PUBLISHED

UNITED STATES COURT OF APPEALS

FOR THE FOURTH CIRCUIT

No. 14-2254

LIBERTY UNIVERSITY, INC.,

Plaintiff – Appellee,

v.

CITIZENS INSURANCE COMPANY OF AMERICA; HANOVER AMERICAN 

INSURANCE COMPANY; HANOVER INSURANCE COMPANY,

Defendants – Appellants.

Appeal from the United States District Court for the Western

District of Virginia, at Lynchburg. Norman K. Moon, Senior 

District Judge. (6:13-cv-00033-NKM-RSB)

Argued: May 13, 2015 Decided: July 10, 2015

Before NIEMEYER, DUNCAN, and THACKER, Circuit Judges.

Vacated and remanded by published opinion. Judge Thacker wrote 

the opinion, in which Judge Niemeyer and Judge Duncan joined.

ARGUED: John Peter Malloy, ROBINSON & COLE LLP, Hartford, 

Connecticut, for Appellants. Harold Edward Johnson, WILLIAMS 

MULLEN, Richmond, Virginia, for Appellee. ON BRIEF: Thomas S. 

Garrett, HARMAN CLAYTOR CORRIGAN & WELLMAN, Richmond, Virginia; 

Wystan M. Ackerman, ROBINSON & COLE LLP, Hartford, Connecticut, 

for Appellants. Calvin W. Fowler, Jr., WILLIAMS MULLEN, 

Richmond, Virginia, for Appellee.
2

THACKER, Circuit Judge:

In November 2012, Janet Jenkins sued Liberty 

University, Inc. (“Appellee”), alleging that the school 

participated -- both directly and vicariously -- in a scheme to 

kidnap Jenkins’s daughter in order to disrupt the parent-child 

relationship. In her complaint (“Jenkins Complaint”), Jenkins 

alleged that Appellee and its agents helped Lisa Miller, the 

child’s biological mother and Jenkins’ former partner in a samesex civil union, to defy state court visitation orders and to 

abscond with the child to Nicaragua. 

The district court ruled that Citizens Insurance 

Company of America (“Appellant”), Appellee’s liability insurance 

carrier, has a duty to defend Appellee. Under the insurance 

policy at issue, Appellant must defend Appellee against suits 

alleging certain harms that arise from an “occurrence” -- an 

unexpected accident, which does not fall under any of the

coverage exclusions. The policy also contains a “Separation of 

Insureds” provision, which requires the court to evaluate a 

claim by each named insured individually.1 Concluding that this 

 1 In addition to Appellee, the Jenkins Complaint names 

Victoria Hyden, who was a “student worker” at Liberty University 

School of Law, as a defendant. J.A. 44. The Jenkins Complaint 

alleges that Hyden acted as Appellee’s agent when she “aided and 

abetted” the kidnapping. Id. at 49 (internal quotation marks 

omitted). Although the Jenkins Complaint names many other 

(Continued)
3

Separation of Insureds provision is ambiguous and should be

interpreted in Appellee’s favor, the district court refused to

consider the intent of Appellee’s agents when determining if the 

complaint alleged an accidental “occurrence” and whether the 

policy’s exclusions applied. The district court also decided

that, even if the Separation of Insureds provision would not 

prevent imputing the intent of Appellee’s agents to Appellee,

the Jenkins Complaint failed to “sufficiently allege” Appellee’s 

vicarious liability. Thus, the district court granted summary 

judgment and awarded defense costs to Appellee.

We conclude otherwise. Because the Jenkins Complaint 

does not allege an “occurrence,” and because it triggers the 

policy’s coverage exclusions, Appellant has no duty to defend.

I.

We review a grant of summary judgment de novo. See

CACI Int’l, Inc. v. St. Paul Fire & Marine Ins. Co., 566 F.3d 

150, 155 (4th Cir. 2009). 

 

defendants, they are not named insureds under the policy and are 

not essential to resolving this appeal.

Citations to the “J.A.” refer to the Joint Appendix 

filed by the parties in this appeal.
4

II.

A.

The Jenkins Complaint

The child at the core of this dispute was born to Lisa 

Miller and Janet Jenkins in 2002 while the two women were joined 

in a Vermont same-sex civil union. Miller is the biological 

mother and a legal parent to the child. Jenkins is also the 

child’s legal parent, pursuant to a 2004 Vermont state court

ruling. Miller subsequently converted to Christianity; moved to 

Virginia; and believing that homosexuality was sinful, sought to 

prevent Jenkins from having contact with her daughter. For 

several years, Miller defied visitation orders issued by Vermont 

and Virginia courts. In 2009, facing the possibility that 

Vermont or Virginia would transfer custody to Jenkins, Miller 

absconded to Nicaragua with the child. Jenkins has not seen her 

daughter since. 

Jenkins brought a lawsuit in Vermont district court on 

her own behalf and on behalf of her daughter in November 2012. 

