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Markel Insurance Co. v. Ebner Camps, Inc.

United States District Court, D. Connecticut

August 4, 2017




         This is a declaratory judgment action brought by Markel Insurance Co. (“Markel Insurance” or “Plaintiff”) seeking a declaration that its general liability insurance policy affords no coverage to Ebner Camps, Inc. (“Ebner Camps” or “Defendant”) for liability it may have to a plaintiff in a civil action pending in state court brought by a former camper alleging that in 1987 he was sexually assaulted by a counselor at Camp Awosting owned by Ebner Camps. For the following reasons, the Court GRANTS summary judgment in favor of Markel Insurance.

         I. Background

         A. The State Case

         In early 2015, an individual proceeding under the pseudonym John Doe initiated a civil action against Ebner Camps. See [Dkt. 47-1 ¶ 7 (Defs.' D. Conn. L. R. 56(a)(1) Stmt.)[1]; Dkt. 50-1 (Pl.'s D. Conn. L. R. 56(a)(2) Stmt.) ¶ 7; Dkt. 48-4 (Opp'n Pl.'s Summ. J. Ex. D, Marshal's Return) (stating Ebner Camps was served with John Doe's complaint on Feb. 17, 2015); Dkt. 41-4 (D. Conn. L. R. 56(a)(1) Stmt. Ex. C, State Court Docket) at 3 of PDF (indicating complaint was filed on Jan. 26, 2015)].[2]The state court complaint alleges that in 1987 John Doe attended summer camp at Camp Awosting, which is owned and controlled by Ebner Camps. See [Dkt. 47-1 ¶¶ 9-10; Dkt. 50-1 ¶¶ 9-10]. Ebner Camps allegedly employed John Murphy as a camp counselor, and over the course of the 1987 summer he sexually assaulted and battered John Doe on numerous occasions. [Dkt. 47-1 ¶¶ 11-12; Dkt. 50-1 ¶¶ 11-12]. The state court complaint raises allegations of negligence, negligent hiring and retention, negligent supervision, breach of fiduciary duty, and negligent infliction of emotional distress against Ebner Camps, all which pertain to the alleged sexual assault and battery. See [Dkt. 47-1 ¶¶ 14-18; Dkt. 50-1 ¶¶ 14-18].

         B. The Policy

         Markel Insurance issued an insurance policy to Ebner Properties, LLC with an effective date of March 1, 2014. See [Dkt. 47-1 ¶¶ 1-2; Dkt. 50-1 ¶¶ 1-2]. The policy period expired March 1, 2015. See [Dkt. 47-1 ¶ 2; Dkt. 50-1 ¶ 2]. Defendant Ebner Camps, Inc. is a named insured under the policy. [Dkt. 47-1 ¶ 6; Dkt. 50-1 ¶ 6]. The policy contained Commercial General Liability Coverage and certain endorsements including Abuse or Molestation Coverage, Miscellaneous Professional Liability Coverage Endorsement, and Punitive Damages Exclusion. [Dkt. 47-1 ¶¶ 3-5; Dkt. 50-1 ¶¶ 3-5; Dkt. 48-2 (Opp'n Pl.'s Mot. Summ. J. Ex. B (Markel Policy) at EBNER000200, -0218]. The Commercial General Liability Extension of Declarations lists Camp Awosting at a premises owned, rented, or occupied by the named insured and designates the Abuse and Molestation Coverage to apply to Camp Awosting. [Dkt. 47-1 ¶ 19; Dkt. 50-1 ¶ 19; Dkt. 48-2 at -0154].

         The policy contains several provisions relevant to the case at hand. First, the CGL Coverage states that Markel Insurance “will pay those sums that the insured becomes legally obligated to pay as damages because of ‘bodily injury' . . . to which the insurance applies” but has “no duty to defend the insured against any ‘suit' seeking damages for ‘bodily injury' . . . to which this insurance does not apply.” [Dkt. 48-2 at -0157]. “Bodily injury” is defined as “bodily injury, sickness or disease sustained by a person, including death resulting from any of these at any time.” Id. at -0167. Markel Insurance reserves a right to “at [its] discretion, [to] investigate any ‘occurrence' and settle any claim or ‘suit' that may result.” Id. at -0157.

         “Occurrence” is defined as “an accident, including continuous or repeated exposure to substantially the same general harmful conditions.” Id. at -0169. The CGL Coverage limits the application of insurance coverage to “bodily injury” if three conditions are satisfied. Those conditions are if “(1) [t]he ‘bodily injury' . . . is caused by an ‘occurrence' that takes place in the ‘covered territory, '; (2) [t]he bodily injury' . . . occurs during the policy period; and (3) [p]rior to the policy period, no insured listed under Paragraph 1 of Section II - Who is an Insured and no ‘employee' authorized by you to give or receive notice of an ‘occurrence' or claim, knew that the ‘bodily injury' . . . had occurred, in whole or in part.” Id. at -0157 (emphasis added). This section explicitly states that “[v]arious provisions in this policy restrict coverage” and directs the insured to “[r]ead the entire policy carefully to determine rights, duties and what is and is not covered.” Id.

         Second, Markel Insurance added an endorsement provision titled Abuse or Molestation Coverage, which “modifies insurance provided under the [CGL Coverage].” See Id. at -0190. This endorsement states that “the provisions of the CGL Coverage Form apply unless modified by this endorsement.” Id. (emphasis added). Under the Abuse or Molestation Coverage endorsement, Markel Insurance will

pay those sums the insured becomes legally obligated to pay as damages that result in ‘bodily injury' . . . because of abuse, molestation or exploitation arising from negligent employment, training, investigation, reporting to the proper authorities, or failure to so report, or retention and supervision of a person for whom any insured is or ever was legally responsible. Coverage includes the actual, alleged, or threatened abuse, molestation, or exploitation by anyone of any person while in the care, custody or control of any insured.

Id. (emphasis added). The Abuse or Molestation Coverage endorsement also includes “mental anguish or emotional distress” as types of “bodily injury.” Id. The endorsement, however, includes Limits of Insurance such that “[n]o coverage in this policy is provided for abuse, molestation or exploitation except as provided herein, under this endorsement.” Id. at -0191. “Multiple incidents of abuse, molestation or exploitation involving a person which takes place over multiple policy periods for which this coverage is provided by us shall be deemed as one ‘occurrence' and shall be subject to the coverage and limits in effect at the time of the first incident.” Id. Monetary limitations are $1, 000, 000 per person, per occurrence or $2, 000, 000 aggregate per policy period. Id. at -0190.

         There also exists a Miscellaneous Professional Liability Coverage Endorsement that modifies certain provisions of the CGL Coverage. See Id. at -0199. This endorsement covers damages “arising out of a covered ‘wrongful act' to which this insurance applies or ‘wrongful act(s)' of others for which you are liable.” Id. The endorsement expressly states, “This insurance does not apply to: . . . (3) [l]iability resulting from any actual, threatened, or alleged abuse, molestation or sexual conduct.” Id.

         Lastly, the policy includes a Punitive Damages Exclusion endorsement, which modifies insurance provided, in relevant part, under the CGL Coverage Part. See Id. at -0218. This endorsement states, “It is understood and agreed that coverage under this policy does not apply to punitive or exemplary damages, nor to fines, ...

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