Valley Forge Insurance v. Field, 670 F.3d 93

An 11-year-old child suffered long-term physical and sexual abuse by her adoptive mother and stepfather, resulting in severe injuries and lifelong care needs.
Murphy, as legal guardian, sued in Massachusetts state court against Carson Center, Carol Field, and other providers for failing to detect or report signs of ongoing abuse.
Valley Forge Insurance Co. and American Casualty of Reading, PA (insurers) sought federal declaratory judgment that Abuse or Molestation Exclusions in Professional Liability and Commercial Umbrella coverages preclude coverage.
The key issue is whether these Exclusions apply when the victim was not in physical custody at the time of abuse but had been the insureds’ long-term patient receiving outpatient therapy for about 14 months.
The district court agreed the Exclusions were unambiguous and barred coverage; Murphy and insureds appealed; the First Circuit majority affirmed; a dissent argued ambiguity and alternative readings.
The majority held that the term “care” in “care, custody or control” has its plain, ordinary meaning and can apply even when custody or physical dominion is not present at the time of abuse; the dissent urged two rational readings and would have found ambiguity in the policy language.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether “care, custody or control” excludes coverage where victim was not in insured custody.	Murphy urged broader reading: care requires custody/control	Insurers argued care requires physical dominion or control	Exclusion applies; care has ordinary meaning; coverage barred
Is “care” a term of ordinary meaning or an insurance industry term of art in this context?	Care should be ordinary meaning separate from custody/control	Care might be artful term of art meaning dominion/control	Plain and ordinary meaning governs; not a technical term of art that overrides ordinary reading
Should the Exclusion be read in harmony with other policy provisions and insured expectations?	Exclusions defeat reasonable expectations; coverage should exist	Exclusions operate consistently with policy as a whole to limit coverage	Exclusion construed against insurers; coverage remains where facts show no dominion/control by insured
Dissent’s position: ambiguity exists and preferred reading favors coverage	Ambiguity exists; insurers’ reading is rational	Majority rejected ambiguity; favored insured interpretation	Dissent would find ambiguity and rule for coverage

City of Springfield v. Dep't of Telecomm. & Cable, 457 Mass. 562 (Mass. 2010) (technical meaning may apply in specialized contracts; ordinary meaning otherwise)
Atlantic Mut. Ins. Co. v. McFadden, 413 Mass. 90 (Mass. 1992) (terms of art; environmental context; not controlling here)
McAuliffe v. Northern Ins. Co. of New York, 69 F.3d 277 (8th Cir. 1995) (abuse exclusion applying when victim was in the care of the abuser)
Jefferson Ins. Co. of N.Y. v. City of Holyoke, 503 N.E.2d 475 (Mass. App. Ct. 1987) (custody-related exclusion; care, custody or control language discussed)
Brazas Sporting Arms, Inc. v. Am. Empire Surplus Lines Ins. Co., 220 F.3d 1 (1st Cir. 2000) (canon: ambiguities construed against insurer; ordinary meaning rule)