United States District Court, Central District of Illinois, Springfield Division
May 22, 1995
MARYLAND CASUALTY COMPANY, PLAINTIFF,
JOSEPH HAVEY; JOHN DOE; JAMES DOE; JOHN SMITH; JOHN BROWN AND JOHN JONES, DEFENDANTS.
The opinion of the court was delivered by: Richard Mills, District Judge:
Is the insurance company required to defend here?
"John Doe," "James Doe," "John Smith," "John Brown," and
"John Jones" (Defendants) have filed a Complaint in the Sangamon
County Circuit Court against Defendant Joseph Havey (Father
Havey), a Catholic Priest, and the Diocese of Springfield
(Diocese), along with other members of the Roman Catholic Church.
The Complaint alleges Father Havey sexually abused Defendants
during the period between 1978 and 1981. At the time, Defendants
were approximately eleven or twelve years old.
The state court complaint alleges Defendants are from
devoutly catholic families and Father Havey was a frequent and
honored guest in Defendants' homes. In 1978 Father Havey began
supplying Defendants with pornography, cigarettes, alcohol and
marijuana. Father Havey encouraged Defendants to masturbate with
him while viewing the pornography. Father Havey then began having
Defendants perform bizarre masochistic acts to him for his own
Father Havey and the Diocese submitted Defendants' case to
the Plaintiff — Maryland Casualty Company — for defense and, if
necessary, indemnification. Maryland Casualty agreed to defend
the Diocese; however, it refused to defend Father Havey. Maryland
Casualty has filed this declaratory judgment action asking the
Court for a declaration that under its insurance policies it has
no duty to defend Father Havey. Maryland Casualty
and Father Havey have each filed motions for summary judgment.
II. Summary Judgment
Under Fed.R.Civ.P. 56(c), summary judgment shall be granted
if the record shows that "there is no genuine issue as to any
material fact and that the moving party is entitled to a judgment
as a matter of law." Black v. Henry Pratt Co., 778 F.2d 1278,
1281 (7th Cir. 1985). The moving party has the burden of
providing proper documentary evidence to show the absence of a
genuine issue of material fact. Celotex Corp. v. Catrett,
477 U.S. 317, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). A genuine issue
of material fact exists when "there is sufficient evidence
favoring the nonmoving party for a jury to return a verdict for
that party." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 249,
106 S.Ct. 2505, 2511, 91 L.Ed.2d 202 (1986). Unquestionably, in
determining whether a genuine issue of material facts exists, the
evidence is to be taken in the light most favorable to the
nonmoving party. Adickes v. S.H. Kress & Co., 398 U.S. 144, 90
S.Ct. 1598, 26 L.Ed.2d 142 (1970). Once the moving party has met
its burden, the opposing party must come forward with specific
evidence, not mere allegations or denials of the pleadings, which
demonstrates that there is a genuine issue for trial. Howland v.
Kilquist, 833 F.2d 639 (7th Cir. 1987). "A scintilla of evidence
in support of the nonmovant's position is insufficient to
successfully oppose summary judgment; `there must be evidence on
which the jury could reasonably find for the [nonmoving party].'"
Brownell v. Figel, 950 F.2d 1285 (7th Cir. 1991) (quoting
Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 251-52, 106 S.Ct.
2505, 2511, 91 L.Ed.2d 202 (1986)).
The Supreme Court of Illinois has set forth the standard to
be used when determining if an insurance company has a duty to
defend its insured.
To determine an insurer's duty to defend its
insured, the court must look to the allegations of
the underlying complaints. If the underlying
complaints allege facts within or potentially
within policy coverage, the insurer is obliged to
defend its insured even if the allegations are
groundless, false, or fraudulent. (Thornton v.