Appellee and Victoria Hyden, a student worker at Liberty 

University, were among the named defendants. The Jenkins 

Complaint alleges that Appellee assisted Miller by withholding 

the child from Jenkins and by taking the child out of the 

country. As a result, Jenkins claims Appellee was directly 

liable for conspiring to “commit the intentional tort of 
5

kidnapping,” which is “chargeable as a criminal offense under 

Vermont law,” and conspiring “through [a] pattern of 

racketeering” to kidnap the child and to “assure her continued 

detention” in Nicaragua in violation of the Racketeer Influence 

and Corrupt Organizations Act (RICO), 18 U.S.C. § 1962(d).2 J.A. 

49, 51. The Jenkins Complaint also asserts that Appellee was 

vicariously liable for the role Hyden played in the kidnapping, 

for its agents’ racketeering, and for its agents’ participation 

in a conspiracy to violate Jenkins’s and the child’s “rights to 

a parent-child relationship.” Id. at 46, 49.

In particular, the Jenkins Complaint charges that 

Miller retained the dean of Liberty University School of Law, 

Mathew Staver, and one of the school’s professors, Rena 

Lindevaldsen, as her attorneys. As alleged, Staver and 

Lindevaldsen encouraged and assisted Miller in violating state 

court orders, established social media forums soliciting 

 2 Pursuant to 18 U.S.C. § 1962,

It shall be unlawful for any person employed 

by or associated with any enterprise engaged 

in, or the activities of which affect, 

interstate or foreign commerce, to conduct 

or participate, directly or indirectly, in 

the conduct of such enterprise’s affairs 

through a pattern of racketeering 

activity . . . .

18 U.S.C. § 1962(c). Section 1962(d) criminalizes conspiring to 

violate § 1962(c).
6

donations to groups that aimed to “prevent court ordered 

contact” between Jenkins and her daughter, and planned with 

other co-conspirators to kidnap the child. J.A. 42. The 

Jenkins Complaint further accuses Victoria Hyden, an employee of 

the law school, of calling Miller’s father to help transport 

Miller and the child to a parking lot in Lynchburg, Virginia, 

where Philip Zodhiates -- who is Hyden’s father and was one of 

Staver’s acquaintances -- picked them up and drove them to the 

Canadian border. Staver allegedly aided the kidnapping by using 

telephone lines registered to Liberty University to speak to 

Zodhiates as he drove back from the Canadian border. Therefore, 

“[w]ith the assistance of . . . Philip Zodhiates and Victoria 

[Hyden] . . . as agents of . . . Liberty University . . . Miller 

was able to leave the United States” with the child. Id. at 46. 

The Jenkins Complaint also alleges that Appellee and 

its agents “enable[d] [Miller] to remain outside the country.” 

J.A. 44. For example, Lindevaldsen allegedly founded a Facebook 

group to solicit donations for Miller while Miller was hiding 

with the child in Nicaragua. The Jenkins Complaint also asserts 

that Hyden emailed “her co-workers at the law school requesting 

donations for supplies to send to . . . Miller to enable her to 

remain outside the country.” Id. at 44. The Jenkins Complaint 

further alleges that Staver and Lindevaldsen “routinely 

instructed their Law School students that the correct course of 
7

action for a person in . . . Miller’s situation would be to 

engage in ‘civil disobedience’ and defy court orders.” Id. at 

45. As such, “Liberty University encouraged its agents to 

disregard state laws governing parental rights . . . of same-sex 

families.” Id. at 45-46.

Based on these facts, the Jenkins Complaint alleges 

that Appellee was directly liable for its involvement in the 

kidnapping scheme and, at the same time, vicariously liable 

because it “promoted, condoned and explicitly ratified its 

agent[s’] tortious, racketeering activity.” J.A. 46. The 

Jenkins Complaint sought damages for these injuries. 

B.

The Policy

The policy at issue was effective from February 2009 

to February 2010 and contains two coverage forms: (1) Commercial 

General Liability coverage (“CGL”) and (2) School and Educators 

Legal Liability coverage (“SELL”).3

 3 Technically, there are four insurance policies at issue. 

But two of these are umbrella policies that the parties agree 

have essentially the same terms as the CGL and the SELL.
8

1.

CGL Coverage

The CGL itself provides two subsidiary coverage forms: 

Coverage A and Coverage B.

a.

Coverage A

Under Coverage A, Appellant must defend suits seeking 

damages for “bodily injury” and “property damage” arising from 

an “occurrence.” J.A. 68. Consistent with Virginia law, the 

policy defines the terms “occurrence and accident . . . 

synonymous[ly] [as] refer[ing] to an incident that was 

unexpected from the viewpoint of the insured.” AES Corp. v. 

Steadfast Ins. Co., 725 S.E.2d 532, 536 (Va. 2012) (internal 

quotation marks omitted); J.A. 81. According to the Supreme 

Court of Virginia:

For coverage to be precluded under a CGL 

policy because there was no occurrence, it 

must be alleged that the result of an 

insured’s intentional act was more than a 

possibility; it must be alleged that the 

insured subjectively intended or anticipated 

the result of its intentional act or that 

objectively, the result was a natural or 

probable consequence of the intentional act.

. . . .

. . . Where the harmful consequences of an 

act are alleged to have been not just 

possible, but the natural and probable 

consequences of an intentional act, choosing 

to perform the act deliberately, even if in 

ignorance of that fact, does not make the 

resulting injury an ‘accident’ . . . .
9

AES, 725 S.E.2d at 536, 538 (internal quotation marks omitted). 

