Mass. Court Rules Zurich’s Auto Policy Provides Victim No Coverage for Rape by Tow Company Driver

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Liability policies provide coverage for accidents causing bodily injury or property damage. These policies do not provide any indemnity for damages caused by an insured’s acts that were expected or intended to cause damage. While the principle of fortuity seems straight forward, the actual application by insurers to intentional acts that cause damages is often difficult to prove under the law.

Under Massachusetts law, the determination of what is expected or intended from the standpoint of the insured does not focus on the insured’s actions but on whether the insured had the subjective intent to cause specific harm. As a result, liability insurers that deny a claim on the basis that an insured had to expect or intend that their actions would cause bodily injury or property damages often have difficulty in convincing a court that the insured expected or intended the specific harm that resulted from their actions.

However, in a recent case, Zurich American Insurance (Zurich) obtained summary judgment denying a rape victim (Victim or woman) any potential indemnity from a tow company’s automobile liability policy. The Victim contested Zurich’s summary judgment motion alleging that the injuries she suffered caused by the insured tow driver’s actions in sexually assaulting her while she was unconscious in the cab of his tow truck were as a matter of law “expected or intended.”

The United States District Court, while acknowledging that ordinarily, Zurich would have to prove the tow truck driver had the specific intent to cause injury to the Victim, ruled that a sexual assault by an insured was an exception to the general rule, under Massachusetts law. In the case of sexual assault, state law holds that specific intent to harm is inherent in the nature of the insured’s acts.

The accident and the sexual assault leading to the coverage suit

On Christmas Eve 2017, a woman attended a Christmas party at a friend’s house in Lawrence and had several drinks. She left the party shortly before 3 a.m. on Christmas morning to drive home. On her way, she either passed out or lost control and crashed her car into a snowbank on Lawrence Street in Methuen.

The accident rendered the woman unconscious.

A motorist who passed the woman’s car in the snowbank saw a flatbed tow truck from Sheehan Towing, a company that offered 24-hour roadside tow service down the road from the accident scene, this motorist stopped, and advised the tow driver, Christian Baez, about the vehicle in the snowbank that needed assistance.

Mr. Baez drove to the accident scene. When he arrived, there was another motorist who had stopped and was attempting to assist the unconscious woman.

Mr. Baez informed the other motorist he would transport the woman to the hospital in his tow truck and the other motorist assisted Mr. Baez in placing the woman plaintiff into the passenger seat of the tow truck.

While driving towards the hospital, he unsuccessfully tried to awaken the Victim’s in by slapping her face and shaking her. When she failed to regain consciousness, instead of continuing to the hospital, Mr. Baez drove to a secluded area and parked. He then got out of the tow truck and walked up to the passenger side door and opened it. The woman was wearing a dress and slumped down in the tow truck’s passenger seat. Mr. Baez removed the woman’s underwear and sexually assaulted her with his fingers, mouth, and tongue while she was unconscious.

While he was assaulting her, the woman regained consciousness, and became hysterical and screamed at Mr. Baez to stop and to return her to her vehicle. Mr. Baez did stop and did drive the woman (now “the Victim”) back to her vehicle where Methuen police officers were investigating the accident scene. The Victim immediately reported Mr. Baez to the police.

The police questioned Mr. Baez who claimed he did not know why he had assaulted the Victim. The police placed Mr. Baez under arrest and recovered the Victim’s underwear from the glove compartment of the tow truck. DNA evidence confirmed the rape.

A grand jury indicted Mr. Baez. He pleaded guilty to kidnapping and two counts of rape, and is presently serving a state prison sentence of not less than six nor more than eight years of incarceration.

The Victim’s civil action against Mr. Baez and his employer, Sheehan Towing

In December 2020, the Victim filed a civil complaint against Christian Baez and Sheehan Towing, LLC alleging one count of negligence against Mr. Baez and three counts against his employer, Sheehan Towing, which included liability as the registered owner of the tow truck under G.L. c. 231, section 85A, liability as a common carrier, and negligent supervision by of the defendant Mr. Baez.

In her complaint, the Victim alleged total hospital expenses of $4,212, counseling and therapy expenses $7,820, and lost wages of $46,800 plus conscious pain-and-suffering for a major depressive disorder and post-traumatic stress disorder because of the rape and kidnapping.

Zurich’s policies and the declaratory judgment against Mr. Baez and the Victim

Sheehan’s Towing had three policies with Zurich and an affiliate, American Guarantee and Liability Insurance Company (American) for the policy years October 1, 2017, to October 1, 2018. American provided Sheehan Towing a commercial general liability policy (CGL) and an umbrella policy. Zurich provided Sheehan Towing a commercial automobile policy with a $1 million liability limit while the American CGL had a single limit of $1 million, and aggregate limit of $2 million. The American umbrella policy had a $1 million limit.

After the Victim filed suit on January 11, 2020, Zurich issued a denial letter to Mr. Baez denying any coverage under its automobile policy. Shortly thereafter, on February 4, 2020, American issued its denial to Mr. Baez of any coverage under Sheehan Towing’s CGL policy.

The Superior Court docket in the Victim’s suit against Sheehan Towing appears to indicate that Zürich is defending Sheehan Towing under a reservation of rights. Since the Victim’s civil suit alleged negligence and not intentional acts by Mr. Baez in committing his sexual assaults, however, Zurich and American decided to seek confirmation by a court of their coverage denials.

Zurich’s declaratory judgment to affirm its denial of coverage to Mr. Baez

In April 2021, Zurich and American filed a declaratory judgment in the United States District Court against Mr. Baez and the Victim for declaratory relief, arguing that, as to the underlying state court action, Zurich had no obligation to defend or indemnify Mr. Baez under its Auto Policy. Likewise, American sought declarations that it had no obligation to defend and/or indemnify Mr. Baez under neither its CGL Policy, nor its Umbrella Policy.