Paul (1978), 74 Ill.2d 132, 23 Ill.Dec. 541,
384 N.E.2d 335.) An insurer may not justifiably refuse
to defend an action against its insured unless it
is clear from the face of the underlying
complaints that the allegations fail to state facts
which bring the case within, or potentially within,
the policy's coverage. (Conway v. Country
Casualty Insurance Co. (1982), 92 Ill.2d 388, 65
Ill.Dec. 934, 442 N.E.2d 245.) Moreover, if the
underlying complaints allege several theories of
recovery against the insured, the duty to defend
arises even if only one such theory is within the
potential coverage of the policy. Maryland
Casualty Co. v. Peppers, (1976), 64 Ill.2d 187,
355 N.E.2d 24.
United States Fidelity & Guar. Co. v. Wilkin Insulation Co.,
144 Ill.2d 64, 73, 161 Ill.Dec. 280, 284, 578 N.E.2d 926, 930 (1991)
(emphasis in original). When making these determinations, the
complaint and insurance policy must be construed liberally in
favor of the insured. Id. Furthermore, any ambiguity in the
insurance policy must be construed in favor of the insured. Id.
There are two insurance policies at issue in this case. The
first policy is a general liability policy, a series of which
were in effect between 1978 and 1981.*fn1 The second policy is
titled Business Checkmate Policy. A series of Business Checkmate
policies were also in effect between 1978 and 1981.*fn2 The Business
Checkmate policy was basically an umbrella policy.
The general liability policy provides the following coverage.
The company will pay on behalf of the insured all
sums which the insured shall become legally
obligated to pay as damages because of
Coverage A. bodily injury or
Coverage B. property damage
to which this insurance applies, caused by an
occurrence, and the company shall have the right
and duty to defend any suit against the insured
seeking damages on account of such bodily injury or
property damage, even if any of the allegations of
the suit are groundless, false or fraudulent, and
may make such investigation and settlement of any
claim or suit as it deems expedient, but the
company shall not be obligated to pay any claim or
judgment or to defend any suit after the applicable
limit of the company's liability has been exhausted
by payment of judgments or settlements. (emphasis
The policy defines occurrence as follows: "occurrence" means an
accident, including continuous or repeated exposure to
conditions, which results in bodily injury or property damage
neither expected nor intended from the standpoint of the insured.
(emphasis in original).
The Business Checkmate Policy provides the following
COVERAGES. The Company will indemnify the Insured
for ultimate net loss in excess of the retained
limit which the Insured shall become legally
obligated to pay as damages because of
Coverage A. Personal Injury Liability or
Coverage B. Property Damage Liability or
Coverage C. Advertising Offense Liability
to which this policy applies, caused by an
Under the policy, occurrence "as respects personal injury,
property damage or advertising offense, means an accident,
including injurious exposure to conditions, which results, during
the policy period, in personal injury, property damage or
advertising liability neither expected nor intended from the
standpoint of the Insured."
Under the terms of both policies, if Father Havey expected or
intended to cause bodily injury to Defendants, his actions are
not covered. In sexual abuse cases where the victims are minors,
Illinois appellate courts have adopted an inferred-intent rule.
State Farm Fire & Cas. Co. v. Watters, 268 Ill.App.3d 501, 205
Ill.Dec. 936, 644 N.E.2d 492 (1994); Western States Ins. v. Bobo,
268 Ill.App.3d 513, 205 Ill.Dec. 930, 644 N.E.2d 486 (1994);
Scudder v. Hanover Insurance Co., 201 Ill.App.3d 921, 147
Ill.Dec. 386, 559 N.E.2d 559 (1990). Under this rule, if a person
sexually abuses a minor, the court as a matter of law will find
that the abuser intended to injure his or her victims.
Courts which have recognized such an inference have
done so in large part because of the inevitability
of injury in sexual abuse cases, especially when
the victims are minors. Such an inference is also
consistent with this court's recent conclusion that
emotional harm is practically certain to result
from sexual assaults. Although [the defendant's]
sexual contacts with the minors in this case did
not involve penetration and apparently did not
involve the use of force, courts have not hesitated
to apply the above inference in cases involving
"nonviolent" sexual abuse. In our view, these cases
properly recognize the inevitability of emotional
harm to minors from sexual abuse in all forms even
if the abuse was not accomplished through violence
or threats of violence.
Scudder, 201 Ill.App.3d at 928-29, 147 Ill.Dec. at 390, 559
N.E.2d at 563 (citations omitted); See also Watters, 268
Ill.App.3d at 506-07, 205 Ill.Dec. at 940, 644 N.E.2d at 496;
Bobo, 268 Ill.App.3d at 516-17, 205 Ill.Dec. at 933, 644 N.E.2d
The Supreme Court of Illinois has yet to speak on this
issue.*fn3 This Court finds, however, that when faced with this
issue the Supreme Court of Illinois will adopt the
inferred-intent rule. Accordingly, that rule will be applied in
Applying the inferred-intent rule to the case at bar, the
Court finds that Plaintiff has no duty to defend Father Havey.
