Wednesday, July 23, 2003
C.A. Rules Insurer Had Duty to Defend in Dentist Molestation Claim
By DAVID WATSON, Staff Writer
The insurer of a dentist who molested a patient had no duty to indemnify him, but was required to defend him once the victim added claims to her suit that his dental assistants saw but failed to stop the misconduct, the Third District Court of Appeal ruled yesterday.
Insurance Code Sec. 533, barring insurance coverage for willful torts, would have obviated both the duty to defend and the duty to indemnify, Justice Richard M. Sims III wrote for the court, were it not for the claims involving the assistants.
Those claims, added in an amendment to the victim’s complaint, brought the allegations within the ambit of policy language promising a defense, Sims said.
The justice noted that the professional liability policy issued by General Star Indemnity Company to dentist David R. Phipps provided coverage “in the practice of the profession of dentistry by the insured or by any person for whose acts or omissions the insured is legally responsible.” The policy excluded coverage for willful criminal acts, but added that the insurer “will defend any civil suit against the insured seeking amounts which would be covered if this exclusion did not apply.”
“This language would include Phipps’s responsibility for the acts of the dental assistants. Even assuming Phipps had committed a willful criminal act, and even though indemnity was barred by section 533, Phipps could objectively and reasonably expect a defense under [the exclusion], which promised him a defense even though he had committed a willful criminal act.”
Phipps had previously been convicted of molesting patients, and for a time had been restricted to treating female patients only with an assistant present. Those restrictions had been lifted by the time he molested the patient-identified only as Marie Y.-whose action was the subject of yesterday’s ruling.
But two dental assistants saw the misconduct and later testified about it in criminal, civil and disciplinary proceedings. Because Phipps was a partner in the dental practice, he was their employer and responsible for their actions, Sims said.
“Faced with an undisputed record and with no contrary authority, we conclude the dental assistants’ failure to report Phipps’s misconduct constituted a ‘dental incident’ within the meaning of the policy,” the justice declared.
But the actions of the assistants, Sims said, gave rise only to a duty on the part of the insurer to defend, and not to a duty to indemnify. Citing Horace Mann Ins. Co. v. Barbara B. (1998) 61 Cal.App.4th 158 and Coit Drapery Cleaners, Inc. v. Sequoia Ins. Co. (1993) 14 Cal.App.4th 1595, the justice noted courts have held it would contravene the public policy embodied in Sec. 533 to permit coverage for negligent conduct which is “so intertwined with” intentional and willful wrongdoing “as to be inseparable” from it.
The negligence of Phipps’ dental assistants, Sims observed, “consisted only in failing to stop him from continuing the molestation he had already begun.”
The justice continued:
“Without Phipps’s acts of molestation, there was nothing wrongful for the assistants to report. This, in and of itself, shows that the negligence of the assistants was inextricably intertwined with Phipps’s molestation.”
The appeals court reversed the judgment Marie Y., who sued Phipps’ insurer after receiving an assignment of his claim, obtained in Sacramento Superior Court for $1.4 million plus costs after a non-jury trial. On remand, Sims said, the victim should be awarded damages consisting only of the amount of reasonable attorneys’ fees and costs incurred by Phipps in defending the underlying action.
The case is Marie Y. v. General Star Indemnity Company, C038907.
Copyright 2003, Metropolitan News Company