Title: Minnis v. Oregon Mutual Ins. Co.
Citation: N/A
Docket Number: S46892
State: Oregon
Issuer: Oregon Supreme Court
Date: June 7, 2002

Filed:  June 7, 2002
IN THE SUPREME COURT OF THE STATE OF OREGON
JOHN MINNIS
and LITTLE JOHN'S PIZZA CO., LLC,
	Respondents on Review,
	v.
OREGON MUTUAL INSURANCE COMPANY,
	Petitioner on Review.
(CC C96-1230-CV; CA A98241; SC S46892)

	On review from the Court of Appeals.*
	Argued and submitted March 1, 2001.
	William G. Earle, Portland, argued the cause for petitioner
on review.  With him on the briefs were Alan Gladstone and
Abbott, Davis, Rothwell, Mullin &amp; Earls, P.C.
	Christopher A. Rycewicz, Portland, argued the cause for
respondents on review.  With him on the briefs was Rycewicz &amp;
Chenoweth, LLP and Michael J. Knapp, of Myers &amp; Knapp.
	Kenneth Shiroishi, Portland, filed a brief on behalf of
amicus curiae Oregon Association of Defense Counsel.
	Before Carson, Chief Justice, and Gillette, Durham, Leeson,
Riggs, and De Muniz, Justices.**
	DE MUNIZ, J.
	The decision of the Court of Appeals is affirmed in part and
reversed in part.  The judgment of the circuit court is affirmed.
	Riggs, J., specially concurred and filed an opinion.
	*Appeal from Washington County Circuit Court, Jon B. Lund, Judge. 162 Or App 198, 986 P2d 77 (1999).
	**Kulongoski, J., resigned June 14, 2001, and did not
participate in this decision.  Balmer, J., did not participate in
the consideration or decision of this case.
		DE MUNIZ, J.
		In this insurance case, we are asked to determine
whether Oregon Mutual Insurance Company (defendant) had a duty to
defend its insured, Little John's Pizza (Little John's), in a
tort action by a former Little John's employee, Winters.  After
that action was settled, Little John's and its owner, John Minnis
(Minnis), brought this action against defendant.  The trial court
entered summary judgment in favor of defendant.  The Court of
Appeals reversed that judgment in part, holding that defendant
had a duty to defend Little John's because Winters's complaint
could have imposed vicarious liability on Little John's for
conduct of its manager, Tuck Minnis (Tuck), that was covered
under the policy. (1)  Minnis v. Oregon Mutual Ins. Co., 162 Or App
198, 212, 986 P2d 77 (1999).  
		We allowed defendant's petition for review and now
conclude that, as explained below, the underlying complaint could
not have imposed vicarious liability on Little John's for any
conduct by its manager that was covered by the policy. 
Accordingly, defendant did not have a duty to defend Little
John's.  We affirm in part and reverse in part the decision of
the Court of Appeals, and we affirm the judgment of the circuit
court.  
		The material facts are not in dispute.  John Minnis
owned and operated Little John's, a pizza parlor that was managed
by his brother, Tuck.  Little John's hired Winters, then
seventeen years old, to work in the pizza parlor.  After several
months, Winters quit her job and brought an action against 
Minnis, Tuck, and Little John's, alleging that she was forced to
quit her job because of sexual harassment.  
		In her complaint, Winters included claims of sexual
harassment, wrongful discharge, sexual assault, and intentional
infliction of severe emotional distress.  Because the allegations
in Winters's sexual harassment, sexual assault, and intentional
infliction of severe emotional distress claims are central to our
discussion of whether defendant had a duty to defend Little
John's, we set them out in detail here. (2)
		Winters's first claim for relief was for sexual
harassment.  In that claim, Winters alleged that:
		"At all material times, * * * Tuck Minnis was a
management level employee of * * * Little John's * * *.
* * * Tuck Minnis was [Winters's] direct supervisor and
acted at all material times in the scope of his
employment.
		"At all material times, * * * John Minnis was the
owner of * * * Little John's * * *.  * * * John Minnis
was [Winters's] direct supervisor and acted at all
material times in the scope of his employment.	
		"[Winters] was employed by * * * Little John's * * * from approximately April 1, 1995[,] until July 5,
1995[,] when she was forced to quit her job.	