Under the inferred-intent rule as a matter of law the Court must
find that Father Havey intended to harm Defendants when he
engaged in his acts of sexual abuse. Accordingly, Father Havey's
intent to cause bodily harm takes his actions outside the
coverage of both the general liability policy and the Business
Checkmate Policy. Because Father Havey's conduct is not covered
by either insurance policy, Plaintiff has no duty to defend.
Father Havey, who denies abusing Defendants in any way,
argues that if he did in fact abuse Defendants the abuse alleged
is so bizarre it raises questions regarding his ability to form
the necessary intent to intentionally harm Defendants. Under the
inferred-intent rule, however, Father Havey's subjective intent
is irrelevant; his intent to harm is found as a matter of law.
This point was specifically addressed in Watters. In that case,
the defendant was mildly retarded. The defendant attempted to
argue he did not have the mental capability to form the necessary
intent to harm the plaintiffs; therefore, the insurance policy's
exclusion for intentional harm did not apply. The appellate court
found the defendant's argument unpersuasive stating "[w]hen the
insured's specific intent to injure is inferred as a matter of
law, evidence of the insured's diminished capacity is
irrelevant." Watters, 268 Ill.App.3d at 508, 205 Ill.Dec. at 941,
644 N.E.2d at 497.
Father Havey also points to allegations made in Count III of
the state court complaint which he argues triggers Plaintiff's
duty to defend. Count III of the state court complaint is
entitled "Clergy Malpractice." The complaint alleges Father Havey
breached his priestly and pastoral duty of care to
the Plaintiffs by negligently entering into a
spiritual and emotional counseling relations with
the plaintiffs, minors and potential victims of
Defendant's sexual exploitation with full knowledge
of his own exploitive propensities, by continuing
the spiritual counseling relationship with the
minor Plaintiffs after the first instance of sexual
exploitation occurred, by not informing the minor
Plaintiffs that they had been sexually exploited,
by not seeking the proper counseling and therapy
for himself and withdrawing from the spiritual and
emotional counseling relationship, and by failing
to advise and direct the Plaintiffs that they had
been sexually abused and they should seek
appropriate therapy and counseling.
According to Father Havey, under the Supreme Court of Illinois'
interpretation of the terms expected or intended as used in
general liability policies, the claims of negligence just recited
trigger Plaintiff's duty to defend.
In Wilkin, the Supreme Court of Illinois was called upon to
interpret a general liability policy's application in an asbestos
lawsuit. The insurer of an asbestos manufacturer was claiming it
did not have a duty to defend or indemnify the asbestos
manufacturer under its general liability policy in a suit where
a building owner was suing the asbestos manufacturer for property
damage caused by asbestos fibers. One of several arguments put
forth by the insurer was that Wilkin either expected or intended
the property damage which occurred. The insurance contract
interpreted in Wilkin contained the same definition of occurrence
as is contained in the insurance policies in the instant case.
The Supreme Court noted that some of the allegations in the
underlying complaint charged Wilkin with negligently installing
asbestos when it knew or should have known of asbestos' potential
for causing health problems. The Supreme Court reasoned the
allegations that Wilkin knew or should have known about asbestos'
qualities did not equate to allegations that Wilkin intended or
expected to contaminate the buildings with asbestos fibers.
Father Havey argues the recited allegations only allege
negligence and do not allege any intentional actions; therefore,
under Wilkin the allegations are potentially within the coverage
of Plaintiff's policies. The Court does not find this argument
The negligence claims alleged in Count III are based upon the
sexual assault of Defendants
by Father Havey. These claims "are a transparent attempt to
trigger insurance coverage" on the part of Defendants. Watters,
268 Ill.App.3d at 510, 205 Ill.Dec. at 942, 644 N.E.2d at 498.
The negligent acts alleged in Count III cannot be separated from
Father Havey's alleged acts of intentional sexual assault. It is
those acts of sexual abuse Defendants are attempting to recover
damages for, not any negligent acts on Father Havey's behalf.
The United States Court of Appeals for the Fifth Circuit
addressed a similar argument in Commercial Union Ins. Co. v.
