At a store, a female patron wanting to try on clothing secured the dressing area with a curtain. Another patron, the insured, engaged in allegedly assaultive conduct by rummaging, feeling, and grabbing the curtain in an attempt to make physical contact with the female patron. The insured also knelt down and used his phone to take videos or photos of the patron under the curtain.
Notable Timestamps
[ 00:19 ] - At a store, a female patron wanting to try on clothing secured the dressing area with a curtain. However, another patron, (who happens to be our insured) entered the store with various family members, selected a shirt and approached the occupied dressing area. Although the insured was made aware by the patron not to come in, he then engaged in allegedly assaultive conduct by rummaging, feeling, and grabbing the curtain in an attempt to make physical contact with the patron.
[ 01:00 ] - At this point, a store associate provided the insured an alternate location to try on the shirt, which the insured did. But afterwards, the insured knelt down and used his phone to take videos or photos of the patron under the curtain.
[ 01:24 ] - The patron sued the insured for allegedly assaultive conduct in a store. Prior to trial, in her discovery deposition, the patron explained that she tried to laugh it off and make a joke out of an uncomfortable situation by saying "you don't want to spoil your breakfast." According to the patron, the insured's family told the insured not to act that way, and "we kind of giggled and I just tried to shut it down very quickly and said, guys, enjoy your day."
[ 02:00 ] - The insured sought coverage under his HO policy, and the insurer sought a declaratory judgment that it owed no duty to defend or indemnify the insured.
[ 02:40 ] - Special guest Michele Hunter, coverage counsel at PLRB, joins us today to discuss this podcast’s first Casualty topic.
[ 03:37 ] - See AIG Property Casualty Co. v. Anenberg, 2020 WL 4607839 (D. Haw. 8/11/20). This behavior does not seem accidental, but this particular policy defines an occurrence not just as an accident, but as an offense as well.
[ 05:50 ] - Among other charges, the patron claimed Negligent Infliction of Emotional Distress. If one claim triggers coverage, there is a duty to defend for the entire claim.
[ 06:46 ] - The insurer relied on the Intentional Acts exclusion to deny coverage. Courts are split on whether to apply a subjective or objective test in applying this exclusion. For the objective test, the court asks if a reasonable person would consider it an intentional act. The subjective test asks what the insured believed, and Hawaii applies this test.
[ 08:24 ] - However, the insured chose to argue that objectively speaking, his behavior was not intentional. The insured claimed that the patron’s joking response proved he had no intent to harm.
[ 09:20 ] - The court agreed that the insured objectively did not intend harm.
[ 11:30 ] - The majority of relevant case law does not allow the “creative pleading” addition of Negligent Infliction of Emotional Distress to establish coverage, in intentional sexual assault cases.
[ 12:40 ] - The court found that the Sexual Molestation exclusion did not apply because the complaint did not allege the pertinent actions.
[ 13:50 ] - The laughter occurred after the behavior, but this court used it to interpret the insured’s intent anyway.
[ 15:30 ] - Under the typical ISO definition of an occurrence, this would likely not be considered an occurrence.
[ 15:33 ] - Michele provides a recap of the scenario and the points above. This case demonstrates the impact that specific policy language, creative pleading, and individual judges can have on a seemingly clear-cut argument.
Your PLRB Resources
Homeowners Policy Annotation Key 611 Expected or Intended Injury Exclusion - https://www.plrb.org/documents/ho611-expected-or-intended-injury-exclusion/
AIG Property Casualty Co. v. Anenberg (Hawaii 2020 federal district case) - https://www.plrb.org/documents/aig-property-casualty-co-v-anenberg/
Coverage Question: Would a Michigan Court Apply a Subjective or Objective Standard When Interpreting the HO Policy’s Intentional Acts Exclusion? - https://www.plrb.org/documents/would-a-michigan-court-apply-a-subjective-or-objective-standard-when-interpreting-the-ho-policys-intentional-acts-exclusion-1997-09-10/
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The views and opinions expressed in this resource are those of the individual speaker and not necessarily those of the Property & Liability Resource Bureau (PLRB), its membership, or any organization with which the presenter is employed or affiliated. The information, ideas, and opinions are presented as information only and not as legal advice or offers of representation. Individual policy language and state laws vary, and listeners should rely on guidance from their companies and counsel as appropriate.
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