Metropolitan News-Enterprise


Monday, March 21, 2011


Page 1


C.A.: Insurer Had No Duty to Defend Sexual Battery Action

Justices Say Businessman’s Attack on Lawyer Not Accident


By SHERRI M. OKAMOTO, Staff Writer


The Fourth District Court of Appeal has ruled a liability insurer did not have a duty to defend an Orange County businessman in a sexual battery lawsuit brought by an attorney, because the policies at issue provided no coverage for intentional torts and there was no potential for liability on a negligence theory.

In its March 8 opinion, ordered published Thursday, Div. Three said “we fail to see how grabbing [the victim’s] buttock, squeezing it, and telling her that its firmness must be the result of all her horseback riding, could have been accidental.”

  Cheryl Skigin, a workers’ compensation attorney now practicing in Orange, cited this incident at a December 2003 Christmas party,  among others, in her lawsuit against her former employer, John Shanahan, for sexual harassment and battery, various forms of discrimination, and breach of contract, fraud and wrongful termination.

Her complaint alleged that Shanahan had “grabbed” her “by the buttocks, made comments about [her] body, and lewdly suggested [she] engage in sexual intercourse with [Shanahan]” during the party at Shanahan’s house. Shanahan also allegedly “groped [her] buttocks as she was leaving a dinner meeting” again in 2005.

Sent Flowers

Skigin further claimed that Shanahan had repeatedly pressured her to leave her husband and sent flowers to her family’s residence with a card suggesting she had a relationship with Shannahan that was more personal than professional.

Shanahan tendered his defense to State Farm General Insurance Company which denied his claim, asserting the renter’s policy and umbrella policy he held did not cover business pursuits and intentional misconduct.

He sued State Farm for breach of contract and breach of the covenant of good faith for failing to defend him, claiming to have incurred over $1 million in fees in addressing Skigin’s lawsuit before reaching a settlement of $700,000.

State Farm filed a motion for summary judgment, which Orange Superior Court Judge Franz E. Miller granted.

Writing for the appellate court, Justice Eileen C. Moore noted that State Farm’s renter’s policy insured Shanahan against personal liability in a suit in the event of an accident …which results in…bodily injury,” while the umbrella policy provided protection against any “loss,” which the policy defined as “an accident,…or…the commission of an offense, or series of similar or related offenses, which result in personal injury.”

Under the terms of these policies, Moore reasoned the facts alleged by Skigin did not give rise to a duty to defend since Skigin did not claim and physical injury and the complained-of conduct was not accidental.

“One does not ‘accidentally’ tell a woman horseback riding has resulted in her having firm buttocks,” the justice said, explaining that “[s]peech is intentional,” even if the speaker is intoxicated or under the influence of medication, as Shanahan claimed to have been at the time of the alleged incident.

Moore added that this incident at the 2003 Christmas party, was not the basis for Skigin’s sexual battery claim, which relied instead upon the allegations from 2005. Since Skigin did not seek damages arising from the alleged events in 2003, Moore said no duty to defend could have arisen from their inclusion in the complaint.

The justice went on to reject Shanahan’s contention that the umbrella policy, which provided coverage for slander and invasion of privacy, was potentially applicable to Skigin’s lawsuit.

No Third Party

Because Skigin did not assert that any third party was present during either of the groping incidents or overheard Shanahan’s lewd questions at the 2003 party, Moore said the complaint did not allege a publication, which is a necessary element of slander.

Moore also concluded Shanahan’s argument that the entreating a individual to leave her spouse could create a cause of action for invading that individual’s right of privacy was unsupported by any authority.

Justices Richard D. Fybel and Raymond J. Ikola joined Moore in her opinion

Shanahan was represented by Viterbo L. Valera. The attorneys for State Farm were James R. Robie, now deceased, along with Michael J. O’Neill and Ronald P. Funnell, all of Robie & Matthai.

 The case is Shanahan v. State Farm General Insurance Company, 11 S.O.S. 1466.


Copyright 2011, Metropolitan News Company