		"During and throughout such employment as stated
above, [Winters's] supervisor, * * * Tuck Minnis, a man
approximately twenty years older than [Winters],
encouraged and engaged in a continuous pattern and
practice of subjecting [Winters] to sexually explicit
conduct and comments, creating a sexually hostile work
environment, and conditioning [Winters's] continued
employment on acquiescence to such an environment.  * *
* Tuck Minnis'[s] sexually explicit comments included,
but were not limited to the following:	
		"(a) Unwelcome statements and graphic descriptions
of sex habits, activities, body parts[,] and abilities;
		"(b) Repeated offensive sexual comments about the
anatomy of females;
		"(c) Telling another employee under his
supervision that he wanted [Winters] to 'wear short
skirts with fishnet stockings.'
		"On or about May 28, 1995, * * * Tuck Minnis
called [Winters] at home at 3:45 a.m. and implored her
and her female roommate * * * to come over to his
apartment to help him grieve the death of his brother. 
[Winters] and her roommate went to his apartment and
stayed from approximately 4:30 a.m. until 9 a.m. 
During that time period [Winters] was subjected to
sexually explicit, unwelcome, offensive and
intimidating comments and conduct from [Tuck Minnis,
including]:
		"(a) Unwelcome forced kissing, and touching of
[Winters's] breasts while pinning her arms against the
wall;	
		"(b) Unwelcome lifting up of [Winters's] clothes
and fondling [Winters's] body underneath;		
		"(c) Following Winters into the bathroom against
her wishes and touching her against her will;
		"(d) Intimidating and offensive graphic sexual
comments * * * while forcing himself on top of Winters
and asking her to have sex with him;
		"(e) Unwelcome rubbing of [Tuck Minnis's] body
against [Winters's] body;
		"(f) Intimidating statements about his ability to
fire employees at Little John's * * * , but that
[Winters] should think of herself as his friend.      
		"Upon returning to work after the above described
incident, * * * Tuck Minnis continued to subject
[Winters] to unwelcome sexual conduct, comments, and
attempted flirtation, to continue the pattern and
practice alleged [above], and to retaliate against
[Winters] for having resisted his past sexual advances. 
* * * Little John's * * * had no anti-sexual harassment
policy, and no specified avenue or avenues of
complaint.
		"On or about June 6, 1995[,] while [Winters] was
working at * * * Little John's * * * with * * * Tuck
Minnis, and while no other employees were there,
[Winters] was again subjected to sexually explicit,
intimidating, unwelcome and offensive comments and
conduct directed towards her by her supervisor, * * *
Tuck Minnis, which included but were not limited to the
following:
		"(a) Attempting to tear off [Winters's] clothing
in an apparent effort to rape her.  * * * Tuck Minnis
pulled on [Winters's] pants so hard that they fell down
around [her] ankles and * * * Tuck Minnis * * * fell
off his chair;
		"(b) Unwelcome and offensive graphic sexual
comments * * *;
		"(c) Unwelcome rubbing of [Minnis's] body against
[Winters's] body; 	
		"(d) Chasing [Winters] around the pizza parlor;
		"(e) Unwelcome touching of [Winters's] body and
grabbing her face.
		"* * * * *. 
		"[Winters] reported the harassment described above
to her mother and to other co-workers at the pizza
parlor.  [Winters's] mother and [Winters] reported the
harassment to * * * John Minnis. * * * 
		"* * * * *. 
		"[Tuck, Minnis, and Little John's] retaliated
against [Winters] for resisting and reporting the
sexual harassment conduct * * * by engaging in a course
of intentional conduct designed to further traumatize
[Winters] and force her to quit, including but not
limited to excusing and condoning * * * Tuck Minnis'[s]
conduct toward [Winters], retaining Tuck Minnis as an
employee and continuing him as [Winters's] supervisor
following the report of harassment despite the nature
and severity of the harassment, assigning [Winters] to
undesirable later night shifts, ordering her to change
her wardrobe on and off work, setting rules for women
employees that were not applied to men, reducing
[Winters's] work hours, changing her job duties from
hostess to cook, punitively treating her in a rude and
angry manner, and writing her up for alleged
insubordination on the job.
		"* * * * *
		"As a result * * *, [Winters] has suffered lost
wages and benefits of employment * * *."
