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As of: April 3, 2012 11:13 AM EDT

Scheer v. State Farm Fire & Cas. Co.

Court of Appeal of Florida, Fourth District
March 11, 1998, Opinion Filed

CASE NO. 97-2582

Reporter: 708 So. 2d 312; 1998 Fla. App. LEXIS 2268; 23 Fla. L. Weekly D 679

MICHAEL SCHEER, M.D., Appellant, v. STATE FARM FIRE AND CASUALTY COMPANY,
an Illinois corporation authorized to do business in Florida, JUNE VERNON and DELROY VER-
NON, JASMINE ASHLEY, and MARJORIE YOUNG, Appellees.

Subsequent History: [**1] Rehearing Denied May 7, 1998. Released for Publication May 7,
1998. Petition for Review Denied November 3, 1998, Reported at: 1998 Fla. LEXIS 2318.

Prior History: Appeal from the Circuit Court for the Seventeenth Judicial Circuit, Broward
County; George A. Brescher, Judge; L.T. Case No. 96-15452 CACE 25.

Disposition: Reversed.

Core Terms
allegations, insured, business pursuit, trial court, conclusions, complaints, profession, coverage,
touching, counts, coverage of the policy, scope of employment, homeowner’s policy, sexual
harassment, legal conclusion, sufficient facts, policy coverage, umbrella policy, duty to defend,
general rule, tort claim, no effect, co-employees, individually, exclusions, offensive, policies,
patient, female, Mutual

Case Summary
Procedural Posture
Defendant insured appealed a judgment of the Circuit Court for the Seventeenth Judicial Circuit
(Florida), which entered summary judgment in favor of plaintiff insurance company in a suit by
plaintiff in which it sought a declaratory judgment determining that it had neither a duty to de-
fend nor to indemnify defendant in a sexual harassment suit filed against defendant.

Overview
Three female co-employees of defendant insured sued him and their joint employer, claiming
sexual harassment. Plaintiff insurance company filed a suit seeking a declaratory judgment that it
had neither a duty to defend nor to indemnify defendant in the sexual harassment suit. The trial
court granted plaintiff’s motion for summary judgment, concluding that the allegations in the sexual
harassment suit brought the claims within the ″business pursuits″ exclusions in the two policies is-
sued to defendant by plaintiff. The court reversed the trial court’s grant of summary judgment
 Page 2 of 3
708 So. 2d 312, *312; 1998 Fla. App. LEXIS 2268, **1

to plaintiff, holding that the allegations in the complaints that the conduct occurred within the
course of his employment were not pertinent to the tort claims against defendant individually; they
were only relevant to the counts seeking relief from his employer. The court held that the trial
court was therefore incorrect in concluding that it followed from those allegations that there was
no coverage because of the business pursuits exclusions. The court held further that the acts al-
leged against defendant which included touching co-employees’ breasts and buttocks, did not arise
out of his profession.

Outcome
The court reversed the trial court’s grant of summary judgment for plaintiff insurance company,
holding that the allegations in the complaints that the conduct occurred within the course of his em-
ployment were not pertinent to the tort claims against defendant individually and, therefore, the
trial court erred in concluding that there was no coverage because of the business pursuits exclu-
sion of the policies.

LexisNexis® Headnotes
Insurance Law > Claim, Contract & Practice Issues > General Overview

If a complaint or petition against the insured states conclusions rather than allegations of acts,
the general rule is that the statement of conclusions has no effect whatsoever on the determina-
tion whether or not the action brought against the insured is within the coverage of the policy, that
is, the legal conclusions of the plaintiff do not prejudice the insured, provided there are suffi-
cient facts alleged to bring the case within the policy coverage.

Counsel: Joseph S. Kashi of Sperry, Shapiro & Kashi, P.A., Fort Lauderdale, for appellant.

Spencer M. Sax and Anthony M. Lawhon of Sachs, Sax & Klein, Boca Raton, for Appellee-
State Farm Fire and Casualty Company.

Judges: KLEIN, J., WARNER and FARMER, JJ., concur.

