In Selective Insurance Co. v. Thomas L. Oglebay, et al., No. 05-2357 (4th Cir. July 17, 2007) (per curiam), the United States Court of Appeals for the Fourth Circuit held that, under Maryland law, an employee who sexually assaulted a driving student was not an insured under his employer’s commercial general liability contract because the employee’s conduct was not within the scope of his employment “while performing duties” related to the employer’s business.
Factual and Procedural Background
Widmeyer Driving School (Widmeyer) employed Thomas Oglebay. A driving school student sued Oglebay and Widmeyer because Oglebay allegedly committed “vulnerable adult abuse, sexual assault, battery and rape.” Oglebay allegedly committed these acts in a vehicle owned by Widmeyer or at Oglebay’s personal residence. They occurred during the time when the student was scheduled to receive driving instructions.
Selective Insurance Company (Selective) had issued a commercial general liability contract to Widmeyer. The definition of “insured” included “employees … but only for acts within the scope of their employment by you or while performing duties related to the conduct of your business.” Selective disclaimed a duty to defend or indemnify Oglebay on the basis that Oglebay was not an insured because he was not performing his duties for Widmeyer when he assaulted the claimant.
In the sexual assault suit, the court entered summary judgment against Oglebay on a false imprisonment claim. Oglebay entered into a consent judgment with the claimant and assigned his rights against Selective to the claimant.
Selective filed a declaratory judgment action in Maryland federal district court against Oglebay and the claimant. The parties filed cross motions for summary judgment. The district court granted Selective’s motion. The district court held that, under Maryland law, Oglebay’s intentional sexual misconduct did not take place “while performing duties” within the scope of his employment. The claimant, as Oglebay’s assignee, appealed.
The Fourth Circuit affirmed the district court’s holding that Oglebay is not an insured.
The Fourth Circuit stated that the question before it was “whether the district court properly concluded that Mr. Oglebay’s actions were not acts committed ‘while performing duties related to the conduct of’ Widmeyer’s business.”
The claimant argued that the “while performing duties” provision must be construed more broadly than the “scope of employment” provision. When the provision is construed broadly, Oglebay’s alleged conduct, the claimant argued, would be covered because it took place during the time when Oglebay was supposed to be teaching the claimant how to drive.
The claimant also argued that the alleged misconduct was covered because there was a “temporal-spatial connection” between Oglebay’s duties and the tortious conduct. The claimant argued that a “but for” test should be applied, i.e., the claimant would not have been sexually assaulted “but for” Oglebay’s providing driving instructions.
The Fourth Circuit rejected the claimant’s arguments. The court noted that a Maryland court had not yet construed the “while performing duties” provision. Because Maryland has not addressed the issues, the court turned to its decision in Federal Insurance Company v. Ward, 166 Fed.Appx. 24 (4th Cir. 2006) (applying Virginia law) for guidance. In Ward, the Fourth Circuit held that an employee who flicked her ashes into a wastebasket, causing a fire, was not performing her duties, because smoking was not within the employee’s job description or necessary to perform a job-related duty.
Applying the rationale of Ward to the case before it, the Fourth Circuit reasoned that “[t]here is no suggestion that sexual contact in any form constituted part of Oglebay’s job description or that the subsidiary act of accomplishing it in an assaultive way could be characterized as the exercise of a duty.” Additionally, the Fourth Circuit explained that to apply a “but for” test “would result in coverage for a ‘virtually limitless number of activities’ beyond the anticipation of either the insurer or the insured simply because they ‘coincide with a job-related duty.’ ”
The Fourth Circuit also explained that the Maryland Court of Appeals had rejected a similar “but for” test in Wolfe v. Anne Arundel County, 821 A.2d 52, 58 (Md. 2003). The Wolfe court determined that a rape committed by an on-duty police officer during a traffic stop did not fall within a collective bargaining agreement that covered “litigation arising out of acts within the scope of … employment.”
The Fourth Circuit explained that the Wolfe court’s rejection of a “but for” test in construing the “scope of employment” phrase was instructive in predicting the manner in which Maryland courts would interpret the “more broad” “while performing duties” provision.
Based on Wolfe, the Fourth Circuit refused to apply a broad “but for” test. Accordingly, the Fourth Circuit held that Oglebay was not an insured because the assault did not take place while Oglebay was performing duties for his employer. The court explained that Oglebay’s “sexual assault of [the claimant], even if committed during the time or at a place related to his employment as a driving instructor, was certainly not the performance of a duty related to the conduct of his employer’s business.”
This decision establishes that, under Maryland law, an employee who commits a sexual assault or engages in similar misconduct is not an insured under his/her employer’s commercial general liability contract. It also establishes that even if the phrase “while performing duties” is construed broadly, a court will not strain to find that an employee’s sexual misconduct took place while he/she performed duties for his/her employer. It also establishes that a court will not apply a “but for” test to determine if improper acts resulted from an employee’s duties.