Accordingly, a suit alleging only intentional torts does not 

state an “occurrence.” See Travelers Indem. Co. v. Obenshain, 

245 S.E.2d 247, 249 (Va. 1978). Even if the insured 

demonstrates that the suit alleges “bodily injury” or “property 

damage” arising from an “occurrence,” Coverage A’s “Expected 

Injury Exclusion” excludes “‘[b]odily injury’ or ‘property 

damage’ expected or intended from the standpoint of the 

insured.” J.A. 69. 

b.

Coverage B

Coverage B insures against suits alleging “personal 

and advertising injury,” the definition of which includes 

“[f]alse arrest, detention or imprisonment.” J.A. 81. The 

policy defines “wrongful act” as:

any breach of duty . . . committed by an 

insured:

a. In the lawful discharge of the 

duties that are characteristic of, 

distinctive or inherent to the 

operation and functioning of an 

educational institution; and

b. While acting within the course and 

scope of their duties for the named 

insured.

Id. at 130. But Coverage B’s “Criminal Acts Exclusion” excludes 

any “‘[p]ersonal and advertising injury’ arising out of a 
10

criminal act committed by or at the direction of the insured.” 

Id. at 73. And Coverage B’s “Knowing Violation Exclusion” 

excludes any “‘[p]ersonal and advertising injury’ caused by or 

at the direction of the insured with the knowledge that the act 

would violate the rights of another and would inflict ‘personal 

and advertising injury’” (“Knowing Violation Exclusion”). Id.

2.

SELL Coverage

Under the SELL, Appellant has the duty to defend 

against any claim “[a]lleging injury arising out of a wrongful 

act . . . and seeking loss because of such injury.” J.A. 116 

(internal quotation marks omitted). The SELL policy contains an 

“Intentional and Criminal Acts Exclusion,” which excludes 

coverage for: 

[a]ny “claim” arising out of any 

intentional, dishonest, fraudulent, 

criminal, or malicious act or omission or 

any willful violation of law by the insured 

. . . .

. . . . 

This exclusion precludes coverage for 

all insured persons under the policy 

regardless whether the person seeking 

coverage participated in any way in the 

intentional or criminal acts or omissions.

Id. at 116.
11

3.

Separation of Insureds

The insurance policy includes a Separation of Insureds 

provision, which states:

Except with respect to the Limits of 

Insurance, and any rights or duties 

specifically assigned in this Coverage part 

to the first Named Insured, this insurance 

applies:

a. As if each Named Insured were the 

only Named Insured; and

b. Separately to each insured against 

whom claim is made or “suit” is 

brought.

J.A. 159. 

When multiple named insureds claim the right to a 

defense against the same suit, a separation of insureds clause 

requires the insurer to evaluate the claims against each named 

insured individually. The insurer treats each insured as if he 

or she has separate insurance coverage, so that excluded conduct 

by one insured does not preclude claims brought by other 

insureds. See W. Am. Ins. Co. v. AV&S, 145 F.3d 1224, 1227-29 

(10th Cir. 1998); see, e.g., Commercial Standard Ins. Co. v. Am. 

Gen. Ins. Co., 455 S.W.2d 714, 721 (Tex. 1970) (construing a 

severability of interests clause, which “refer[s] to each 

insured as a separate and distinct individual apart from any and 

every other person who may be entitled to coverage thereunder”
12

(internal quotation marks omitted)). The policy designates 

Appellee’s “employees,” “volunteer workers,” “student groups,” 

and “executive officers” as additional named insureds. J.A. 62, 

75-76 (internal quotation marks omitted).

C.

Underlying Litigation

Faced with the Jenkins Complaint, Appellee turned to 

Appellant, seeking to have Appellant defend the lawsuit on its 

behalf. When Appellant refused, Appellee filed a complaint in 

district court, requesting a declaration of its right to a 

defense and an award of damages for costs and fees it had 

already incurred defending against the Jenkins Complaint. The 

parties filed cross-motions for summary judgment. The district 

court granted summary judgment in favor of Appellee, holding 

Appellant had a duty to defend and awarding defense costs.

The district court began its analysis with the CGL. 

Regarding Coverage A, the court determined that the Jenkins 

Complaint did not allege “bodily injury” but that it sought 

damages for “property damage” allegedly caused by Appellee and 

its agents. It determined that, under Virginia law, Appellee 

could become liable for physical injury to the plaintiffs’ 

tangible property because the Jenkins Complaint alleged that the 

“[p]laintiffs suffered injury to their . . . property, including 

. . . deprivation of personal property.” J.A. 51; see Liberty 
13

Univ., Inc. v. Citizens Ins. Co. of Am., 16 F. Supp. 3d 636, 

653-54 (W.D. Va. 2014). 

The district court then turned to whether the alleged 

“property damage” arose from an “occurrence,” as defined by the 

policy. It recognized that the “Jenkins Complaint made claims 

for only intentional torts” and that, if the intent of 

Appellee’s agents was imputed to Appellee, Appellee “should have 

reasonably anticipated or foreseen the incident of [the child]’s 

abduction.” Liberty, 16 F. Supp. 3d at 655, 659-60. But the 

district court nonetheless concluded that the Jenkins Complaint 

alleges an “occurrence” for two reasons. 

