Pettit v. Erie Insurance Exchange

RODOWSKY, Judge. This is a declaratory judgment action concerning personal liability insurance coverage for a pedophile who was sued for sexual child abuse. We shall hold that the exclusion for injuries expected or intended by the insured applies, ⁷⁷⁹ despite the pedophile’s subjective belief that his conduct caused no harm. Petitioner, Gloria Pettit (Pettit), as mother and next friend of her two minor sons, sued James Kowalski (Kowalski) in the Circuit Court for Prince George’s County alleging, purportedly under several theories of negligence, that Kowalski had sexually molested the boys.

The amended complaint averred that Kowalski became acquainted with the Pettit family in April of 1991. When the boys’ father died approximately one year later, Kowalski began to spend more time with, take care of, and supervise the Pettit children. Between April 1, 1991, and May 25, 1993, Kowalski engaged in sexual activities with the Pettit children at his residences in Maryland and Virginia, including fondling, undressing, masturbating, and performing oral sex. He encouraged and permitted others to molest the boys.

Kowalski also videotaped these activities. The boys were seven and nine years old at the time the abuse began. During that twenty-six-month span, Kowalski was insured under four separate policies issued by the respondent, Erie Insurance Exchange (Erie). Those policies are: (1) Q520105754, an Erie HomeProtector Policy 2003 Extracover Edition; (2) Q55-2704047, an Erie HomeProtector Policy 2003 Extracover Edition running consecutively to the first; (3) Q41-0180158, an Erie Ultrasure Policy for Landlords; and (4) Q53-0108729, an Erie 2004 Tenantcover Policy.

The policies listed (1), (2), and (4) each contain a provision which excludes liability coverage for “injury or damage expected or intended by anyone we protect.” The policy listed (3) excludes liability coverage for “injury or damage expected or intended from the standpoint of anyone we protect.” Kowalski demanded that Erie defend him in the action brought by Pettit. Erie instead filed an action seeking a judgment declaring that Erie had no duty to indemnify or defend Kowalski as his acts of sexual abuse were intentional, and thus excluded under the “intentional injury” provision found in each of Kowalski’s policies. Kowalski, Pettit, and the two children were named as defendants in the declaratory ⁷⁸⁰ judgment action. The underlying tort action has been stayed pending the outcome of the action that is now before us.

The circuit court concluded on summary judgment that the intentional injury provisions in the policies excluded adult sexual molestation of children as a matter of law, and it entered an order declaring the rights of the parties to that effect. A divided panel of the Court of Special Appeals affirmed. Pettit v. Erie Ins. Exch., 117 Md.App. 212 , 699 A.2d 550 (1997).

That court held “that an adult insured’s intent to engage in sexual contact with a child embodies an intent to injure for the purpose of applying the intentional injury exclusion.” Id. at 232 , 699 A.2d at 560 (footnote omitted). We agree. Erie is entitled to a summary judgment declaring that it has no duty to defend Kowalski only if it is manifestly clear that in the underlying tort suit the petitioner cannot allege facts giving rise to a potentiality of coverage. See Brohawn v. Transamerica Ins.

Co., 276 Md. 396, 408 , 347 A.2d 842, 850 (1975) (“Even if a tort plaintiff does not allege facts which clearly bring the claim within or without the policy coverage, the insurer still must defend if there is a potentiality that the claim could be covered by the policy.”). Although declaratory judgment actions are disfavored in liability insurance coverage cases while the underlying tort action is pending, such relief is appropriate prior to trial of the tort action where the allegations in the underlying tort claims “obviously constitute a patent attempt to recharacterize, as negligent, an act that is clearly intentional.... ” Allstate Ins. Co. v. Atwood, 319 Md. 247, 253 , 572 A.2d 154, 157 (1990); see also Brohawn, 276 Md. at 406 , 347 A.2d at 849 . Under the unique circumstances in Atwood , this Court permitted a post tort-trial, declaratory judgment coverage action after the jury in the tort case may well have found that a battery was negligence.

