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Horace Mann Insurance Co. v. Barney

United States District Court, W.D. Virginia, Big Stone Gap Division

April 10, 2018

HORACE MANN INSURANCE COMPANY, Plaintiff,
v.
JUDY WALTON BARNEY, ET AL., Defendants.

          Theodore I. Brenner and Alexander S. de Witt, Freeborn & Peters LLP, Richmond, Virginia, for Plaintiff.

          David L. Scyphers, Scyphers & Austin, P.C., Abingdon, Virginia, for Defendant Judy Walton Barney.

          OPINION AND ORDER

          James P. Jones United States District Judge.

         In this declaratory judgment action, the plaintiff insurance company seeks a ruling that it has no obligation under the terms of its liability insurance policy to defend or indemnify an insured school teacher accused of the sexual abuse of a child she taught. Based on the factual allegations of the claim, and the language of the policy, I agree, and will grant the insurance company's Motion for Summary Judgment.

         I.

         In 2013, Joshua Howard Goins, then 38 years old, filed suit for damages in state court against his Fourth Grade teacher, Judy Walton Barney, claiming that she had sexually abused him on two occasions, once in 1984 and again in 1985. According to the allegations of Goins' lawsuit (the “Underlying Action”), including his deposition taken in the course of that case, the first occasion had been in the fall of 1984, when he was nine years old. Goins testified that he had stayed at school after class ended to practice for a 4-H Club event in which he and other club members were to perform. After the practice, while he was waiting for his parents to pick him up, he “ended up” alone with his teacher, Judy Barney, in a classroom, “sitting in her lap.” Mem. Supp. Mot. Summ. J. Ex. 4, Goins Dep. 181, ECF No. 17-4. Barney then proceeded to remove Goins' trousers and underpants and “manually stimulate [his] genitals.” Compl. Ex. 3, Am. Bill of Compl. Circuit Court for Lee Cty., Va., Case No. CL13050112-00, at ¶ 6, ECF No. 1-5.

         The second occasion was in an afternoon of the next summer, after school had ended for the year and Goins had finished the Fourth Grade. It is alleged that Goins met Barney near the town library and sat in her vehicle while she performed oral sex on him. Id. at ¶ 7.[1]

         The plaintiff in the present case, Horace Mann Insurance Company (the “Insurance Company”) issued an Educators Employment Liability Policy (the “Policy”) to the Virginia Education Association covering all of its members for the years in question. The Insurance Company does not dispute that Barney is an insured under the Policy; rather it contends that the claims made by Goins are not covered either by the scope of the Policy's coverage or by one of its exclusions.

         The Insurance Company primarily relies on the coverage language of the Policy, which provides that “[t]he Company agrees to pay all damages which the Insured shall become legally obligated to pay as a result of any claim arising out of an occurrence in the course of the Insured's educational employment activities.” Compl. Ex. 1, Policy § III.A., ECF No. 1-3 (italics omitted). The term “educational employment activities” is defined in the Policy as “the activities of the Insured performed . . . [p]ursuant to the express or implied terms of his/her employment by an educational unit.” Id. at § II.D.1 (italics omitted). In addition, the Insurance Company relies on a provision of the Policy that excludes “occurrences involving damages which are the intended consequences of action taken by or at the direction of the Insured, unless the action involves corporal punishment.” Id. at § VII.I (italics omitted).

         The Insurance Company's Motion for Summary Judgment has been fully briefed and is ripe for decision.[2]

         II.

         The court is required to grant a motion for summary judgment “if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed.R.Civ.P. 56(a). In ruling on motions for summary judgment, the court must, “view the facts and all justifiable inferences arising therefrom in the light most favorable to the nonmoving party.” Kolbe v. Hogan, 849 F.3d 114, 130 (4th Cir. 2017).[3] The party seeking summary judgment bears “the burden of showing the absence of a genuine issue as to any material fact.” Adickes v. S.H. Kress & Co., 398 U.S. 144, 157 (1970). However, the party opposing summary judgment must nevertheless “properly address [the movant]'s assertion of fact” in order to proceed to trial. Fed.R.Civ.P. 56(e).

         Because this is a diversity case, [4] Virginia substantive law, including Virginia choice-of-law rules, applies. Res. Bankshares Corp. v. St. Paul Mercury Ins. Co., 407 F.3d 631, 635 (4th Cir. 2005) (“A federal court hearing a diversity claim must apply the choice-of-law rules of the state in which it sits.”). In Virginia, “the law of the place where an insurance contract is written and delivered controls issues as to its coverage.” Buchanan v. Doe, 431 S.E.2d 289, 291 (Va. 1993). It is undisputed that the insurance policy was issued in Virginia. The parties accordingly agree that Virginia substantive law controls this case.

         Virginia law is settled that insurance policies are to be constructed in line with the intent of the parties involved, as exhibited by the terms the parties have used, provided the policy does not transgress statutory requirements and is not antithetical to public policy interests. Nat'l Hous. Bldg. Corp. v. Acordia of Va. Ins. Agency,591 S.E.2d 88, 90-91 (Va. 2004). If the terms used in the policy are unambiguous, they are to be taken in their ordinary meaning. Craig v. Dye,526 S.E.2d 9, 11 (Va. 2000). Policy language may be ambiguous where it can reasonably have more than one meaning given its context. Salzi v. Va. Farm Bureau Mut. Ins. Co.,556 S.E.2d 758, 760 (Va. 2002). Such ambiguities are to be resolved against the insurer and in favor of coverage. Gov't Emps. Ins. Co. v. Moore, 580 S.E.2d 823, 828 (Va. 2003). Similarly, reasonable exclusions to coverage, when stated in the policy in clear and unambiguous language that is clearly applicable to a specific situation at hand, will be enforced. Transcon. ...


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