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SCI Liquidating Corp. v. Hartford Insurance Co.2/28/2000
d have been exposed outside of the employment context, but only injuries that arise as a proximate result of the peculiar nature of the employment. Id. In Murphy, the Court of Appeals refused to hold that sexual harassment was traceable to a cafeteria worker's employment. The court reasoned that the injury was due to "the willful act of a third person for personal reasons" rather than a work-related condition.
To be compensable in the workers' compensation context, an injury must both occur "in the course of employment" and "arise out of employment." Potts, supra; Garrett v. K-Mart Corp., 187 Ga. App. 374, 375 (398 SE2d 302)(1990). Similarly, Exclusion No. 16 is not triggered unless the injury both arises out of and in the course of employment since sexual harassment claims are construed under Georgia law as not having "arisen out of employment." For the reasons stated above, we find that Exclusion No. 16 does not operate to preclude coverage for claims of sexual harassment filed by employees against Sunrise.
Question answered. All the Justices concur, except Fletcher, J., who dissents.
Fletcher, Presiding Justice, dissenting.
Because the majority relies on workers' compensation law to interpret a commercial liability insurance contract, I dissent.
At issue in this case is the meaning of exclusion 16 in the umbrella liability insurance policy Hartford Casualty Insurance Company issued to Sunrise Carpet Industries, Inc. The use of workers' compensation law to guide the interpretation of a contract not involving workers' compensation is inappropriate. Workers' compensation is a state-imposed and regulated system that provides limited benefits to employees who suffer injuries on the job without regard to the traditional principles of tort law. Public policy concerns have led the legislature to mandate that courts interpret the workers' compensation act liberally in order to bring both employers and employees within its coverage, but these concerns have no place in interpreting private contracts. Additionally, the umbrella policy contains a specific exclusion for claims covered by workers' compensation, and it is therefore illogical and redundant to incorporate workers' compensation law into exclusion 16.
Exclusion 16 provides that the policy does not apply to coverage afforded for personal injuries "to other employees arising out of and in the course of their employment." Thus, the focus is on whether the claim arises out of and in the course of a plaintiff's employment, and not whether sexual harassment is within the scope of an employee's duties. According to the allegations of the plaintiffs' complaint in the underlying suit, a supervisor made the plaintiffs' submission to his sexual advances an express condition of employment, and Sunrise discriminated against the plaintiffs in retaliation for reporting the offensive conduct. Thus, the plaintiffs' claim clearly arose out of and in the course of their employment. This conclusion is consistent with the decisions of a majority of other courts interpreting similar policy exclusions. Therefore, I would conclude that an employee's sexual harassment of another employee triggers exclusion 16.
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