First, the district court opined that, although no 

Virginia court had interpreted a separation of insureds clause, 

relevant case law forbade the court from imputing to Appellee 

the intent of its agents -- even though the Jenkins Complaint 

unequivocally alleged Appellee’s liability in respondeat 

superior for its agents’ acts. See Liberty, 16 F. Supp. 3d at 

655-60. Noting that separation of insureds clauses generally 

direct “courts [to] consider each insured separately under the 

contract in determining whether provisions excluding the insured 

from coverage apply to that particular insured,” the district 

court believed the Separation of Insureds provision in this case 

required it to “separate the intent [and expectations] of 

Liberty’s agents and employees from Liberty’s own.” Liberty, 16 
14

F. Supp. 3d at 659, 660 (internal quotation marks omitted). 

Therefore, the district court reasoned that, although Appellee 

was allegedly responsible for the kidnapping through its 

employee Hyden -- who was also a named insured -- Appellee could 

not become liable for causing damage that arose from an 

“occurrence” because the Jenkins Complaint does not allege that 

Appellee individually expected or intended the alleged 

kidnapping. The district court held in the alternative that, 

even if the Separation of Insureds provision did not 

unambiguously require it to separate the intent of Appellee’s 

agents, the provision at least “create[d] an ambiguity in the 

contract” as to “whether the expectations of Liberty’s

agents . . . would be imputed to Liberty” -- an ambiguity that 

“must [be] construe[d] in favor of . . . the insured.” Id. at 

659. 

Second, the district court concluded that Appellee 

could not be held liable for damages arising from an 

“occurrence” because the Jenkins Complaint did not “sufficiently 

allege” Appellee’s vicarious liability. The district court 

opined that, because the complaint supplied “only conclusory 

allegations that tie Liberty to the actions of its alleged 

agents and employees” and “provide[d] no facts to support 

allegations of vicarious liability,” there could be no 
15

“imputation of [its] tortfeasor employees’ expectations.” 

Liberty, 16 F. Supp. 3d at 660-61.

Turning to CGL Coverage B, the district court 

determined that the Jenkins Complaint alleged “personal and 

advertising injury,” but, based on essentially the same 

reasoning for its decision that the complaint did not plead an 

“occurrence” under Coverage A, the court concluded that neither 

the Knowing Violation Exclusion nor the Criminal Acts Exclusion 

applied. 

The district court’s analysis of the SELL coverage was 

similar. That is, the court concluded that the Jenkins 

Complaint pled an injury arising from a “wrongful act,” because 

its “factual allegations [supported an inference] that Liberty 

was essentially negligent in urging civil disobedience of court 

orders” without implicating the Intentional and Criminal Acts 

Exclusion. Liberty, 16 F. Supp. 3d at 672. 

III.

A.

Virginia Insurance Law

Because our jurisdiction rests in diversity, we apply 

the law of Virginia and its choice of law rules. See Erie R.R. 

Co. v. Tompkins, 304 U.S. 64, 78 (1938); see also Klaxon Co. v. 

Stentor Elec. Mfg. Co., 313 U.S. 487, 496-97 (1941); Res. 

Bankshares Corp. v. St. Paul Mercury Ins. Co., 407 F.3d 631, 635 
16

(4th Cir. 2005). Virginia substantive insurance law applies to 

policies that are delivered to insureds in Virginia. See CACI 

Int’l, Inc. v. St. Paul Fire & Marine Ins. Co., 566 F.3d 150, 

154 (4th Cir. 2009); Res. Bankshares Corp., 407 F.3d at 635-36. 

It is undisputed that the policy was delivered to Appellee, a 

Virginia-based university. If we are presented with an issue 

that Virginia’s highest court has not directly or indirectly 

addressed, we must anticipate how it would rule. See Ellis v. 

Grant Thornton LLP, 530 F.3d 280, 287 (4th Cir. 2008). 

Virginia applies the “Eight Corners Rule” to determine 

if an insurer has a duty to defend a lawsuit against the 

insured. See AES Corp. v. Steadfast Ins. Co., 725 S.E.2d 532, 

535 (Va. 2012). Under the Eight Corners Rule, we “compar[e] the 

‘four corners’ of the underlying complaint with the ‘four 

corners’ of the policy[] to determine whether the allegations in 

the underlying complaint come within the coverage provided by 

the policy.” Id. 

The insured has the initial burden to establish a duty 

to defend, but this burden is not onerous because “[p]rinciples 

of insurance law in Virginia . . . are solicitous of insureds.” 

CACI, 566 F.3d at 155. The duty to defend is much broader than 

the duty to indemnify because, “while . . . the duty to 

indemnify relies on litigated facts,” id. at 154, the duty to 

defend arises “whenever the [underlying] complaint alleges facts 
17

and circumstances, some of which would, if proved, fall within 

the risk covered by the policy,” AES, 725 S.E.2d at 535 

(internal quotation marks omitted).

