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IMT Insurance Co. v. Crestmoor Golf Club8/19/2005
Insurance company appeals the district court's determination that its insurance policy provided coverage for claims of negligent supervision and retention. REVERSED AND CASE REMANDED WITH INSTRUCTIONS.
This appeal involves a petition for declaratory judgment filed by an insurance company requesting judgment that it did not have a duty to defend or indemnify under its policy of insurance. The district court found coverage to exist for the claims of negligent supervision and retention. Thus, the insurance company was required to defend or indemnify regarding those claims. The insurance company appeals contending various exclusions in the policy exclude coverage. We reverse the decision of the district court and remand the case to enter judgment in favor of the insurance company because the policy provides " his insurance does not apply under any of the coverages to damages arising out of . . . the liability of the insured for the misconduct of . . . any other person," thereby excluding coverage for the claims of negligent supervision and retention.
I. Background Facts and Proceedings
Tabitha Lynnae Cottrell, a former female employee of Crestmoor Golf Club d/b/a Crestmoor Country Club (Crestmoor) claims her supervisor, Galen Krieger, made inappropriate sexual comments to her, touched her inappropriately, and sexually assaulted her. She later complained to Crestmoor personnel. She alleges when she returned to work at Crestmoor, "other managers ridiculed her complaint and engaged in other improper conduct toward her." She further claims Crestmoor constructively discharged her. As a result of the actions of her supervisor and Crestmoor, she claims she suffered humiliation, alienation, severe emotional distress, and economic harm.
She filed a complaint in the United States District Court against Crestmoor and Krieger. She also filed a petition against the same defendants in state court, making the same allegations as she made in federal court. She alleged federal and state claims of sexual harassment and retaliation against Crestmoor. She additionally alleged claims of negligent supervision, negligent retention, tortious infliction of severe emotional distress, and a claim of respondeat superior against Crestmoor.
Relevant to this appeal, she alleged "Crestmoor knew, or should have known, that Krieger harassed and acted inappropriately toward other employees prior to Krieger's harassment and assault on ." Her allegation of negligent supervision claimed: "Crestmoor, its agents, board members, servants, and employees were negligent in failing to properly supervise and control the activities of Krieger." Her allegation of negligent retention claimed: "Crestmoor, its agents, board members, servants, and employees were negligent in retaining and failing to terminate Krieger." As a proximate cause of Crestmoor's negligent supervision and retention of Krieger, Cottrell asked for damages.
Crestmoor purchased a contract of insurance through IMT Insurance Company (IMT). This policy was in force at the time of the alleged incident. Although Crestmoor and Krieger timely requested IMT defend them from the claim, IMT denied the request asserting there was no coverage under the terms and provisions of the insurance contract existing between IMT and Crestmoor. IMT filed a petition for declaratory judgment requesting judgment that it did not have a duty to defend or indemnify Crestmoor or Krieger under its policy of insurance. IMT also named Cottrell as a defendant.
The parties submitted the coverage case to the court as a bench trial on stipulated facts. The parties stipulated the IMT insurance policy did not provide coverage for the claims agai
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