Medical Malpractice Joint Underwriting Association of Rhode Island v. Charlesgate Nursing Center, L.P.
115 A.3d 998
R.I.2015Background
- In June 2009 a Charlesgate Nursing Center resident alleged she was sexually assaulted by a Charlesgate employee (a CNA); the resident later died and her son (as administrator) sued Charlesgate, two partners, and two employees alleging negligence, and assault/battery against the CNA.
- The JUA insured Charlesgate (Dec 2008–Dec 2009) under a policy containing Hospital Professional Liability (HPL) and Commercial General Liability (CGL) coverage; CGL coverage applies only to bodily injury caused by an “occurrence” defined as an “accident.”
- The estate’s complaint alleged both intentional sexual assault by the CNA and separate negligence allegations against the Charlesgate defendants (negligent hiring, supervision, training, failure to report, and failure to discipline).
- The JUA issued a reservation-of-rights and sought a declaratory judgment that it had no duty to defend, arguing the assault was intentional (not an “accident”/“occurrence”) and not a “medical incident” for HPL.
- The Charlesgate defendants counterclaimed for a declaration that the JUA must defend them and for breach of contract; the Superior Court granted defendants’ cross-motion and held JUA owes a duty to defend against the negligence counts.
- The Supreme Court reviews de novo and affirms: under the pleadings-test the negligence allegations potentially fall within the policy’s coverage (an “occurrence”), so the insurer has a duty to defend.
Issues
| Issue | Plaintiff's Argument (JUA) | Defendant's Argument (Charlesgate / Estate) | Held |
|---|---|---|---|
| Whether allegations trigger CGL coverage by constituting an “occurrence” (an “accident”) | The underlying facts describe an intentional sexual assault by an employee, so there is no “accident” and thus no “occurrence” to trigger CGL defense obligation | The complaint includes distinct negligence allegations (hiring, supervision, training, reporting) that could constitute an accidental/unintended cause of bodily injury from the insureds’ perspective and thus an “occurrence” | Held for defendants: negligence allegations potentially fall within CGL “occurrence” coverage; JUA has duty to defend |
| Whether HPL coverage is triggered as a “medical incident” | No “medical incident” alleged, so HPL does not apply | Estate argued HPL might be triggered by medical-incident language in complaint | Not addressed on merits by Court (insureds did not press HPL); Court declined to resolve HPL issue here |
| Whether intentional sexual-act / criminal-act exclusions render duty to defend unnecessary | If the assault is intentional, policy’s “accident” requirement bars coverage, making exclusions unnecessary | Insureds note no allegations that they committed sexual acts; exclusions would not necessarily apply to their negligence claims | Court rejected insurer’s narrow reading of “accident”; readings that nullify specific exclusions would be disfavored; duty to defend remains for negligence claims |
| Proper scope of the pleadings-test for duty to defend | JUA urged read-down to view complaint only as intentional wrongdoing by the individual perpetrator | Defendants argued the pleadings include separate factual negligent acts by insureds that must be considered; any doubt resolved for insured | Court reaffirmed pleadings-test: complaints that potentially fall within coverage require insurer to defend; doubts resolved in favor of insured |
Key Cases Cited
- The Employers’ Fire Insurance Co. v. Beals, 240 A.2d 397 (R.I. 1968) (establishes pleadings test: insurer must defend when complaint alleges facts potentially within coverage)
- Peerless Insurance Co. v. Viegas, 667 A.2d 785 (R.I. 1995) (reaffirmed the pleadings-test for duty to defend)
- American Commerce Ins. Co. v. Porto, 811 A.2d 1185 (R.I. 2002) (interpreting an "arising out of" exclusion broadly to bar coverage where negligent supervision allegations were causally tied to sexual misconduct)
- Craven v. Metropolitan Property & Cas. Ins. Co., 693 A.2d 1022 (R.I. 1997) (mem.) (insurer owed no duty where insured himself was alleged to have committed intentional sexual misconduct)
- Sanzi v. Shetty, 864 A.2d 614 (R.I. 2005) (physician’s insurer had no duty to defend alleged intentional sexual misconduct by the insured physician under professional coverage)
- Derderian v. Essex Insurance Co., 44 A.3d 122 (R.I. 2012) (insurance policies construed as contracts; unambiguous terms enforced)
- Allstate Ins. Co. v. Ahlquist, 59 A.3d 95 (R.I. 2013) (contract interpretation: give words their plain, ordinary meaning)