Relabeling Child Molestation As ''Negligence'' for Insurance Coverage Purposes

In Horace Mann Ins. Co. v. Barbara B. (1993) the Supreme Court recognized that the insurer's argument missed the point, concluding that "if the parties to a declaratory relief action dispute whether the insured's alleged misconduct should be viewed as essentially a part of a . . . sexual molestation, or instead as independent of it and so potentially within the policy coverage, . . . then factual issues exist precluding summary judgment in the insurer's favor. Indeed, the duty to defend is then established. . . ." (Horace Mann, supra, 4 Cal. 4th at p. 1085, original italics.) The Supreme Court in Horace discussed the possibility that artful plaintiffs' lawyers would try to "plead around" J. C. Penny by alleging misconduct not rising to the level of sexual molestation. (Horace Mann Ins. Co. v. Barbara B., supra, 4 Cal. 4th 1076, 1084.) The court said: "Our decision is no license to 'plead around' J. C. Penny . . . . We do not sanction relabeling child molestation as negligence in order to secure insurance coverage for the plaintiff's injuries. We merely hold to the established rule that a potential for coverage, whether found within the four corners of the complaint or in facts extrinsic to it, gives rise to the defense duty." (Id. at p. 1086.) It is therefore clear that, while an insurer is not liable for intentional conduct, it may be liable for negligent conduct. It is also clear that child sexual molestation is always intentional conduct. (J. C. Penny Casualty Ins. Co. v. M. K., supra, 52 Cal. 3d 1009, 1025.) Since almost all of the conduct alleged in the complaint is intentional child sexual molestation, there is little potential for coverage. However, to prevail, the insurer must show that there is no potential for coverage. (Montrose Chemical Corp. v. Superior Court, supra, 6 Cal. 4th 287, 300.) The issue thus becomes whether the other conduct alleged in the complaint establishes a potential for coverage. (Ibid.) Under the policy in Horace Mann, there was a possibility of liability for other misconduct not amounting to sexual molestation.