Indeed, when a complaint’s allegations could support 

alternative theories of liability (e.g., claims for both 

intentional torts and negligence) and one theory falls within 

the coverage agreement, the insurer has a duty to defend the 

insured against all claims. Parker v. Hartford Fire Ins. Co., 

278 S.E.2d 803, 804 (Va. 1981) (holding that an exclusion for 

intentional injury did not preclude coverage, even though 

complaint alleged intentional trespass, because under Virginia 

law a claim for intentional trespass could also “support[] a 

judgment of unintentional trespass” without amendment (internal 

quotation marks omitted)).4 “On the other hand, if it appears 

clearly that the insurer would not be liable under its contract 

for any judgment based upon the allegations, it has no duty even 

to defend.” AES, 725 S.E.2d at 536-38; see, e.g., Premier Pet 

Prods., LLC v. Travelers Prop. Cas. Co. of Am., 678 F. Supp. 2d 

409, 418-19 (E.D. Va. 2010). 

 4 See also Minn. Lawyers Mut. Ins. Co. v. Antonelli, Terry, 

Stout & Kraus, LLP, 472 F. App’x 219, 225 (4th Cir. 2012) 

(unpublished) (noting that Parker v. Hartford Fire Insurance Co.

does not hold that a duty to defend lies when a complaint would 

support “any conceivable cause of action” and still requires 

“that the complaint actually asserts the claim” (emphasis 

omitted)). 
18

If the insured demonstrates that the complaint alleges 

a covered injury, the burden shifts to the insurer to show that 

the policy’s “exclusionary language . . . clearly and 

unambiguously bring[s] the particular [alleged] act or omission 

within its scope.” Floyd v. N. Neck Ins. Co., 427 S.E.2d 193, 

196 (Va. 1993); see also Fuisz v. Selective Ins. Co. of Am., 61 

F.3d 238, 244-45 (4th Cir. 1995). However, ambiguities in an 

insurance policy are construed against the insurer, who 

presumably drafted the contract and “could have written it more 

clearly.” CACI, 566 F.3d at 155.

B.

Analysis

We conclude that the district court erroneously 

interpreted the Jenkins Complaint, the Separation of Insureds

provision, and Virginia law.

1.

CGL Coverage A

a.

“Occurrence” and Respondeat Superior Liability

As to CGL Coverage A, we hold that the Jenkins 

Complaint, which only alleges Appellee’s liability for 

intentional conduct, does not plead an “occurrence,” 

notwithstanding the Separation of Insureds provision.
19

In the first place, we conclude that Virginia’s 

highest court would hold that an allegation of a principal’s 

liability under the theory of respondeat superior for the 

intentional acts of an agent does not state an “occurrence.” In 

Rockingham Mutual Insurance Co. v. Davis, an employee sued her 

employer claiming it was vicariously liable for the intentional 

tort of another employee. See 58 Va. Cir. 466, 467 (2002). The 

employer’s insurer sought a declaration that it had no duty to 

defend because the underlying complaint did not state an 

“occurrence.” The Circuit Court of Rockingham County, Virginia 

agreed, concluding that an intentional tort “cannot be 

considered unexpected, even when viewed from the standpoint of 

the employer, and does not become an ‘occurrence’ . . . simply 

by operation of respondeat superior.” Id. at 473-74 (emphasis 

supplied). This is because Virginia holds that an agent’s state 

of mind is ordinarily imputed to the principal. See Fulwiler v. 

Peters, 20 S.E.2d 500, 503 (Va. 1942) (“The general rule is that 

knowledge of the agent is imputed to the principal . . . .”);

Atl. Envtl. Constr. Co. v. Malveaux, 762 S.E.2d 409, 412 (Va. 

Ct. App. 2014); Magco of Md., Inc. v. Barr, 531 S.E.2d 614, 617 

(Va. Ct. App. 2000) (“Indeed, it is a longstanding principle in 

the Commonwealth that a foreman’s knowledge of facts or events 

on a worksite is imputed to his employer.”); Rockingham, 58 Va. 
20

Cir. at 473 (“The doctrine of respondeat superior attributes the 

bad intentions of the employee to the employer . . . .”).5

Federal district courts sitting in Virginia --

including the district court below -- have also applied this 

rule. See, e.g., Liberty Univ., Inc. v. Citizens Ins. Co. of 

Am., 16 F. Supp. 3d 636, 656 (W.D. Va. 2014) (“[A]n insurance 

company would have no duty to defend an employer for claims 

based on the intentional torts of its employees.”); State Farm 

Fire & Cas. Co. v. Frank, No. 4:10-cv-99, 2011 WL 1883987, at 

*10 (E.D. Va. Apr. 20, 2011); Am. & Foreign Ins. Co. v. Church 

Sch. in Diocese of Va., 645 F. Supp. 628, 633 (E.D. Va. 1986) 

(concluding that under an occurrence-based insurance policy, 

allegations of respondeat superior liability for agents’ 

intentional torts “are not covered and impose no duty to 

defend”).

Therefore, in this case the pivotal issue is whether 

the Separation of Insureds provision alters Virginia’s rule that 

the expectations and bad intentions of Appellee’s agents are

 5 Likewise, in an unpublished disposition we observed that 

under Virginia law “claims of agency liability [and] respondeat 

superior . . . for the intentional acts of an agent do not 

impose a duty to defend,” even if viewed from the perspective of 

the insured. Nat’l Fruit Prod. Co. v. Fireman’s Fund Ins. Co., 

No. 98-1471, 1999 WL 270033, at *3 (4th Cir. May 4, 1999)

(unpublished).
21

imputed to Appellee. The district court concluded the provision 

alters Virginia’s rule. We disagree. 

