Daily Blast October 6, 2014

The California Court of Appeal, Second Appellate District, Division Four (Los Angeles), published its opinion in Baek v. Continental Casualty Co. (Oct. 6, 2014, B251201) __ Cal.App.4th __, analyzing whether a massage therapist, accused in an underlying action for sexually assaulting a client during a massage, is entitled to a defense under the employer’s general liability insurance policy. (Slip opn., p. 2.) The Court of Appeal held that “[because] the intentional sexual assault alleged in the underlying case cannot properly be characterized as within the scope of [the massage therapist’s] employment or having occurred while performing duties related to the conduct of [the employer’s] business, [the employee] was not insured under the policy, and [the insurer] had no duty of defense or indemnity.” (Ibid.)

The Court of Appeal determined that although the massage therapist’s employment “provided him the opportunity to the meet [the client] and to be alone with her, nothing alleged in the underlying complaint suggested that the alleged assault was ‘engendered by’ or an ‘outgrowth of his employment’ in that its ‘motivating emotions were fairly attributed to work-related events or conditions.’” (Slip opn., p. 12.) Thus, “the alleged sexual assault was not an ‘act[] within the scope of [the massage therapist’s] employment’ within the meaning of the [insurer’s] policy.” (Ibid.)

Further, the appellate court concluded that the sexual assault did not occur while performing duties related to the conduct of the employer’s business. The Court of Appeal indicated that it was “unaware of any California cases . . . that have considered whether sexual misconduct at work can be said to occur ‘while performing duties related to the conduct of’ an insured’s business.” (Slip opn., p. 12.) After analyzing several out-of-state cases, the appellate court explained that “[although] the alleged sexual assault of [the client] occurred during a massage, the particular acts on which liability is premised . . . indisputably were not ‘duties related to the conduct of [the employer’s] business’ or acts of the kind [the employee] had been hired to perform.” (Id. at p. 14.) “Instead, they represented a ‘stepping away’ from [the employer’s] business because they were performed solely for [the employee’s] own benefit, not for [the employer].” Accordingly, it “cannot be said to have occurred ‘while performing the duties related to the conduct of [the employer’s business.’” (Ibid.)

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