Opinion ID: 734239
Heading Depth: 2
Heading Rank: 3

Heading: OMI Policy

Text: 25 OMI provided a umbrella excess liability policy that covered damages on account of personal injuries caused by or arising out of an occurrence. The personal injury definition included invasion of privacy, false detention, and discrimination. OMI's policy also originally contained an employee exclusion but this was eliminated when Valsamis purchased employee buy-back coverage. 26 Because OMI's policy does not contain an employment exclusion, we must determine whether Gisentaner's claims fall within the definition of personal injury in OMI's policy. Under OMI's policy, personal injury coverage requires an occurrence. OMI's policy defines an occurrence as an accident or a happening or event or a continuous or repeated exposure to conditions which unexpectedly and unintentionally results in personal injury, property damage or advertising liability. 27 Gisentaner claims that we are bound to accept the characterization of Valsamis' acts as negligent because judgment was entered on this basis in the state court as a result of the settlement between herself and Valsamis. However, in Columbia Mutual Ins. Co. v. Fiesta Mart, 987 F.2d 1124 (5th Cir.1993), a panel of this court declined to bind an insurer to findings in a state court suit where coverage was not at issue. Fiesta Mart, 987 F.2d at 1127. Therefore, we must characterize the facts alleged in Gisentaner's complaint to determine whether they fall within the language of OMI's policy. 28 Gisentaner also insists that we look at each individual cause of action she listed in her complaint to determine whether she alleged an occurrence. In her original complaint, Gisentaner alleged negligent infliction of emotional distress, negligent invasion of privacy, and negligent hiring and supervision. In 1993, the Texas Supreme Court eliminated negligent infliction of emotional distress as a cause of action. Boyles v. Kerr, 855 S.W.2d 593, 593 (Tex.1993). Texas law also requires proof of intent for an invasion of privacy cause of action. See Billings v. Atkinson, 489 S.W.2d 858, 859 (Tex.1973); Childers v. A.S., 909 S.W.2d 282, 291 (Tex.Ct.App.-Ft. Worth 1995); but see Wheeler v. Yettie Kersting Memorial Hospital, 866 S.W.2d 32, 54 (Tex.App.--Houston 1993, no writ)(finding that the question of whether Texas law recognizes a claim of negligent invasion of privacy is still an open question). Therefore, the only negligence claims available under Texas law are for negligent supervision and hiring of Papapetrou. 29 This circuit has held that where liability premised on negligence is related to and interdependent of other tortious activities, the ultimate issue is whether the tortious activities themselves are encompassed by the occurrence definition. New York Life Ins. v. Travelers Ins. Co., 92 F.3d 336 (5th Cir.1996); Fiesta Mart, Inc., 987 F.2d at 1128 (citing Thornhill v. Houston Gen. Lloyds, 802 S.W.2d 127, 130 (Tex.App.-Fort Worth 1991-no writ); Centennial Ins. Co. v. Hartford Accident and Indemnity Co., 821 S.W.2d 192, 194 (Tex.App.-Houston 1991, no writ); Fidelity and Guaranty Ins. Underwriters, Inc. v. McManus, 633 S.W.2d 787, 790 (Tex.1982)). Gisentaner's negligent hiring and supervision claims require proof of misconduct by Papapetrou. See Canutillo Independent School District v. National Union Fire Ins. Co., 99 F.3d 695, 705 (5th Cir.1996)(finding that negligent supervision claim would not exist without damage caused by sexual abuse). Therefore, our only inquiry is whether Papapetrou and Valsamis' acts are covered under the definition of occurrence. 30 The district court cited Old Republic Ins. v. Comprehensive Health Care, 786 F.Supp. 629 (N.D.Tex.1992), affd. on other gds., 2 F.3d 105 (5th Cir.1993), for the proposition that intentional torts, such as sexual harassment, cannot be occurrences under Texas law. Old Republic held that intentional or willful acts are not occurrences as that term is defined in insurance policies. The specific language in Old Republic mirrored that of OMI's policy here, stating that occurrences result in personal injuries neither expected nor intended from the standpoint of the insured. Old Republic, 786 F.Supp. at 633. The court in Old Republic noted that Texas courts had consistently excluded intentional torts from the definition of occurrence and found that the insured had not produced Texas precedent to call these decisions into question. 