Although the Separation of Insureds provision requires 

the coverage claims of each named insured to be evaluated 

“[s]eparately to each insured against whom claim is made or 

‘suit’ is brought,” J.A. 159, it does not displace Virginia’s 

rule that an agent’s intentionally tortious act cannot be 

“unexpected” by the principal who is vicariously liable for the 

act. See State Farm, 2011 WL 1883987, at *10; Church Sch., 645 

F. Supp. at 633; Rockingham, 58 Va. Cir. at 467. Because she 

was either an “employee” or a “volunteer worker” under the terms 

of the policy, Hyden would qualify as a named insured. J.A. 76. 

The Jenkins Complaint names Hyden as a defendant, so we must 

analyze Appellee’s coverage claim separately.6 But even if we 

imagine that Appellee was the only party sued in this case and 

the only insured requesting a defense under the policy, the 

Jenkins Complaint still frames Appellee’s liability in terms of

respondeat superior. Therefore, we have ample reason to 

anticipate that Virginia courts would impute the intent of 

Appellee’s agents accordingly. 

 6 Although Staver and Lindevaldsen are named insureds, the 

Jenkins Complaint does not name them as defendants.
22

Our decision in IFCO Systems of North America, Inc. v. 

American Home Assurance Co., 502 F. App’x 342 (4th Cir. 2013) 

(unpublished), and other cases cited by the district court, are 

inapposite. The district court below viewed the issue in IFCO 

Systems as “whether an insurance company had a duty to defend an 

employer for intentional tort claims against its employees.” 

Liberty, 16 F. Supp. 3d at 659. This is an incorrect view 

because, in IFCO Systems, the underlying complaint asserted 

claims against the insured for, inter alia, negligent 

supervision and hiring and conversion under a theory of 

vicarious liability -- all arising from thefts committed by the 

insured’s employees. See IFCO, 502 F. App’x at 343-44. The 

policy provided occurrence-based coverage and contained a 

separation of insureds provision. Analyzing whether there was a 

duty to defend, we distinguished allegations of a principal’s 

vicarious liability for its agent’s intentional torts -- which 

would not constitute an “occurrence,” despite the separation of 

insureds provision -- from assertions that the principal was 

liable for the agent’s intentional act due to its negligent 

failure to supervise. See id. at 345, 347 (observing that “none 

of the . . . cases cited by the district court [were] directly 

on point” because “none of the cases involved a situation where 

the court was asked to determine whether an employee’s 

intentional conduct could be treated as an ‘accident’ in a 
23

subsequent negligence action against the employer” (emphasis in 

original)). Because negligent hiring or supervision actions 

depend on whether the alleged harm was reasonably foreseeable, 

we concluded the separation of insureds clause may have 

“require[d] us to approach the question of coverage solely from 

IFCO’s perspective.” Id. at 347. Therefore, we certified the 

question of whether, “[i]n a negligent hiring and supervision 

action against an insured-employer, . . . the intentional 

conduct of an employee of the insured constitute[d] a covered 

‘occurrence.’” Id. at 343. Notably, we did not certify a 

similar question regarding the complaint’s allegation that the 

insured was vicariously liable for its employees’ conversion. 

When a complaint alleges the liability of a principal 

for the intentional acts of an agent under a negligent 

supervision theory, a separation of insureds clause may 

implicate the duty to defend. There are several reasons why 

this result may occur. First, a negligent supervision action is 

not particularly concerned with the agent’s intent or 

expectations -- the claim is predicated on whether the harm was 

foreseeable. See Interim Pers. of Cent. Va., Inc. v. Messer, 

559 S.E.2d 704, 707 (Va. 2002). Second, because a negligent 

supervision claim alleges the principal’s direct liability, a 

separation of insureds clause may require the court to look at 

whether the harm was foreseeable solely from the principal’s 
24

perspective. See IFCO, 502 F. App’x at 347. And, in the 

context of an occurrence-based policy, Virginia’s potentiality 

rule holds that insurers must defend an entire suit if any of 

the complaint’s allegations could support a judgment that the 

principal did not expect, intend, or foresee the agent’s 

intentional tort. See Travelers Indem. Co. v. Obenshain, 245 

S.E.2d 247, 249 (Va. 1978) (“If the allegations state a case 

which may be covered by the policy, Travelers has a duty to 

defend . . . .”). 

The cases the district court cited merely demonstrate 

these propositions. See Pac. Ins. Co. v. Catholic Bishop of 

Spokane, 450 F. Supp. 2d 1186, 1202 (E.D. Wash. 2006) (rejecting 

insurer’s argument that the alleged sexual abuse was not a 

covered “accident” because insurer “disregard[ed] the fact that 

the claims against the diocese [were] based upon alleged 

negligent hiring, supervision, and retention, not an intentional 

wrong of direct sexual abuse”); King, 85 S.W.3d at 185, 188-92 

(finding duty to defend because insured was sued for intentional 

torts under a theory of respondeat superior and for negligence 

and the policy contained a separation of insureds provision and 

because the “employer’s alleged negligent hiring, training, and 

supervision constitute[d] an ‘occurrence’ under the terms of the 

insurance policy although the injury was directly caused by the 

employee’s intentional conduct’”); Unigard Mut. Ins. Co. v. 
25

Argonaut Ins. Co., 579 P.2d 1015, 1018 (Wash. Ct. App. 1978) 

(separating claims against a child for his intentional act of 

burning a school, which precluded the duty to defend, from 

claims against the child’s parents for negligent supervision, 

which was not an excluded intentional act). 