We examined how, because both the plaintiff and the defendant in a tort suit share a common interest in coverage being applicable, there may be collusion and an effort to manipulate coverage. As a result, “plaintiffs’ attorneys bring suits for ‘negligent rape, ⁷⁸¹ negligent sodomy, ... and negligent sexual molestation.’ ” Atwood, 319 Md. at 253 , 572 A.2d at 156 -57 (quoting Brief of Allstate Ins. Co.). Both parties to the tort action profit by a jury’s ruling that “ ‘even the most obvious and blatant criminal and/or intentional acts Lare] negligent conduct.’ ” Id. at 253 , 572 A.2d at 157 (quoting Brief of Allstate Ins.

Co.). Such a situation has arisen here. In the underlying tort suit, petitioner, as plaintiff, alleged that the defendant Kowalski had “committed] fellatio and oral sex with the minor Plaintiffs with injury; undressed the minor Plaintiffs, and exposed himself to the minor Plaintiffs; ... fondl[ed] the minor Plaintiffs; and filmed these pedophile activities, all of which was for the purpose of [Kowalski’s] self gratification and satisfaction of [his] sexual fantasies as a pedophile.” In this declaratory judgment case, however, petitioner attempts to characterize that very same activity as Kowalski’s failure to refrain from unreasonable conduct, to warn of his pedophilia, and to take reasonable precautions to protect children in his care from a risk of harm. Such characterizations were rejected in Atwood, 1 In Harpy v. Nationwide Mut.

Fire Ins. Co., 76 Md.App. 474 , 545 A.2d 718 (1988), the Court of Special Appeals, consid ⁷⁸² ering a case remarkably similar to the case at bar, held that sexual activity between an adult and a minor child is per se injurious. There a daughter sued her father alleging sexual abuse which occurred between the ages of nine and thirteen and predicated the action on (1) assault and battery, (2) intentional infliction of emotional distress, and (3) negligence. The father was covered for personal liability by two homeowner’s insurance policies issued by Nationwide, each of which excluded coverage for injury “ ‘which is expected or intended by the insured.’ ” Id. at 477 , 545 A.2d at 720 .

Mr. Harpy requested Nationwide’s defense based on the third count of negligence. In order to evade summary judgment for the insurer, Mr. Harpy filed an affidavit swearing “ ‘that I have never taken any action with regard to my daughter ... in which I intended or expected that she would suffer the type of injuries that she has alleged in her Complaint against me.’ ” Id. Mr. Harpy contended that his “intent to harm his daughter [was] a disputed material fact relevant to the potentiality of coverage under Count 3 (negligence).” Id. at 482 , 545 A.2d at 722 . The Court of Special Appeals found such a claim to be “absurd,” holding that sexual activity between an adult and a minor child was an intentional tort, injurious per se.

Id. at 482, 545 A.2d at 722-23 . Accordingly, Nationwide was entitled to summary judgment that there was no potentiality of coverage. In the instant action the Court of Special Appeals relied heavily on its decision in Harpy and demonstrated that Harpy is in accord with the overwhelming majority of decisions elsewhere on the issue. Pettit, 117 Md.App. at 230-31 , 699 A.2d at 560 .

Petitioner, however, seeks to distinguish Harpy and similar holdings in essentially three ways, none of which is persuasive. I First, petitioner contends that Harpy involved “violent unconsensual rape,” but characterizes the conduct engaged in by Kowalski as “involv[ing] many forms of consensual conduct ... normally reserved for adult relationships.” Brief of “Ap ⁷⁸³ pellants” at 36. Under Maryland Code (1957, 1996 Repl.Vol.), Art. 27, § 464A(a)(3) a person is guilty of a second degree sexual offense who “engages in a sexual act with another person ... [u]nder 14 years of age and the person performing the sexual act is four or more years older than the victim.” 2 Under § 464B(a)(3) a person is guilty of a third degree sexual offense who engages in “[s]exual contact with another person who is under 14 years of age and the person performing the sexual contact is four or more years older than the victim.” 3 Some of Kowalski’s conduct amounts to a sexual act in violation of § 464A(a)(3) and other of Kowalski’s conduct violates § 464B(a)(3). See Martin v. State, 113 Md.App. 190, 238 , 686 A.2d 1130, 1153-54 (1996) (caressing a victim’s genital area is legally sufficient evidence of “sexual contact” under § 461(f)); see also Shand v. State, 341 Md. 661, 674-77 , 672 A.2d 630, 636-38 (1996) (analyzing legislative history of § 461(f)).

