Coverage and Liability Issues in Sexual Misconduct Claims

SOUTH CAROLINACoverage Trigger & Number ofOccurrencesIntentional Acts ExclusionsPerpetrator:Non-perpetrator:Sexual Misconduct ExclusionsStatute of LimitationsA sexual misconduct claim is deemed “made” on the date the claim isreported to the insured. Loadholt v. South Carolina State Budget andControl Board, 528 S.E.2d 670 (S.C. Ct. App. 2000).Sexual abuse of a minor is so inherently injurious that a perpetrator’sintent to harm is inferred as a matter of law and such abuse does notconstitute an insurable “occurrence.” Manufacturers and MerchantsMutual Ins. Co. v. Harvey, 498 S.E.2d 222 (S.C. Ct. App. 1998); StateFarm Fire & Cas. Co. v. Barrett, 530 S.E. 2d 132 (S.C. Ct. App. 2000)(Sexual harassment in employment).Negligent supervision claims against grandparents for permittinggrandchildren to be in the company of potential abusers were notexcluded by intentional acts exclusions. Manufacturers and MerchantsMutual Ins. Co. v. Harvey, 498 S.E.2d 222 (S.C. Ct. App. 1998).Not addressed.Personal injury actions must be commenced within 3 years after theperson knew or by the exercise of reasonable diligence should haveknown that he had a cause of action. S.C. Code Ann. §15-3-535.Actions for assault or battery must be brought within 2 years. Id at§15-3-550.Effective August 31, 2001, an action to recover damages arising outof an act of sexual abuse may be brought within the later of six yearsafter the person reaches the age of 21 or within three years from thetime of discovery of the injury and the causal relationship between theinjury and the sexual abuse. S.C. Code Ann. § 15-3-555.In a case decided prior to § 15-3-555, the court held that repressedmemory of sexual abuse tolls the limitations period but such an actionmust be corroborated with independent verifiable, objective evidenceincluding expert testimony to prove both the abuse and the repressedmemory. Moriarty v. Garden Sanctuary Church of God, 534 S.E.2d672 (S.C. 2000) (Failure to discover the extent of an injury does notimplicate the discovery rule).Reporting LawsOtherS.C. Code Ann.§20-7-409 et. seq.The South Carolina Tort Claims Act limits tort liability imposed oncharitable organizations to $300,000 per person and $600,000aggregate. S.C. Code Ann. § 33-56-180. An action against thecharitable entity constitutes a complete bar to any action against theentity’s employee unless it is proved that the employee acted in areckless, willful or grossly negligent manner. Id.An employer is not vicariously liable for an employee’s criminal sexualassault because such acts are outside the scope of employment.See Brockington v. Pee Dee Mental Health Center, 433 S.E. 2d 16(S.C. Ct. App. 1993) (Mental health employee not acting within scopeof employment when he sexually molested minor patient); See alsoDoe v. South Carolina State Budget and Control Board, 494 S.E. 2d469 (S.C. Ct. App. 1998), aff’d, 523 S.E. 2d 457 (S.C. 1999) (Policeofficer’s sexual assaults of women “grossly exceeded” the scope of hisduties).– 59 –