation"). Accord Osvaldo Varane, Inc., supra. Thus, if the alleged
acts of abuse were in any way [408MASS409] performed on behalf of the
corporation, the abuse would be attributable to the corporation. For example,
if it were shown that the individual defendants were engaged in the sale of
child pornography and that the corporation was financially implicated in such
activity, the intentions of the wrongdoers properly could be imputed to Fells
Acres.
[11] Similarly, if it could be shown that abuse at the school was so
routine as to constitute a general practice or policy, the abuse could be
imputed to Fells Acres, even if the abuse was not committed for the benefit of
the corporation. Considerations of this kind led a court to conclude that,
although a corporate insured was covered for negligent supervision claims when
its principals had sexually harassed employees, the insurance company had no
responsibility "for the corporation's intentional or discriminatory acts."
Seminole Point Hosp. Corp. v. Aetna Casualty & Sur. Co., 675 F.Supp. 44, 47
(D.N.H.1987).
[12][13] Other considerations as well might persuade us to impute the
wrongful intent of Violet, Gerald, or Cheryl to Fells Acres. We cannot reach
a precise determination on this issue in the absence of a more fully developed
factual record. The inquiry is factually based, and may have to be conducted
as to each injury. We do not have sufficient uncontroverted evidence in the
record to determine whether Fells Acres expected or intended the injuries.
The fact alone that the corporation's officers and shareholders committed
intentional torts would not be sufficient to warrant imputing their
expectations or intentions to Fells Acres. See Lawler Mach. & Foundry Co. v.
Pacific Indem. Ins. Co., 383 So.2d 156 (Ala.1980); Rivers v. Brown, 168 So.2d
400 (La.Ct.App.1964).
5. Negligence claims against Violet, Gerald, and Cheryl. The plaintiffs
have alleged that Violet, Gerald, and Cheryl were negligent in the performance
of their duties at the school. The insurance companies
------------------------- Page 558 N.E.2d 970 follows --------------------------
argue that there can be no coverage for these claims, because (a) the
individual tort defendants "expected or intended" injury to the tort
plaintiffs (see section 1), and any claims in negligence must fail for that
reason; and (b) as far as claims against Violet and [408MASS410] Cheryl are
concerned, their respective homeowner's policies exclude coverage for
business-related liability.
a. Expected or intended injury. Under the terms of the SMP policies
issued by Worcester, Violet, Gerald, and Cheryl are all insureds under a
clause providing that, "if the named insured is designated ... as other than
an individual, partnership or joint venture, [persons insured include] the
organization so designated and any executive officer, director or stockholder
thereof while acting within the scope of his duties as such." Worcester
argues, however, that there is no insurance coverage under the SMP policy for
the negligence claims against Violet, Gerald, and Cheryl, because "each of
these individuals knew and expected that the others routinely committed
abusive acts of the sort that they often perpetrated together--indeed, that it
was their common goal to facilitate such abuse."
[14][15][16] We agree with Worcester's argument that, "to the extent
that the plaintiffs seek to recover in negligence from the same individuals
whom they have sued for assault and battery, for the same acts which are
contended to be the basis of those assault and battery claims, the negligence
claims are legally unsupportable" (emphasis supplied). See Sabatinelli v.
Butler, 363 Mass. 565, 567, 296 N.E.2d 190 (1973) ("[i]f conduct is negligent
it cannot also be intentional"). Accord Allstate Ins. Co. v. Troelstrup, 789
P.2d 415, 418 n. 7 (Colo.1990) (en banc) (denying coverage for "negligent"
sexual abuse claim); Linebaugh v. Berdish, 144 Mich.App. 750, 376 N.W.2d 400
(1985) (same). The tort plaintiffs, however, apparently proceed on a
conventional negligence theory; the Uniform Complaint alleges that Violet,
Gerald, and Cheryl each "knew or should have known of the assault, rape and
sexual molestation of the minor plaintiffs and failed to exercise care to
prevent" these acts. We do not agree with Worcester's argument that a tort
defendant's knowledge (if any) of the abusive acts committed by others
nullifies coverage for a negligence claim. (FN16)
[17] [408MASS411] The knowledge of one of the tort defendants concerning
the abusive activities of the others, coupled with the failure to protect the
children, renders that tort defendant's conduct reckless. Restatement
(Second) of Torts Sec. 500 (1965), states: "The actor's conduct is in
reckless disregard of the safety of another if he ... intentionally fails to
do an act which it is his duty to the other to do, knowing or having reason to
know ... not only that his [omission] creates an unreasonable risk of physical
harm to another, but also that such risk is substantially greater than that
which is necessary to make his conduct negligent." See, e.g., Pridgen v.
