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Court of Appeal:
Definition of ‘Care,’ ‘Control’ in Property Cases Doesn’t Apply Where Insured Harmed Persons
Opinion Says Policy Exclusion Applies Where Patrons Were Sexually Abused at Spa
By a MetNews Staff Writer
Div. Seven of this district’s Court of Appeal has held that an insurance contract excluding coverage for the abuse or molestation of persons under the “care, custody or control” of an insured precludes coverage for the defendant’s sexual assault of women during massages at his spa, finding inapplicable cases involving damage to property which require exclusive dominion on the part of the insured for the exclusion to kick in.
Plaintiffs Toiah Gordon, Morganne Mersadie Root, and Karina Carrero—collectively referred to in the opinion as the “Gordon plaintiffs’—alleged that defendant Zhong Shen sexually assaulted them while they were receiving massages at his business, Nobles Massage Spa.
In May 2021, the plaintiffs obtained a $6.8 million judgment against Shen and his wife, Zhong Xin, who managed the facility and against whom the plaintiffs asserted a claim for negligent training. Shen had a commercial insurance policy with Continental Casualty Company, but the insurer declined to provide a defense, citing the exclusion.
Shen and Xin stipulated to liability and subsequently assigned their rights against Continental to the plaintiffs in exchange for an agreement that the women would not execute the judgment against them. The plaintiffs sued Continental in October 2021 for breach of contract and related claims.
At issue is language in the exclusion that says that the policy does not apply to bodily or personal injury “arising out of” the “actual or threatened abuse or molestation by anyone of any person while in the care, custody or control of any insured” or to harms arising out of the negligent supervision “of a person for whom any insured is or ever was legally responsible and whose conduct would be excluded” by the terms of the agreement.
Interpretation of Phrase
Noting the lack of California precedent addressing the interpretation of the phrase “in the care, custody, or control of” in the context of persons, the plaintiffs cited jurisprudence construing the phrase as it relates to property which requires “exclusive or complete control.” Under this standard, the plaintiffs argue, Shen cannot be said to have exercised the requisite exclusive control to trigger the exclusion.
Continental moved for summary judgment on the basis of the abuse or molestation exclusion. Los Angeles Superior Court Judge Robert S. Draper sided with the insurer and granted the motion, saying:
“It does not take a ‘painstaking evaluation’…for the Court to determine that control, custody, and care of a human being is distinguishable from that of…physical property. Indeed, the Court cannot contemplate a situation in which a human being is in the ‘exclusive and complete’ control of another.
“With that said, a good description of what ‘exclusive and complete’ control of another might look like can be found in the underlying Complaint, which repeatedly alleges that Shen refused to allow [the Gordon plaintiffs] to leave his massage table when they attempted to exit, physically pushing [the Gordon plaintiffs] back onto the table.”
Justice Gail Ruderman Feuer authored the opinion, filed Tuesday, affirming the judgment. Presiding Justice Gonzalo Martinez and Justice John L. Segal joined in the opinion.
Feuer wrote:
“Using the plain and ordinary meaning of the terms ‘care’ and ‘control,’ we conclude the exclusion applied to the injury to Gordon because, on the facts alleged in the Gordon action, Shen had care and control of Gordon during the massage. Although California courts have not construed ‘care, custody or control’ in the context of an abuse or molestation exclusion, courts in other jurisdictions have adopted a similar interpretation with respect to the exclusion.”
The court found the claims by Root and Carrero arose out of alleged assaults occurring outside the coverage period.
Plain Meaning
Unpersuaded that the phrase was ambiguous because it was left undefined despite being used 10 other times in the policy, Feuer looked to ordinary definitions of the words and said:
“Merriam Webster’s Online Dictionary defines ‘care’ as ‘responsibility for or attention to health, well-being, and safety.’ The dictionary defines ‘custody’ as ‘immediate charge and control (as over a ward or a suspect) exercised by a person or an authority’ or ‘safekeeping.’….And ‘control’ is defined to mean ‘to exercise restraining or directing influence over’ or ‘to have power over.’
Noting the use of the word “or” in the exclusion, she concluded:
“Here, as alleged, Shen was providing a massage to Gordon when he sexually molested her. It is a reasonable reading of the complaint that during the massage session, Gordon was under the ‘care’ of Shen because Shen was responsible for Gordon’s well-being as her massage therapist. Gordon was likewise under Shen’s control during the massage. The complaint does not allege anyone was in the room during the massage other than Shen, and further, the complaint alleges Shen held Gordon down ‘with his body weight and pressure.’ ”
Negligent Training
The jurist rejected the argument that the exclusion did not apply to the claims against Xin for negligent training, finding the absence of the word “training” in the policy to be irrelevant as the term was encompassed by the exclusion’s reference to “supervision.”
She opined:
“Each of the three causes of action alleged by the Gordon appellants against Continental requires a showing Continental breached its duty to defend Shen and Xin in the Gordon action. As discussed, Shen’s abuse and molestation of Gordon and Xin’s negligent employment or supervision of Shen fall within the abuse or molestation exclusion from coverage. Therefore, Continental did not have a duty to defend Shen or Xin in the Gordon action.”
The case is Gordon v. Continental Casualty Company, 2024 S.O.S. 3804.
Christina Coleman, whose law office is in the Miracle Mile, and Westwood attorney Michael Lee Cohen represented the plaintiffs. Attorneys for Continental were Steven M. Crane and Barbara S. Hodous of the downtown Los Angeles firm of Berkes Crane Santana & Spangler LLP.
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