In a recent August 2020 decision, the Supreme Court of Massachusetts in. (SJC-12856) determined that molestation policy exclusions do not preclude coverage arising out of alleged assault in personal injury claims. The Court found that the term “physical abuse” was ambiguous in a homeowner’s insurance policy and a personal injury claim arising out of a physical altercation was not sufficient to trigger an abuse and molestation policy exclusion for the coverage of a bodily injury claim.
On September 13, 2014 Timothy Krusell, who was 23 years old at the time, was with a friend when he struck up a conversation with Robert Christian Haufler, age 62, and his companion. The conversation became heated and Krusell pushed Haufler, causing him to lose his balance and fall onto a parked automobile before striking the pavement. Krusell fled the scene and Haufler suffered broken bones and other injuries that resulted in permanent damage to his right arm. Haufler filed a civil action against Timothy Krusell and Dorchester Mutual, the homeowners’ insurance carrier of Krusell’s parents (“the Krusells”). Dorchester Mutual agreed to defend the claim under a reservation of rights, citing to a coverage exclusion in the Krusells’ insurance policy relating to “intentional acts.”
The Krusells requested that Dorchester Mutual participate in settlement negotiations, however, Dorchester Mutual declined to participate in on the grounds that it had insufficient information to determine whether the claim will be denied. The Krusells settled the claim for $750,000, anticipating that Dorchester Mutual would cover $500,000 under their insurance policy. Dorchester Mutual commenced a declaratory judgment action seeking a judgment that it had no duty to indemnify the Krusells under the terms of their homeowners’ insurance policy, and the Krusells brought a counterclaim against Dorchester Mutual, arguing that its refusal to participate in settlement discussions constituted a breach of contract, a breach of the implied covenant of good faith and fair dealing, and a violation of G.L.c. 93A and G.L.c. 176D.