31 In one of the cases cited by Old Republic, Argonaut Southwest Insurance Company v. Maupin, 500 S.W.2d 633, 636 (Tex.1973), the Texas Supreme Court considered whether an intentional tort could be considered an occurrence under a comprehensive general liability policy. The policy in Maupin defined an occurrence as either (a) an accident, or (b) in the absence of an accident, a condition for which the insured is responsible which during the policy period causes physical injury to or destruction of the property which was not intended. Maupin, 500 S.W.2d at 634 n. 1. The insured in Maupin purchased dirt from a man who occupied a parcel of land, mistakenly thinking that he owned the land. The insured then went onto the land and removed the dirt. The actual owners then sued the insured for trespass. The court found that the resulting injury to the owners was not caused by an occurrence because the insured acted intentionally when he took the soil off the property, even though the resulting injury was unforeseen or unintended. Maupin has been interpreted by Texas courts to exclude intentional acts from the definition of occurrence without regard to whether the harm was expected or intended by the actor. See, e.g., Pierce v. Benefit Trust Life Insurance Co., 784 S.W.2d 516, 518 (Tex.Ct.App.--Amarillo 1990)(finding that the insured's hernia was not caused by an occurrence because, although it was unexpected and unintended, it resulted from the insured's intentionally lifting a bag); Baldwin v. Aetna Casualty & Surety Co., 750 S.W.2d 919, 920 (Tex.App.-Amarillo 1988, error denied)(finding that the definition of occurrence excluded a trucking company's claims for damage caused by their deliberately putting overweight trucks on the road); Southern Farm Bureau Casualty Ins. Co. v. Brock, 659 S.W.2d 165 (Tex.Ct.App.-Amarillo 1983)(finding that damage to a truck that was rammed into a car in order to prevent the occupant of the car from shooting someone was not caused by an occurrence because the truck driver meant to drive into the car). 32 Gisentaner claims, however, that the Texas supreme court's decision in State Farm Fire & Cas. Co. v. S.S., 858 S.W.2d 374 (Tex.1993) modifies the rule in Maupin to require specific intent to commit the harm for a claim to fall outside the definition of occurrence. She reasons that an intentional act with unintended consequences can still give rise to liability unexpected or unintended from the standpoint of the insured. 33 In State Farm, the supreme court considered whether an intentional injury exclusion precluded recovery for a woman who contracted herpes from her boyfriend. The court held that the transmission of herpes was not an intentional act, despite the intentional nature of the intercourse, because the boyfriend was asymptomatic and therefore the transmission was not a natural result of his intentional act. The court explained that Maupin stood for the proposition that damage is not accidental where the acts are voluntary and intentional and the injury was the natural result of the act, even though the injury may have been unexpected, unforeseen and unintended. State Farm, 858 S.W.2d at 377 n. 2. 34 Even if Texas law requires specific, instead of general, intent, we find that the harm in this case was not caused by an occurrence. State Farm does not preclude a finding that intent to cause injury can be inferred as a matter of law. The Texas supreme court noted that the question of intent is highly fact specific and that an actor intends to injure if he believes that the consequences of his acts are substantially certain to follow. State Farm, 858 S.W.2d at 379. In the present case, Gisentaner's first amended complaint alleged that Papapetrou and Valsamis' conduct was extreme and outrageous, undertaken for the purpose of causing ... severe emotional distress, and was calculated to and did produce ... severe emotional distress. Her injuries were the natural result of Valsamis' actions and were substantially certain to follow.