Court reverses lower court's holdilng that insurance policy coverage was illusory and summarily disposes of CMH insured's coverage claim
One Community Mental Health client struck another client in the face while they were being transported to a training facility. The victim suffered a permanent eye injury and attributed the assault, in part, to negligence by the transporting CMH employee. The insurer for the CMH, Cincinnati Insurance Company, argued that it was not required to provide coverage because it had written the CMH liability policy to exclude coverage for any allegations of "abuse or molestation."
The lower court and the first reviewing appellate court had ruled that allegations of abuse or molestation necessarily sounded in sexual misconduct, making the policy exclusion inapplicable to a negligent assault with no sexual connotation. The judges had concluded that to rule otherwise would be to eviscerate the policy of any meaningful coverage and therefore "illusory."
in a second appeal by Cincinnati, two judges of the Court of Appeals disagreed. They cited multiple definitions for "abuse" and "molestation" and noted that under the broadest possible interpretation of these terms, the subject assault could be termed "abuse." Therefore, they concluded, the policy coverage was not illusory and Cincinnati was not required to provide liability insurance coverage for this event. The judges, including the insurance company's favorite, Kirsten Frank Kelly, wrote "it appears that our Supreme Court will not strike an insurance policy as illusory if there is any manner in which the policy could be interpreted to provide coverage [no matter how minimal or unreasonabler]."
To his credit, Judge Fitzgerald dissented. He pointed out that we normally interpret contracts and insurance policies by their "common meaning" and that the common meaning of "abuse and molestation" carried a sexual connotation. He agreed with the other judges who had addressed the issue previously and determined that giving the term "abuse" its broadest possible meaning allowed the coverage exclusion to completely devour the coverage. He also pointed out that under the "law of the case" doctrine, a prior decision of the Court of Appeals was binding on this panel and it could not re-consider the issue of illusory coverage.