Under either section, Kowalski’s seven and nine year old victims could not have legally consented to the sexual activities. Both §§ 464A and 464B contain a subsection (a)(1), in which the respective offenses apply if the criminal behavior is “against the will and without the consent of the other person.” Unlike subsection (a)(1), however, subsection (a)(3) of each statute contains no such requirement, and a purported consent by the victim is no defense. Moreover, petitioner’s use of the word “violent” to differentiate Harpy from the instant case is similarly inappropriate. Child sexual abuse is an affront to the dignity of the child—an invasion of the child’s autonomy—because a child cannot appreciate or comprehend the full nature of the sexual acts.

See Doe v. Archdiocese of Washington, 114 Md.App. ⁷⁸⁴ 169, 186, 689 A.2d 634, 643 (1997). While it is undoubtedly worse to couple sexual molestation of a child with physical injury, such a distinction differs in degree, not in kind. The essence of child sexual abuse is the violation of the dignitary interest, whether there is physical injury or not. See id.; see also Restatement (Second) of Torts § 18 cmt. c (1979) (“Since the essence of the plaintiffs grievance consists in the offense to the dignity involved in the unpermitted and intentional invasion of the inviolability of his person and not in any physical harm done to his body, it is not necessary that the plaintiffs actual body be disturbed.” (Emphasis added)).

II Petitioner’s principal contention is that Kowalski had no subjective intent to harm his victims. 4 In support petitioner points to the uncontradieted affidavit of Dr. Neil H. Blumberg, a psychiatrist who, based on a review of Kowalski’s medical records, concluded that Kowalski “suffered from a mental disorder known as pedophilia” and that “he did not have the intent to harm these two children.” The affiant stated that “[t]his disorder is not characterized by intent to injure or harm their sexual partner. To the contrary, it is motivated by their own need for sexual gratification and is based upon their belief that their relationship and sexual activity with the child is healthy and normal.” ⁷⁸⁵ Petitioner submits that, in deciding if there is insurance coverage, whether an injury is expected or intended by the insured is determined by the insured’s subjective intent. Although petitioner acknowledges that Kowalski intended to engage in the conduct constituting sexual acts and contacts, the submission is that Erie’s policies cover such conduct because Kowalski subjectively believed that the sexual acts and contacts were not harmful to the children. Legal support for this position, petitioner asserts, is found in Allstate Ins.

Co. v. Sparks, 63 Md.App. 738 , 493 A.2d 1110 (1985), and in Bailer v. Erie Ins. Exch., 344 Md. 515 , 687 A.2d 1375 (1997). Erie does not join issue with petitioner over whether injury expected or intended by the insured ordinarily is determined by the insured’s subjective intent. Further, Erie does not seek to distinguish its policy that excludes for injury expected or intended “from the standpoint of’ the insured from the policies that do not include the quoted language.

Erie’s position is that in cases of sexual molestation of a child by an adult, the conduct is intentional as a matter of law for the purpose of construing an intentional conduct exclusion in an insurance policy. Thus, the subjective belief of the insured as to whether harm was intended is immaterial. Petitioner’s repeated reliance upon Sparks is misplaced. In that case, three youths attempted to siphon gasoline at night from a truck parked near a mill.

One of the boys, displaying “an extraordinary lack of good judgment,” lit a cigarette lighter in order to provide some light. The flame ignited gas fumes and resulted in a fire which destroyed the mill and virtually everything inside. In a declaratory judgment action brought by the insurer of one of the boys it was held that there was a potentiality of coverage. Sparks, 63 Md.App. at 740 , 493 A.2d at 1111 .

The Court of Special Appeals held that “the insured must have intended the results (‘damages’), not simply the causing act, for coverage not to apply.” Id. at 742 , 493 A.2d at 1112 . Because the boys intended to steal gasoline from a truck and the resulting harm was the destruction of a mill by