IN A CASE OF FIRST IMPRESSION IN TEXAS, THE UNITED STATES DISTRICT COURT CONCLUDES THAT INSURER’S POLICY EXCLUSION DID NOT EXCLUDE BODILY INJURIES TO A FETUS CAUSED BY A PUNCH TO THE MOTHER’S STOMACH

Last week, the United States District Court for the Southern District of Texas, Houston Division, concluded that a policy provision excluding claims of bodily injury to a child that occur “as a consequence” of bodily injury to his or her parent, did not exclude bodily injuries to a fetus caused by a punch to the mother’s stomach.  In Colony Ins. Co. v. Hearts with Hope Foundation, No. H-17-886, 2018 WL 1089225 (S.D. Tex. [Houston Division] February 28, 2018, mem. op.), Karen Anderson worked for Hearts with Hope Foundation, an organization that provides childcare for mentally and emotionally disturbed children.  At work, Ms. Anderson, pregnant at the time, was punched in her stomach by one of the children. As a result, her baby was born prematurely and suffered severe physical and emotional injuries.  Ms. Anderson and her husband brought suit on behalf of their child, VA, against Hearts with Hope. Their petition stated that the hit to the stomach caused Anderson’s amniotic sac to rupture and caused VA to be injured.  In turn, Hearts with Hope tendered the claim to its insurer, Colony Insurance Company (“Colony”). However, Colony denied coverage and sought a declaratory judgment that it did not owe a duty to defend Hearts with Hope. 

Colony’s policy excluded claims of bodily injury to the spouse, child, parent, brother or sister as a consequence of bodily injury to an employee of the insured arising out of and in the course of employment by the insured. Thus, the main issue before the Court was whether VA’s bodily injuries occurred “as a consequence” of Ms. Anderson’s bodily injury (her rupture of amniotic sac), in which case the policy exclusion would apply, or whether VA’s injuries were direct injuries, in which case the exclusion would not apply. 

The Court, after noting that there was a “dearth of cases on point” and analyzing two out-of-state cases, concluded that the exclusion did not apply and that Colony had a duty to defend Hearts with Hope.  The Court reasoned that Andersons’ “petition did not preclude a direct injury as it alleges that the hit caused Anderson’s amniotic sac to rupture and caused VA to be injured.”  The Court further reasoned that“[u]nder a liberal reading of the petition, VA would have been injured even if Anderson’s amniotic sac did not rupture.”