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Vol. 8 - Issue 11
December 18, 2019


Remarkable Duty To Defend Test = Insurer Has Duty To Defend Insured For Sex Trafficking Claims


On one hand, it wasn’t entirely shocking that the court in Ricchio v. Bijal, Inc., No. 15-13519 (D. Mass. Nov. 22, 2019) concluded that the insurer had a duty to defend its insured, a motel owner, for claims that it violated the Victims of Trafficking and Violence Protection Act (“TVPA”).  After all, the victim’s complaint against the insured alleged false imprisonment, which is specifically included in the general liability policy’s definition of “personal and advertising injury.”  But how the court got there was finger-in-a-socket worthy.

It was not alleged that the insured itself engaged in sex trafficking.  The insured’s involvement was as follows.  Lisa Ricchio alleged that she was kidnapped by Clark McLean.  She alleged that McLean brought her to the Shangri-La Motel in Seekonk, Massachusetts and held her captive there for a period of several days.  The hotel was owned by the insured, Bijal, Inc.

Ms. Ricchio alleged that “she was repeatedly raped and abused by McLean during her captivity, and that McLean made clear to her that he intended to force her to work as a prostitute under his control.  She further contends that Bijal and the Patels [who lived and worked at the motel and insureds] were aware of the abuse and profited from it.”  It was alleged that Bijal violated the TVPA by receiving rental income for the motel room.

Putting aside several issues, and getting to the heart of the matter, the insurer argued that, despite the policy’s definition of “personal and advertising injury” including false imprisonment, coverage was precluded by the policy’s exclusion for personal injury “arising out of a criminal act committed by or at the direction of the insured.”  The insurer argued that Ms. Ricchio’s injuries were caused by criminal violations of the TVPA.

The court’s decision is a little hard to follow, but I think it went like this.

The court observed that “it is possible for a defendant to be civilly liable [under the TVPA] without having violated any of the criminal portions of the TVPA, because the statute permits recovery under a civil standard even in the absence of proof of intentional conduct.”

But, despite this, the complaint still alleged only intentional conduct, such as the following:

They [the Patels and Bijal]:

“knowingly benefitted from participat[ing] in [] McLean’s venture, knowing or in reckless disregard of the fact that the venture was engaged in the providing or obtaining of [] Ricchio’s labor or services by means of [] force . . .” in violation of 18 U.S.C. § 1589.

“knowingly harbored [] Ricchio at the Shangri-La Motel,” “knowingly benefitted from participation in [] McLean’s venture which they knew or should have known was engaged in an act in violation of the TVPA” and “aided and abetted [] McLean’s violations of 18 U.S.C. § 1590(a).”

The court acknowledged that, while “each of Ricchio’s claims includes allegations of criminal conduct by the Patels . . . the complaint is ‘reasonably susceptible’ to an interpretation finding only negligence.” 

But how can that be?  How can allegations of criminal conduct be reasonably susceptible to an interpretation that negligence is alleged?  Here’s how:

“[T]he Court is not bound to presume all allegations are perfectly accurate as pleaded in assessing the possibility of coverage; a ‘rough[] sketch’ of a covered claim will do.  Second, it is commonplace for allegations in a complaint to outline only one, relatively extreme, version of events.  The fact that the complaint alleges intentional conduct does not preclude an interpretation that it also includes lesser allegations of negligent conduct.  That approach accords with the Massachusetts duty to defend standard that requires only a ‘general allegation’ susceptible to a ‘possibility’ of liability insurance coverage.”

Thus, the court held that the insurer had a duty to defend.

Based on this rationale, an insurer that disclaims coverage, based on a complaint’s allegations of intentional conduct, is at risk of being incorrect since, despite the complaint’s allegations of intentional conduct, there may be another version of events that does not involve intentional conduct.  The plaintiff may have only pleaded the “relatively extreme version of events.”  The court, in making its duty to defend decision, may consider another possible version.   


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