The 6th U.S. Circuit Court of Appeals ruled Thursday that a Berkshire Hathaway Inc. unit does not need to defend a youth advocacy group against a sexual harassment suit.
The appellate panel in RSUI Indemnity Co. v. National Youth Advocate Program said the Columbus-Ohio based group waived its argument that a sexual misconduct exclusion in its policy is ambiguous because it did not fully raise it before the trial judge.
“Unfortunately for NYAP, there is no way to square its argument before the district court with its arguments before us. Either the Sexual Misconduct Exclusion is unenforceable because the policy’s sexual harassment coverage is wholly nullified by the exclusion, as NYAP argued to the district court, or the employee’s claim falls outside of the Sexual Misconduct Exclusion but is covered by the sexual harassment provision under a more favorable interpretation of the policy. Both arguments cannot be true, and neither argument implies the other,” the panel wrote.
RSUI’s employment practices liability policy for NYAP provided coverage for claims of sexual harassment but also included a sexual misconduct exclusion barring coverage for sexual assault or any sexual act against an individual. In January 2023, NYAP received a letter from a former employee threatening litigation over sexual harassment and sexual misconduct by a supervisor. The group sought coverage from RSUI, which refused, citing the sexual misconduct exclusion, court record show.
The insurer sued NYAP in federal court in Columbus, seeking a court order that it does not need to defend or indemnify the organization. NYAP asserted counterclaims for breach of contract and bad faith.
Representatives for the parties did not respond to requests for comment.
