Opinion ID: 2383883
Heading Depth: 1
Heading Rank: 1

Heading: backgrouind

Text: In February, 1998, a former student in the Montgomery County school system, using the name John Doe, filed suit in U.S. District Court against the county school board, the principal (or former principal) of Wood Middle School, and Barbara Robbins, a teacher (or former teacher) at that school. The essence of the complaint was that, while a student at Wood from 1989 to 1993, Doe, then a pre-teen, was in a mentoring program in which Ms. Robbins acted as his mentor and that Ms. Robbins abused her professional relationship with him in a variety of ways, including her engagement in a sexual relationship with him. [1] We are concerned here only with the action against Ms. Robbins. The complaint alleged, in preliminary paragraphs applicable to all of the claims against Ms. Robbins, that in the course of more than three years, she repeatedly, sexually abused Doe by having vaginal and other forms of sex with him and that she abused her special relationship with Doe in numerous, inappropriate ways. Doe complained, [m]ore specifically, that she called him, bought him gifts, sent food to his home, invited him into the bedrooms and other rooms of her home, sent him love cards, wrote him love letters, provided him with transportation, and frequently had vaginal and other forms of sex with him. He added that Robbins intentionally and inappropriately interfered with his parents and guardians by inappropriately blending and confusing the roles of mentor, teacher, lover, friend and parent and that, as a result of her wrongful acts, Doe suffered severe mental and emotional distress and economic and psychic damage. Maryland Code, § 4-105 of the Education Article requires county school boards to carry comprehensive liability insurance to protect the board and its agents and employees but permits the boards to satisfy that requirement through a self-insurance program. The Montgomery County school board elected to become part of the self-insurance program established by Montgomery County pursuant to Maryland Code, title 19, subtitle 6 of the Insurance Article and Montgomery County Code, § 20-37. Section 4-104(d) of the Education Article independently requires the board to provide counsel for teachers (and other employees) with respect to claims made against them if (1) the conduct complained of was in the performance of the teacher's duties, within the scope of employment, and without malice; and (2) [t]he board determines that [the teacher] was acting within [his/her] authorized official capacity in the incident. The county self-insurance program in which the board participates also provides for defending claims. County Code, § 20-37(c) requires the insurance program generally to provide for the defense of claims, and § 20-37(e)(2) more specifically requires the county attorney to provide a defense for claims against a participating agency or its officials or employees. There are a number of explicit and implicit conditions to the coverage provided by the county program. Section 20-37(c) authorizes the county to provide insurance to compensate for injury arising from tortious conduct of an employee within the scope of official duties, and an Attachment to the Participating Agency Agreement between the county and the school board states that there is no coverage for actions falling outside the scope of employment, cases of wanton or malicious wrongdoing, or intentional torts. The Attachment provides, in that regard, that in all cases involving questions of scope of employment or allegations of intentional torts or wanton or malicious wrongdoing, the county attorney shall evaluate whether the employee is entitled to coverage, defense or indemnification, based on the facts, and, if the county attorney concludes that coverage, defense, or indemnification should be denied, make such a recommendation to an interagency panel, which would make the final administrative decision. Ms. Robbins demanded that the board defend her in Doe's action but, upon concluding that she was being sued for actions outside the scope of her employ, the board refused to provide her with counsel or indemnification. It appears that the ultimate decision not to provide counsel was made by the county attorney, upon recommendation of the board, rather than by the interagency panel. Eventually, Ms. Robbins was defended by Horace Mann Insurance Company pursuant to an Educators Employment Liability Policy that it had issued to the Maryland State Teachers Association. Under that policy, Horace Mann agreed to defend teachers against claims arising from an occurrence in the course of the teacher's educational employment activities but retained the right to negotiate and settle any such claim. Horace Mann settled the claim for $15,000 and then filed this action in the Circuit Court for Montgomery County seeking reimbursement from the county school board for the cost of defense and settlement and for attorneys' fees incurred in prosecuting the instant declaratory judgment action. The action for declaratory and other relief was based on the assertion that the school board had breached its statutory duty to defend Ms. Robbins. There being no genuine dispute of material fact, and the amount of damages, if liability was found, being stipulated, the issue was presented to the court on cross-motions for summary judgment. After examining the allegations in the Doe complaint and the extrinsic evidence produced by the parties, the court determined that there was a potentiality of coverage for Ms. Robbins under the board's self insurance and entered a declaratory judgment that the school board had a duty to defend the action, that the duty was primary to that of Horace Mann, that the board breached its duty, and that it therefore must reimburse Horace Mann for the sums it expended in defending and settling the Doe claim. The final order entered judgment against the board for the stipulated amount of $100,556. Aggrieved by the substantive ruling as to liability, the school board appealed to the Court of Special Appeals, which affirmed. Board of Education v. Mann, 154 Md.App. 502, 840 A.2d 220 (2003). The intermediate appellate court treated the gravamen of the Doe complaint as charging only sexual misconduct  a sexual relationship between the teacher and the student  which, the court concluded, would not be within the scope of Robbins's employment and therefore did not produce even a potentiality of coverage under the board's self insurance program. Observing then that, under this Court's decision in Aetna v. Cochran, 337 Md. 98, 651 A.2d 859 (1995), it was necessary to consider not just the allegations set forth in Doe's complaint but also any extrinsic evidence called to the board's attention that might create a potentiality of coverage, the court noted that Ms. Robbins had denied the existence of a sexual relationship, that some of her co-workers had said that they were unaware of such a relationship, and that, as a result, the extrinsic evidence regarding any sexual relationship was inconclusive. Viewing the extrinsic evidence in a light most favorable to Ms. Robbins, the court concluded that her conduct and the relationship with John Doe was potentially within the scope of employment, authorized in her official capacity, and not malicious or intentional, and that it was therefore potentially covered under the self insurance program. Board of Education, supra, 154 Md.App. at 518, 840 A.2d at 229. We granted the board's petition for certiorari to consider whether (1) a county board of education is required to provide counsel to defend an action against an employee if the board determines that the employee's actions were outside the scope of her employment and that she was not acting within her authorized official capacity, (2) whether a claim against a teacher based on sexual abuse of a student is potentially covered under the board's self-insurance program where the only extrinsic evidence favorable to the employee is her denial, and (3) whether the holding of the Court of Special Appeals expanded an insurer's duty to defend beyond that set forth in Brohawn v. Transamerica Ins. Co., 276 Md. 396, 347 A.2d 842 (1975) and Aetna v. Cochran, supra, 337 Md. 98, 651 A.2d 859. We also granted Horace Mann's cross-petition to consider whether the Court of Special Appeals erred (1) in holding that the allegations in Doe's complaint, alone, were insufficient to establish a potentiality of coverage, and (2) in failing to address the additional argument that the board failed to comply with its own mandated procedures in determining not to defend Robbins. Although we do not embrace all of the reasoning of the Court of Special Appeals, we find no merit in the board's arguments, some merit in Horace Mann's first argument, and none in its second argument.