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Allstate Vehicle and Property Insurance Co. v. Hunter

United States District Court, D. South Carolina, Beaufort Division

January 17, 2019

ROSE WADFORD HUNTER, JANE DOE, by and through her mother and natural Guardian ad Litem, MARY ROE, and MARY ROE, individually, Defendants.



         The following matter is before the court on plaintiff Allstate Vehicle and Property Insurance Company's (“Allstate”) motion for summary judgment, ECF No. 34. For the reasons set forth below, the court grants the motion for summary judgment.

         I. BACKGROUND

         This is an insurance coverage case. It arises out of the alleged sexual assault of minor Jane Doe (“Doe”) by Joseph Stephen Hunter (“Joseph Hunter”), the husband of Rose Wadford Hunter (“Rose Hunter”). According to the complaint, Rose and Joseph Hunter were Doe's neighbors in Bluffton, South Carolina when the abuse and harassment occurred. Joseph Hunter began to sexually assault Doe in 2006, when Doe was seven years old. He continued to do so until 2015, when Doe was 16 years old. During this period, Joseph Hunter exposed himself to Doe, forced Doe to masturbate Joseph Hunter, and made Doe perform and receive oral sex. Joseph Hunter videotaped and photographed Doe performing these sex acts. On January 5, 2016 Joseph Hunter was arrested on charges of first and third degree child molestation. The complaint alleges that Rose Hunter was aware of her husband's sexual proclivities concerning young girls yet continued to encourage interactions between Doe and Joseph Hunter including sleepovers. The complaint further alleges that after Joseph Hunter's arrest, Rose Hunter posted comments on the social networking site Facebook “disparaging, denigrating, and defaming” Doe's mother Mary Roe (“Roe”) as a “sorry mother.” This type of behavior was, the complaint alleges, part of a pattern of behavior that Rose Hunter engaged in to discredit victims of Joseph Hunter's abuse.

         Doe, through Roe, brought suit against Rose Hunter in state court entitled Jane Doe, by and through her mother and natural Guardian Ad litem, Mary Roe, and Mary Roe, individually, C.A. No. 2016-CP-07-1541 (“the underlying suit”). Doe alleges that as the result of Joseph Hunter's actions-and Rose Hunter's inactions in the face of the abuse-Doe has received substantial medical, therapeutic, and counseling expenses. Doe suffers from, and likely will continue to suffer from, psychological distress including depression and post-traumatic stress disorder. Doe levies causes of action for negligence/gross negligence/recklessness, defamation, breach of fiduciary duty, and aiding and abetting breach of fiduciary duty.

         Allstate issued a homeowner's policy, Policy No. 990100794 (“the Policy”), to the Hunters, with an effective date of June 16, 2015. The relevant provisions of the Policy are the family liability protection and guest medical protection provisions. The family liability protection provides:

         Losses we cover under Coverage X:

Subject to the terms, conditions and limitations of this policy, we will pay damages which an insured person becomes legally obligated to pay because of bodily injury or property damages arising from an occurrence to which this policy applies, and is covered by this part of the policy.

         The Policy defines an “insured person” as “you and, if a resident of your household: a) any relative; and b) any dependent person in your care, ” and further defines “you” and “your” as “the person listed under Named Insured(s) on the Policy Declarations as the insured and that person's resident spouse.” The Policy goes on to define an “occurrence” to mean “an accident, including continuous or repeated exposure to substantially the same general harmful conditions during the policy period, resulting in bodily injury or property damage.” And finally, “bodily injury” is defined as “physical harm to the body, including sickness or disease . . . .” The Policy also includes a number of exclusions from coverage. Most saliently, it includes an intentional acts exclusion:

         Losses we do not cover under Coverage X:

We do not cover any bodily injury or property damage intended by, or which may reasonably be expected to result from the intentional or criminal acts or omissions of, any insured person. This exclusion applies even if:
a) Such insured person lacks the mental capacity to govern his or her conduct;
b) Such bodily injury or property damage is of a different kind or degree than intended or reasonably expected; or
c) Such bodily injury or property damage is sustained by a different person than intended or reasonably expected.

         Allstate is currently defending Rose Hunter in the underlying action, subject to a reservation of rights.

         On February 8, 2017 Allstate filed this suit, asking the court to declare that Allstate is not required to provide coverage for any of Doe's injuries. Specifically, Allstate contends that the Policy does not provide coverage because: (1) allegations of sexual abuse do not constitute an “occurrence” as defined under the Policy; (2) all or some of the allegations of the sexual abuse did not happen during the policy period; and (3) the allegations of sexual abuse in the underlying action arise from the intentional and criminal acts of Joseph Hunter, placing the acts within the Policy's intentional acts exclusion.

         Allstate filed a motion for summary judgment on March 12, 2018. ECF No. 34. Defendants[1] filed a response on March 26, 2018, ECF No. 36, and Allstate filed a reply on April 9, 2018, ECF No. 41. The court held a hearing on the motion on May 15, 2018. On June 7, 2018, the court entered an order deferring its ruling with regard to the negligence and breach of fiduciary duty claims and instead certifying a question of state law to the Supreme Court of South Carolina. ECF No. 48. In its order, the court also held that there was no coverage for defamation under the Policy. Id. at 16. Then on December 13, 2018, the court entered a text order denying without prejudice the motion for summary judgment pending the outcome of the certified ...

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