When an employer negligently supervises an employee who commits separate acts of sexual harassment against three different co-workers on separate occasions, how many “occurrences” are there under a standard commercial general liability policy? The Northern District of Ohio, Eastern Division, considered this question in Scott Fetzer Co. v. Zurich Am. Ins. Co., No. 16 CV 1570 (N.D. Ohio Dec. 18, 2017), and concluded that the answer is three.
Three Times the HarassmentIn 2015, three women filed suit against the policyholder, the Scott Fetzer Company (“Fetzer”) in Missouri state court alleging they were subjected to sexual harassment and assault by a male co-worker, John Field (“Field”), while working for Fetzer as door-to-door vacuum salespersons. The three plaintiffs in the Missouri case alleged that their injuries were the direct and proximate result of conduct by Fetzer. Their first claim, for fraudulent misrepresentation, alleged that Fetzer was vicariously liable for Field’s false promises in inducing the plaintiffs to work with him. Their second claim, for fraudulent concealment, alleged theories of direct and vicarious liability; the direct liability allegations were that the Fetzer defendants failed to inform the plaintiffs of Field’s criminal history, sexually deviant propensities, and sexually deviant activities with other employees, and that he was forbidden from selling vacuums door-to-door without supervision because he was a sex offender. Their third claim, for negligence, alleged that Fetzer negligently hired, retained, and supervised Field.
Fetzer was insured under two policies providing general liability insurance issued by Zurich American Insurance Company (“Zurich”), with identical material terms (collectively, “Policies”). Policy 1 covered the time period January 1, 2012 to January 1, 2013. Policy 2 covered the time period January 1, 2013 to January 1, 2014. Zurich accepted coverage under...
