Ohio Govt. Risk Mgt. Plan v. Harrison

• Decision Date: 27 September 2007
• Docket Number: No. 2005-1461.,2005-1461.
• Citation: 874 N.E.2d 1155,115 Ohio St.3d 241,2007 Ohio 4948
• Parties: OHIO GOVERNMENT RISK MANAGEMENT PLAN, Appellant, v. HARRISON et al.; Kohler, Appellee.
• Court: Ohio Supreme Court

874 N.E.2d 1155

115 Ohio St.3d 241

2007-Ohio-4948

OHIO GOVERNMENT RISK MANAGEMENT PLAN, Appellant, v. HARRISON et al.; Kohler, Appellee.

No. 2005-1461.

Supreme Court of Ohio.

Submitted December 13, 2006.

Decided September 27, 2007.

Shumaker, Loop & Kendrick, L.L.P., and Michael G. Sanderson, Toledo, for appellant.

Hunter, Carnahan, Shoub & Byard, Grant D. Shoub, and Robert M. Cody, Columbus, for appellee.

PFEIFER, J.

{¶ 1} Denise Kohler, appellee, filed a federal action against the city of Wapakoneta and David L. Harrison Sr., formerly Wapakoneta's chief of police. Kohler alleged that Harrison had used the department's computer system to display and distribute offensive and pornographic photographs and e-mails, and that he also used hidden electronic devices owned by the department to audio record female employees, including Kohler, while they were in the police-department restroom. Kohler's amended complaint set forth five counts against Harrison: denial of equal protection by creating a work environment that was hostile to Kohler because of her sex, denial of her constitutional right to privacy, an R.C. 4112.02 sex-discrimination claim, and common-law claims of invasion of privacy and intentional infliction of emotional distress. Kohler named Harrison as an individual and in his official capacity, asserting that Harrison had acted in his official capacity as chief of police and under color of state law.

{¶ 2} At the time of the events alleged in the complaint, the Ohio Government Risk Management Plan ("the Plan"), appellant, provided liability insurance coverage to Wapakoneta, and to Harrison as the chief of police. In June 2004, the Plan filed a declaratory-judgment action in the Auglaize County Court of Common Pleas seeking a determination that it had no duty to provide coverage or a defense to Harrison. The trial court granted summary judgment in the Plan's favor.

{¶ 3} The Court of Appeals for Auglaize County reversed the trial court's judgment. The court of appeals determined that Kohler's claims arose from her employment with the Wapakoneta Police Department while Harrison was chief of police. The court noted that Kohler had alleged that Harrison's actions were taken in the course of his duties and that, although his actions might not have been in furtherance of his official duties, Harrison was able to take those actions only because of his position as chief of police.

{¶ 4} Further, the court stated that the Plan's policy specifically provided that it would defend against a suit for any wrongful act even if the complaint were groundless or false, and it additionally specified that it would defend suits for misfeasance, malfeasance, nonfeasance, civil rights violations, and discrimination. Because some of Kohler's claims fell within the Plan's coverage, the court, viewing the evidence in a light most favorable to Harrison, held that Kohler's underlying federal claims were not indisputably outside the coverage of the policy and, thus, the Plan had a duty to defend Harrison. Ohio Govt. Risk Mgt. Plan v. Harrison, 161 Ohio App.3d 726, 2005-Ohio-3235, 831 N.E.2d 1079, ¶ 10.

{¶ 5} This cause is now before the court on a discretionary appeal. We review the granting of summary judgment de novo. Comer v. Risko, 106 Ohio St.3d 185, 2005-Ohio-4559, 833 N.E.2d 712, ¶ 8.

Sexual Harassment/Scope of Employment

{¶ 6} In the primary issue on appeal, the Plan asks us to hold that conduct involving sexual harassment and sexually deviant behavior—such as the acts alleged in the underlying complaint—is conduct that is manifestly outside the scope of employment as a matter of law. The Plan maintains that acts of sexual harassment are outside the scope of employment because they are unrelated and antithetical to the objectives of the employer. The Plan thus argues that when, as here, the liability policy defines an "insured" as any employee "while acting on behalf of or in the interest of" the employer, the employer's insurer has no duty to defend an employee against such claims. We decline to adopt such a broad and absolute rule, for the following reasons.

{¶ 7} First, we rejected exactly this claim under analogous circumstances in Kerans v. Porter Paint Co. (1991), 61 Ohio St.3d 486, 575 N.E.2d 428. Like Kohler, the plaintiff in Kerans raised allegations of workplace sexual harassment by her supervisor. The employer contended that it could not be held liable for the supervisor's intentional acts, since the activities that formed the basis of the complaint took place outside the scope of the supervisor's employment. The employer argued that because it did not hire the supervisor to sexually harass female employees and because the supervisor's actions in no way facilitated the employer's business, the employer could not be held liable for the harm that resulted from the supervisor's egregious behavior. Kerans, 61 Ohio St.3d at 490, 575 N.E.2d 428.

