Coverage and Liability Issues in Sexual Misconduct Claims

MICHIGANCoverage Trigger & Number ofOccurrencesIntentional Acts ExclusionsPerpetrator:Non-perpetrator:Sexual Misconduct ExclusionsStatute of LimitationsNot addressed in sexual misconduct setting.Courts have upheld exclusions for bodily injury expected and intendedby the insured where the insured was the perpetrator of sexual abuseagainst children because the intent to harm was inferred by theconduct. See Fire Ins. Exch. v. Diehl, 545 N.W.2d 602 (Mich. 1995);Auto-Owners Ins. Co. v. Gardipey, 434 N.W.2d 220 (Mich. App. Ct.1988). However, the Michigan Supreme Court refused to extend theinferred-intent rule to cases where the perpetrator is a child. SeeFire Ins. Exch. v. Diehl, 545 N.W.2d 602 (Mich. 1995); Cf. Weekley v.Jameson, 561 N.W.2d 408 (Mich. App. Ct. 1997) (Applied the inferredintentrule to a mentally handicapped adult who sexually molested aminor).Not addressed in sexual misconduct setting.The Michigan courts have upheld sexual misconduct exclusions. SeeAuto Club Group Ins. Co. v. Chincak, 2001 WL 732407 (Mich. App.Ct. June 8, 2001) (Sexual misconduct exclusion barred coveragefor claims arising out of the sexual abuse of neighborhood childrenby insured’s minor child); Meridian Mut. Ins. Co. v. Bidle, 1997 U.S.Dist. LEXIS 7043 (S.D. Mich. Apr. 11, 1997), aff’d, 1998 U.S. App.LEXIS 13630 (6th Cir. Jun. 23, 1998) (Sexual misconduct exclusionin a homeowner’s policy precluded coverage for claims against thechild perpetrator of sexual assault and the derivative claims againstthe perpetrator’s parents); Brotherhood Mut. Ins. Co. v. DeLauter,1998 WL 432482 (6th Cir. July 17, 1998) (Exclusion which precludedcoverage for “liability arising from any act or conduct of a sexual,molesting, or criminally deviant nature” barred coverage for all liabilityarising out of sexual misconduct including claims against a nonperpetrator).The limitations period for personal injury claims is 2 years from thedate of discovery for claims of assault and battery and 3 years fromthe date of discovery for all other personal injury claims. Mich. Comp.Laws § 600.5805.In Lemmerman v. Fealk, 534 N.W.2d 695 (Mich. 1995), where a 54-year-old woman sued her aunt and her father’s estate for allegedchildhood sexual abuse, the Michigan Supreme Court held that neitherthe discovery rule nor the insanity disability statute extended the timeallowable for bringing suit in a repressed memory situation and thatthe question of tolling the allowable time for bringing claims allegedlydue to repressed memory should be addressed by the legislature.See also Delmeyer v. Archdiocese of Detroit, 593 N.W.2d 560 (Mich.App. Ct. 1999) (Noted Lemmerman did not address whether thestatute of limitations should be tolled in repressed memory caseswhere the defendant has made express and unequivocal admissionsof childhood sexual contact with the plaintiff); See also Doe v.Archdiocese of Detroit, 692 N.W. 2d 398 (Mich. App. Ct. 2004) (Foundclaimant failed to state a fraudulent concealment that avoids thestatutes of limitation); Guerra v. Garratt, 564 N.W.2d 121 (Mich. App.Ct. 1997) (Repressed memory did not constitute a “handicap” underthe Michigan Handicappers’ Civil Rights Act or a “disability” under theAmericans with Disabilities Act).– 32 –