ILNews

Appellate court reverses summary judgment for insurer

Back to TopCommentsE-mailPrintBookmark and Share

The Indiana Court of Appeals reversed summary judgment in favor of a hotel’s insurance company in a negligent hiring suit, ruling there is a question as to whether the teenage hotel guest was under the “care, custody or control” of the hotel at the time the teen was molested by an employee.

The parent of R.H.M., a 15-year-old guest at the Holiday Inn Express of New Castle, sued the hotel, its parent company and employee Michael Forshey after R.H.M. was molested by Forshey. AMCO Insurance Co. sought a declaratory judgment action that its policy with Holiday Inn doesn’t provide coverage to any of the defendants. The trial court granted summary judgment to AMCO.

The hotel parent company, Holiday Hospitality, argued that the trial court was wrong in concluding the molestation wasn’t an “occurrence” as that term is defined in the policy. The appellate court agreed with Holiday Hospitality, citing Wayne Township Bd. Of Sch. Commissioners v. Indiana Insurance Co., 650 N.E.2d 1205, 1209 (Ind. Ct. App. 1995). The COA concluded in that case that due to a separation of insureds provision in the township’s insurance policy, the actions of the school board commissioners may have been accidental even though the principal’s action of molesting a minor in his office were intentional. AMCO’s insurance policy also contained a separation of insureds provision.

The judges noted that only once have the state appellate courts specifically addressed whether an employer’s negligent hiring or supervision of an employee could be accidental. They adopted the analysis in American Family Mut. Ins. Co. v. Bower, 752 F.Supp.2d 957 (N.D. Ind. 2010), a negligence supervision suit brought against parents Michael and Anne Bower after their son molested a minor. That court held in light of Indiana’s construction of ambiguous insurance policies against the insurance company, where a severability provision exists, no evidence is designated showing the defendants intended or expected their son Jonathan to molest the minor when they allegedly acted negligently and the term “accident” is not further defined in the policy and is “susceptible to differing reasonable interpretations,” then the alleged negligent conduct constitutes an “occurrence” for purposes of the insurance policy.  

The separation of insureds provision allows the finding of an “occurrence” regarding Holiday Hospital’s action even if Forshey’s actions don’t amount to an accident; there is ambiguity in the insurance policy; and without evidence that the employer intended or expected the sexual misconduct to result, it can’t be deemed intentional, wrote Chief Judge Margret Robb in Holiday Hospitality Franchising Inc. v. AMCO Insurance Company, No. 33A01-1103-CT-104.

The judges also concluded there was a genuine issue of material fact as to whether R.M.H. was in the “care, custody or control” of Holiday Inn, Holiday Hospitality or any other insured. There are exclusions in the insurance policy for abuse or molestation that occur while the person is in the care, custody or control of any of the insured.

While AMCO may be correct that the teen was a business invitee of the hotel and was owed a duty of reasonable care, that is not the same as being “in the care, custody or control” of Holiday Inn, wrote Robb.

“In the context of a hotel, it would require something additional, such as a minor being supervised by hotel employees. Thus, AMCO has not demonstrated that there are no genuine issues of material fact and that it is entitled to judgment as a matter of law,” she wrote. The judges remanded the case for further proceedings.

ADVERTISEMENT

Post a comment to this story

COMMENTS POLICY
We reserve the right to remove any post that we feel is obscene, profane, vulgar, racist, sexually explicit, abusive, or hateful.
 
You are legally responsible for what you post and your anonymity is not guaranteed.
 
Posts that insult, defame, threaten, harass or abuse other readers or people mentioned in Indiana Lawyer editorial content are also subject to removal. Please respect the privacy of individuals and refrain from posting personal information.
 
No solicitations, spamming or advertisements are allowed. Readers may post links to other informational websites that are relevant to the topic at hand, but please do not link to objectionable material.
 
We may remove messages that are unrelated to the topic, encourage illegal activity, use all capital letters or are unreadable.
 

Messages that are flagged by readers as objectionable will be reviewed and may or may not be removed. Please do not flag a post simply because you disagree with it.

Sponsored by
ADVERTISEMENT
Subscribe to Indiana Lawyer
  1. Can I get this form on line,if not where can I obtain one. I am eligible.

  2. What a fine example of the best of the Hoosier tradition! How sad that the AP has to include partisan snark in the obit for this great American patriot and adventurer.

  3. Why are all these lawyers yakking to the media about pending matters? Trial by media? What the devil happened to not making extrajudicial statements? The system is falling apart.

  4. It is a sad story indeed as this couple has been only in survival mode, NOT found guilty with Ponzi, shaken down for 5 years and pursued by prosecution that has been ignited by a civil suit with very deep pockets wrenched in their bitterness...It has been said that many of us are breaking an average of 300 federal laws a day without even knowing it. Structuring laws, & civilForfeiture laws are among the scariest that need to be restructured or repealed . These laws were initially created for drug Lords and laundering money and now reach over that line. Here you have a couple that took out their own money, not drug money, not laundering. Yes...Many upset that they lost money...but how much did they make before it all fell apart? No one ask that question? A civil suit against Williams was awarded because he has no more money to fight...they pushed for a break in order...they took all his belongings...even underwear, shoes and clothes? who does that? What allows that? Maybe if you had the picture of him purchasing a jacket at the Goodwill just to go to court the next day...his enemy may be satisfied? But not likely...bitterness is a master. For happy ending lovers, you will be happy to know they have a faith that has changed their world and a solid love that many of us can only dream about. They will spend their time in federal jail for taking their money from their account, but at the end of the day they have loyal friends, a true love and a hope of a new life in time...and none of that can be bought or taken That is the real story.

  5. Could be his email did something especially heinous, really over the top like questioning Ind S.Ct. officials or accusing JLAP of being the political correctness police.

ADVERTISEMENT