## Facts

- James Francis Rapp was a priest ordained by Oblates of St. Francis de Sales, Inc. (Oblates) and employed by the Archdiocese of Oklahoma City (Archdiocese).
- Rapp had a roughly 20-year history of sexually abusing minor boys and underwent multiple in-patient treatment programs for pedophilia, but reoffended after release.
- After Rapp’s most recent in-patient treatment, the facility director advised that Rapp would need lifelong therapy and should not be assigned work involving children.
- In 1990, despite that history and the treatment advice, the Oblates reassigned Rapp to Assumption Parish in Duncan, Oklahoma.
- The Oblates did not warn Assumption Parish or the Archdiocese about Rapp’s prior sexual misconduct or his pedophilia diagnosis.
- After the reassignment, Rapp was not placed under counseling requirements and his work with children was not restricted until his arrest in 1999.
- While assigned to Assumption Parish, Rapp sexually abused a minor child from about 1993 to 1997.
- The child’s parents sued the Oblates, alleging the Oblates’ negligent failure to disclose Rapp’s history and negligent failure to supervise caused their child’s injuries.
- Cincinnati Insurance Company (CIC) issued commercial umbrella liability policies to the Oblates. CIC denied coverage for the claim.
- Because coverage was denied, the Archdiocese lent the Oblates $5 million to fund a settlement of the parents’ lawsuit; later, the Oblates assigned their rights under the CIC policies to the Archdiocese.
- CIC filed a declaratory-judgment action in Ohio regarding its duty to defend and indemnify; the litigation ultimately focused on CIC’s duty to indemnify under the umbrella policy in force from January 1, 1994, through January 1, 1997.
- The trial court granted summary judgment to CIC, concluding there was no covered “occurrence” because the Oblates’ conduct made injury “expected,” and also concluding a sexual/physical abuse or molestation exclusion barred coverage. The Archdiocese appealed.

## Issues

1. Whether the Oblates’ alleged negligent failure to warn or supervise, given Rapp’s known history, could still qualify as an “occurrence” (i.e., not “expected or intended” injury) under the umbrella policy for purposes of indemnity.
2. Whether the umbrella policy’s exclusion for “claims arising out of the sexual or physical abuse or molestation of any person” barred indemnity for a negligence-based claim against the Oblates tied to Rapp’s abuse.

## Decision

- The court of appeals reversed the trial court’s summary judgment for CIC and remanded.
- The court held the trial court erred in concluding, as a matter of law, that the Oblates’ alleged negligence could not be an “occurrence” under the policy’s expected-or-intended injury requirement.
- The court also held the molestation exclusion did not clearly eliminate coverage for the Archdiocese’s indemnity claim based on the Oblates’ alleged negligent conduct, as opposed to liability for committing abuse.

## Legal Principles

- In Ohio, whether an injury is “expected or intended” for liability coverage generally turns on the insured’s own intent or expectation, not merely the fact that harm was a foreseeable risk.
- Negligence-based claims against an insured for failure to disclose, warn, or supervise can constitute an “occurrence,” even when the immediate harm was inflicted intentionally by a third party.
- Summary judgment is improper where coverage turns on conclusions that cannot be fixed as a matter of law on the record presented, including whether the insured expected injury for purposes of the policy’s definition of “occurrence.”
- Policy exclusions are construed narrowly; if an exclusion is not stated in clear, unambiguous terms for the claim at issue, coverage is not defeated at the summary-judgment stage.
- An exclusion for claims “arising out of” sexual or physical abuse does not automatically bar coverage for an insured’s independent negligence claims unless the policy language plainly reaches those negligence theories.

## Conclusion

The Sixth District Court of Appeals reversed summary judgment for CIC in this umbrella-coverage dispute arising from sexual abuse committed by an Oblates priest, holding that the Oblates’ alleged negligent failure to warn or supervise could qualify as an “occurrence” under the policy and that the molestation exclusion did not clearly bar indemnity for the negligence-based claim; the case was remanded for further proceedings on CIC’s duty to indemnify under the 1994–1997 umbrella policy.


Cincinnati Insurance Co. v. Oblates of St. Francis De Sales, Inc., 2010 WL 3610451 (2010)