		In her claim of sexual assault and battery (brought
against Tuck and Little John's), Winters realleged and
incorporated the foregoing factual allegations of her claim of
sexual harassment.  In addition, she alleged that "Tuck Minnis
intended harmful, offensive, hostile, and insulting physical
contact of a sexual nature to [her] person."  She also alleged
that, as a result of the sexual assault, she suffered 
	"severe emotional distress, depression, embarrassment,
* * * physical anxiety, and pain and nausea." 
		Finally, in her two claims of intentional infliction of
severe emotional distress (one brought against Tuck and Little
John's, the other against Minnis and Little John's), Winters
again realleged and incorporated the factual allegations of the
sexual harassment claim, set out above.  She also alleged that
the intentional infliction of severe emotional distress resulted
not only in severe emotional distress, but also "physical
anxiety, pain and nausea."
		During the time period addressed in Winters's
complaint, Little John's was insured under a commercial general
liability policy issued by defendant.  Plaintiffs tendered
defense of Winters's action to defendant.  Before we describe the
events that occurred after that tender, we first describe the
relevant terms of the insurance coverage as set out in the
insurance policy. 
		Under Little John's commercial general liability
policy, defendant had a duty to defend employees of Little
John's, acting in the course and scope of their employment, in
any action seeking damages for "bodily injury" or "personal
injury" as defined in the policy.  The "bodily injury" coverage
of the policy covered "bodily injury, sickness or disease
sustained by a person * * *" and "caused by an occurrence" in the
"coverage territory."  That coverage specifically excluded
"bodily injury to an employee of the insured arising out of and
in the course of employment by the insured" (employee exclusion)
and "bodily injury * * * expected or intended from the standpoint
of the insured" (intended acts exclusion).  The "personal injury"
coverage of the policy covered "injury, other than bodily injury,
arising out of" enumerated "offenses," including, to the extent
relevant in this case, "false imprisonment."  Although the
personal injury coverage also had exclusions, none of those are
relevant here.  
		Defendant refused to defend.  After settling Winters's
action, plaintiffs brought this action to recover the costs of
settling and defending Winters's action.  Plaintiffs and
defendant moved for summary judgment.  As noted above, the trial
court entered summary judgment in favor of defendant, and
plaintiffs appealed.
		The Court of Appeals, in a split decision, affirmed the
trial court's judgment in regard to plaintiff Minnis, but
reversed it in regard to plaintiff Little John's.  It held that
Winters's allegations concerning Tuck's actions at the apartment
could have imposed liability on Little John's under the "bodily
injury" coverage of the policy.  That holding was based on
several conclusions.  First, the majority explained that, even if
Tuck was not acting in the course of his employment when he
assaulted Winters at his apartment, Little John's nevertheless
could have been vicariously liable according to the doctrine of
respondeat superior because those assaults were a "'direct
outgrowth of and engendered by'"  Tuck's on-the-job harassment of
Winters.  Minnis, 162 Or App at 207, citing Fearing v. Bucher,
328 Or 367, 377, 977 P2d 1163 (1999).  Second, the majority
concluded that the employee exclusion of the bodily injury
provision did not exclude from coverage the bodily injury ("pain
and nausea") (3) Winters suffered as a result of Tuck's actions at
his apartment, because Winters was not then acting in the course
of her employment.  Id. at 204.  Finally, the majority also
concluded that Tuck's assaults of plaintiff at his apartment were
"occurrences" as defined in the policy and were not excluded
under the intended acts exclusion. (4)  Id. at 209-10.  
		Presiding Judge Edmonds dissented.  He would have held
that Little John's was not vicariously liable for Tuck's conduct
at the apartment because Tuck's conduct at work was "not part of
the chain of causation that resulted in" the sexual assault at
the apartment.  Id. at 224.  He also would have held that,
because Tuck's "supervision" of Winters was "the gravamen of
Little John's vicarious liability" according to the theory of
Winters's allegations, Winters's injury would have been excluded
from coverage by the employee exclusion.  Id. at 218, 225.  As
previously noted, we allowed defendant's petition for review. 
