Sexual Abuse of Students not Educational Employment Activities
Barry Zalma
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Read the full article at https://lnkd.in/grEsE2pH and see the full video at https://lnkd.in/gYVHwu2a and at https://lnkd.in/gJFipdH6 and at https://zalma.com/blog plus more than 4450 posts.
In Nautilus Insurance Company v. Nicole Dufault, Isaiah Ziyambe-Freeman, Uchechi Ike, Matthew Derilus, Isaiah Gavin, Ormond Simpkins, Frankie Jerome, Brandon Hayes, and John Does 1-10, Civil Action No. 22-cv-836, United States District Court, D. New Jersey (March 9, 2023) Nautilus refused to defend or indemnify a convicted sexual abuser of children. Because Nicole Dufault (“Defendant” or “Dufault”) was convicted of the crime Nautilus sought a declaration form the USDC and brought:
A motion for summary judgment seeking a declaration that it is not obligated to defend or indemnify Defendant Nicole Dufault in several underlying civil lawsuits; and a motion for default judgment against defendants Matthew Derilus, Isaiah Gavin, Ormond Simpkins, Frankie Jerome, Brandon Hayes, Isaiah Ziyambe-Freeman, and Uchechi Ike (collectively, the “Default Defendants” or “Underlying Plaintiffs”)
BACKGROUND
The Underlying Plaintiffs, in separate civil actions, alleged that Defendant Nicole Dufault, an insured high-school teacher formerly of Columbia High School in New Jersey, sexually abused them while they were under the age of 16.
On February 11, 2015, an Essex County grand jury returned a 40-count indictment against Defendant, charging her with first-degree aggravated sexual assault and second-degree endangering welfare of a child. The Indictment accused Defendant of engaging in sexual relations with six male students under the age of 16 in 2013 and 2014.
In 2020 Defendant pleaded guilty in the criminal action to three counts of third-degree aggravated criminal sexual contact as to three of the abused minors.
The Nautilus Policies and Coverage Dispute
Plaintiff issued an Excess Educators Employment Liability Insurance Policy to the New Jersey Education Association, of which Defendant is a member, covering September 2013 through September 2015. (hereinafter, the “Nautilus Policies”). The Nautilus Policies provided defense and indemnity coverage on behalf of an insured educator, but only for claims arising from the insured's “education employment activities.”
For defense and indemnity coverage to attach under the Nautilus Policies, the subject matter of the suit for which coverage is sought must be premised on “education employment activities.” The Nautilus Policies expressly define “education employment activities” as either: “(1) pursuant to the express or implied terms of his or her employment by an educational unit; or (2) at the express request or with the express approval of his or her supervisor, provided that, at the time of such request or approval, the supervisor was performing what would appear to be his or her educational employment activities.”
Even if coverage attaches through “education employment activities,” the Nautilus Policies contain exclusions that disclaim coverage for claims arising out of a “criminal proceeding that has resulted in the Insured's conviction,” or “[o]ccurrences involving damages which are the intended consequence of action taken by the Insured.”
Nautilus disclaimed all defense and indemnity coverage for the underlying claims.
The Instant Actions for Summary Judgment and Default Judgment
Specifically, Plaintiff sought a declaration from the Court that it has no duty to indemnify or defend Dufault in the civil actions brought by the Underlying Plaintiffs because:
her conduct does not fall within the Nautilus Policies' definition of “educational employment activities;”
her convictions for criminal sexual contact, the acts of which constitute the underlying lawsuits, preclude coverage under the Nautilus Policies' exclusions; and
her intentional sexual abuse of minor children excluded her from coverage under the “Intentional Damages” provision of the Nautilus Policies.
DISCUSSION
Plaintiff argued that Defendant's purported sexual abuse clearly falls outside the definition of covered “education employment activities,” and thus Defendant may not invoke coverage under the Nautilus Policies.
The Court agreed with Plaintiff and granted a declaratory judgment in Nautilus' favor.
The terms of the Nautilus Policies are clear and unambiguous - Nautilus disclaims its obligation to defend and indemnify civil lawsuits in which the underlying subject matter is not related to “educational employment activities."
It was undisputed that the alleged sexual abuse of minor students was not conducted pursuant to the terms of Defendant's (or any educator's) educational employment. Therefore, the court found that coverage does not attach to Defendant under the Nautilus Policies because the Underlying Plaintiffs' claims against Defendant do not arise out of her “educational employment activities.”
