Searching over 5,500,000 cases.


searching
Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

JENSEN v. AUTOMOBILE INSURANCE COMPANY OF HARTFORD

August 8, 2005.

BRUCE JENSEN and GRETCHEN JENSEN, Plaintiffs,
v.
AUTOMOBILE INSURANCE COMPANY OF HARTFORD, CONNECTICUT, Defendant.



The opinion of the court was delivered by: KEN SCHROEDER, Magistrate Judge

DECISION AND ORDER

In accordance with 28 U.S.C. § 636(c), the parties have consented to have the undersigned conduct all further proceedings in this case, including entry of final judgment. Dkt. #12.

Currently before the Court is plaintiffs' motion for summary judgment (Dkt. #26), declaring that defendant is obligated to defend and indemnify plaintiffs in an action titled Mary and Dennis Stanek, et al. v. Gretchen Jensen, which is pending in New York State Supreme Court, County of Erie (Index No. 11826/01), and defendant's cross-motion for summary judgment (Dkt. #31), declaring that defendant is not obligated to defend or indemnify plaintiffs in the underlying action. For the following reasons, plaintiffs' motion is denied and defendant's motion is granted. BACKGROUND

  The Automobile Insurance Company of Hartford Connecticut ("AIC"), insured Bruce and Gretchen Jensen pursuant to a homeowner's policy issued September 15, 1998 and renewed to September 15, 2000. Dkt. #33, ¶ 1. The policy provides defense and indemnification

 
If a claim is made or a suit is brought against any insured for damages because of bodily injury or property damage caused by an occurrence to which this coverage applies, even if the claim or suit is false.
Dkt. #31, Pt. 32, p. 17. An insured is defined to include the policy holders and residents of the policy holders' household who are relatives. Dkt. #31, Pt.32, p. 6. An occurrence is defined as "an accident" which results in "bodily injury." Dkt. #31, Pt.32, p. 6.
  The policy excludes coverage for bodily injury "which is expected or intended by any insured" or "arising out of business pursuits of any insured." Dkt. #31-32, p. 17. The policy includes the following language with respect to business pursuits:
NOTE: The furnishing of home day care services for
(1) a fee, or
(2) other compensation by the insured and rendering of such services two or more days per week for a period of two or more hours per day constitutes one type of many different business pursuits.
This exclusion does not apply to:
(1) activities which are ordinarily incident to non-business pursuits
* * *
Dkt. #31, Pt.32, p. 17. As a condition of coverage, the insured is subject to the following provision:
Duties After Loss. In case of an accident or occurrence, the insured shall perform the following duties that apply. You will help us in seeing that these duties are performed:
a. give written notice to us or our agent as soon as is practical, which sets forth:
(1) the identity of the policy and insured;
(2) reasonably available information on the time, place and circumstances of the accident or occurrence; and
(3) names and addresses of any claimants and witnesses;
* * *
Dkt. #31, Pt. 32, p. 20.

  During the policy period, Ms. Jensen provided babysitting services for a profit at her residence. Dkt. #35, ¶ 2.*fn1 During November or December of 1999 and again during January or February of 2000, Gretchen Jensen personally witnessed inappropriate behavior of a sexual nature by her son against children in her care. Dkt. #35, ¶¶ 2-3. Ms. Jensen sought treatment for her son and obtained a referral to counseling services in February of 2000. Dkt. #35, ¶ 6.

  In February or March of 2000, the mother of one of the children in her care informed Ms. Jensen that "there was an incident involving" her son. Dkt. #35, ¶ 4. In March of 2000, Gretchen Jensen moved daycare operations to another residence to avoid further contact between her son and the children in her care. Dkt. #35, ¶ 5. By that time, Ms. Jensen was aware that Erie County was investigating possible misconduct regarding daycare services provided at the Jensen's residence. Dkt. #35, ¶ 7.

