This opinion will be unpublished and
may not be cited except as provided by
Minn. Stat. 480A.08, subd. 3 (1998).


Thomas Weekly, M.D.,


Farm Bureau Mutual Insurance Company,

Filed November 9, 1999
Schumacher, Judge

Becker County District Court
File No. CX97519

Todd W. Foss, Stafanson, Plambeck & Foss, 403 Center Avenue, Suite 302, Post Office Box 1287, Moorhead, MN 56561-1287 (for respondent)

Barton J. Cahill, Cahill & Marquart, P.A., 403 Center Avenue, Suite 200, Post Office Box 1238, Moorhead, MN 56561-1238 (for appellant)


Considered and decided by Schumacher, Presiding Judge, Kalitowski, Judge, and Forsberg, Judge.[*]

U N P U B L I S H E D   O P I N I O N


Appellant Farm Bureau Mutual Insurance Company challenges the district court's determination that Farm Bureau had a duty to defend respondent Thomas Weekly, M.D., under his homeowner's policy against a sexual harassment claim. Farm Bureau argues there was no requisite covered occurrence, and the intentional acts and business exclusions apply. We reverse.


In March 1994, Gretchen and Virgil Hoffman served a complaint against St. Mary's Hospital, claiming sexual harassment and reprisal in violation of the Minnesota Human Rights Act, Minn. Stat. 363.01-.20 (1998). The complaint alleged that between January 5, 1991 and April 4, 1992, Weekly engaged in a pattern of sexually harassing Gretchen Hoffman, a nurse, that included groping Hoffman's breasts. After Hoffman reported Weekly's misconduct to St. Mary's, Hoffman was subject to differential disciplinary treatment and negative scheduling changes. In April 1994, St. Mary's served a third-party complaint against Weekly and his employer Dakota Clinic. The case settled just prior to trial for a total of $90,000, with Weekly contributing $15,000.

In February 1995, Weekly sought insurance coverage for defense costs under his homeowner's policy with Farm Bureau. Farm Bureau denied coverage, asserting that there was no "occurrence" as defined by the insurance policy and that the intentional acts and business pursuits exclusions applied. In March 1996, Weekly commenced this declaratory judgment action. After the parties agreed to have the court determine the coverage question on stipulated facts, the district court concluded that Farm Bureau had a duty to defend Weekly. After a hearing on reasonable attorney fees, the district court issued an order awarding Weekly $65,735 for representation in the underlying case and $39,135 for representation in the declaratory judgment action.


The question whether an insurer has a legal duty to defend an insured is a legal question subject to de novo review. Metropolitan Property & Cas. Ins. Co. v. Miller, 589 N.W.2d 297, 299 (Minn. 1999). A duty to defend arises when any part of the claim against the insured is arguably within the scope of the policy. Id. In determining the existence of a duty to defend, we compare the allegations in the complaint in the underlying action with the relevant language in the insurance policy. Meadowbrook, Inc. v. Tower Ins. Co., 559 N.W.2d 411, 415 (Minn. 1997).

1. Farm Bureau argues that the underlying sexual harassment and reprisal claims against Weekly do not constitute a covered occurrence under his homeowner's policy. The policy defines occurrence as "an accident, including continuous or repeated exposure to substantially the same general harmful conditions," that results in bodily injury or property damage. The complaint alleged a pattern of physical and verbal sexual misconduct and harassment in violation of the Minnesota Human Rights Act. The district court did not expressly address whether the claims alleged in the complaint constitute a covered occurrence under the policy.

Whether the claims constitute an occurrence turns on whether they were an accident. Minnesota caselaw defines accident as "an unexpected, unforeseen, or undesigned happening." Sage Co. v. Insurance Co. of North America, 480 N.W.2d 695, 698 (Minn. App. 1992) (quotation omitted). This court has noted that the definition of accident includes "all negligently caused injury, provided such injury was not intentional." Gilman v. State Farm Fire & Cas. Co., 526 N.W.2d 378, 382 (Minn. App. 1995) (quotation omitted). Applying this definition, this court has upheld a jury's determination that one person tackling another was not an accident because the tackle was not unexpected, unforeseen and undesigned, and was not negligent, even though the resulting harm may have been unintended. See Gilman, 526 N.W.2d at 380-83.