		We review the record on summary judgment in the light
most favorable to the party opposing the motion.  Miller v. Water
Wonderland Improvement District, 326 Or 306, 309, 951 P2d 720
(1998).  In this case, such review presents several questions of
law.  The ultimate question is whether defendant has a duty to
defend Little John's against Winters's claims.  It has that duty
only if the allegations in Winters's complaint state a claim for
"bodily injury" or "personal injury" that is covered by the
policy.  See Marleau v. Truck Insurance Exchange, 333 Or 82, 91,
37 P3d 148 (2001)(insurer has duty to defend if factual
allegations of complaint state claim for any offense covered by
policy).  Accordingly, we must examine the insurance policy to
determine what the parties intended the policy to cover, Hoffman
Construction Co. v. Fred S. James &amp; Co., 313 Or 464, 469, 836 P2d
703 (1992), and the complaint to determine if it, "without
amendment, may impose liability for conduct covered by the
policy,"  Ferguson v. Birmingham Fire Ins. Co., 254 Or 496, 507,
460 P2d 342 (1969).  We begin by considering whether Winters's
allegations may impose liability for conduct covered under the
"bodily injury" provisions of the policy. 
		On review, Little John's adopts the reasoning of the
majority of the Court of Appeals.  First, in arguing that the
policy covers Winters's bodily injury claim, Little John's relies
only on the allegations of bodily injury that Winters suffered as
a result of the episode at Tuck's apartment, because any injury
Winters suffered at work, even if the result of otherwise covered
conduct by Tuck, would have been excluded from coverage under the
employee exclusion as an injury "arising out of and in the course
of" Winters's employment.  In addition, in regard to the injury
Winters suffered as a result of the episode at the apartment,
Little John's does not argue that Tuck was then acting in the
course and scope of his employment.  Instead, Little John's
argues as follows:  (1) The act that resulted in Winters's injury
was Tuck's sexual harassment of Winters on-the-job (even if the
particular episode of harassment did not take place there); and
(2) Tuck was acting within the course and scope of employment
when he harassed Winters at the pizza parlor. (5)  Accordingly,
Little John's contends that, under this court's case law
concerning the doctrine of respondeat superior, Winters's
allegations are sufficient to impose vicarious liability on
Little John's for Tuck's sexual abuse of Winters at his
apartment.  In addition, Little John's argues that the injury
Winters suffered as a result of what happened at Tuck's apartment
is not subject to the employee exclusion because Winters was not
then at work.  Finally, Little John's argues that Tuck's conduct
was not "intended" by Little John's, and thus the injury
resulting from that conduct is not subject to the intended acts
exclusion.   
		Defendant adopts the reasoning of dissenting Judge
Edmonds.  It argues that Winters's allegations do not allow the
inference that her injuries, as a result of Tuck's actions at his
apartment, were caused by Tuck's actions at work or by any other
act taken within the course and scope of employment.  Therefore,
Winters's allegations could not impose vicarious liability on
Little John's.  Defendant also argues that, because Winters
alleges that her employment at Little John's is what "led to" the
incident at the apartment and her resulting injury, even if
Tuck's actions otherwise would be covered, coverage of Winters's
injury is subject to the employee exclusion.  Finally, defendant
argues that, even if Tuck's actions otherwise could be covered by
the policy, they nevertheless are excluded under the intended
acts exclusion.
		For the reasons set out below, we agree with defendant
that, according to Winters's allegations, Winters's bodily injury
was caused by Tuck's actions at his apartment, not by Tuck's
actions at the workplace.  Therefore, we reject Little John's
theory of vicarious liability in this case. (6)  Also as we explain
below, Little John's argument and the conclusion of the Court of
Appeals to the contrary are based on a misinterpretation of our
case law on the doctrine of respondeat superior.  Because of our
holding concerning vicarious liability, we do not reach the
question whether the bodily injury Winters suffered as a result
of those actions would otherwise be excluded from coverage under
either the employee or the intended acts exclusion.  We turn now
to a discussion of the doctrine of respondeat superior.
		Under the doctrine of respondeat superior, an employer
is liable for an employee's tort when the employee acts within
the course and scope of employment.  Chesterman v. Barmon, 305 Or
439, 442, 753 P2d 404 (1988).  This court has stated that three
requirements must be met to conclude that an employee was acting
within the course and scope of employment:  (1) the act must have
"occurred substantially within the time and space limits
authorized by the employment; (2) * * * the employee was
motivated, at least partially, by a purpose to serve the
employer; and (3) * * * the act is of a kind which the employee
was hired to perform."  Id., citing Stanfield v. Laccoarce, 284
Or 651, 654, 588 P2d 1271 (1978).  
