FINDINGS OF FACT AND CONCLUSIONS OF LAW An action commenced in the District of South Carolina alleged that defendant Choice Hotels International, Inc. (“Choice”) was liable for a brutal incident of human trafficking that occurred on the premises of a Quality Inn. See B.H. v. Choice Hotels International, Inc., 19 Civ. 3442 (D.S.C.) (the “B.H. Action”). B.H. alleged that through use of force and violence, she was held captive at the Quality Inn and forced to engage in sex acts with paying customers, and that, based on the circumstances of her captivity, Choice “knew or should have known” of the trafficking venture and her forced captivity. Plaintiff Starr Indemnity and Liability Company (“Starr”) issued comprehensive general liability policies to the franchisee of that Quality Inn. The policies named Choice as an additional insured. Choice timely demanded that Starr defend and indemnify it in the B.H. Action. Starr disclaimed coverage, asserting that because B.H. was within the “care, custody or control” of Choice, coverage was excluded under an Abuse or Molestation Exclusion. Starr then commenced this declaratory judgment action. It seeks a declaration that it has no duty to defend or indemnify Choice. In a counterclaim, Choice seeks a declaration that Starr has wrongfully disclaimed coverage. While this case was pending, the B.H. Action was dismissed without prejudice. Choice no longer seeks indemnification from Starr, and the parties’ remaining dispute is whether Starr had a duty to defend Choice in the B.H. Action. On May 18, 2021, this Court held a bench trial on the issue of Starr’s duty to defend. Each side called two witnesses.1 Twenty-two exhibits were received into evidence. The following are the Court’s findings of fact and conclusions of law: 1. The plaintiff in the B.H. Action filed her complaint on December 9, 2019, and named Choice as the sole defendant. (PX C.) The Complaint describes the violent sex trafficking of B.H., which occurred principally at the Quality Inn Fort Jackson Maingate hotel in Columbia, South Carolina. (Id.) That Quality Inn was operated by Maniben, LLC (“Maniben”), a franchisee of Choice. (Stipulation of Fact 3.) 2. B.H. asserts that she had gone on a date with a man who later invited her to his room at the Quality Inn, where the man and two accomplices accosted her. (Compl’t 4.) The man forcibly raped B.H., after which he and his accomplices demanded that she engage in commercial sex on their behalf because “they now owned her.” (Id.) She alleges that she was held captive at the Quality Inn for approximately three weeks, where she was raped and required to sexually service paying customers. (Id.
4, 50.) B.H. alleges that at one point she fled the premises, but that “a few days later” her three traffickers abducted her off the street, forcibly returned her to the hotel, and continued to force her to engage in sex for money. (Id.
