Jacquin Clifford v. Church Mutual Insurance Co., 655 F. App'x 293

Plaintiffs (Sandra and Jacquin and their parents) obtained a $4.35 million jury verdict against Lonnie Aleshire Jr. for repeated sexual molestation (Sandra) and rape (Jacquin) committed when the victims were minors; Aleshire pleaded guilty and served prison time.
Church Mutual Insurance issued a liability policy to Licking Baptist Church; after trial the insurer refused to indemnify Aleshire or pay the judgment, and Plaintiffs sued the insurer to collect the award.
The Policy contains an express "Sexual Misconduct or Sexual Molestation Liability" exclusion and other provisions excluding coverage for damages arising from sexual misconduct; the medical-expense provision only covers injuries from an "accident."
The district court granted summary judgment to the insurer, holding (1) the Policy excludes coverage for Aleshire’s intentional sexual acts and (2) Ohio public policy bars insurance coverage for sexual abuse of minors; it also considered and rejected Plaintiffs’ post hoc contention that some non-sexual incidents could have supported the verdict.
On appeal the Sixth Circuit affirmed: it applied Ohio law to interpret the policy, found the sexual-misconduct exclusions dispositive, held Gearing v. Nationwide precludes indemnity for intentional sexual abuse of minors, and rejected Plaintiffs’ argument that the jury award could be allocated to separate non-sexual false-imprisonment incidents.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether federal court should have remanded to state court	District court should have remanded discretionary declaratory action	Federal court properly retained jurisdiction under Grand Trunk factors	No abuse of discretion; federal jurisdiction proper
Whether the Policy covers damages from Aleshire’s sexual acts	Policy provisions (bodily injury, medical expense, counseling, personal injury) cover Plaintiffs’ claims	Policy contains express exclusions for sexual misconduct; medical coverage limited to "accidents"	Policy does not cover Aleshire’s sexual acts; exclusions apply
Whether Ohio public policy allows indemnity for sexual abuse of minors	Public interest in compensating victims (and religious-insurer context) requires coverage exception	Ohio public policy bars insurance for intentional sexual molestation of minors	Public policy precludes insurance coverage for sexual abuse of minors (Gearing controls)
Whether part of the verdict could be allocated to non-sexual false-imprisonment incidents	Jury may have awarded damages for three non-sexual incidents (pinkie link, hug, some drives); insurer failed to obtain an allocated verdict	Plaintiffs presented no separate non-sexual claims at trial; verdict was for sexual misconduct only	No allocation possible; Plaintiffs didn’t present distinct non-sexual claims, so no recovery

Gearing v. Nationwide Ins. Co., 665 N.E.2d 1115 (Ohio 1996) (Ohio public policy precludes liability insurance coverage for intentional sexual molestation of a minor)
Bondex Intern., Inc. v. Hartford Acc. & Indem. Co., 667 F.3d 669 (6th Cir. 2012) (insurance contract interpretation under Ohio law; unambiguous terms enforced)
Kleiber v. Honda of Am. Mfg., Inc., 485 F.3d 862 (6th Cir. 2007) (standard of review for summary judgment)
Anderson v. Liberty Lobby, Inc., 477 U.S. 242 (1986) (summary judgment inquiry—whether reasonable jury could return a verdict for nonmoving party)