Plaintiff's motion for summary judgment against Defendant was granted and Plaintiff's motion for default judgment against the Default Defendants - was granted.
ZALMA OPINION
No liability insurance policy covers every possible claim against its insureds. Almost all, like the Nautilus policies, exclude intentional and criminal acts. Since defendant was convicted of a crime, the sexual abuse of minor students, was not part of her employment as a teacher and was clearly intentional, there was no possibility that Nautilus had an obligation to defend or indemnify the abusive teacher.
(c) 2023 Barry Zalma & ClaimSchool, Inc.
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Barry Zalma, Esq., CFE, now limits his practice to service as an insurance consultant specializing in insurance coverage, insurance claims handling, insurance bad faith and insurance fraud almost equally for insurers and policyholders. He practiced law in California for more than 44 years as an insurance coverage and claims handling lawyer and more than 54 years in the insurance business. He is available at http://www.zalma.com and [email protected]
Write to Mr. Zalma at [email protected]; http://www.zalma.com; http://zalma.com/blog; daily articles are published at https://zalma.substack.com. Go to the podcast Zalma On Insurance at https://anchor.fm/barry-zalma; Follow Mr. Zalma on Twitter at https://twitter.com/bzalma; Go to Barry Zalma videos at Rumble.com at https://rumble.com/c/c-262921; Go to Barry Zalma on YouTube- https://www.youtube.com/channel/UCysiZklEtxZsSF9DfC0Expg; Go to the Insurance Claims Library – https://zalma.com/blog/insurance-claims-library.
Subscribe and receive videos limited to subscribers of Excellence in Claims Handling at locals.com https://lnkd.in/gfFKUaTf.
Consider subscribing to my publications at substack at https://lnkd.in/gcZKhG6g
Barry Zalma, Esq., CFE is available at http://www.zalma.com and [email protected]
Follow Mr. Zalma on Twitter at https://twitter.com/bzalma; Go to Barry Zalma videos at Rumble.com at https://lnkd.in/gV9QJYH; Go to Barry Zalma on YouTube- https://lnkd.in/g2hGv88; Go to the Insurance Claims Library – https://lnkd.in/gWVSBde.
Subscribe and receive videos limited to subscribers of Excellence in Claims Handling at locals.com https://lnkd.in/gfFKUaTf.
Consider subscribing to my publications at substack at https://lnkd.in/gcZKhG6g
Barry Zalma, Esq., CFE is available at http://www.zalma.com and [email protected]
Follow Mr. Zalma on Twitter at https://twitter.com/bzalma; Go to Barry Zalma videos at Rumble.com at https://lnkd.in/gV9QJYH; Go to Barry Zalma on YouTube- https://lnkd.in/g2hGv88; Go to the Insurance Claims Library – https://lnkd.in/gWVSBde.
Interpleader Protects All Claimants Against Life Policy and the Insurer
Who’s on First to Get Life Insurance Proceeds
Post 5184
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Interpleader Protects All Claimants Against Life Policy and the Insurer
In Metropolitan Life Insurance Company v. Selena Sanchez, et al, No. 2:24-cv-03278-TLN-CSK, United States District Court, E.D. California (September 3, 2025) the USDC applied interpleader law.
Case Overview
This case involves an interpleader action brought by the Metropolitan Life Insurance Company (Plaintiff-in-Interpleader) against Selena Sanchez and other defendants (Defendants-in-Interpleader).
Key Points
Plaintiff-in-Interpleader’s Application:
The Plaintiff-in-Interpleader...
A Claim by Any Other Name is not a Claim
Post 5182
It is Imperative that Insured Report Potential Claim to Insurers
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In Jeffrey B. Scott v. Certain Underwriters At Lloyd’s, London, Subscribing To Policy No. B0901li1837279, RLI Insurance Company, Certain Underwriters At Lloyds, London And The Insurance Company, Subscribing To Policy No. B0180fn2102430, No. 24-12441, United States Court of Appeals, Eleventh Circuit (August 25, 2025) the court explained the need for a claim to obtain coverage.