Boston Hous. Auth., 364 Mass. 696, 705, 308 N.E.2d 467 (1974); Baines v.
Collins, 310 Mass. 523, 526, 38 N.E.2d 626 (1942).
[18] Generally, injuries resulting from reckless conduct do not fall into
the category of "expected or intended" injuries, but are considered
"accidental" and thus are covered under insurance policies. "Our cases have
concluded that an injury is nonaccidental only where the result was actually,
not constructively, intended, i.e., more than recklessness " (emphasis
supplied). Quincy Mut. Fire Ins. Co. v. Abernathy, 393 Mass. 81, 86, 469
N.E.2d 797 (1984) (reversing summary judgment for insurer on coverage issue
when insured intentionally threw a large piece of "blacktop" at a car,
injuring occupants). Accord Sheehan v. Goriansky, 321 Mass. 200, 205, 72
N.E.2d 538 (1947). See Peterson v. Western Casualty & Sur. Co., 5 Wis.2d 535,
93
------------------------- Page 558 N.E.2d 971 follows --------------------------
N.W.2d 433 (1958) (affirming liability of insurance company for injuries
sustained when insured's automobile struck plaintiff while insured was
attempting to use the automobile to evade arrest). The omissions alleged in
the negligence counts amount to reckless, not wilful conduct. Thus, the SMP
policies cover the claims of negligence by Violet, Gerald, and Cheryl, to the
extent that the claims do not seek recovery for the same acts that are the
basis of the assault and battery claims.
[19] [408MASS412] b. Business-related exclusions in the homeowner's
policies. The insurance companies argue that the negligence (FN17) claims
against Violet and Cheryl fall within the "business pursuits" exclusions of
their respective homeowner's policies.S412 [408MASS] We agree. The negligence
claims plainly allege negligent failure to perform responsibilities incident
to the insureds' business pursuits as directors of the school. The insureds'
responsibilities "to prevent the assault, rape and sexual molestation of the
minor plaintiffs" derive from the school's contractual agreement to provide
care for the child tort plaintiffs. The negligence claims would have no
factual basis were Violet and Cheryl not in positions of responsibility in the
school, the operation of which was a business pursuit the insureds owned and
engaged in for profit. See Newell-Blais Post # 443, Veterans of Foreign Wars
of the U.S., Inc. v. Shelby Mut. Ins. Co., 396 Mass. 633, 636, 487 N.E.2d 1371
(1986); Ratner v. Canadian Universal Ins. Co., 359 Mass. 375, 379, 269
N.E.2d 227 (1971). "[T]he manifest design of homeowners' insurance is to
protect homeowners from risks associated with the home and activities related
to the home." Worcester Mut. Ins. Co. v. Marnell, 398 Mass. 240, 245, 496
N.E.2d 158 (1986). The alleged negligence of Violet and Cheryl is in no way
"associated with" or "related to" the home. These claims are not covered by
the homeowner's policies. (FN19)
6. Consortium claims. The Uniform Complaint prays for consortium damages
but does not include a separate claim by the adult tort plaintiffs for loss of
consortium. Thus, the issue whether any consortium claims are covered by the
insurance policies is only arguably within the purview of the first
reported[408MASS413] question. See Appendix. Nevertheless, because the
parties have argued the issue, and because the plaintiffs are free to amend
their complaints (see Mass.R.Civ.P. 15[b] ), we discuss it.
[20][21][22] a. The homeowner's policies. Worcester's homeowner's
policy defines "bodily injury" as "bodily injury, sickness or disease,
including care, loss of services and death resulting therefrom." (FN20) The
policy provides coverage for "all sums which the insured shall become legally
obligated to pay as damages because of bodily injury [i.e., bodily injury,
including care and loss of services resulting therefrom] or property damage,
to which this insurance applies, caused by an occurrence." The exclusion for
expected or intended injury compels the exclusion from coverage of the bodily
injuries themselves. See section 1, supra. The injuries to the adult tort
plaintiffs in the form of "care and loss of services," however, remain within
the scope of coverage, unless trial of the issues demonstrates that the
insured intended to injure
------------------------- Page 558 N.E.2d 972 follows --------------------------
the adult tort plaintiffs. (FN21)
[23] Nevertheless, Worcester argues that the phrase "resulting therefrom"
"makes clear that care and loss of services are a subset of bodily injury,
sickness or disease and that, therefore, coverage for a claim for loss of
consortium cannot exist unless there is coverage for the bodily injury ...
from which it resulted." Worcester's argument appears to be that only "care
[and] loss of services" resulting from a covered bodily injury are covered.
