Opinion ID: 203566
Heading Depth: 2
Heading Rank: 1

Heading: Abuse or Molestation Exclusion

Text: Doe contends that the district court erred in interpreting the Abuse or Molestation Exclusion to bar coverage for her claims under the commercial general liability provisions of the National Union policy. If Doe were to prevail on this coverage issue, she asserts that a new trial would be required on her Chapter 93A claim, and that she should be entitled to summary judgment on her claim to recover up to $1,000,000 under the policy to satisfy her judgment against Hovestadt (including post-judgment interest). The commercial general liability provisions of the National Union policy include limitations of $1,000,000 per occurrence and $3,000,000 aggregate, while the coverage provided by the Sexual Abuse Endorsement is limited to $100,000 per occurrence and $300,000 aggregate. The district court granted summary judgment on this issue. The district court reasoned that because Doe's Massachusetts Superior Court claims against Hovestadt arose out of sexual abuse, the Sexual Abuse Endorsement of National Union's policy limited the available coverage to $100,000. We think that the district court properly interpreted the Abuse or Molestation Exclusion to limit coverage to that provided by the Sexual Abuse Endorsement. In establishing coverage under a commercial general liability policy, such as the National Union policy here, the insured bears the burden of proving coverage.... If the insured satisfies his burden, then the insurer must prove that an exclusion applies in order to avoid coverage. Nascimento, 513 F.3d at 277 (internal citations omitted). Consistent with the Massachusetts general rule favoring insureds in policy interpretation, any ambiguities in the exclusion provision are strictly construed against the insurer. Ambiguity exists when the policy language is susceptible to more than one rational interpretation. But it does not follow that ambiguity exists solely because the parties disagree as to the provision's meaning. Brazas Sporting Arms, 220 F.3d at 4-5 (internal citations omitted). The commercial general liability provisions of the National Union policy provided that National Union would pay those sums that the insured becomes legally obligated to pay as damages because of `bodily injury' or `property damage' to which this insurance applies. J.A. at 3811. The Abuse or Molestation Exclusion, however, excluded certain types of claims from coverage under the commercial general liability provisions. It stated: This insurance does not apply to bodily injury, property damage, advertising injury or personal injury arising out of: (a) the actual or threatened abuse or molestation by anyone of any person while in the care custody, or control of any insured, or (b) the negligent: (i) employment; (ii) investigation; (iii) supervision; (iv) reporting to the proper authorities, or failure to so report; or (v) retention; of a person for whom any insured is or ever was legally responsible and whose conduct would be excluded by (a) above. J.A. at 3821 (emphasis added). The Sexual Abuse Endorsement provided more limited coverage. It provided, in relevant part, as follows: It is hereby agreed that Section 1 COVERAGES, COVERAGE A, 1. Insuring Agreement and COVERAGE B, 1. Insuring Agreement are replaced by the following Insuring Agreement with respect to the coverages provided by this endorsement: Insuring Agreement We will pay for those sums that the insured becomes legally obligated to pay as damages because of bodily injury or personal injury arising from sexual abuse, sexual molestation or sexual exploitation but only if (1) bodily injury or personal injury is caused by an occurrence that takes place in the coverage territory, and (2) the bodily injury or personal injury occurs during the policy period. ... J.A. at 3831-32 (emphases added). Coverage under the Sexual Abuse Endorsement was limited to: $100,000 per occurrence `bodily injury' as defined ... below and `personal injury' as defined in the policy. $300,000 Aggregate. J.A. at 3831. Doe argues that, while the exclusion bars recovery for sexual abuse or molestation under the commercial general liability provisions of the policy, those provisions must be interpreted to provide coverage for sexual exploitation. She notes that, although the Sexual Abuse Endorsement uses the terms sexual abuse, sexual molestation, and sexual exploitation separately, the Abuse or Molestation Exclusion excludes from coverage under the commercial general liability provisions of the policy only abuse and molestation. Doe contends that sexual exploitation claims are accordingly not excluded from the commercial general liability provision, apparently contending that sexual exploitation claims are covered both under the Endorsement and the commercial general liability provisions of the policy. Finally, she asserts that her claims against Hovestadt and Senechal arose from sexual exploitation rather than abuse or molestation. Despite the slight difference in wording, it is obvious that the Abuse or Molestation Exclusion and the Sexual Abuse Endorsement are intended to have the same scope, and that the Endorsement is designed to provide more limited coverage for the same risks that the exclusion removes from coverage under the commercial general liability provision. We thus think it likely that Doe is incorrect in urging that sexual exploitation is covered by the commercial general liability provisions of the policy. However, even if we were to assume that the commercial general liability provisions of the National Union policy provided coverage for sexual exploitation, as Doe contends, we think that the present case involves sexual abuse rather than sexual exploitation. The general definition of sexual abuse is [a]n illegal sex act, esp[ecially] one performed against a minor by an adult. Black's Law Dictionary 10 (8th ed.2004). [4] The general definition of sexual exploitation is [t]he use of a person, esp[ecially] a child, in prostitution, pornography, or other sexually manipulative activity that has caused or could cause serious emotional injury. Id. at 1407. [5] Under this definition the acts in question involved sexual abuse rather than exploitation. Senechal admitted that he engaged in sexual intercourse with Doe, and he was deemed the father of Doe's child. Thus, there is no question that Senechal engaged in an illegal sex act, consistent with sexual abuse, but there has been no contention that Senechal used Doe to further some advantage of his own through prostitution, pornography, or other such sexually manipulative activity. We conclude that the district court properly held that Doe's claim arose from sexual abuse, that Doe's claim was excluded from the commercial general liability provisions of the National Union policy, and that Doe's claim was covered only under the Sexual Abuse Endorsement, thus making Doe's claim subject to the limitations of coverage provided in the Endorsement. [6]