Clear & Unambiguous Exclusions Must Be Enforced
Post 4843
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The Plaintiff insurance company seeks a declaration that it has no duty to defend or indemnify Jacob Jackson or his wife, Stacy Jackson, for claims asserted against them in civil lawsuits which allege that Mr. Jackson sexually abused and exploited minors.
In American Strategic Insurance Corp, a foreign insurer v. Jacob Jackson, individually, Inspirit Athletics, Inc, et al., No. 3:23-cv-05461-RJB, United States District Court, W.D. Washington, Tacoma (July 24, 2024) the insurer proved that criminal charges against Mr. Jackson, including for rape of a child in the third degree, child molestation in the third degree, and communication with a minor for immoral purposes are now pending in Pierce County, Washington Superior Court (“criminal case”). Trial on the criminal charges is set to begin on November 19, 2024.
The Insurer moved for partial summary judgment on its claims against Mr. and Mrs. Jackson only as they relate to Jane Doe 20, as Guardian ad Litem for John Doe 20, et. al. v. Inspirit Athletics, Inc., et.al., Pierce County, Washington Superior Court case number 23-208692-4 (“John Doe 20 lawsuit”).
FACTS
The Plaintiff issued a homeowners insurance policy (“primary policy”) to Mr. and Mrs. Jackson. This primary policy was in effect between September 16, 2019 – September 16, 2022. In addition to the primary policy, the Plaintiff also issued an umbrella liability policy to the Jacksons. The Plaintiff accepted defense of the civil lawsuit at issue for the Jacksons pursuant to a reservation of rights. It then sued seeking a declaration that it owes no duty to defend or indemnify the Jacksons for any of the claims asserted against them in the John Doe 20 lawsuit.
ALLEGATIONS IN THE UNDERLYING LAWSUIT
According to the complaint filed in the John Doe 20 lawsuit, Mr. Jackson was the head boys’ basketball coach for Sumner High School, located in Sumner, Washington, from 2016 to September of 2022. Mr. Jackson is also alleged to be the CEO of Inspirit Athletics, Inc. d/b/a/ Sterling Athletics (“Sterling”) a sports equipment manufacturing and marketing company.
The John Doe 20 lawsuit contended that Mr. Jackson met John Doe 20 when he was around 10 years old and over the next several years showered John Doe 20 with attention and gifts of athletic equipment, Sterling clothing and gear. Mr. Jackson socialized with the family. While John Doe 20 was in the Jackson’s closet, Mr. Jackson stripped naked, cornered John Doe 20 in the closet, and began masturbating in front of John Doe 20. Mr. Jackson then allegedly forced himself on John Doe 20, grabbing his genitalia and masturbating John Doe 20. The John Doe 20 lawsuit makes claims for sexual exploitation of children and false imprisonment against Mr. Jackson.
INSURANCE POLICIES
As stated above, there are two insurance policies which are the subject of this case: the primary policy and umbrella policy. Both policies exclude “‘bodily injury’ . . . arising out of sexual molestation, …” as well as “‘bodily injury’ . . . resulting from any illegal or criminal act performed by, at the direction of, or in conspiracy with any ‘insured.’ This exclusion applies regardless of whether the insured is charged with a crime.”
Relevant Umbrella Policy Provisions
The umbrella policy also contains several exclusions that the Plaintiffs maintain are relevant. For example, it excludes “‘bodily injury’ . . . and ‘personal injury’ unless such liability is also covered under the applicable underlying insurance.” The umbrella policy excludes “‘bodily injury’ which is expected or intended by an ‘insured’” and “‘bodily injury’ and ‘personal injury’ arising out of: sexual molestation, corporal punishment or mental abuse”
DISCUSSION
In Washington, an insurance policy is construed as a contract and given fair, reasonable, and sensible construction as would be given to the contract by the average person purchasing insurance.
The Plaintiff’s motion for summary judgment regarding the duty to defend should be granted. The Plaintiff has no duty to defend the Jacksons in the John Doe 20 lawsuit. Neither the primary policy nor the umbrella policy (which only provides coverage if the primary policy does) could conceivably cover the allegations in the complaint.
DUTY TO INDEMNIFY
If there is no duty to defend, then there is no duty to indemnify. Therefore the Plaintiff’s partial motion for summary judgment should be granted. Plaintiff American Strategic Insurance Corp’s Motion for Summary Judgment Is Granted.
ZALMA OPINION
Liability insurance is designed to protect an insured only against fortuitous acts. Sexually molesting a child can never be fortuitous. It is an intentional act that is both immoral and illegal and excluded by clear and unambiguous language in the homeowners and umbrella policy. The couple should be forced to pay whatever assets they have to the families of the abused children as well as serve time in prison. Insurance is not designed to make it easy to commit crimes at all, and especially crimes against minor children.
(c) 2024 Barry Zalma & ClaimSchool, Inc.
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Concurrent Cause Doctrine Does Not Apply When all Causes are Excluded
Post 5119
Death by Drug Overdose is Excluded
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Southern Insurance Company Of Virginia v. Justin D. Mitchell, et al., No. 3:24-cv-00198, United States District Court, M.D. Tennessee, Nashville Division (October 10, 2024) Southern Insurance Company of Virginia sought a declaratory judgment regarding its duty to defend William Mitchell in a wrongful death case pending in California state court.
