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Appellate court reverses summary judgment for insurer

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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.

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  1. Indianapolis employers harassment among minorities AFRICAN Americans needs to be discussed the metro Indianapolis area is horrible when it comes to harassing African American employees especially in the local healthcare facilities. Racially profiling in the workplace is an major issue. Please make it better because I'm many civil rights leaders would come here and justify that Indiana is a state the WORKS only applies to Caucasian Americans especially in Hamilton county. Indiana targets African Americans in the workplace so when governor pence is trying to convince people to vote for him this would be awesome publicity for the Presidency Elections.

  2. Wishing Mary Willis only God's best, and superhuman strength, as she attempts to right a ship that too often strays far off course. May she never suffer this personal affect, as some do who attempt to change a broken system: https://www.youtube.com/watch?v=QojajMsd2nE

  3. Indiana's seatbelt law is not punishable as a crime. It is an infraction. Apparently some of our Circuit judges have deemed settled law inapplicable if it fails to fit their litmus test of political correctness. Extrapolating to redefine terms of behavior in a violation of immigration law to the entire body of criminal law leaves a smorgasbord of opportunity for judicial mischief.

  4. I wonder if $10 diversions for failure to wear seat belts are considered moral turpitude in federal immigration law like they are under Indiana law? Anyone know?

  5. What a fine article, thank you! I can testify firsthand and by detailed legal reports (at end of this note) as to the dire consequences of rejecting this truth from the fine article above: "The inclusion and expansion of this right [to jury] in Indiana’s Constitution is a clear reflection of our state’s intention to emphasize the importance of every Hoosier’s right to make their case in front of a jury of their peers." Over $20? Every Hoosier? Well then how about when your very vocation is on the line? How about instead of a jury of peers, one faces a bevy of political appointees, mini-czars, who care less about due process of the law than the real czars did? Instead of trial by jury, trial by ideological ordeal run by Orwellian agents? Well that is built into more than a few administrative law committees of the Ind S.Ct., and it is now being weaponized, as is revealed in articles posted at this ezine, to root out post moderns heresies like refusal to stand and pledge allegiance to all things politically correct. My career was burned at the stake for not so saluting, but I think I was just one of the early logs. Due, at least in part, to the removal of the jury from bar admission and bar discipline cases, many more fires will soon be lit. Perhaps one awaits you, dear heretic? Oh, at that Ind. article 12 plank about a remedy at law for every damage done ... ah, well, the founders evidently meant only for those damages done not by the government itself, rabid statists that they were. (Yes, that was sarcasm.) My written reports available here: Denied petition for cert (this time around): http://tinyurl.com/zdmawmw Denied petition for cert (from the 2009 denial and five year banishment): http://tinyurl.com/zcypybh Related, not written by me: Amicus brief: http://tinyurl.com/hvh7qgp

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