		In this case, before we apply the traditional
respondeat superior test, we must identify the injury at issue
and the act or acts that gave rise to it.  Little John's does not
argue that the injury Winters suffered while at work is covered
by the policy, because any such injury presumably "arose out of
and in the course of" Winters's employment and would be subject
to the employee exclusion.  Accordingly, the only injury that
arguably is covered by the policy is the injury Winters suffered
when she was not on duty, that is, the injury she suffered as a
result of the episode at Tuck's apartment.  As to the act or acts
that gave rise to that injury, the parties disagree.
		Defendant argues that the relevant act by Tuck that
resulted in Winters's injury was his assaultive conduct at his
apartment.  Because Tuck was not acting within the course and
scope of employment when he engaged in that assaultive conduct,
defendant argues, Little John's cannot be vicariously liable for
the resulting injury to Winters.  In response to that argument,
Little John's, as noted above, does not contend that Tuck was
acting within the course and scope of his employment when he was
at his own apartment.  Little John's argues, instead, that it was
Tuck's actions at the workplace -- his "two-month pattern of
sexual intimidation and harassment," as the Court of Appeals
described it -- that resulted in Winters's injury.   162 Or App
at 208.  Because that conduct was undertaken within the course
and scope of Tuck's employment, Little John's argues, it could be
vicariously liable for the resulting injury to Winters.  We agree
with defendant, as explained below.   
		In most instances, the relevant act for respondeat
superior analysis is the act that was the immediate cause of the
harm.  See Stroud v. Denny's Restaurant, 271 Or 430, 437, 532 P2d
790 (1975)  (respondeat superior analysis is made as of time
injury occurred).  However, this court has held that that rule is
inappropriate in cases in which "there is a 'time-lag' between
the act allegedly producing the harm and the resulting harm." 
Chesterman, 305 Or at 444.  In those cases, "[t]he focus should
be on the act on which vicarious liability is based and not on
when the act results in injury."  Id.  So, for example, if an
employee ingests a drug during the course and scope of employment
that causes that employee to hallucinate and to commit a sexual
assault on his way from one job site to another, the "act," for
purposes of the first requirement of the respondeat superior
test, is the act of ingesting the drug, not the assaultive
conduct that was the immediate cause of injury to the victim of
the sexual assault.  Id. at 443.  Vicarious liability may be
imposed if acts that were within the course and scope of
employment "resulted in the acts which led to [the] injury" at
issue.  Id. (emphasis added).
   		Implicitly recognizing that Tuck was not acting within
the course and scope of his employment when he assaulted Winters
at his apartment, Little John's argues that this court should use
the "time-lag" standard described in Chesterman.  However,
reading Winters's complaint with that standard in mind reveals
that her allegations do not describe the requisite causal
connection between the workplace harassment and the sexual
assault at the apartment.  
		Winters does not allege that the workplace harassment
that preceded the episode at the apartment  -- the explicit
sexual comments set out above -- "resulted in" the sexual assault
at the apartment.  She alleges instead that the episode at the
apartment was one of several episodes in a series.  From those
allegations, a reasonable juror could not have inferred that one
example of Tuck's misconduct resulted in or caused another.  The
sexual harassment at the workplace and the sexual abuse at the
apartment were related to each other only as examples of Tuck's 
pattern, not as "cause" and "effect."  Accordingly, the
Chesterman "time-lag" standard does not apply to Winters's
allegations.    
		In this case, the act that resulted in Winters's injury
at Tuck's apartment was Tuck's abusive conduct at his apartment. 
Therefore, that is the conduct to which we apply the traditional
respondeat superior test.  In regard to the application of that
test to Tuck's conduct at the apartment, Little John's does not
argue that Tuck was then acting within the course and scope of
his employment and, in our view, could not persuasively do so: 
Winters's allegations do not suggest that Tuck's assaultive
conduct at the apartment "occurred substantially within the time
and space limits authorized by the employment" as required under  
Chesterman, 305 Or at 442.  Accordingly, Winters's allegations
could not have imposed vicarious liability on Little John's for
Tuck's actions at his apartment.  Because any other bodily injury
Winters suffered was excluded from coverage, we hold that
defendant did not have a duty to defend Little John's under the
"bodily injury" provision of the policy.
