New Hampshire’s highest court recently held that an insurance policy’s sexual molestation exclusion applied to claims for negligent supervision brought against the alleged perpetrator’s parents. Philbrick v. Liberty Mut. Fire Ins. Co., No. 2007-042 (N.H. Oct. 31, 2007).
In the underlying case, the plaintiff parents alleged that their son had been sexually molested while being baby-sat by the defendant parents’ minor child. The plaintiffs brought a number of claims against the babysitter and his parents, including claims of negligent supervision and negligent entrustment against the parents.
As a result of the lawsuit, the defendant parents filed a claim under their homeowner’s policy. Their insurer denied their claim because, among other things, the policy excluded coverage for bodily injury arising out of sexual molestation. Thereafter, the trial court in the declaratory judgment action filed by the defendant parents against their homeowner’s insurer, granted summary judgment against the insurer on the basis that the sexual molestation exclusion was ambiguous and did not preclude coverage.
The Supreme Court of New Hampshire, reversed the grant of summary judgment to the insureds. In doing so, the court noted that the language of the policy explicitly tied the exclusion to the nature of the injury. As such, reasoned the court, the analysis should be directed toward the injuries suffered rather than the causes of action in the complaint. As the damages alleged were for bodily injury to the child and emotional distress of all plaintiffs, there could be no doubt that those injuries originated from, grew out of or flowed from the sexual molestation. Although it could be argued that the injuries in question were, in a sense, caused by the parents’ negligent acts, the court reasoned that it did not follow that those injuries failed to arise out of the alleged sexual molestation. Absent the sexual molestation, there would have been no harm or damages as a result of the alleged negligence. The court held that the alleged bodily injuries arose out of the excluded act of sexual molestation, and the negligence claims against the alleged perpetrator’s parents were excluded.