Critically, unlike the underlying complaints 

considered in the cases cited by the district court, the Jenkins 

Complaint does not allege that Appellee was responsible for its

agents’ intentional acts because it was negligent. Rather, the

Jenkins Complaint alleges that Appellee is directly liable for 

harm arising from its intentional participation in conspiracies

and vicariously liable for the intentional acts of its agents. 

For these reasons, the Separation of Insureds provision 

unambiguously would not displace the ordinary rule in Virginia 

that a complaint alleging a principal’s liability solely in 

respondeat superior for the acts of its agent does not state an 

“occurrence.”

Furthermore, even if the Separation of Insureds 

provision was ambiguous, the district court’s interpretation

contradicts the clearly-stated intent of the parties. Under 

Virginia law, courts must interpret insurance policies 

consistent with the parties’ intent. See Transit Cas. Co. v. 

Hartman’s, Inc., 239 S.E.2d 894, 897 (Va. 1978); see also Safeco 

Ins. Co. of Am. v. Merrimack Mut. Fire Ins. Co., 785 F.2d 480, 
26

482 (4th Cir. 1986). Ambiguities in the instrument must be 

construed in favor of the insured. But we do not entertain an 

absurd result -- one that would “enlarge the obligations 

undertaken originally by the insurer, and would permit a 

windfall to [the insured].” Transit Cas. Co., 239 S.E.2d at 

897. 

While Virginia law provides that an agent’s intent is 

imputed to the principal for the purpose of determining whether 

an injury was an “occurrence” (i.e., expected from the 

principal’s perspective) the district court would impose a duty 

to defend even though the policy clearly states that any harm 

that was “expected or intended from the standpoint of the 

insured” is excluded from coverage. J.A. 69; see also Nw. G.F. 

Mut. Ins. Co. v. Norgard, 518 N.W.2d 179, 184 (N.D. 1994) 

(stating that “the purpose of severability clauses is to spread 

protection, to the limits of coverage, among all of 

the . . . insureds. The purpose is not to negate bargained-for 

exclusions which are plainly worded” (alteration in original)

(internal quotation marks omitted)). 

The district court’s interpretation enlarges

Appellant’s obligation beyond what it anticipated. And because 

Virginia recognizes that a corporation, like Appellee, “can act 

only through its officers and agents,” Pulliam v. Coastal 

Emergency Servs. of Richmond, Inc., 509 S.E.2d 307, 320 (Va. 
27

1999), the district court’s construction of the Separation of 

Insureds provision would nullify the Expected Injury Exclusion

for allegations of vicarious liability against organizational or 

corporate insureds, creating a windfall to Appellee. Cf.

Minkler v. Safeco Ins. Co. of Am., 232 P.3d 612, 621 (Cal. 2010) 

(holding that to permit a severability of insurance clause to 

prevail over a plainly worded exclusion for intentional acts 

“would effectively nullify a policy exclusion in the case of 

married coinsureds, since one coinsured spouse could always 

demand coverage for the excluded tortious act of the other on 

the mere basis of derivative community property liability”).

For the foregoing reasons, we conclude the Separation 

of Insureds provision does not displace Virginia’s rule that an 

insurer has no duty to defend against a suit alleging the 

insured is liable for the intentional acts of its agents under a 

theory of respondeat superior. Because the Jenkins Complaint 

alleges only intentional acts, we hold that it does not allege 

Appellee’s liability for damage arising from an “occurrence.”

b.

“Sufficient” Allegations of Respondeat Superior

We now turn to the district court’s alternative basis 

for holding that the Jenkins Complaint does not state an 

“occurrence.” In this section of its opinion, the district 

court reasoned that, even if the Separation of Insureds
28

provision did not preclude ascribing to Appellee its agents’ 

expectations, the Jenkins Complaint “did not state a plausible 

claim that Liberty is liable for intentional torts,” offered 

“only conclusory allegations that tie Liberty to the actions of 

its alleged agents and employees,” and “provide[d] no facts to 

support allegations of vicarious liability.” Liberty, 16 F.

Supp. 3d at 660, 661, 663. Significantly, when determining 

whether insurance coverage exists, Virginia courts do not ask if 

a complaint “sufficiently” alleges facts in support of a claim 

such that it would survive a motion to dismiss. Instead, they 

determine whether the complaint alleges facts and circumstances

that fall within the four corners of the policy. The claim’s 

probability of success is inconsequential. See Fuisz, 61 F.3d 

at 244-45; Church Sch., 645 F. Supp. at 633; AES, 725 S.E.2d at

535 (“[I]t is a well-established principle, consistently applied 

in this Commonwealth, that only the allegations in the complaint 

and the provisions of the insurance policy are to be considered 

in deciding whether there is a duty on the part of the insurer 

to defend and indemnify the insured.”); cf. CACI Int’l, Inc. v. 