		Before addressing the Court of Appeals' contrary
conclusion, we offer the following point of clarification.  
According to the factual allegations of Winters's complaint, her
claims against Little John's and John Minnis were based on their
direct liability for sexual harassment, not on their vicarious
liability for Tuck's actions at his apartment.  Our conclusion,
above, that Little John's was not vicariously liable for Tuck's
actions at the apartment, has no bearing on whether Little John's
could be directly liable for the alleged pattern and practice of
sexual harassment of which Tuck's actions at his apartment formed
a significant part.  This case does not pose that question. 
Although that should be clear from our opinion, we emphasize it
here because a case like this, which involves both an underlying
action concerning the employer's direct liability and an
insurance action that concerns the employer's vicarious
liability, has the potential to cause confusion.  That said, we
turn to our discussion of the opinion of the Court of Appeals.   
		The Court of Appeals reasoned that the "causal
connection" that Winters alleged between Tuck's workplace actions
and Winters's injury from the assault at the apartment was as
strong as the "causal connection" identified by this court as
sufficient to support vicarious liability in Fearing and Lourim
v. Swensen, 328 Or 380, 977 P2d 1157 (1999).  Minnis, 162 Or App
at 206-07.  Indeed, the Court of Appeals used phrases from this
court's opinion in Fearing to form the standard that it used in
this case, holding, as set out above, that Little John's could
have been vicariously liable because Tuck's assaults of Winters
were the "'direct outgrowth of and engendered by'" Tuck's on-the-job harassment.  Id. at 207.  However, as explained below, the
Court of Appeals' reliance on Fearing and Lourim is misplaced.
		Unlike Chesterman, Fearing and Lourim did not concern
the first requirement of the respondeat superior test, namely,
whether the employee's act was within the time and space limits
authorized by the employment.  Fearing and Lourim did not involve
a "time-lag" between the act on which vicarious liability
depended and the resulting harm.  Instead, those cases focused
more specifically on the other requirements of the respondeat
superior test, whether the employee was motivated by a purpose to
serve the employer and whether the act at issue was of a kind
that the employee was hired to perform.  
		Fearing and Lourim presented this court with similar
material facts.  In each, the plaintiff had alleged that a person
in a position of trust by virtue of his employment (in Fearing, a
priest; in Lourim, a Boy Scout leader) used that position of
trust to gain the opportunity to sexually assault the plaintiff. 
Fearing, 328 Or at 372; Lourim, 328 Or at 384-85.  Each plaintiff
characterized the tortious conduct as "manipulations committed
within the time and space limits" of the tortfeasor's employment
that were "generally actions of a kind and nature" that the
tortfeasor was required to perform in his employment role (in
Fearing, the tortfeasor's role as priest, in Lourim, the
tortfeasor's role as Boy Scout leader).  Fearing, 328 Or at 372;
Lourim, 328 Or at 385.  
		This court explained in Fearing that, in the context of
intentional torts, "it usually is inappropriate for the court to
base its decision * * * on whether the complaint contains
allegations that the intentional tort itself was committed in
furtherance of any interest of the employer or was of the same
kind of activities that the employee was hired to perform." 
Fearing, 328 Or at 375-76.  Employers do not ordinarily hire
others for the specific purpose of committing intentional torts,
and vicarious liability would be defeated in almost every
instance under such a standard.  Rather, for the purpose of
determining whether a complaint meets the second and third
Chesterman requirements (employer's purpose/kind of act hired to
perform) for the imposition of vicarious liability, "the focus
properly is directed at whether the complaint contains sufficient
allegations of [employee's] conduct that was within the scope of
his employment," that is, conduct that the employee was hired to
perform, "that arguably resulted in the acts that caused
[plaintiff's] injury."  328 Or at 376 (emphasis added).  In both
cases, this court held that the allegations in the complaint were
sufficient to allow a jury to infer that the tortfeasor's
"conduct in cultivating a trust relationship with the plaintiff
was motivated, at least in part, by a desire to further the
interests of the [employer], that that conduct was of a kind that
the [employee] was hired to perform, and that that conduct led to
the sexual assaults."  Lourim, 328 Or at 386; see also Fearing,
328 Or at 376 (similarly stating).  Accordingly, plaintiffs in
those cases had stated claims for vicarious liability based on
the doctrine of respondeat superior.