Opinion by: KLEIN

Opinion

[*312] KLEIN, J.
Three female co-employees of Dr. Scheer sued him and their joint employer in federal court for
sexual harassment, battery, invasion of privacy and false imprisonment. State Farm, the insurer of
Dr. Scheer under a homeowner’s policy and personal liability umbrella policy, sought, in this
suit, a declaratory judgment determining that it had neither a duty to defend nor to indemnify. The
trial court granted State Farm’s motion for summary judgment, concluding that the allegations
in the complaints to the effect that [*313] Dr. Scheer committed these torts within the course of
his employment brought these claims within the ″business pursuits″ exclusions in the two poli-
cies. [**2] We reverse.
The homeowner’s policy excluded injuries ″arising out of business pursuits,″ and the umbrella
policy excluded coverage ″for any loss caused by your business pursuits.″ In both policies busi-
ness was defined as ″a trade, profession, or occupation.″
 Page 3 of 3
708 So. 2d 312, *313; 1998 Fla. App. LEXIS 2268, **2

In the federal case, four of the counts in the complaints asserted tort claims against only Dr.
Scheer, and the three remaining counts sought relief against Dr. Scheer’s employer, alleging that
the torts were committed in the course of his employment. The tort allegations alleged against
Dr. Scheer individually included touching parts of the plaintiffs’ bodies as well as making offen-
sive sexual remarks to plaintiffs.
The trial court correctly looked to the allegations in the complaint to determine whether State
Farm had a duty to defend, National Union Fire Ins. v. Lenox Liquors, Inc., 358 So. 2d 533, 538
(Fla. 1977); however, the allegations in the complaints that the conduct occurred within the
course of his employment were not pertinent to the tort claims against Dr. Scheer individually.
They were only relevant to the counts seeking relief from his employer. The trial court was there-
fore incorrect in concluding that it [**3] followed from those allegations that there was no cov-
erage because of the business pursuits exclusions. As Couch on Insurance explains:
If a complaint or petition against the insured states conclusions rather than allegations of acts,
the general rule is that the statement of conclusions has no effect whatsoever on the determina-
tion whether or not the action brought against the insured is within the coverage of the policy, that
is, the legal conclusions of the plaintiff do not prejudice the insured, provided there are suffi-
cient facts alleged to bring the case within the policy coverage.
14 Couch on Insurance, Section 51:50 (1982 ed.).
Nor does it follow from the fact that this conduct occurred in the work place that it was within
the business pursuits exclusion. That exclusion applies to conduct ″primarily taken in furtherance
of a business interest,″ and it must be assessed in light of the relationship of the alleged con-
duct to the business activity. Lambert v. Allstate Ins. Co., 593 So. 2d 1172, 1173 (Fla. 1st DCA
1992)(citing Landis v. Allstate Ins. Co., 546 So. 2d 1051 (Fla. 1989)). The acts alleged against Dr.
Scheer, which included touching co-employees’ [**4] breasts and buttocks, did not arise out
of his profession. See Farmers Ins. Group v. Santa Clara County, 11 Cal. 4th 992, 906 P.2d 440
(Ca. 1995)(lewd propositioning and offensive touching by deputy sheriff is not within scope of
employment even when misconduct occurs at place and during time of employment); Faragher v.
City of Boca Raton, 111 F.3d 1530 (11th Cir. 1997)(sexual harassment of female life guards by
male supervisor was not within scope of employment under well established common law agency
principles but rather agent was ″on a frolic of his own.″).
We distinguish the case on which the trial court relied, Liberty Mutual v. Miller, 549 So. 2d
1200 (Fla. 3d DCA 1989). In that case two physicians were arguing about how to treat a mutual pa-
tient, and in the heat of the argument one of them jerked on the other’s stethoscope apparently caus-
ing injury. There the assault arose out of a professional dispute about patient care, whereas in
the present case, Dr. Scheer’s actions were not related to his profession.
We therefore conclude that the trial court erred in finding that the business pursuits exclusion
left Dr. Scheer without a defense or coverage. Reversed.
WARNER [**5] and FARMER, JJ., concur.