Thus, the court rejects Psych Associates' claims that the Sexual Misconduct provision is ambiguous because it does not address whether it applies to counterclaims for indemnity or contribution. In determining whether a third-party claim for contribution or indemnity is covered under a liability insurance policy, the courts look to the nature of the underlying claim. Midland Ins. Co. v. Bell Fuels, Inc., 159 Ill. App. 3d 780, 513 N.E.2d 1, 2, 111 Ill. Dec. 755 (Ill. App. 1987). Since Psych Associates' claims "arise out of," Stone's course of treatment and relationship with Sheila Hall, the assertion that "technically" their counterclaims against Stone do not involve "erotic physical contact" is unpersuasive.
Lastly, Psych Associates argues that the special provisions are ambiguous because they conflict with exclusion (p) which states that the policy does not apply "to any wrongful act committed with knowledge that it was a wrongful act." In Cohen, American Home argued that exclusion (p) excludes all coverage for sexual misconduct. 815 F. Supp. at 369. There, the district court found that the policy was ambiguous, reasoning that "if the Court were to adopt American Home's argument . . . there would be no need for the special provision at issue which limits coverage for sexual misconduct." Id. Consequently, the court ruled that the policy must be construed to provide coverage for the alleged sexual misconduct under the special provision.
This court is not persuaded that provision (p), which is apparently an exclusion for intentional conduct, renders this contract ambiguous. Presumably, one of the things the jury will be deciding in the state case is whether certain conduct by Stone was negligent or intentional. In any event, the court agrees that the special provisions sublimit is clearly triggered for all claims when sexual misconduct is alleged, as is the case here. Based upon the foregoing, the court concludes that the special provisions on sexual misconduct are unambiguous.
Further, despite the Halls' argument to the contrary, there is no question of material fact in this case that all of the alleged causes of action against Stone arise out of the same or related courses of professional treatment and/or relationships.12 Specifically, Stone met with all four members of the Hall family during his course of treatment/relationship with Sheila Hall. The Halls went to Stone for couple therapy, individual therapy, family therapy, mediation sessions, and child therapy. (See Defs.' Devin and Brenden Halls' Complaint at 1-2). Moreover, all defendants' allegations against Stone clearly focus on the alleged sexual misconduct by Stone.
Therefore, it is clear that all of the alleged causes of action arise out of these related courses of professional treatment and/or relationships.
Thus, on these facts, the $ 25,000 sublimit would be enforceable unless it violates public policy.
The Sexual Misconduct Provision is Not a Violation of Public Policy
The general provisions governing the construction and interpretation of insurance contracts are the same as those controlling other contracts. Dempsey v. National Life and Accident Ins. Co., 404 Ill. 423, 88 N.E.2d 874 (Ill. 1949); Zitnik v. Burik, 395 Ill. 182, 69 N.E.2d 888 (Ill. 1961). It is well established that courts will not enforce a private contract which is contrary to public policy. O'Hara v. Ahlgren, Blumenfeld and Kempster, 127 Ill. 2d 333, 537 N.E.2d 730, 130 Ill. Dec. 401 (Ill. 1989); Roanoke Agency, Inc. v. Edgar, 101 Ill. 2d 315, 461 N.E.2d 1365, 78 Ill. Dec. 258 (Ill. 1984). In determining the public policy of a state, the court should look to the State Constitution, statutes and judicial decisions. See S.H.A. Const. Art. 1 § 16; McClure Eng'g Assocs., Inc. v. Reuben H. Donnelley Corp., 95 Ill. 2d 68, 447 N.E.2d 400, 69 Ill. Dec. 183 (Ill. 1983).
The Halls' Arguments
The Halls' first argument is that the Sexual Misconduct provision violates public policy because it disproportionately disadvantages women. They claim this is so because women are more likely to be the victims of sexual misconduct by therapists. (See Def. Sheila Hall's Mem. at 9) (citing Bouhoutsos, Sexual Intimacy Between Psychotherapists and Patients, 14 Professional Psychology: Research and Practice 185, 188 (1983) which states 92% of the victims are women). In addition, the Halls allege that Illinois has expressed a strong public policy against sexual discrimination because it is prohibited in the Illinois Constitution, and laws relating to employment, real estate transactions, financial institutions, credit transactions, and public accommodations. (See id. at 10).
Assuming that this provision does disproportionately affect women and that Illinois has expressed a strong public policy against sex discrimination, it does not necessarily follow that insurance companies cannot limit certain risks because they disproportionately affect a certain sex. In this regard, the Cohen case is instructive.
In addressing this same sex discrimination question, the Cohen court considered Washington's statutes prohibiting sex discrimination, several statues addressing sex discrimination in the insurance context, and the defendant's undisputed evidence of disproportionate impact. Cohen, 815 F. Supp. at 372. However, the court rejected this public policy argument because under Washington law, some discrimination based on sex is permissible when bona fide statistical differences in risk or exposure have been substantiated, and American Home had provided evidence of its increased risk. Id. The court also noted that two cases in the Washington Supreme Court suggested that a sublimit on sexual misconduct alone does not violate Washington public policy. Id. Here, unlike Cohen, the Halls have not cited and the court has not uncovered insurance provisions addressing under what circumstances it is permissible to have provisions which adversely impact women. In addition, the parties have not submitted supporting documentation for their positions. The court simply does not have enough evidence to substantiate the alleged disproportionate impact or the alleged increased risk. On this record, the court has no basis for concluding that the American Home provision violates public policy because of its disproportionate impact on women.
The Halls' second public policy argument is more compelling. They contend that the Sexual Misconduct provision may give victims of sexual exploitation the incentive to cover up claims of sexual misconduct which arise out of the same or related therapeutic treatment in which nonsexual misconduct has also occurred, and that this result is a violation of Illinois public policy. In addressing this very troubling aspect of American Home's policy the Cohen court reasoned:
The present provision of American Home's Policy will discourage or preclude bona fide claims of sexual misconduct which arise out of the same or related therapeutic treatment in which non-sexual misconduct has also occurred. Because the sublimit extends to all other non-sexual misconduct claims, a victim will be reluctant to allege claims of sexual misconduct. In effect, a toleration of sexual misconduct by licensed psychologists is encouraged. If a victim exercises rights under Washington law to seek injunctive relief against the therapist who has sexually abused the victim, or if the victim cooperates with others who have initiated either civil or criminal action against the therapist, insurance companies with policies such as American Home's could then assert that the sublimit of $ 25,000 would apply to the entire cause of action because the accompanying claims or evidence of sexual misconduct. In a practical sense, victims of sexual misconduct would be worse off by the existence of a policy sublimit of this breadth than if sexual misconduct claims were excluded from the Policy altogether. Such a result is contrary to public policy.