St. Paul Fire & Marine Ins. Co., 566 F.3d 150, 155-56 (4th Cir. 

2009) (acknowledging differences between a Rule 12(b)(6) 

analysis and a duty-to-defend analysis). The Jenkins Complaint 

clearly alleges facts and circumstances demonstrating that 
29

Appellee is liable in respondeat superior for kidnapping and 

racketeering through its agent Hyden. 

Therefore, we conclude Appellant has no duty to defend 

Appellee under CGL Coverage A.

2.

CGL Coverage B

We also hold that Appellant has no duty to defend 

pursuant to CGL Coverage B because, assuming the Jenkins 

Complaint alleged “personal and advertising injury,” the 

Criminal Acts Exclusion clearly applies.

The district court concluded that CGL Coverage B’s

exclusion for criminal acts did not apply because the Jenkins 

Complaint’s “allegations insufficiently tie Liberty to any 

criminal acts either directly or vicariously.” Liberty, 16 F.

Supp. 2d at 669. But the Criminal Acts Exclusion applies to 

injuries “arising out of a criminal act committed by or at the 

direction of the insured.” J.A. 73. 

In the context of homeowner’s insurance, the Circuit 

Court of Warren County, Virginia has observed that an injury 

arises out of an event “when there is apparent to the rational 

mind upon consideration of all of the circumstances, a causal 

connection between” the event and the injury. Erie Ins. Exch. 

v. Young, 69 Va. Cir. 34, 41 (2005) (internal quotation marks 

omitted). Notably, The Supreme Court of Virginia has quoted 
30

this definition of “arising out of” “many times with approval” 

Lucas v. Lucas, 186 S.E.2d 63, 64 (Va. 1972) (internal quotation 

marks omitted). Against this backdrop, we conclude that the 

criminal acts exclusion applies for two reasons. First, the 

Jenkins Complaint clearly and unambiguously alleges that 

Appellee and its agents committed criminal acts – namely, 

kidnapping and conspiracy to commit racketeering, which is a 

federal crime pursuant to 18 U.S.C. § 1962(d). The Jenkins 

Complaint also specifically alleges Appellee’s role in these 

crimes. For example, the Jenkins Complaint contends that Staver 

used Liberty University’s phone lines to speak with Philip 

Zodhiates after Zodhiates deposited Miller and the child near 

the Canadian border and that other Liberty University employees

assisted Miller while she was in Nicaragua. Second, the Jenkins 

Complaint unambiguously claims that Appellee is liable for 

injuries arising from those criminal acts. With respect to the

kidnapping claim, the Jenkins Complaint asserts that Jenkins and 

the child suffered injuries as a result of the kidnapping. J.A.

52. The Jenkins Complaint also alleges injuries as a “direct 

and proximate result of Defendants’ [RICO] violation.” Id. at 

51. These statements allege a causal connection between 

Appellee’s alleged criminal acts and the claimed injuries.

Therefore, Appellant has no duty to defend pursuant to 

CGL Coverage B.
31

3.

SELL Coverage

The district court concluded that the SELL’s Intentional and 

Criminal Acts Exclusion did not apply because “the Jenkins 

Complaint insufficiently implicated Liberty in . . . excluded 

conduct because it insufficiently alleged direct or vicarious 

liability and facts to support those links.” Liberty, 16 F.

Supp. 3d at 673. However, the Intentional and Criminal Acts 

Exclusion embraces claims “arising out of any intentional, 

dishonest, fraudulent, criminal, or malicious act or omission or 

any willful violation of law by the insured” and “precludes 

coverage for all insured persons under the policy regardless 

whether the person seeking coverage participated in any way in 

the intentional or criminal acts or omissions.” J.A. 116. As 

we have emphasized, the Jenkins Complaint alleges Appellee’s 

liability for injuries arising from its direct involvement in 

conspiracies to commit kidnapping and racketeering, which carry 

criminal penalties. We conclude these claims clearly and 

unambiguously trigger the Intentional and Criminal Acts 

Exclusion.7

 7 Appellee argues that the Criminal Acts Exclusion and the 

definition of “personal and advertising injury” are in conflict, 

which is impermissible under Virginia law because an insurer 

cannot “‘give coverage with the right hand and then take away 

with the left.’” Appellee’s Resp. Br. 40 (alteration omitted) 

(Continued)
32

IV.

For the foregoing reasons, we hold that Appellant had 

no duty to defend Appellee against the Jenkins Complaint. We 

therefore reverse the district court’s grant of summary 

judgment, vacate its award of fees and costs, and remand for 

further proceedings.

VACATED AND REMANDED

 

(quoting Fuisz, 61 F.3d at 243). Appellee’s argument relies on 

the definition a “personal and advertising injury” as one 

arising out of seven enumerated “offenses.” J.A. 81 (emphasis 

supplied). Appellee equates “offenses” with “crimes.” But that 

reading of “offense” is not supported by the policy. The 

examples of “offenses” it provides are noncriminal acts -- torts 

and copyright offenses. Therefore, read together, there is no 

conflict between the policy’s definition of “personal and 

advertising injury” and the Criminal Acts Exclusion.