KEY POINTS
1. Motion for Judgment on the Pleadings: The Plaintiff moved for judgment on the pleadings, which was granted in part and denied in part.
2. Duty to Defend: The court found that the Plaintiff has no duty to defend William Mitchell in the California case due to a specific exclusion in the insurance policy.
3. Duty to Indemnify: The court could not determine at this stage whether the Plaintiff had a duty to ...
GEICO Sued Fraudulent Health Care Providers Under RICO and Settled with the Defendants Who Failed to Pay Settlement
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Post 5119
Default of Settlement Agreement Reduced to Judgment
In Government Employees Insurance Company, Geico Indemnity Company, Geico General Insurance Company, and Geico Casualty Company v. Dominic Emeka Onyema, M.D., DEO Medical Services, P.C., and Healthwise Medical Associates, P.C., No. 24-CV-5287 (PKC) (JAM), United States District Court, E.D. New York (July 9, 2025)
Plaintiffs Government Employees Insurance Company and other GEICO companies (“GEICO”) sued Defendants Dominic Emeka Onyema, M.D. (“Onyema”), et al (collectively, “Defendants”) alleging breach of a settlement agreement entered into by the parties to resolve a previous, fraud-related lawsuit (the “Settlement Agreement”). GEICO moved the court for default judgment against ...
ZIFL – Volume 29, Issue 14
Post 5118
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You can read the full 20 page issue of the July 15, 2025 issue at https://lnkd.in/giaSdH29
THE SOURCE FOR THE INSURANCE FRAUD PROFESSIONAL
This issue contains the following articles about insurance fraud:
The Historical Basis of Punitive Damages
It is axiomatic that when a claim is denied for fraud that the fraudster will sue for breach of contract and the tort of bad faith and seek punitive damages.
The award of punitive-type damages was common in early legal systems and was mentioned in religious law as early as the Book of Exodus. Punitive-type damages were provided for in Babylonian law nearly 4000 years ago in the Code of Hammurabi.
You can read this article and the full 20 page issue of the July 15, 2025 issue at https://zalma.com/blog/wp-content/uploads/2025/07/ZIFL-07-15-2025.pdf
Insurer Refuses to Submit to No Fault Insurance Fraud
...
Rulings on Motions Reduced the Issues to be Presented at Trial
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CASE OVERVIEW
In Richard Bernier v. State Farm Mutual Automobile Insurance Company, No. 4:24-cv-00002-GMS, USDC, D. Alaska (May 28, 2025) Richard Bernier made claim under the underinsured motorist (UIM) coverage provided in his State Farm policy, was not satisfied with State Farm's offer and sued. Both parties tried to win by filing motions for summary judgment.
FACTS
Bernier was involved in an auto accident on November 18, 2020, and sought the maximum available UIM coverage under his policy, which was $50,000. State Farm initially offered him $31,342.36, which did not include prejudgment interest or attorney fees.
Prior to trial Bernier had three remaining claims against State Farm:
1. negligent and reckless claims handling;
2. violation of covenant of good faith and fair dealing; and
3. award of punitive damages.
Both Bernier and State Farm dispositive motions before ...
ZIFL Volume 29, Issue 10
The Source for the Insurance Fraud Professional
See the full video at https://lnkd.in/gK_P4-BK and at https://lnkd.in/g2Q7BHBu, and at https://zalma.com/blog and at https://lnkd.in/gjyMWHff.
Zalma’s Insurance Fraud Letter (ZIFL) continues its 29th year of publication dedicated to those involved in reducing the effect of insurance fraud. ZIFL is published 24 times a year by ClaimSchool and is written by Barry Zalma. It is provided FREE to anyone who visits the site at http://zalma.com/zalmas-insurance-fraud-letter-2/ You can read the full issue of the May 15, 2025 issue at http://zalma.com/blog/wp-content/uploads/2025/05/ZIFL-05-15-2025.pdf
This issue contains the following articles about insurance fraud:
Health Care Fraud Trial Results in Murder for Hire of Witness
To Avoid Conviction for Insurance Fraud Defendants Murder Witness
In United States of America v. Louis Age, Jr.; Stanton Guillory; Louis Age, III; Ronald Wilson, Jr., No. 22-30656, United States Court of Appeals, Fifth Circuit (April 25, 2025) the Fifth Circuit dealt with the ...
Professional Health Care Services Exclusion Effective
Post 5073
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This opinion is the recommendation of a Magistrate Judge to the District Court Judge and involves Travelers Casualty Insurance Company and its duty to defend the New Mexico Bone and Joint Institute (NMBJI) and its physicians in a medical negligence lawsuit brought by Tervon Dorsey.
In Travelers Casualty Insurance Company Of America v. New Mexico Bone And Joint Institute, P.C.; American Foundation Of Lower Extremity Surgery And Research, Inc., a New Mexico Corporation; Riley Rampton, DPM; Loren K. Spencer, DPM; Tervon Dorsey, individually; Kimberly Dorsey, individually; and Kate Ferlic as Guardian Ad Litem for K.D. and J.D., minors, No. 2:24-cv-0027 MV/DLM, United States District Court, D. New Mexico (May 8, 2025) the Magistrate Judge Recommended:
Insurance Coverage Dispute:
Travelers issued a Commercial General Liability ...
