World Harvest Church v. Grange Mut. Cas. Ins. Co.

Plaintiffs sued World Harvest Church (WHC) for claims arising from an incident involving Plaintiffs’ two-year-old son, who attended WHC’s daycare. Plaintiffs alleged that WHC’s employee had beaten their son with a knife. Final judgment was entered in favor of Plaintiffs in the amount of $2.87 million. The court of appeals affirmed. WHC subsequently filed suit against Grange Mutual Casualty Company, which insured WHC under a commercial liability insurance policy and an umbrella policy and had defended the matter but reserved its right to deny coverage. Plaintiffs alleged that Grange improperly refused to indemnify it for any portion of the judgment awarded to Plaintiffs. The trial court entered judgment in favor of WHC, finding that Grange was obligated to indemnify WHC in the amount of $1.47 million but that Grange was not responsible to indemnify WHC for the punitive damages awarded to Plaintiffs. The Supreme Court reversed, holding (1) the abuse or molestation exclusion in the commercial liability insurance policy barred coverage for an award of damages based on WHC’s vicarious liability for intentional infliction of emotional distress arising from WHC’s employee’s abuse of Plaintiff’s son while in WHC’s care and custody; and (2) the policy did not provide coverage for an award of attorney fees and postjudgment interest. View "World Harvest Church v. Grange Mut. Cas. Ins. Co." on Justia Law