Total Frat Move: Eastern District of Arkansas Holds CGL Policy’s Exclusions Preclude Coverage for Injuries Arising Out of Hazing
In Admiral Insurance Co. v. Bradley, 2015 U.S. Dist. LEXIS 70490 (E.D. Ark., June 1, 2015) a federal judge sitting in the U.S. District Court for the Eastern District Court addressed whether a fraternity and individual fraternity members were entitled to coverage under a standard CGL policy for injuries sustained by a pledge of the fraternity on the night of his initiation. The underlying claimant alleged that he was caned, paddled, and hit by the fraternity’s members, resulting in his being hospitalized due to fluid in his lungs and kidney damage. The claimant was allegedly put in a medically induced coma to heal from his injuries.
The insurer denied coverage on several bases, including: (1) the individual fraternity members were not insureds under the subject CGL policy; (2) the claimant’s injuries did not arise out of an “occurrence”, as required by the policy; and (3) coverage was barred by the policy’s exclusions for expected or intended injury, assault and/or battery, hazing, sexual or physical abuse, or molestation. The fraternity disputed the insurer’s coverage position, resulting in the declaratory action.
The policy stated that fraternity members constituted insureds only when acting within the scope of their duties on behalf of the fraternity. The court held that the fraternity members were insureds because it was common knowledge that the event-in-question typically involved paddling, caning and hitting pledges and, therefore, the fraternity members were acting within the scope of their duties on behalf of the fraternity.
The court found it unnecessary to address whether the injuries resulted from an “occurrence” because, it held, the exclusions precluded coverage. The court was not persuaded by the fraternity’s arguments that the full extent of the claimant’s injuries were not intended, nor that the exclusionary language was ambiguous.
Ordinarily, the intentional acts of individual insureds will not operate to bar coverage as to a corporate-named insured that did not itself have the requisite state of mind to intend the injuries. Here, however, the court held there was no coverage for either the individual fraternity members or the fraternity itself because the hazing was intentional. Presumably, the fraternity’s common knowledge that the Initiation process involved hazing influenced the court’s holding that the exclusion barred coverage for all insureds, including the fraternity itself.