WRONGFUL TERMINATION CLAIM HELD NOT COVERED UNDER BODILY INJURY LIABILITY INSURING AGREEMENT

WRONGFUL TERMINATION CLAIM HELD NOT COVERED UNDER BODILY INJURY LIABILITY INSURING AGREEMENT 270_C089

WRONGFUL TERMINATION CLAIM HELD NOT COVERED UNDER BODILY INJURY LIABILITY INSURING AGREEMENT

This case is instructive with respect to the scope of bodily injury liability coverage and the disposition of a claim alleging emotional distress.

A former employee of a commercial firm filed a wrongful termination suit against her former employer, alleging that (1) she had been fired because of her intent to report allegedly wrongful business activities by the firm and that (2) she suffered severe emotional distress as a consequence.

The firm's general liability insurer filed a motion for summary judgment, contending that the woman's suit did not trigger a contractual duty for it to defend or indemnify its insured.

The policy undertook to provide defense and pay damages with respect to a suit seeking damages for "bodily injury" caused by an "occurrence."

"Bodily injury" was defined in the policy as "bodily injury, sickness or disease sustained by a person, including death resulting from any of these at any time." The definition of "occurrence" was "an accident, including continuous or repeated exposure to substantially the same harmful conditions."

The court identified its first task as determining if the woman's claim arose from an "occurrence." It noted that courts applying

Pennsylvania law to policies defining "occurrence" as in the policy under review "....have held that intentional acts do not amount to 'occurrences' because they are not accidental in nature." Accordingly, it concluded that the former employee's discharge, being intentional, was not an "occurrence" that could trigger a duty on the part of the insurer to indemnify the insured.

The insured contended that the woman's alleged emotional and psychological injury was "bodily injury." The federal court said that "Pennsylvania courts have soundly rejected the contention that policy definitions of injury or bodily injury encompass mental or emotional harm. Furthermore, the court stressed that, to be covered, an alleged injury must have resulted from an "occurrence," as defined. The intentional act of firing was not an "occurrence."

The insurance company's motion for summary judgment was granted. It had no duty to defend or indemnify.

(NATIONWIDE PROPERTY & CASUALTY INSURANCE COMPANY, Plaintiff v. FERYO HEARING AID SERVICE, INCORPORATED ET AL, Defendants. United States District Court for the Eastern District of Pennsylvania. No. 95-CV-0225. August 4, 1995. CCH 1995 Fire and Casualty Cases, Paragraph 5381.)