California Court Rules No Defense for Massage Spa Owner in Abuse Claim - USA Herald

[Rochdi Rais]

In a significant ruling, a California state appeals court affirmed that Continental Casualty Co. had no obligation to defend the owner and manager of a massage spa against sexual assault allegations under the terms of its commercial insurance policy. The court’s decision, handed down on Tuesday, interpreted the meaning of the phrase “care, custody or control” within the abuse exclusion, a first-of-its-kind interpretation in the state.

The appeal stemmed from claims filed by three women—Toiah Gordon, Morganne Mersadie Root, and Karina Carrero—who alleged that the spa owner, Zongwei Shen, sexually assaulted them during separate massage sessions. The plaintiffs sought coverage for a $6.8 million covenant judgment stemming from an arbitration settlement with Shen and his wife, Zhong Xin, who managed the spa.

In its ruling, a three-judge panel in the Second Appellate District rejected the claimants’ argument that Shen needed to have “exclusive or complete” control over them for the abuse exclusion to apply. The court found that Shen was responsible for the well-being of the plaintiffs during the massage sessions, thereby meeting the threshold for “care, custody or control.”