Roberts, 7 F.3d 86 (5th Cir. 1993). In Roberts, the defendant
molested two young girls. The girls' parents filed suit in state
court against the defendant alleging he had been negligent in not
having his pedophilia treated, for treating young female patients
(the defendant was a doctor) knowing his propensity to molest
young girls, and for teaching Sunday school to young girls
knowing his condition. The defendant submitted the case to his
insurance company to defend. The insurance company filed a
declaratory judgment action in a federal district court claiming
it had no duty to defend. The district court granted summary
judgment to the insurance company finding the defendant's acts
intentional and therefore excluded from coverage under the
On appeal, the Fifth Circuit affirmed. Initially, the Fifth
Circuit noted that the defendant's intent to harm the girls would
be inferred as a matter of law. The Fifth Circuit then addressed
the claims of negligence asserted by the girls in their state
court complaint, summarizing the girls' argument as follows:
"[t]he claim is essentially that the doctor's negligence set in
motion the events that eventually led to his sexual molestation."
Id. at 88. The Court rejected this argument stating "[e]ach and
every allegation arises out of the alleged acts of sexual
molestation. The claims of negligence are not independent
causes-in-fact of the injuries. Finding a separate and distinct
duty to defend Dr. Roberts would necessarily require proof of the
underlying sexual molestation." Id.
The same reasoning applies to the case at bar. Father Havey's
failure to seek counseling did not cause the Defendants' damages;
Father Havey's intentional acts of sexual abuse caused them.
Since Father Havey's acts of sexual abuse are not covered by
either insurance policy at issue in this case, Plaintiff has no
duty to defend.
There is one possible way Defendants could recover from
Father Havey under their theory that he negligently breached his
duties as a priest. In Corgan v. Muehling, 143 Ill.2d 296, 158
Ill.Dec. 489, 574 N.E.2d 602 (1991), the Supreme Court of
Illinois held that a patient could maintain a cause of action for
negligent infliction of emotional distress against her
psychologist by alleging the psychologist breached a duty of
professional due care by negligently engaging in sexual
intercourse with the plaintiff during her treatment. In such a
case, it is the breach of the psychologist's professional duty of
care to the plaintiff which provides the basis of recovery, not
the act of sexual intercourse. In the case at bar, therefore,
Defendants could recover from Father Havey for his breach of
professional due care as a priest. The allegations in Counts III
and IV of the state court complaint could be read as alleging
such a cause of action.
But there is one insurmountable obstacle barring such a
claim. The initial determination of whether or not a defendant
owes a duty to a plaintiff due to their relationship is for a
court to make. If a court determines there is no duty owed by the
defendant to the plaintiff, there can be no breach of that duty.
This point is relevant to the case at bar because Illinois courts
have refused to create a legally recognized duty between
clergymen and their congregation. Dausch v. Rykse, 52 F.3d 1425
(7th Cir. 1994). Without such a duty imposed by law, there can be
no claim for negligent infliction of emotional distress or for
breach of a fiduciary duty. Counts III and IV, therefore, as a
matter of law do not state a claim for which relief can be
granted. Accordingly, Plaintiff will never have a duty to
indemnify based on Counts III and IV of the complaint. "[T]he
duty to defend is broader than the duty to indemnify only when
the insurer has the potential obligation to indemnify. But when,
as here, the insurer has no potential obligation to indemnify
it has no duty to defend." Zurich Ins. Co. v. Raymark
Industries, 118 Ill.2d 23, 52, 112 Ill.Dec. 684, 697,
514 N.E.2d 150, 163 (1987).
In sum, Father Havey's intentional molestation of Defendants
is not covered by the insurance policies at issue here.
Furthermore, any valid claim of negligence against Father Havey
is not recognized under Illinois law. Accordingly, Plaintiff has
no duty to defend Father Havey and therefore also no duty to
indemnify. Scudder, 201 Ill. App.3d at 929, 147 Ill.Dec. at 391,
559 N.E.2d at 564.
Ergo, Plaintiff's motion for summary judgment (d/e 8) is
ALLOWED. Father Havey's motion for summary judgment (d/e 6) is
DENIED. Plaintiff has no duty to either defend or indemnify
Father Havey in the state court action filed by Defendants.