A federal court in Virginia recently held that an insurer had a duty to defend against claims that the insured conspired to kidnap a seven-year-old child. Liberty University, Inc. v. Citizens Ins. Co. of America, 2014 WL 1496674 (W.D. Va. Apr. 16, 2014)
The insured, a private university, was sued for kidnapping, racketeering and conspiracy related to the alleged kidnapping of a child. The underlying lawsuit alleged that the insured assisted one of the child’s parents in fleeing overseas with the child to escape a custody battle. Its insurer refused to defend the insured, and the insured filed suit to obtain reimbursement of the costs of the defense. On the parties’ cross-motions for summary judgment, the court granted the insured’s motion and held that the insurer had a duty to defend. The court found coverage because the underlying lawsuit included allegations of “property damage,” i.e., the child could no longer use personal items left in the United States since her kidnapping, and that there was an “occurrence” because the underlying lawsuit did not allege sufficient facts to make the child’s abduction “reasonably anticipated” from the viewpoint of the insured. The court held that there was also coverage under Coverage B in that the underlying lawsuit alleged that the injury arose out of “false arrest, detention, or imprisonment,” which was allegedly “promoted, encouraged, and ratified” by the insured.