{¶ 8} We found, however, that there was a genuine issue of material fact as to whether the supervisor's actions took place within the scope of his employment. Specifically, we noted that federal courts have held that "where an employee is able to sexually harass another employee because of the authority or apparent authority vested in him by the employer, it may be said that the harasser's actions took place within the scope of his employment." Kerans, 61 Ohio St.3d at 490, 575 N.E.2d 428. We further noted that in Shrout v. Black Clawson Co. (S.D.Ohio 1988), 689 F.Supp. 774, the court had held that when the supervisor's harassment of an employee takes "`place during work hours, at the office, and was carried out by someone with the authority to hire, fire, promote and discipline the plaintiff,'" it will normally fall within the supervisor's scope of employment. Kerans, at 490, 575 N.E.2d 428, quoting Shrout at 781.

{¶ 9} Second, the Plan argues that two Ohio court of appeals' decisions establish—for purposes of determining the duty to defend—that sexual harassment is conduct that is manifestly outside the scope of employment. We find that neither case supports the broad proposition urged by the Plan.

{¶ 10} The Plan first cites Oye v. Ohio State Univ., Franklin App. No. 02AP-1362, 2003-Ohio-5944, 2003 WL 22511511. The issue in Oye was whether a state employee was entitled to personal immunity under R.C. 9.86 against allegations that included claims of hostile-work-environment sexual harassment. R.C. 9.86 provides that "no officer or employee shall be liable in any civil action * * * for damage or injury caused in the performance of his duties, unless the officer's or employee's actions were manifestly outside the scope of his employment or official responsibilities." The Oye court, however, did not decide that acts of sexual harassment were always manifestly outside the scope of employment. Rather, the court noted that the "term `scope of employment' is an elusive concept * * * [that] `has never been accurately defined * * * because [whether an act falls within the scope of employment] is a question of fact'" to be determined according to the peculiar facts of each case. Oye at ¶ 6, quoting Posin v. A.B.C. Motor Court Hotel (1976), 45 Ohio St.2d 271, 278, 74 O.O.2d 427, 344 N.E.2d 334. That is, Oye turned on the specific facts of the case.

{¶ 11} Nevertheless, the Plan argues that Oye relied on Burlington Industries, Inc. v. Ellerth (1998), 524 U.S. 742, 118 S.Ct. 2257, 141 L.Ed.2d 633, a case in which the United States Supreme Court stated that the "general rule is that sexual harassment by a supervisor is not conduct within the scope of employment." Id. at 757, 118 S.Ct. 2257, 141 L.Ed.2d 633. But Ellerth did not hold that all acts of workplace sexual harassment were outside the scope of employment. Rather, the court recognized that when a supervisor engages in sexual harassment with the purpose (however misguided) to serve the employer, the supervisor acts within the scope of employment. Id. at 756-757, 118 S.Ct. 2257, 141 L.Ed.2d 633, citing Sims v. Montgomery Cty. Comm. (M.D.Ala.1990), 766 F.Supp. 1052, 1075.

{¶ 12} In a companion case decided the same day as Ellerth, the court again recognized that not all acts of sexual harassment by a supervisor fall outside the scope of employment. Faragher v. Boca Raton (1998), 524 U.S. 775, 798-799, 118 S.Ct. 2275, 141 L.Ed.2d 662. Indeed, Faragher cites numerous cases holding employers vicariously liable for intentional discriminatory acts of their supervisors—including sexual harassment. Faragher at 788-794, 118 S.Ct. 2275, 141 L.Ed.2d 662. See also Durham Life Ins. Co. v. Evans (C.A.3, 1999), 166 F.3d 139, 150 (noting that Ellerth and Faragher drew a line between a supervisor's sexually discriminating acts that are in line with the employer's interest and those that have no apparent purpose of serving the employer's interest).

{¶ 13} We also find Oye distinguishable from the case before us in that Oye did not involve claims of sexual harassment against a supervisor. Kerans, Ellerth, and Faragher recognized that an employer is more likely to be held liable for the acts of its supervisors than its nonsupervisory employees because a supervisor can take tangible, adverse employment actions against his or her subordinates because of the authority delegated by the employer. Kerans, 61 Ohio St.3d at 490-491, 575 N.E.2d 428; Ellerth, 524 U.S. at 761-762, 118 S.Ct. 2257, 141 L.Ed.2d 633; and Faragher, 524 U.S. at 800-801, 118 S.Ct. 2275, 141 L.Ed.2d 662.

{¶ 14} The second case cited by the Plan, Crise v. Cleveland, Cuyahoga App. No. 80984, 2002-Ohio-6229, 2002 WL 31528793, did involve claims of sexual harassment against a supervisor. The issue in Crise was whether the city had a duty to defend the supervisor under R.C. 2744.07(A)(1) against such claims. R.C. 2744.07(A)(1) provides that a political subdivision has a duty to defend municipal employees in civil actions if the employee was acting, or was alleged to have...