Nothing in the policy language compels such a result. The policy provides
coverage for bodily injury and for care and loss of services resulting
therefrom, subject to the later limiting phrase--which triggers the
exclusion--"to which this insurance applies." Only the initial bodily injury
(assault and battery) is excluded by this limitation. [408MASS414] See
Interstate Fire & Casualty Co. v. Stuntman Inc., 861 F.2d 203 (9th Cir.1988)
(clause providing coverage for damages "because of personal injury" includes
coverage for emotional injuries arising out of physical injuries not covered
under the terms of an unrelated exclusion).
[24] Worcester argues that "coverage for loss of consortium is derivative
of coverage for the underlying bodily injury." This argument also fails. We
have rejected the argument that consortium claims are essentially derivative
on a number of previous occasions. See Pinheiro v. Medical Malpractice Joint
Underwriting Ass'n of Mass., 406 Mass. 288, 291, 547 N.E.2d 49 (1989);
Bilodeau v. Lumbermens Mut. Casualty Co., 392 Mass. 537, 539, 467 N.E.2d 137
(1984); Feltch v. General Rental Co., 383 Mass. 603, 607, 421 N.E.2d 67
(1981). Although it is clear that a consortium claim bears a "symbiotic"
relation to the initial claim of injury to a spouse or other family member,
Corrigan v. General Elec. Co., 406 Mass. 478, 480, 548 N.E.2d 1238 (1990), it
is an independent injury, explicitly included in the policy coverage through
the policy's definition of bodily injury. Cf. Pinheiro, supra 406 Mass. at
291, 547 N.E.2d 49.
Moreover, we would apply the exclusion to the consortium injuries only if
such injuries were unambiguously excluded by the policy language. Worcester's
argument convinces us merely that the policy may be ambiguous. "It is well
established that, where an insurer drafts the policy ... all ambiguities are
resolved against the insurer." Liberty Mut. Ins. Co. v. Tabor, 407 Mass.
354, 362, 553 N.E.2d 909 (1990), quoting Transamerica Ins. Co. v. Norfolk &
Dedham Mut. Fire Ins. Co., 361 Mass. 144, 147, 279 N.E.2d 686 (1972). See
Quincy Mut. Fire Ins. Co. v. Abernathy, 393 Mass. 81, 83, 469 N.E.2d 797
(1984). Thus, the homeowners' policy covers any consortium injury that is not
itself subject to an exclusion. (FN22)
[25][26] [408MASS415] b. SMP policies. Worcester's SMP policies
provide coverage for "all sums which the insured shall become legally
obligated to pay as damages because of bodily injury ... to which this
insurance applies, caused by an occurrence." Bodily injury is defined as
"bodily injury, sickness or disease sustained by any person which occurs
during the policy period, including death at any time resulting therefrom."
Unlike the definition of bodily injury in the homeowner's policies, this
definition of bodily injury does not appear to include consortium injuries.
Consortium injuries are covered, however, as "damages because of bodily
injury," as long as the bodily injuries are ones "to which this insurance
applies, caused by an occurrence." This "occurrence" qualification excludes
consortium injuries arising out of the assaults and batteries. See section 1,
supra. It does not,
------------------------- Page 558 N.E.2d 973 follows --------------------------
however, exclude consortium injuries relating to bodily injuries suffered by
the minor tort plaintiffs as a result of negligence or breach of warranty.
See sections 4 and 5a, supra. Cf. Hazen Paper Co. v. United States Fidelity
& Guar. Co., 407 Mass. 689, 555 N.E.2d 576 (1990) (clause providing coverage
for "damages because of ... property damage" covers costs of reimbursing
government agencies for toxic waste clean-up).
Worcester argues that we should not construe consortium claims as "damages
because of bodily injury," because nothing in the policy indicates that there
is coverage for suits brought by third parties (such as consortium claimants)
for losses occasioned by a covered bodily injury. We note, however, that
nothing in the policy language excludes such coverage. Indeed, the simplest
and most direct interpretation of "damages because of bodily injury" includes
any damages, including loss of consortium, arising from a bodily injury.
Because any ambiguity is resolved against Worcester, see Liberty Mut. Ins.
