Coverage and Liability Issues in Sexual Misconduct Claims

TENNESSEECoverage Trigger & Number ofOccurrencesIntentional Acts ExclusionsPerpetrator:Non-perpetrator:Sexual Misconduct ExclusionsStatute of LimitationsNot addressed in sexual misconduct setting.Courts have upheld exclusions for expected or intended injury whenclaims against insured are for sexual abuse of a minor because sexualabuse of a minor is intended or expected to cause injury. State FarmFire and Casualty Co. v. Pickral, 1997 WL 80046 (Tenn. Ct. App. Feb.26, 1997). Intent to harm is also inferred when the perpetrator is aminor. Tennessee Farmers Mutual Ins. Co. v. Anderson, 1989 WL22698 (Tenn. Ct. App. March 17, 1989).An intentional acts exclusion would not preclude insurance coverageto parents for claims of negligent supervision of a minor perpetrator ofsexual abuse. Tennessee Farmers Mutual Ins. Co. v. Anderson, 1989WL 22698 (Tenn. Ct. App. March 17, 1989).Not addressed.Personal injury actions shall be commenced within 1 year after thecause of action accrues. Tenn. Code. Ann. § 28-3-104(a) (1).The limitations period is tolled when the claimant does not discoverand reasonably could not be expected to discover a right of action.Hunter v. Brown, 955 S.W.2d 49 (Tenn. 1997) (Limitations period nottolled because claimant was aware of the abuse). The discovery ruledoes not toll the limitations period merely because a claimant did notknow the full extent of injuries from the sexual abuse, especially whenthere is no evidence of repressed memory and claimant knew thesexual abuse was wrong. Doe v. Coffee County Board of Educ., 852S.W.2d 899 (Tenn. Ct. App. 1992).Reporting LawsOtherTenn. Code Ann. §37-1-401 et. seq.Tennessee courts have adopted the “trust-fund immunity” rulewhereby a charitable institution’s assets used exclusively for carryingout charitable pursuits are immune from execution of judgments fortort liability. Webb v. Blount Memorial Hospital, 196 F. Supp. 114 (E.D.Tenn. 1961), aff’d., 303 F.2d 437 (6th Cir. 1962).Employer is not vicariously liable for an employee’s criminal acts,including sexual assault, because such acts are normally outside thescope of employment. Jane Doe v. Linder Construction Co., 845 S.W.2d 173 (Tenn. 1992).– 61 –