Here, the district court did not address the "accident" standard laid out in Gilman and Sage, even though Farm Bureau raised the issue in its memorandum before the district court. In this case, the verbal misconduct included questions such as "what are you wearing under that dress?" and "can I touch them for myself?"; the physical harassment included incidents where Weekly groped Hoffman's breasts. We conclude that such conduct, like the tackle in Gilman, was not unexpected, unforeseen and undesigned, and was not negligent, even if Weekly did not intend the resulting harm. Accordingly, there was no covered occurrence under the homeowner's policy.

2. Farm Bureau also contends that the district court erred in determining that the intentional acts exclusion in the policy did not apply to the underlying claims. The policy provides that coverage does not apply to bodily injury or property damage that is "expected or intended by the insured." The district court determined that Weekly did not intend to cause injury to Hoffman because he was suffering from an untreated serious emotional illness. The supreme court has explained

that for the purposes of applying an intentional act exclusion contained in a homeowner's insurance policy, an insured's acts are deemed unintentional where, because of mental illness or defect, the insured does not know the nature or wrongfulness of an act, or where, because of mental illness or defect, the insured is deprived of the ability to control his conduct regardless of any understanding of the nature of the act or its wrongfulness.

State Farm Fire & Cas. Co. v. Wicka, 474 N.W.2d 324, 331 (Minn. 1991).

In this case, the evidence of Weekly's mental illness consists of medical records documenting that Weekly was diagnosed with major depression in December 1993 and began taking an anti-depressant. In March 1994, Weekly's medication was supplemented with lithium, and in January 1995, another doctor reviewed Weekly's medical records and concluded that Weekly's "relatively dramatic response to lithium * * * certainly suggests that Dr. Weekly was, in fact, suffering from bipolar disorder the entire course of his illness." Weekly's diagnosed major depression and possible bipolar disorder do not by themselves meet the Wicka standard for lack of intent. The record does not include any doctor's opinion that Weekly's mental illness ever rendered him incapable of understanding the nature of his acts or their wrongfulness or deprived him of the ability to control his conduct. Accordingly, there is no evidence to support the district court's determination that Weekly did not intend to cause injury because of untreated mental illness.

3. Farm Bureau argues that the business exclusion applies to the claims against Weekly. The policy provides that coverage does not apply to bodily injury or property damage arising out of or in connection with a "business" engaged in by the insured; "business" includes any trade, profession, or occupation. The district court determined that because Hoffman's claims included allegations of inappropriate conduct that occurred away from the hospital, those claims "did not arise out of or in connection with Dr. Weekly's work as a medical doctor."

But the fact that instances of offensive conduct may have occurred outside the course of employment does not render the exclusion inapplicable to sexual harassment claims under the Minnesota Human Rights Act. The supreme court has explained:

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. * * * 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 plaintiff's employment.

Meadowbrook, Inc., 559 N.W.2d at 420. Accordingly, the fact that some of the conduct occurred away from the hospital does not make the claim for sexual harassment any less business-related. To hold otherwise ignores that a sexual harassment claim alleging a hostile work environment under the Minnesota Human Rights Act is a claim of employment discrimination that would not exist but for the business relationship. Cf. Zimmerman v. Safeco Ins. Co. of Am., 593 N.W.2d 248, 250 (Minn. App. 1999) (upholding application of business pursuits exclusion because "the sexual-harassment claim would not have arisen but for the business relationship"), review granted (Minn. Jul. 28, 1999).


[*] Retired judge of the district court, serving as judge of the Minnesota Court of Appeals by appointment pursuant to Minn. Const. art. VI, § 10.