See Diocese of Winona, slip op. at 8-10. The Diocese of Winona plaintiffs attempted to distinguish Industrial Steel as a property damage case, where it is difficult to determine when the damage occurs, rather than a personal injury case, where all the damage occurs at one time. The court, however, rejected the assumption in Interstate, Diocese of Lafayette, and May, that all damage in sexual abuse cases occurs at the time of the first encounter. Id. at 10-11.
Clearly, there are two opposing theories. What matters, however, is the explicit language of the insurance contract which states that the "continuous or repeated exposure . . . results in personal injury." Thus, we must find that John Doe suffered personal injury during the policy period. While we agree with the Winona court that not all damage occurred at the time of the first encounter with Father O'Connell, we do not believe this fact requires a conclusion of more than one occurrence under the facts of this case. The Winona court applied the rule stated in Industrial Steel, a case involving property damage due to long-term release of hazardous wastes, to a sexual abuse case. However, we do not believe that such an extension is appropriate. As the Industrial Steel court stated: "It is difficult in long-term exposure cases to determine whether there was property damage occurring during a specific policy period." Industrial Steel, 399 N.W.2d at 159.
We do not face this question in this case. Interstate does not deny that John Doe suffered some injury at the time of the first encounter.
Thus, the policy behind Industrial Steel and similar hazardous materials cases, and upon which the Winona court relied, is not present here. Looking at the contract language, this court believes that the interpretation of similar contract language by the Interstate court and its progeny is the reasonable interpretation -- that the continuing actions of Father O'Connell and the continuous negligence of the Diocese were the cause of John Doe's injuries and thus constitute one occurrence. Based on this reasoning, we believe that the Rhode Island Supreme Court would find that the negligent supervision on the part of Diocese officials and the acts of Father O'Connell constitute one occurrence under the terms of the insurance policies.
B. Did the Abuse Occurring at Two Separate Locations Constitute Two Occurrences?
Interstate also argues that because Father O'Connell molested John Doe at two separate locations, Bristol and South Kingston, Rhode Island, we must find such actions to constitute two occurrences under the language of the insurance policy. Interstate further argues that we must consider the multiple locations of assault and battery by Father O'Connell.
The critical language of the policies states: "All such exposure to substantially the same general conditions existing at or emanating from one location shall be deemed one occurrence."
1. Actions of the Diocese
Citing Transport Insurance Co. v. Lee Way Motor Freight, Inc., 487 F. Supp. 1325 (N.D. Tex. 1980), Underwriters contend that Father O'Connell's conduct constitutes but one occurrence under the policy language. Transport Insurance concerned an insurance dispute of a company found to have engaged in a pattern of racial discrimination at four separate locations. Id. at 1326. Even though the discrimination occurred at four different locations, the Transport Insurance court found that the discrimination was due to a companywide policy emanating from the corporate headquarters in Oklahoma City. Id. at 1329. Based on similar language in the policies at issue,
the actions or inactions of the Diocese and its officials all took place at one location, Providence.
2. Actions of Father O'Connell
Interstate appears to argue that the abuse of John Doe by Father O'Connell at two separate locations constitutes two occurrences, separate and distinct from whether the Diocese's failure to supervise Father O'Connell constitutes two occurrences.
Although Underwriters never addressed this issue,
it is clear to the court that the actions of Father O'Connell did not emanate from the same location. From the evidence, there is no factual dispute that the sexual abuse occurred in two places: the rectory of the Diocese in Bristol and at Father O'Connell's summer cottage in South Kingston.
Father O'Connell's first sexual encounter with John Doe was at the cottage in July 1983.
Father O'Connell was an insured under the policies at issue. See Def. Rule 12(m) Statement of Undisputed Facts, P 4. The settlement released and discharged Father O'Connell in addition to the other defendants to the underlying sexual abuse action for inter alia, "claims for bodily and personal injuries . . . which may have resulted or may result from the alleged acts or omission of Reverend William C. O'Connell . . . ." There seems no question to this court that Father O'Connell's actions subjected him to liability separate from the liability of Diocese officials for failure to supervise and that the parties released Father O'Connell from liability as part of the settlement. A plain reading of the insurance policies states that acts occurring at one location are one occurrence. This suggests to this court that Father O'Connell's sexual abuse of John Doe constitutes two occurrences.
The court is reluctant, however, to issue a definitive ruling on this issue at this time. As we stated supra, Underwriters did not address this issue in their reply brief. We also noted that Interstate's framing of the issue was less than clear. Although we are called on to decide one case, we are aware that this issue of first impression could have an impact on other cases. The effect on insurance companies and on insured Archdioceses and Dioceses of acts of sexual abuse by priests will continue in the future. Consequently, we believe it is best to postpone deciding this issue until we are convinced that the parties clearly understand the issue and advocate their respective positions. We therefore order the defendant to submit additional arguments within 30 days on the question of whether Father O'Connell's own actions at Bristol and South Kingston constitute two occurrences under the insurance policies.
For the reasons stated above, we conclude that Father O'Connell's actions in the two policy periods do not constitute two occurrences, and that his abuse of John Doe in two locations in one policy period constitutes one occurrence for the purposes of the failure to supervise claim. We decline to decide at this time the question of whether Father O'Connell's own actions in two locations constitutes two occurrences under the insurance policies and we order further briefing on this issue. Consequently, we deny plaintiffs' motion for summary judgment and deny defendant's cross-motion for summary judgment.
JAMES B. MORAN,
Chief Judge, U.S. District Court
July 6, 1993.