Party Bus Rape Victim Can Hold Insurer Liable

SAN FRANCISCO (CN) - A woman who was raped by a party bus driver can hold the insurer for the bus company liable for a $2 million judgment, a federal judge ruled.

Gustavo Rosales was driving the party bus chartered by American Bus Lines and operated by VIP Club Bus dba Nitelife Express on Jan. 27, 2008, even though he had a history of violent criminal acts against women, according to the complaint.

After Rosales drove the bus to its second stop of the night, a club in San Francisco called Kelly's Mission Rock, bouncers allegedly denied entry to Lillian Gradillas and another passenger who did not have ID.

Gradillas said it was raining and after midnight, so she and the other female passenger accepted Rosales' invitation to wait with him and his nephew on the bus. Rosales then drove the bus to a dark parking lot away from the bar and locked the doors. While the other woman used the bathroom, Rosales' nephew guarded as Rosales repeatedly raped Gradillas, according to the complaint.

Gradillas says Rosales is now in prison after pleading guilty to sexually assaulting her.

When she and her husband sued several of the parties involved, American Bus Line owner Kenneth Nwadike Jr. tried to rely on his policy with Lincoln General Insurance.

Lincoln refused to defend Nwadike, however, first claiming that the policy did not cover the bus and then saying that the rape was actually molestation and the policy did not cover abuse or molestation.

Nwadike eventually agreed to a judgment awarding Gradillas $2 million and her husband $500,000, leading the couple to seek summary judgment against Lincoln for breach of contract.

Lincoln argued that the stipulated judgment was unreasonable, fraudulent and the result of collusion between Nwadike and the plaintiffs.

U.S. District Judge Charles Breyer rejected these claims Monday.

"Defendant offers no evidence in support of its allegations of unreasonableness, instead arguing that because the reasonableness is supported only by the stipulated judgment, the lack of other facts in the record create a dispute as to the reasonableness of the judgment," Breyer wrote. "Given that defendant provides no authority for questioning the reasonableness of the judgment, and a state court judge implicitly found the judgment reasonable, the court finds that the judgment was reasonable."

Breyer also rejected Lincoln's claims of fraud and collusion between Nwadike and the Gradillases, noting that the law does not bar the stipulated judgment and the company failed to level specific charges of collusion against the plaintiffs.

Lincoln also failed in its claim that the bus on which the rape occurred - which Nwadike had leased from Nitelife Express because his own buses were out for maintenance -did not qualify as a "substitute auto" under the policy.

"Mr. Nwadike submitted a second declaration stating that '[d]uring the week-end [sic] of January 27, 2008, when Ms. Gradillas was injured on one of [ABL's] buses, the three ABL buses were unavailable due to engine problems and transmission repairs," the ruling states. "The engines were essentially non-operable at the time.' Defendant attacks Nwadike's statements that the buses were 'unavailable due to engine problems and transmission repairs' and 'essentially non-operable' not with contradictory evidence, but merely by alleging that plaintiff did not carry their burden of establishing that the bus in question was a substitute auto. Nonetheless, the court finds that Nwadike's statements are sufficient to satisfy plaintiff's burden that the auto in question is a substitute auto under the policy."

Breyer concluded by rejecting Lincoln's arguments that sexual assault and rape are not "uses" of a vehicle under California law.

"Gradillas was a customer on the bus operated by ABL and Nwadike," Breyer wrote. "The bus was designed for social activity to occur on it, and promoted a party atmosphere. The pictures of the bus show long padded benches, at least two bar areas, glasses, and bottles for storing alcohol. VIP Club Bus advertised the bus as 'California's Favorite Nightclub Party Bus!,' referenced 'drinks served onboard,' and stated that 'the party continues on the bus.' The bus was not intended solely for transportation, as is a typical automobile."

He continued: "Moreover, the manner of operating the vehicle directly contributed to the assault here. Although the bus was not transporting Ms. Gradillas when the rape occurred, it was still being used for its party atmosphere, and features of the vehicle aided in the commission of the rape. The driver, Rosales, locked the only exit to the bus (most vehicles have more than one exit). And Rosales's nephew blocked the other woman on the bus in the bathroom (most vehicles do not have bathrooms, or serve beverages making it more likely that a bathroom will be used). 'The conduct of the insured which contributed to the injury simply cannot be dissociated from the use of the vehicle' here. The court therefore finds that the rape did arise out of the 'use' of the auto." (Parentheses in ruling.)

Subscribe to Closing Arguments

Sign up for new weekly newsletter Closing Arguments to get the latest about ongoing trials, major litigation and hot cases and rulings in courthouses around the U.S. and the world.

Email *

Submit