Co. v. Tabor, supra; Quincy Mut. Fire Ins. [408MASS416] Co. v. Abernathy,
supra, Worcester's argument on this point is without merit. (FN23)
[27] 7. Multiple occurrences. The eighth reported question asks us
whether it can be determined as a matter of law "that the claims of the
underlying tort plaintiffs arise from no more than one occurrence, thereby
limiting each insurer's (FN24) liability, if any, to the applicable 'per
occurrence' policy limit?" The SMP policies define "occurrence" as "an
accident, including continuous or repeated exposure to conditions, which
results in bodily injury." (FN25) The term "occurrence" that appears in the
policies was used by the insurance industry instead of the term "accident"
beginning in the 1960's. The term "occurrence" was adopted "to dispel any
existing notion that [coverage] was limited to sudden happenings." Rosow &
Liederman, An Overview to the Interpretive Problems of "Occurrence" in
Comprehensive General Liability Insurance, 16 Forum 1148, 1149 (1981).
The question, in essence, asks us to determine whether the facts alleged
are susceptible to the interpretation, advanced by Worcester, that the
"single, ongoing cause of the children's injuries was their continuous and
repeated exposure to abusive conditions at the School." Relying on
Appalachian Ins. Co. v. Liberty Mut. Ins. Co., 676 F.2d 56 (3d Cir.1982), and
Transport Ins. Co. v. Lee Way Motor Freight, 487 F.Supp. 1325, 1330
(N.D.Tex.1980), Worcester argues that the abuse of the children in this case
must be interpreted as a single "occurrence." The cases relied on by
Worcester hold that in circumstances where many corporate employees suffered
from a discriminatory corporate employment[408MASS417] policy, there was but
one "occurrence": the adoption of the discriminatory policy. We need not
decide if we would follow those cases if faced with similar facts, because
those cases are fundamentally different from the facts before us.
The tort plaintiffs allege numerous discrete acts of abuse, negligence, and
breach of duty by several different defendants, some individual and one
corporate, at different locations. These allegations preclude the possibility
that there was but a "single, ongoing cause" of the injuries alleged.
Further, we have rejected attempts by insurers to characterize seemingly
discrete events as emanating from a single, ongoing cause. See, e.g.,
Continental Casualty Co. v. Gilbane Bldg. Co., 391 Mass. 143, 151, 461 N.E.2d
209 (1984) (rejecting insurer's interpretation that a second episode of
structural damage to a building was an extension of an earlier
------------------------- Page 558 N.E.2d 974. follows -------------------------
incident of breakage); Slater v. United States Fidelity & Guar. Co., 379
Mass. 801, 809, 400 N.E.2d 1256 (1980) (refusing to interpret employee scheme
to execute numerous small thefts as a single occurrence). We do so here as
well. The allegations in the stipulation, if proved, would constitute more
than one occurrence.
The cases are remanded to the Superior Court for further proceedings
consistent with this opinion.
So ordered.
APPENDIX.
"I. Whether the claims against the defendants in the underlying tort cases
are not covered by policies of liability insurance because, based upon the
Stipulation and Statement of Agreed Facts, the injuries for which recovery is
sought by the underlying tort plaintiffs were, as a matter of law, 'expected
or intended' by the insureds?
"II. Whether the claims of assault and battery against Violet Amirault,
Gerald Amirault, and Cheryl Amirault LeFave are not covered by the SMP
policies issued by Worcester Insurance Company because, based upon the
Stipulation and Statement of Agreed Facts, as a matter of law, the acts for
which recovery is sought by the underlying tort plaintiffs were not performed
within the scope of their duties as officers, directors or stockholders of
Fells Acres Day School, Inc.?
[408MASS418] "III. Whether, based upon the Stipulation and Statement of
Agreed Facts, as a matter of law, the claims asserted against Violet Amirault
d/b/a Fells Acres Day School are not covered under the SMP policies issued by
Worcester Insurance Company?
"IV. Whether, based upon the Stipulation and Statement of Agreed Facts, as
a matter of law, the claims asserted jointly against Fells Acres Day School,
Inc., and/or Violet Amirault d/b/a Fells Acres Day School as alleged partners
or joint venturers are neither actionable nor covered under the SMP policies
issued by Worcester Insurance Company?
"V. Whether, based upon the Stipulation and Statement of Agreed Facts, the
claims of vicarious liability for assault and battery against (1) Fells Acres
Day School, Inc. and (2) Fells Acres Day School, Inc. and/or Violet Amirault
d/b/a Fells Acres Day School are, as a matter of law, based upon intentional
torts which were outside the scope of employment and not in furtherance of the
employer's work?
