Liberty Surplus Insurance Corp. v. Ledesma & Meyer Construction Co., Inc.Annotate this Case
When a third party sues an employer for the negligent hiring, retention, and supervision of an employee who intentionally injured that third party, the suit alleges an “occurrence” under the employer’s commercial general liability policy so long as the injury can be considered “accidental.”
Jane Doe alleged that Construction Company negligently hired, retained, and supervised an employee, who allegedly sexually abused Doe. Construction Company tendered the defense to Insurer. Insurer sought declaratory relief in federal court contending that it had no obligation to defend or indemnify Construction Company. The commercial general liability policy at issue provided coverage for “bodily injury caused by an “occurrence.” “Occurrence” was defined as an “accident.” The district court granted summary judgment to Insurer, reasoning that Doe’s injury was not caused by an “occurrence” because the alleged negligent hiring, retention, and supervision were acts too attenuated from the injury-causing conduct committed by the employee. The Supreme Court reversed, holding that the causal connection between Construction Company’s alleged negligence and the injury inflicted by its employee was close enough to justify the imposition of liability on Construction Company.