Opinion ID: 2145488
Heading Depth: 3
Heading Rank: 2

Heading: Employment exclusion

Text: The policy excludes coverage for bodily injury to any employee of the insured arising out of and in the course and scope of his employment by the insured. Unless ambiguous, the language used in an insurance contract must be given its plain and ordinary meaning. Bobich v. Oja, 258 Minn. 287, 294, 104 N.W.2d 19, 24 (1960). Typically, this court has defined the words `arising out of' in an insurance policy to mean `causally connected with' and not `proximately caused by.' Faber v. Roelofs, 311 Minn. 428, 437, 250 N.W.2d 817, 822 (1977). The question in the instant case thus becomes whether the plaintiffs' allegations of hostile work environment sexual harassment were claims by employees causally connected with employment. [21] The court of appeals held that the plaintiffs' claims for sexual harassment did not necessarily fit within the employment exclusion clause because it found that the exclusion did not apply to all of the conduct cited by the plaintiffs. Meadowbrook, 543 N.W.2d at 425. The court then referred to three specific instances asserted in the complaint that occurred outside the scope of [plaintiffs'] employment. Id. Assuming for the sake of argument that these instances in fact occurred outside the scope of the plaintiffs' employment, [22] the court of appeals' holding that the injuries allegedly caused by these incidents arguably did not arise out of and in the course of their employment is still mistaken. Id. (emphasis in the original). Although the plaintiffs alleged instances of conduct that occurred outside the course and scope of their employment, the injuries allegedly caused by these instances were directly related to the creation of a hostile work environment. See Minn.Stat. § 363.01, subd. 41(3) (1996) (hostile environment claims available only in context of employment, public accommodations, public services, education or housing). In assessing whether an insurer has a duty to defend, the court must focus on the claim and whether its elements fit within the exclusion. Ross v. Briggs and Morgan, 540 N.W.2d 843 (Minn. 1995). In this case, the court of appeals mistakenly focused on some of the conduct being asserted to prove the claim. The claim asserted that the environment in which the plaintiffs worked had become hostile. It is incongruous to hold that such a claim can arise anywhere but in the course and scope of a plaintiffs' employment.