"VI. Whether the alleged conduct of the individual defendants in the
underlying tort cases, as a matter of law, supports only claims of intentional
tort?
"VII. Whether each of the claims against Violet Amirault and Cheryl
Amirault LeFave is not covered by their respective Homeowner's policies
because, based upon the Stipulation and Statement of Agreed Facts, as a matter
of law, one or more of the policies' business risk exclusions applies?
"VIII. Whether it can be determined, based upon the Stipulation and
Statement of Agreed Facts, as a matter of law, that the claims of the
underlying tort plaintiffs arise from no more than one occurrence, thereby
limiting each insurer's liability, if any, to the applicable 'per occurrence'
policy limit?"
FN1. Violet R. Amirault, Gerald A. Amirault, Cheryl Amirault LeFave (who,
along with Fells Acres and Albert LeFave, are defendants in the underlying
tort actions), and the plaintiffs in the underlying tort actions.
FN2. The other declaratory judgment action was brought by Merrimack Mutual
Fire Insurance Company against Fells Acres Day School, Violet R. Amirault,
Gerald A. Amirault, Cheryl Amirault LeFave, Albert LeFave, and the plaintiffs
in the underlying tort actions. We shall refer to the plaintiffs in the
underlying tort actions as the "tort plaintiffs," and to the defendants in the
underlying tort actions as the "tort defendants."
FN3. Although the policies identified, variously, "Violet R. Amirault d/b/a
Fells Acres Day School," "Violet R. Amirault; Violet R. Amirault, Trustee,"
and "Violet Amirault Revocable Trust; Violet Amirault, Trustee," as the named
insured, Worcester, Fells Acres, and Violet intended that the policies would
provide insurance for Fells Acres Day School, Inc. Accordingly, these parties
have agreed that coverage will be provided to Fells Acres to the same extent
as if it had been identified as the named insured. See section 2, infra.
FN4. Gerald also was convicted on two additional indictments charging rape
involving children who are not among the tort plaintiffs.
FN5. The question of the insurance companies' duty to defend is not before us.
FN6. Worcester's SMP policies provide coverage for an "occurrence," defined
as "an accident, including continuous or repeated exposure to conditions,
which results in bodily injury or property damage neither expected nor
intended from the standpoint of the insured." The Worcester homeowners'
policy contains an exclusion for "bodily injury or property damage which is
either expected or intended from the standpoint of the insured." The
Merrimack homeowner's policy also contains an exclusion for "bodily injury or
property damage ... which is expected or intended by the insured." (Emphases
supplied.)
------------------------- Page 558 N.E.2d 974_ follows -------------------------
FN7. The tort plaintiffs would seek to qualify Dr. Yudowitz as an expert.
The stipulation of facts notes that the insurance companies reserve their
right to object to the admission of Dr. Yudowitz's testimony and to offer
their own expert or experts. Because the question is not before us, we
express no opinion concerning the admissibility of Dr. Yudowitz's testimony.
FN8. The complete absence from the record of any evidence of mental disease
or defect renders irrelevant the tort plaintiffs' argument concerning the
burden of proof, in light of the parties' agreement that "all of the material
facts to determine the issues" are contained in the stipulation of facts.
FN9. Massachusetts Property Ins. Underwriting Ass'n v. Norrington, 395 Mass.
751, 481 N.E.2d 1364 (1985), cited by the tort plaintiffs, is inapposite.
That case concerns the question whether the criminal conviction of the insured
precludes the relitigation of issues determined in the criminal trial.
Although, under Norrington, the tort plaintiffs are not precluded from
relitigating the tort defendants' ability to form an intent to injure, nothing
in the record before us permits the inference that the tort defendants were
unable to form such an intent. Moreover, the parties have agreed that "all of
the material facts to determine the issues ... are contained in the
Stipulation."
FN10. Our conclusion on this point makes it unnecessary for us to answer the
second reported question. See Appendix.
FN11. In California, the Courts of Appeal have disagreed on the issue, and
the California Supreme Court is now considering it. Compare Fire Ins. Exch.
v. Abbott, 204 Cal.App.3d 1012, 251 Cal.Rptr. 620 (1988) (following majority
rule), with J.C. Penney Casualty Ins. Co. v. M.K., 209 Cal.App.3d 1208, 220
Cal.App.3d 484, 257 Cal.Rptr. 801 (1989) (rejecting majority rule), review
granted, 261 Cal.Rptr. 310, 777 P.2d 83 (1989).