		With the foregoing understanding of Fearing and Lourim,
we return to the passage in Fearing on which the Court of Appeals
relied for its standard in this case.  In Fearing, this court
stated that the allegations in that case stated a claim for the
employing archdiocese's vicarious liability because:
	"[P]laintiff allege[d] that [priest] 'used and
manipulated his fiduciary position, respect, and
authority as youth pastor and priest' to befriend
plaintiff and his family, gain their trust, spend large
periods of time alone with plaintiff, physically touch
plaintiff and, ultimately, to gain the opportunity to
commit the sexual assaults upon him.  A jury reasonably
could infer that [the priest's] performance of his
pastoral duties with respect to plaintiff and his
family were a necessary precursor to the sexual abuse
and that the assaults thus were a direct outgrowth of
and were engendered by conduct that was within the
scope of [priest's] employment."
328 Or at 377 (emphasis added).  Understood in context, that
passage addresses a situation in which the court must determine
whether tortious conduct by a tortfeasor, acting within the time
and space limits of employment, was sufficiently connected to the
employer's purpose to support the employer's vicarious liability. 
If, however, the situation does not involve a tortfeasor who is
acting within the time and space limits authorized by employment,
the court does not reach the question of whether the tortious
conduct was the "direct outgrowth of conduct that was within the
scope of" the tortfeasor's employment.
		This case is an example of the latter situation:  Tuck,
while at his apartment, was not acting within the time and space
limits authorized by his employment.  Accordingly, the Fearing
standard does not apply.  We turn now to the personal injury
coverage of the policy.  
		Little John's argues that Winters's claim concerning
Tuck's actions at his apartment is a covered personal injury
because it states a claim for false imprisonment, one of the
offenses enumerated in the personal injury provision.  However, a prerequisite for coverage under the personal injury provision,
as under the bodily injury provision, is that the employee who
caused the injury did so within the course and scope of
employment.  Therefore, even if Winters's allegations about
Tuck's actions at his apartment state a claim of false
imprisonment, the injury Winters suffered is not covered under
the policy because, as discussed above, Tuck was not then acting
within the course and scope of his employment.  
		Little John's does not argue that Winters's personal
injury otherwise is covered by the policy, nor could Little
John's do so persuasively.  Winters's allegations concerning
Tuck's actions at the pizza parlor -- his offensive comments on
repeated occasions or his conduct in chasing Winters and pulling
at her clothes -- do not allege claims for false imprisonment or
detention or for any other covered "offense."  See Marleau, 333
Or at 91 (insurer has duty to defend if factual allegations of
complaint state claim for any offense covered by policy).  
Accordingly, we hold that Winters's injury was not a covered
"personal injury" as defined in the policy.
		In sum, the bodily injury that Winters suffered while
she was at work was excluded under the employee exclusion of the
policy because it "arose out of and in the course of" Winters's
employment.  Only the bodily injury Winters suffered at Tuck's
apartment arguably was not so excluded.  However, we do not reach
the question whether that injury, too, "arose out of and in the
course of" Winters's employment, because coverage for any injury
(whether "bodily" or "personal") as a result of Tuck's conduct at
the apartment depends, first, on whether the injury she suffered
was the result of conduct that Tuck undertook in the course and
scope of his employment.  Because we conclude that any injury
Winters suffered as a result of Tuck's conduct at his apartment
did not arise from any action Tuck took while acting in the
course and scope of his employment, the episode at Tuck's
apartment could not have imposed vicarious liability on Little
John's under the doctrine of respondeat superior.  Thus,
Winters's injury as a result of that episode was not covered
under the insurance policy.   
		As to the coverage under the "personal injury"
provision of the insurance policy, there is no employee
exclusion.  However, the personal injury caused by Tuck's actions
at the pizza parlor is not covered because it did not arise out
of one of the covered "offenses" enumerated in the personal
injury coverage provision of the insurance policy.   Accordingly,
Winter's injuries as a result of the episodes at the workplace
also were not covered under the insurance policy.  Therefore,
because Winters's complaint did not state a claim for any offense
covered by the insurance policy, defendant did not have a duty to
defend Little John's.
