Allan Ranta v. Catholic Mutual Relief Society
492 F. App'x 373
4th Cir.2012Background
- Ranta sought declaratory relief that Catholic Mutual must indemnify Brown for a $100 million state-court judgment.
- Settlement in 2009 released claims against diocese, Lessard, Boland, and insurers including Catholic Mutual in exchange for $4.24 million.
- Brown was not a party to the 2009 settlement; he invoked the Fifth Amendment in related proceedings.
- South Carolina state court awarded Ranta $50 million in actual damages and $50 million in punitive damages against Brown in 2010.
- District court held the Settlement did not release Catholic Mutual and that Brown’s acts were not an “occurrence” under the policy; summary judgment for Catholic Mutual.
- On appeal, the court affirms, applying Georgia law to interpret the policy and determining acts of child molestation are intentional and outside coverage.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Brown’s abuse constitutes an occurrence under policy | Ranta: abuse is an accident within policy terms | Catholic Mutual: abuse is intentional, not an occurrence | Yes; court: abuse is intentional, not an occurrence under policy |
| Whether the Settlement Releases Catholic Mutual | Ranta: release extends to insurers including Catholic Mutual | Catholic Mutual: no release of coverage | Settlement did not release Catholic Mutual from indemnification obligations |
| Whether collateral estoppel applies to bar Catholic Mutual | Ranta: insurer’s defense failure estops subsequence challenge | Catholic Mutual: not in privity; no estoppel | No collateral estoppel; insurer and insured not in privity when defense not funded by insurer |
Key Cases Cited
- Roe v. State Farm Fire & Cas. Co., 376 S.E.2d 876 (Ga. 1989) (intent to injure; intentional molestation not covered as an occurrence)
- Harden v. State Farm Fire & Cas. Co., 605 S.E.2d 37 (Ga. Ct. App. 2004) (no duty to indemnify for intentional sexual abuse)
- Mfr. & Merch. Mut. Ins. Co. v. Harvey, 498 S.E.2d 222 (S.C. Ct. App. 1998) (acts of child molestation carry presumption of intent to injure)
- Ex parte Allstate Ins. Co., 528 S.E.2d 679 (S.C. Ct. App. 2000) (collateral estoppel/privity considerations in insurer defenses)
- State Farm Fire & Cas. Co. v. Garrity, 785 F.2d 1225 (4th Cir. 1986) (insurer not bound by underlying action when coverage issue disputed)
- Perry v. State Farm Fire & Cas. Co., 676 S.E.2d 376 (Ga. Ct. App. 2008) (prima facie case requires occurrence within insured risk)
- Allstate Ins. Co. v. Grayes, 454 S.E.2d 616 (Ga. Ct. App. 1995) (insurer’s duty tied to whether injury within policy terms)
- Unisun Ins. Co. v. Hertz Rental Corp., 436 S.E.2d 549 (S.C. Ct. App. 1993) (choice-of-law governing insurance interpretation in diversity)