Nadine operated state-licensed child daycare in her home where she lived with her husband, Carlos. They were insured by an Allstate Deluxe Homeowners Policy with a special endorsement for home daycare coverage. In 1998, Carlos was convicted and sentenced to six years in prison for sexually molesting Ashley, then 10 years old, a daycare child. After the conviction, Ashley's parent sued Nadine, her husband and their childcare business for negligent supervision. Purchase Bob Bruss reports online. Nadine tendered defense of the lawsuit to her insurer, Allstate. But Allstate refused to defend, citing the policy exclusion for sexual molestation, as well as intentional and criminal acts. The trial court rendered a $400,000 judgment against Carlos (now in prison) and against Nadine for $100,0...
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