Even the Judge who decided the case warned “this Decision should serve as a “wake up call” to babysitters and the parents of the children in their care.”
In the Case of PROVIDENCE MUTUAL FIRE INSURANCE COMPANY v KEVIN NEARY et al, A Rhode Island Superior Court Judge has ruled that pursuant to the terms of the Insurance Contract, a homeowner has no Insurance coverage for a child being injured at the Insured’s home in the event that the accident occurs while a babysitter is watching the child and accepting fees as a “business”.
Read the controversial decision here: PROVIDENCE MUTUAL FIRE – Justia
RI Superior Court Justice Brian P. Stern ruled that the homeowners were not covered for Premises Liability damages for a small child’s fatal drowning in a Koi pond on their property.
The pertinent and important facts are as follows:
-Homeowners are friends with 18 month old child’s parents.
-One of the homeowners agrees to babysit for the small child at homeowner’s North Kingstown RI residence.
-The homeowner began babysitting the toddler 8 weeks after the child was born.
-Homeowner was accepting $25 per day to watch the young child and accepted more than $2000 a year
-babysitting homeowner also watched three other children
-The child was left unattended and left the house through a sliding glass door and drowned in koi pond on the residence
The Insurance company filed a declaratory judgment claiming that it is not responsible for “any defense or indemnity obligation under the Policy resulting from Luke Metros death because of the business exclusion contained within the policy.” The Court granted summary judgment in favor of the Insurance Company.
Rhode Island Law concerning Summary Judgment is as follows: “Summary judgment is only appropriate “if, when viewing the evidence in the light most favorable to the nonmoving party, there exists no genuine issue of material fact and the moving party is entitled to judgment as a matter of law.‟” Lozzi v. City of Cranston, — A.3d –, 2012 WL 2588509, at *2 (R.I. 2012) (quoting Henderson v. Nationwide Ins. Co., 35 A.3d 902, 905 (R.I. 2012) (quoting Trust of McManus v. McManus, 18 A.3d 550, 552 (R.I. 2011))). Under RI Law, if “the policy terms are ambiguous or capable of more than one reasonable meaning, the policy will be strictly construed in favor of the insured and against the insurer.‟” Id. at 59-60 (quoting Mallane v. Holyoke Mut. Ins. Co. in Salem, 658 A.2d 18, 20 (R.I. 1995)); see also Derderian v. Essex Ins. Co., 44 A.3d 122, 127 (R.I. 2012)
Pertinent Findings of the Washington County Superior Court Judge:
The decision states that there was an exclusion in the policy “that the personal liability and medical payments coverage did not apply to “bodily injury” if it occurred in connection with a business.” “This Court finds the analysis used by these courts to be persuasive, and finds that babysitting in this case was a “trade, profession or occupation engaged in” by Inez Neary on at least a part-time basis.” “Even if the babysitting did not fall within the first definition, it is clear that when Inez Neary watched Luke, it was an “other activity engaged in for money or other compensation,” because she was paid for her time.” “There is no doubt, therefore, that when Inez Neary started to watch Luke while Pamela and Paul Metro were at work, every day for over a year, for consistent payment, that the babysitting was a “business” contemplated by the Policy at issue here.
Judge Stern Discusses Public Policy implications of his decision:
“On the other hand, the average homeowner does not sit down and review all of the provisions and exclusions in his/her homeowner’s policy. Many homeowners may incorrectly assume that providing babysitting services either at their home or at the child’s home is covered under the policy. Unfortunately, it is not until a tragic event, such as this, that the homeowner realizes that this activity was not covered. Unfortunately for the homeowner, the fact that they did not review the coverage and/or exclusions in their insurance policy is not a justification for a Court to determine that there is coverage when, in fact, none exists under the policy.”
Not in this case, but for future cases, our legislature does have the ability to mandate certain coverage in a homeowners insurance policy or require that insurance companies bring this exclusion to the attention of policy holders upon the inception of the policy or renewal in bold on the cover sheet of the policy.
“Until then, this Decision should serve as a “wake up call” to babysitters and the parents of the children in their care.”
Some people say that “bad facts make bad law.” In this case, the fact that the babysitter watched other children and had collected over $2,000 for babysitting and babysat regularly over many years clearly are bad facts.
The judge was in a difficult situation since his job was to interpret the insurance contract not do justice for the grieving family of the young child. As a result of this ruling, all homeowners should be concerned with allowing babysitting at their house for payment without an additional insurance policy. Parents should be careful not to allow their children to be watched without proper insurance to cover any accident.
Grieving Family May Still Sue Despite Little to Recover
As a theoretical matter, the grieving parents of this child can still proceed with a lawsuit against the homeowners but there is no “deep pockets” to pay for the damages the child’s parents have suffered. I suspect that the grieving parents would also have a tough time finding a RI personal injury attorney – click here – willing to take such a case on a contingency basis. The Homeowners could potentially file bankruptcy and never pay a dime of money. Even if they do not file bankruptcy it would be nearly impossible for the child’s parents to ever collect any real money from the homeowners.
This case could still be appealed to the Rhode Island Supreme Court. David Slepkow helps Rhode Island and Providence County residents with car accident claims and premises liability accidents. Contact him to learn more.