Nationwide Mutual Insurance Co. does not have to defend its insured, an Alabama man who abused a 10-year-old girl, leaving the victim with little recourse for winning significant civil damages, a federal appeals court decided last week.
The 11th U.S. Circuit Court of Appeals dismissed the appeal by A.B., who was sexually exploited a decade ago by her mom and her mom’s husband and boss at the time, David Barrow, the court explained. The couple took photographs of and engaged in sexual acts with the girl in a hotel room and in the man’s home, according to court records and news reports at the time.
The man, a former high school soccer coach in Guntersville, was arrested in 2014 at a soccer tournament in a case that shocked North Alabama. He pleaded guilty to sexual abuse of a minor and to human trafficking, and was sentenced to 30 years in prison.
The victim in 2018 filed suit against Barrow and notified Barrow’s insurer, Nationwide, that she would seek compensation from the carrier under Barrow’s homeowner, dwelling and personal umbrella policies. Nationwide asked for a declaratory judgment that it owed no duty to defend or to indemnify Barrow.
The federal district court for North Alabama agreed with Nationwide, noting that the duty-to-indemnify claim was not ripe and that the insurer thus had no obligation to defend Barrow in the civil suit.
The young victim appealed. The 11th Circuit opinion, led by Chief Judge William Pryor, a former Alabama attorney general, outlined a number of previous court rulings that appear to support the idea that the insurer owed a duty to defend or owed coverage, or that the victim had grounds for appeal. But the Barrow case wasn’t the same, he said.
“This appeal presents a different question: whether a declaratory judgment that an insurer has no duty to defend an insured injures a tort claimant,” and confers standing to appeal, the court wrote in the March 29 opinion.
In the end, the court decided that the girl was not injured by the district court’s declaratory judgment. That meant that the appeals court had no jurisdiction in the case. Quoting from a 1995 decision from the 7th Circuit Court of Appeals, the judges suggested that keeping the insurance giant out of the tort claim actually helped the victim’s lawsuit because she would want to face a weak defense, not a strong one backed by insurance lawyers.
“A.B. (the victim) lacks appellate standing. A.B. suffered no injury from the judgment in favor of Nationwide,” the court noted. Because the girl lacked standing, the court said it must dismiss her appeal.
A concurring but differing opinion by Judge Adalberto Jordan noted that the case did, in fact, present a question of coverage, and that the U.S. Supreme Court “held long ago that there is an actual case or controversy between an insurer and a tort claimant.”
“I have my doubts about the result in this case, but they are not strong enough to advocate that we create a circuit split” by deviating from previous decisions in other federal appeals courts, Jordan wrote.
Nationwide’s argument for declaratory judgment can be seen here. The attorney for the victim could not be reached for comment Friday.