  On July 17, 2000, Ms. Jensen was approached by police officers regarding allegations that her son improperly touched and/or abused children in her care. Dkt. #35, ¶ 8. On November 29, 2000, Ms. Jensen's son was charged with sexual abuse and directed to appear in Family Court. Dkt. #35, ¶ 9. Ms. Jensen was charged with endangering the welfare of a child on June 14, 2001, and pled guilty to that charge on June 18, 2001. Dkt. #35, ¶¶ 9,12. On June 29, 2001, Ms. Jensen's son was convicted by way of a plea to an act which, if committed by an adult, would constitute the crime of sexual abuse in the second degree. Dkt. #35, ¶ 13.

  The parents of three children receiving daycare services from Gretchen Jensen commenced suit against Ms. Jensen in New York State Supreme Court, Erie County on December 18, 2001. Dkt. #44, Exh. A. Each of them allege that between September of 1999 and July of 2000, Gretchen Jensen negligently supervised the children in her care by permitting opportunities for her son to be alone with the children, at which time her son had sexual and other inappropriate contact with the children, and that Ms. Jensen and/or her son subjected the children to verbal and/or physical abuse and/or threats. Dkt. #44, Exh. A. Ms. Jensen was served with the Summons and Complaint in the underlying personal injury action on January 8, 2002. Dkt. #35, ¶ 15. She telephoned her insurance agent that day and delivered a copy of the Summons and Complaint to her insurance agent on January 9, 2002. Dkt. #35, ¶ 16. AIC received notice of the personal injury action by letter from the insurance agent on January 18, 2002. Dkt. #35, ¶ 16.

 
By letter dated January 22, 2002, AIC disclaimed coverage because
The complaint against you alleges various acts of willful and intentional conduct involving sexual abuse and/or other inappropriate contact by [your son] with infants and verbal and/or physical abuse and/or threats by you and/or your son.
Therefore, the plaintiffs' alleged damages do not arise out of an occurrence as required by the insuring agreement of your policy.
Dkt. #31, Pt. 31, p. 3. AIC also advised plaintiffs that "[i]n addition to the fact that any alleged bodily injury, property damage, or personal injury was not caused by an occurrence as required for coverage to attach, the above-mentioned exclusions [intentional acts and business pursuits] also apply and coverage is therefore expressly excluded as a result." Dkt. #31, Pt. #1, p. 3.
  AIC also disclaimed coverage due to plaintiffs' failure to provide timely notice of the claim. Dkt. #31, Pt.31, p. 4. Specifically, AIC advised plaintiffs that
The Complaint states that the alleged incidents and activities occurred between September 1999 and July 2000. However, the first notice to Travelers and/or your agent was only after you were served with a Summons and Complaint on January 8, 2002. Our investigation indicates that you were aware of the activities alleged for quite some time prior to the service of the Summons and Complaint and that as a result of an investigation by the District Attorney and/or other authorities, you pled guilty to endangering the welfare of a child back in June 2001 and your son's case was handled in Family Court back at that time also. Therefore, you have failed to comply with the policy condition mentioned above and as a result, there is no coverage for this matter and [AIC] will not defend or indemnify you regarding it.
Dkt. #31, Pt.31, p. 4.

  Plaintiffs commenced a third-party action against AIC on August 8, 2002, seeking declaratory judgment and alleging breach of contract and breach of the duty of good faith and fair dealing. Dkt. #31, Exh. 4. The third-party action was severed from the personal injury action by stipulation entered September 6, 2002 and removed to this Court on September 9, 2002. Dkt. #31, Exh. 5 & 6. By stipulation entered January 22, 2003, the cause of action for breach of the duty of good faith and fair dealing, as well as claims for punitive or exemplary damages, were dismissed. Dkt. #14.

  On April 24, 2003, the plaintiffs in the underlying personal injury action commenced suit against AIC in New York State Supreme Court, County of Erie, seeking a declaration that AIC is obligated to defend Gretchen Jensen in that action. Dkt. #31, Exh. 11. AIC removed the action to this Court, where it was assigned a case number of 03CV365. Dkt. #31, Exh. 12. That action was consolidated with ...


Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.