FN12. We note that, although the parties address this second issue, the claim
is not explicitly advanced in the Uniform Complaint. The parties are, of
course, free to amend the pleadings. See Mass.R.Civ.P. 15(b), 365 Mass. 761
(1974).
FN13. The tort plaintiffs urge us to broaden our standards so as to permit
the imposition of vicarious liability when the tortious conduct "originated in
activities so closely associated with the employment relationship as to fall
within its scope." Stropes v. Heritage House Childrens Center of Shelbyville,
Inc., 547 N.E.2d 244, 247 (Ind.1989). We need not reach this issue, because
we conclude that the acts alleged would not trigger vicarious liability even
under the broader standard cited by the tort plaintiffs. None of the acts of
forcible sexual molestation or rape can be interpreted as "originating in" any
legitimate activities "closely associated with the employment relationship."
Id.
FN14. The Indiana Supreme Court cited Vannah v. Hart Private Hosp., 228 Mass.
132, 117 N.E. 328 (1917), in support of its extension of common carrier
liability to hospitals. We regard that case as having been decided on a
contract theory: "[W]here (as ... in the case at bar) the injury done the
plaintiff is caused by an act of the defendant's servants outside of the
servants' duty as employees of the defendant but by an act of the defendant's
servants which while not in the course of the servants' employment is none the
less a violation of the duty owed by the defendant under the defendant's
contract with the plaintiff, the only action that can be brought is an action
founded upon the duty arising out of the contract." Id. at 138, 117 N.E. 328.
FN15. The United States Court of Appeals for the Fourth Circuit, in a case
decided under South Carolina law, refused to extend the theory to private
security agencies, despite the court's observation that private security
agencies are subject to a comprehensive regulatory scheme under South Carolina
law. See Rabon v. Guardsmark Inc., 571 F.2d 1277 (4th Cir.), cert. denied,
439 U.S. 866, 99 S.Ct. 191, 58 L.Ed.2d 176 (1978).
FN16. Of course, a tort defendant's participation in or active facilitation
of abuse by others would constitute "intended" injury and would not be
covered. See section 1, supra. Participation and facilitation appear to be
what one plaintiff family means by the term "common scheme." We decline
Worcester's invitation to find that the abuse was the "common goal" of the
individual tort defendants. It is not for an appellate court to find facts.
------------------------- Page 558 N.E.2d 974_ follows -------------------------
FN17. The insurance companies also argue that this exclusion precludes
coverage for claims of intentional wrong by Violet and Cheryl. We need not
consider this argument because of our conclusion in section 1, supra, that the
claims of intentional wrong are not covered.
FN18. Cheryl's homeowner's policy, issued by Merrimack, provides that coverage
is excluded for "bodily injury ... arising out of business pursuits of any
insured." Violet's homeowner's policy, issued by Worcester, contains an
identical exclusion.
FN19. Our conclusion on this point renders it unnecessary for us to interpret
the "professional services" exclusion in Violet's homeowner's policy.
FN20. This definition, which explicitly includes consortium-type injuries,
renders irrelevant our assumption in Bilodeau v. Lumbermens Mut. Casualty
Co., 392 Mass. 537, 541, 467 N.E.2d 137 (1984), when we were interpreting
different policy language, that "loss of consortium is not a 'bodily injury.' "
FN21. Worcester invites us to find that the insured intended the injury to
the parents. We do not find facts. See note 16, supra.
FN22. Much like Worcester's policy, Merrimack's homeowner's policy defines
bodily injury as "bodily harm, sickness or disease, including required care,
loss of services and death resulting therefrom." Coverage is provided if a
suit "is brought against any insured for damages because of bodily injury or
property damage to which this coverage applies." This language is subject to
the same analysis as the very similar language in Worcester's policy. Thus,
the Merrimack policy covers consortium injuries that are not themselves
subject to a policy exclusion.
FN23. We also note that similar language in certain motor vehicle insurance
policies has been interpreted as we interpret these SMP policies. See
Ferreira v. Travelers Ins. Co., 684 F.Supp. 1150, 1152-1153 (D.R.I.1988), and
cases cited. See also Bilodeau, supra 392 Mass. at 541-542, 467 N.E.2d
137. Cf. Interstate Fire & Casualty Co. v. Stuntman Inc., supra.
FN24. Only Worcester presents argument on this point.
FN25. Worcester's homeowner's policy defines "occurrence" as "an accident,
including injurious exposure to conditions, which results ... in bodily
injury." The differences between this definition and the definition in the
SMP policies do not affect our conclusion on this point.
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