Case Background:
This appeal arises from a coverage dispute under a Directors & Officers (D&O) insurance policy. Jeffrey B. Scott, the plaintiff-appellant, was terminated from his role as CEO, President, and Secretary of Gemini Financial Holdings, LLC in October 2019. Following his termination, Scott threatened legal action against Gemini, and ...
A Claim by Any Other Name is not a Claim
Post 5182
It is Imperative that Insured Report Potential Claim to Insurers
Read the full article at https://lnkd.in/gfbwAsxw, See the full video at https://lnkd.in/gea_hgB3 and at https://lnkd.in/ghZ7gjxy, and at https://zalma.com/blog plus more than 5150 posts.
In Jeffrey B. Scott v. Certain Underwriters At Lloyd’s, London, Subscribing To Policy No. B0901li1837279, RLI Insurance Company, Certain Underwriters At Lloyds, London And The Insurance Company, Subscribing To Policy No. B0180fn2102430, No. 24-12441, United States Court of Appeals, Eleventh Circuit (August 25, 2025) the court explained the need for a claim to obtain coverage.
Case Background:
This appeal arises from a coverage dispute under a Directors & Officers (D&O) insurance policy. Jeffrey B. Scott, the plaintiff-appellant, was terminated from his role as CEO, President, and Secretary of Gemini Financial Holdings, LLC in October 2019. Following his termination, Scott threatened legal action against Gemini, and ...
Barry Zalma: Insurance Claims Expert Witness
Posted on September 3, 2025 by Barry Zalma
The Need for a Claims Handling Expert to Defend or Prove a Tort of Bad Faith Suit
© 2025 Barry Zalma, Esq., CFE
When I finished my three year enlistment in the US Army as a Special Agent of US Army Intelligence in 1967, I sought employment where I could use the investigative skills I learned in the Army. After some searching I was hired as a claims trainee by the Fireman’s Fund American Insurance Company. For five years, while attending law school at night while working full time as an insurance adjuster I became familiar with every aspect of the commercial insurance industry.
On January 2, 1972 I was admitted to the California Bar. I practiced law, specializing in insurance claims, insurance coverage and defense of claims against people insured and defense of insurance companies sued for breach of contract and breach of the implied covenant of good faith and fair dealing. After 45 years as an active lawyer, I asked that my license to practice law be declared inactive ...
The Need for a Claims Handling Expert to Defend or Prove a Tort of Bad Faith Suit
© 2025 Barry Zalma, Esq., CFE
When I finished my three year enlistment in the US Army as a Special Agent of US Army Intelligence in 1967, I sought employment where I could use the investigative skills I learned in the Army. After some searching I was hired as a claims trainee by the Fireman’s Fund American Insurance Company. For five years, while attending law school at night while working full time as an insurance adjuster I became familiar with every aspect of the commercial insurance industry.
On January 2, 1972 I was admitted to the California Bar. I practiced law, specializing in insurance claims, insurance coverage and defense of claims against people insured and defense of insurance companies sued for breach of contract and breach of the implied covenant of good faith and fair dealing. After 45 years as an active lawyer, I asked that my license to practice law be declared inactive and became a consultant and expert witness for lawyers representing insurers and lawyers ...
APPRAISAL AWARD SETS AMOUNT OF DAMAGES RECOVERED FROM INSURER
Post 5180
See the full video at https://rumble.com/v6yd2z0-evidence-required-to-prove-breach-of-contract.html and at https://youtu.be/2ywEjs3hZsw, and at https://zalma.com/blog plus more than 5150 posts.
It’s a Waste of Time to Sue Your Insurer if You Don’t Have Evidence
Evidence Required to Prove Breach of Contract
Read the full article at https://www.linkedin.com/pulse/evidence-required-prove-breach-contract-barry-zalma-esq-cfe-rfelc, see the full video at https://rumble.com/v6yd2z0-evidence-required-to-prove-breach-of-contract.html and at https://youtu.be/2ywEjs3hZsw, and at https://zalma.com/blog plus more than 5150 posts.
It’s a Waste of Time to Sue Your Insurer if You Don’t Have Evidence
In Debbie Beaty and Jonathan Hayes v. Homeowners Of America Insurance Company, No. 01-23-00844-CV, Court of Appeals of Texas, First District (August 26, 2025) Debbie Beaty and Jonathan Hayes filed a claim under their homeowner’s insurance policy with Homeowners of ...