		The decision of the Court of Appeals is affirmed in
part and reversed in part.  The judgment of the circuit court is
affirmed. 
		RIGGS, J., specially concurring.		
		I agree with the majority that, according to the terms
of the insurance policy and the allegations of Winters's
complaint, defendant did not have a duty to defend Little John's. 
Accordingly, I concur in the result.  I write separately,
however, because I disagree with the majority's reasoning.  
		I would hold that defendant did not have a duty to
defend Little John's because the "intentional acts" exclusion of
the insurance policy excluded Tuck's actions from coverage. 
Accordingly, I would not address the question whether Winters's
bodily injury was caused by actions taken by Tuck during the
course and scope of his employment.  
		Regarding the majority's conclusion that Winters's
injury was not caused by any of Tuck's actions during the course
and scope of his employment, I agree with the majority that this
is not a "time-lag" case.  Therefore, the Court of Appeals was
incorrect to apply the reasoning of this court's decision in
Chesterman v. Barmon, 305 Or 439, 753 P2d 404 (1988).  Moreover,
in holding that Winters's bodily injury was caused immediately by
Tuck's actions at the restaurant, the Court of Appeals implies
that Tuck's actions at his own apartment were not a cause of her
injury, an implication I reject.  Tuck acted of his own free will
at his apartment, not under the influence of a hallucinogenic
drug as the employee alleged in Chesterman.  However, as
explained below, I do not agree with the assumption by the Court
of Appeals, the parties on review, and the majority of this court
that Tuck could not have been acting within the course and scope
of his employment when he assaulted Winters at his apartment.  
		In my view, in any case involving properly pleaded
allegations of sexual harassment by a supervisor, there is a
question of fact regarding whether that supervisor was acting
within the course and scope of his employment, even if the
assaultive conduct occurs in some location other than the
workplace and during non-work hours.  That is so because, in any
supervisor-employee relationship, there is the potential that the
power of the relationship extends beyond that traditional venue
of the workplace.  
		Furthermore, having a relationship that is sufficiently
powerful to have influence after hours may serve the supervisor's
employer too.  In other words, the employer specifically may
authorize the supervisor to work as the employee's mentor in all
things pertaining to the job, and that mentor-student
relationship may be one that benefits the employer most if it
extends past five o'clock in the afternoon.  In such
circumstances, the supervisor who sexually assaults an employee,
even if the assault occurs at a private residence, may be acting
within the course and scope of his employment just as were the
employees whose conduct was at issue in Fearing v. Bucher, 328 Or
367, 977 P2d 1163 (1999), and Lourim v. Swensen, 328 Or 380, 977
P2d 1157 (1999).  
		In this case, we need not reach the question whether,
according to the allegations in Winters's complaint, this is 
such a case.  However, I offer this concurring opinion to make
clear that such a theory would be supported by our case law
concerning the doctrine of respondeat superior in appropriate and
properly pleaded circumstances.    



1. 	The Court of Appeals affirmed the judgment in favor of
defendant in regard to plaintiff John Minnis. Minnis v. Oregon
Mutual Ins. Co., 162 Or App 198, 212, 986 P2d 77 (1999). 
Plaintiff Minnis did not petition for review of that decision.

2. 	The wrongful discharge claim is not at issue in this
case.

3. 	Defendant does not dispute that Winters's allegation of
having suffered "pain and nausea" constitutes a claim for
"bodily" injury.

4. 	The Court of Appeals also held that coverage of Tuck's
actions was not precluded by the public policy against insurance
for intentional acts.  162 Or App at 209-10.

5. 	Little John's asserts that defendant conceded that Tuck 
was acting within the course and scope of his employment when he
harassed Winters at the pizza parlor.  Defendant disagrees. 
Because of our holding that Tuck's actions at work did not
"result in" Winters's injury at the apartment, slip op. at 15, we
need not determine whether those actions at work were taken
within the course and scope of employment.    

6. 	We note that, under the terms of the policy, Tuck also
was an "insured" while he was acting "within the course and scope
of his employment."  The parties do not argue that that coverage
is different from any coverage Little John's would have for its
vicarious liability for Tuck's actions under the doctrine of
respondeat superior.