Although served with the Zurich and American complaint in prison, Mr. Baez never answered nor otherwise legally responded, and the court defaulted him.

The Victim, who as a potential judgment creditor of Mr. Baez, was a necessary party to Zurich’s and American’s declaratory judgment and did answer.

Zurich and American file for summary judgment

On January 25, 2022. Zurich and American moved for summary judgment.

On American’s motion for summary judgment on the CGL policy, the Victim acknowledged that there was no coverage for Mr. Baez.

The CGL policy provided coverage to employees of Sheehan Towing “only for acts within the scope of their employment by [Sheehan’s Towing] or while performing duties related to the conduct of [Sheehan’s Towing’s] business.” The Victim did not dispute that Mr. Baez sexual assault was outside the scope of his employment and not related to the business of Sheehan’s Towing.

The Victim also did not dispute that the umbrella policy provided no coverage. That policy had a specific exclusion for “The actual, threatened or alleged abuse or molestation by anyone of any person in the care custody or control of any insured; (Emphasis in original).

The Victim did, however, oppose Zurich’s motion for summary judgment as to coverage under the commercial auto policy.

The Court finds as a matter of law Mr. Baez had subjective intent to harm the Victim

The dispute over the coverage on the commercial automobile policy revolved around the policy exclusion that stated:

This insurance does not apply to any of the following:

1. Expected or Intended Injury

“Bodily injury” or “property damage” expected or intended from the standpoint of the “insured.”

Zurich claimed that the Court could, on summary judgment, decide as a matter of law that Mr. Baez intended to harm the Victim.

The Victim, for her part, argued that for the purposes of insurance coverage there was a question of fact whether Mr. Baez specifically intended to harm her.

As evidence of Mr. Baez not having the specific intent to cause her the injuries she did receive, the Victim directed the Court to Mr. Baez’ responses to the police when they asked him why he had performed sexual acts on her. According to the police, he stated:

“I swear to God I didn’t mean for it to go that far. I didn’t mean for it.” “Stress man, I’m stressed.” “I should have never did that man; I don’t know. I just got a lot of things going in my head. I’m stressed.” “I wasn’t thinking man.” “I shouldn’t have done that; I don’t know why.” “The stress just got to me man.” “I stopped, I was feeling very bad, and I got back in the driver’s seat.” “I don’t know why; I was not thinking.”

In making its decision, the Court acknowledged that the Massachusetts Supreme Judicial Court has interpreted insurance policies with exclusionary language like the Zurich policy’s language to cover intentional acts of the insured if “the insured does not specifically intend to cause the resulting harm or is not substantially certain that such harm will occur.”

The Court noted that while normally an insured’s intent is not determinable on summary judgment, there are exceptions. One such exception is that Massachusetts law allows a Court to conclude that that an “intent to injure may be inferred as a matter of law from the intentional commission of an inherently injurious act such as forcible sexual abuse.”

The Supreme Judicial Court, the Court stated has likened “sexual assault” and “rape” to the “act of striking another in the face;” each act is “so certain to cause a particular kind of harm that we can say a person who performed the act intended the resulting harm, and his statement to the contrary does nothing to refute that rule of law.

As to the Victim’s argument that Mr. Baez’ lack of intent to harm her can be inferred from his statements to police following the assault that he “didn’t mean for it to go that far,” and that he “wasn’t thinking,” the Court stated:  

“Mr. Baez may have acted impulsively in committing the assault, but as [the Supreme Judicial Court has] made clear, sexual assault and rape are inherently injurious. As soon as Mr. Baez initiated the sexual assault, some degree of harm was certain.”

Based on this conclusion, the Court stated that it would infer as a matter of law that Mr. Baez intended to injure the Victim and, therefore, the Auto Policy’s exclusion of coverage for bodily injury expected or intended from the standpoint of [Mr. Baez] applied.

The federal judge’s final order

As his final decision, The Federal Judge deciding the summary judgment, Timothy S. Hillman, ruled, “For the reasons stated [in this decision], …a declaratory judgment shall enter, stating:

  1. American is not obligated to defend and/or indemnify Mr. Baez under the CGL Policy with respect to [Victim] v. Christian Mr. Baez and Sheehan’s Towing, LLC, Civil Action No. 2077CV1281.
  2. Zurich is not obligated to defend and/or indemnify Mr. Baez under the Auto Policy with respect to [Victim] v. Christian Mr. Baez and Sheehan’s Towing, LLC, Civil Action No. 2077CV1281.
  3. American is not obligated to defend and/or indemnify Mr. Baez under the Umbrella Policy with respect to [Victim] v. Christian Mr. Baez and Sheehan’s Towing, LLC, Civil Action No. 2077CV1281.

The Victim has thirty days to appeal final judgment

            Under the Federal Rules of Civil Procedure, the victim has thirty days, until March 13, 2022, to appeal Judge Hillman’s decision to the First Circuit Court of Appeals.

            Agency Checklists will keep its readers posted.

Best insurance lawyers Massachusetts

Owen Gallagher

Insurance Coverage Legal Expert/Co-Founder & Publisher of Agency Checklists

Over the course of my legal career, I have argued a number of cases in the Massachusetts Supreme Judicial Court as well as helped agents, insurance companies, and lawmakers alike with the complexities and idiosyncrasies of insurance law in the Commonwealth.

To learn more about ForbesGallagher, visit our website. Or, to contact me directly, please call me at 617-598-3801 or send an email using the button below.

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