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W. World Ins. Co. v. Resurrection Catholic Mission of the S., Inc., 2006 U.S. Dist. LEXIS 51119 (D. Ala. 2006)

Insurer filed a declaratory judgment action seeking coverage determination. Underlying suit, filed in State court, alleged sexual abuse by an employee who had disclosed prior accusations of sexual abuse when he was filed. The third amended complaint in State court alleged the resident, 90 years old, was physically abused and/or sexually molested and/or beaten, and that she was found covered with blood, skin tears, vaginal tears, black eyes and bruising. The policy included an exclusion providing that “no coverage exists for claims or suits brought against any insured for damages arising from sexual action.” The exclusion further provided that it applied even if the alleged cause of action was insured’s negligent hiring, placement, training, supervision, act, error or omission. There was separate coverage titled “Sexual Molestation Insurance” which limited coverage to $100,000 for each claim or $300,000 in aggregate. The insurer sought a declaratory judgment that its maximum indemnity amount was $100,000. The Court found that the rape allegations were clearly excluded and that the only coverage for the rape related allegations was $100,000, finding that claim (undefined in the policy) meant per occurrence and there was one attack. The court refused to hold that the non-rape injuries were inextricably intertwined with the rape, that the other injuries were severable and, therefore, those injuries may be covered under the policy.

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