State Supreme Court upholds intentional acts exclusion

In West Virginia Fire & Casualty v. Stanley, No. 31230 the West Virginia Supreme Court of Appeals ruled that "[t]he inferred-intent rule set forth in Horace Mann Ins. Co. v. Leeber, 180 W.Va. 375, 376 S.E.2d 581 (1988), applies to minors so that there is neither a duty to defend an insured in an action for, nor a duty to pay for, damages allegedly caused by the sexual misconduct of an insured who is a minor, when the liability insurance policy contains a so-called "intentional injury/acts" exclusion. In such a case, the intent of the minor insured to cause some injury will be inferred as a matter of law.

The case involves insurance coverage for Stanley, who is a disabled coal miner that won a $5.6 million lottery jackpot 18 years ago. He is accused of looking the other way while his youngest son, Jesse, repeatedly molested a granddaughter. The ruling was issued 5-0.

Even though the complaint included several negligence counts along with accusations of intentional sexual misconduct, the Court nevertheless found that the intentional acts exclusion applied. On this point, the Court relied upon Syllabus Point 4 of Smith v. Animal Urgent Care, Inc., 208 W.Va. 664, 542 S.E.2d 827 (2000), which held that, "[t]he inclusion of negligence-type allegations in a complaint that is at its essence a sexual harassment claim will not prevent the operation of an 'intentional acts' exclusion contained in an insurance liability policy which is defined as excluding 'bodily injury' 'expected or intended from the standpoint of the insured.'" The Court stated that "we believe it is clear that the gravamen of Cass-Sandra and Sandra Stanley's complaint is that Jesse Stanley intentionally sexually abused and sexually exploited Cass-Sandra Stanley, and that he intended, or at least expected, bodily injury to result. Accordingly, we conclude that any alleged negligent acts against Jesse Stanley are precluded by the intentional acts exclusion."