COUNTRY Mutual and COUNTRY Preferred Insurance Companies are seeking to walk away from a $15.48 million lawsuit, arguing their policies don’t cover alleged workplace sexual assault and harassment.
The insurers filed a complaint in the United States District Court for the District of Oregon, Eugene Division, asking a federal judge to declare they have no obligation to defend or indemnify Blake and Briana Denman, their policyholders, in a high-stakes legal dispute. The underlying lawsuit, brought by Maya Luske English in Deschutes County Circuit Court, accuses the Denmans of subjecting her to a hostile work environment and a series of sexual assaults while she worked as their nanny in Bend, Oregon, from approximately January 2024 through approximately August 23, 2024.
According to the federal complaint, English alleges that during her employment, the Denmans “groomed” her to have sex with them, extended her working hours, and convinced her to live with them. The complaint details allegations that, in August 2024, while in Fresno, California, Blake Denman sexually assaulted English at a rented house. The described conduct includes unwanted advances, physical acts, and repeated objections by English. The complaint further alleges that Briana Denman aided and abetted her husband’s actions by making comments, creating situations that could lead to a sexual relationship, and ignoring warning signs.
English’s amended complaint in the underlying lawsuit seeks $120,000 in economic damages and $1,280,000 in non-economic damages, as well as additional sums for costs, disbursements, pre-judgment and post-judgment interest, and attorney fees, with total damages asserted at $15,480,000. The claims include unlawful employment discrimination under ORS 659A.030, battery, intentional infliction of emotional distress, and retaliation.
COUNTRY Mutual and COUNTRY Preferred state they are currently providing a defense to the Denmans in the underlying lawsuit, subject to a full reservation of rights under the policies. In their federal complaint, the insurers point to several policy exclusions they believe bar coverage for the Denmans. The relevant homeowners and umbrella liability policies exclude coverage for “expected or intended injury,” “sexual misconduct, sexual molestation, corporal punishment or physical or mental abuse,” “criminal acts,” and injuries to employees arising out of and in the course of their employment.
The complaint quotes policy language, including: “Bodily injury or property damage that may reasonably be expected or intended to result from the intentional acts of an ‘insured’ even if the resulting ‘bodily injury’ or ‘property damage’... is of a different kind, quality or degree than initially expected or intended... This exclusion applies regardless of whether any ‘insured’ personally participated in or committed the alleged act and regardless of whether any ‘insured’ subjectively intended the ‘bodily injury’ or ‘property damage’ for which a claim is made.” The policies also exclude “bodily injury or property damage arising out of sexual misconduct, sexual molestation, corporal punishment or physical or mental abuse,” and “bodily injury or property damage arising from any criminal act,” as well as injuries to employees in the course of employment.
COUNTRY Mutual and COUNTRY Preferred are asking the court to declare that these exclusions preclude coverage for the claims asserted by English, and that they have no duty to defend or indemnify the Denmans. They also seek a declaration that they may withdraw from the defense and owe no indemnity or benefits under the policies.
This case puts a spotlight on the critical role of policy exclusions in high-value liability claims and the challenges insurers face when allegations involve intentional or criminal conduct.
All allegations are unproven at this stage.
