Cuervo v. Cincinnati Ins. Co. - Ohio Supreme Court Opinion - Ohio Supreme Court Decision

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CUERVO ET AL., APPELLEES, v. CINCINNATI INSURANCE COMPANY,
APPELLANT.
[Cite as Cuervo v. Cincinnati Ins. Co. (1996), ___ Ohio St.3d ___.]
Insurance -- Incidents of intentional acts of sexual molestation of a
minor do not constitute "occurrences" for purposes of determining
liability insurance coverage -- Public policy precludes issuance of
insurance to provide liability coverage for injuries resulting from
intentional acts of sexual molestation of a minor.
(No. 94-2404 -- Submitted January 23, 1996 -- Decided July 3, 1996.)
APPEAL from the Court of Appeals for Franlin County, No. 93APE12-
1715.

On August 31, 1989, Armando and Cathy Cuervo, the parents of
Andrew Cuervo, age eight, and his sister, Christina Cuervo, age six,
filed suit on their own behalf, and on behalf of their children, naming
Peter Snell, a minor, and his father, Stephen Snell, defendants. The
plaintiffs sought to recover damages from Peter based on alleged acts
of child sexual abuse committed by him while baby-sitting Andrew and

Christina in 1985, when Peter was sixteen years of age. In addition, the
plaintiffs sought recovery from Stephen, based on his alleged
negligence in advertising Peter to be a competent sitter, and in failing to
properly supervise his son. The complaint alleged that both Andrew and
Christina had suffered physical injuries, and emotional and
psychological damage, as a result of the defendant's conduct. It further
alleged that the Cuervo parents had suffered compensable mental
anguish and suffering.

Appellant, Cincinnati Insurance Company ("Cincinnati"), had
issued a homeowner's insurance policy to Stephen which provided
personal liability coverage to the Snells during the time of the alleged
sexual molestation. The Snells were duly served with a summons and
copy of the complaint and amended complaint. There is no evidence in
the record that the Snells ever requested Cincinnati to provide them with
a defense to the lawsuit filed by the Cuervos. Instead, the Snells
invoked the services of several Ohio attorneys to represent them in the
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suit brought by the Cuervos, one of whom appeared for the limited
purpose of challenging the sufficiency of the complaint. The Snells'
other attorney advised them that, in his opinion, the Cuervos lawsuit did
not fall within the coverage provided by the Cincinnati homeowner's
policy.

Ultimately, the court entered default judgments against Peter and
Stephen, finding them liable as alleged in an amended complaint filed
by the Cuervos. After the plaintiffs offered evidence of their damages,
the court entered final judgment awarding $100,000 to Andrew,
$100,000 to Christina, and $62,248.85 to the Cuervo parents. No
appeal was taken from the entry of this final judgment on June 7, 1991.

In 1992 the Cuervos filed a new and separate action, naming
defendant-appellant Cincinnati Insurance Company, and seeking
satisfaction of the judgments obtained against the Snells from Cincinnati
based on the homeowner's policy. Both the Cuervos and Cincinnati
filed motions seeking summary judgment. Cincinnati's motion was
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based upon its contentions that (1) the Snell judgment did not fall within
the coverage provided by Stephen's homeowner's insurance policy, as it
came under an "intended injury" exclusion; (2) the judgment was not for
"bodily injury" or "property damage" within the meaning of the policy;
and (3) Cincinnati was not liable on the judgment, in that it was obtained
without notice to it. Cincinnati also asserted that the Cuervos did not
seek collection from it by following the supplemental petition procedures
established by R.C. 3929.06.

The trial court granted summary judgment to Cincinnati, finding
that the policy it had issued to Stephen did not create an obligation on
its part to satisfy the judgments entered against either Peter or Stephen.

The court of appeals reversed, finding that "as to the liability of
Stephen Snell, there is coverage since there is nothing in the evidence
indicating that he intended any bodily injury to occur to the minor
children" by his alleged negligent supervision of Peter. Thus, the court
of appeals reversed the entry of judgment in favor of Cincinnati as to the
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obligation to pay the judgment entered against Peter, finding that
coverage would exist if Peter had not intended to harm the Cuervo
children, and that issues as to Peter's intent and state of mind
presented questions of fact which could not be resolved by summary
judgment. The court of appeals remanded for a determination of Peter's
intent.

The cause is now before this court pursuant to the allowance of a
discretionary appeal.

Isaac, Brant, Ledman & Teetor, Charles E. Brant and Terri B.
Gregori, for appellees.

Lane, Alton & Horst and Karen Krisher Rosenberg, for appellant.

Moyer, C.J. Cincinnati Insurance Company has abandoned its
argument below that the Cuervos could only use the supplemental
petition procedures established by R.C. 3929.06 to collect the amounts
awarded to them from Cincinnati, the Snells' insurer. Without
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expressing any opinion concerning the merits of that argument, and
without condoning the procedure used by the Cuervos in filing a new,
separate action, rather than filing a supplemental petition in the action
brought against the insureds, we deem any error which may have
occurred arising out of this procedural choice to have been waived.
In
Gearing v. Nationwide Ins. Co. (1996), ____ Ohio St.3d ___,
___ N.E.2d ___, decided this date, we held that incidents of intentional
acts of sexual molestation of a minor do not constitute "occurrences" for
purposes of determining insurance coverage; that intent to harm
inconsistent with an insurable incident is properly inferred as a matter of
law from deliberate acts of sexual molestation of a minor; and that the
public policy of the state of Ohio, which prohibits the issuance of
insurance to indemnify damages flowing from intentional torts,
precludes issuance of insurance to provide liability coverage for injuries
resulting from intentional acts of sexual molestation of a minor.
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Gearing's holdings require that we reverse the court of appeals
which remanded the instant cause for determination of Peter Snell's
actual intent. Pursuant to Gearing, it makes no difference whether
Peter lacked a subjective intent to harm the Cuervo children (and no
question has been raised as to Peter's capacity, as a sixteen year old,
to commit an intentional act. Cf. Nationwide Ins. Co. v. Kollstedt Estate
[1995], 71 Ohio St.3d 624, 646 N.E.2d 816.) Therefore, the trial court
properly entered summary judgment in favor of Cincinnati as to its
alleged obligation to pay the judgment awarded against Peter Snell.

Similarly, the damages for which the Cuervos seek compensation
flow from Peter's intentional acts of sexual molestation of a minor.
Thus, and on this record, the obligation of Cincinnati to pay the
judgment entered against his father, Stephen, is precluded as well. See
Gearing, at paragraph two of the syllabus. See, also, Taryn v. Joshua
(1993), 178 Wis.2d 719, 505 N.W. 2d 418; Northwest G.F. Mut. Ins. Co.
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v. Norgard (N.D.1994), 518 N.W. 2d 179, 184; Farmers Ins. Co. of
Washington v. Hembree (1989), 54 Wash. App. 195, 773 P.2d 105.

For the above reasons, the judgment of the court of appeals is
reversed.

Judgment reversed.

DOUGLAS, WISE and O'DONNELL, JJ., concur.

RESNICK, F.E. SWEENEY and PFEIFER, JJ., dissent.

JOHN W. WISE, J., of the Fifth Appellate District, sitting for WRIGHT,
J.

TERRENCE O'DONNELL, J., of the Eighth Appellate District, sitting for
COOK, J.

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