In a victory for Wiley Rein’s client, a Florida federal court has held that an employment practices liability policy that provided coverage for “harassment” did not cover a licensing action arising out of a dentist’s alleged sexual misconduct. Turbyfill v. Scottsdale Indem. Co., No. 3:14-cv-283 (N.D. Fla. Feb. 24, 2016). The court also noted that Florida public policy likely precluded coverage for sexual abuse claims and that coverage was unavailable because the insurer was not given timely written notice as required by the policy at issue. Wiley Rein represented the insurer in the case.

A partner in a dental practice was engaged in the practice of sedation dentistry. The Florida Department of Health filed a complaint alleging that on four separate occasions, staff members at the dentistry practice saw the dentist enter rooms where minor patients were sedated and were left alone. According to the Department of Health, those staff members observed the dentist “moving the patients’ hands from under blankets and standing near and/or touching them while he was visibly sexually aroused and thrusting his hips and pelvic region on or near them.” The Department of Health’s complaint charged the dentist with violating a statutory provision prohibiting “sexual misconduct” by a dentist. The dentist denied the allegations.

A staff member at the dentist’s office forwarded a short notice to the practice’s insurer that “a Partner is being charged with sexual misconduct.” The insurer asked for more details by telephone, and the staff member incorrectly advised that the matter had been resolved. Thereafter, the dentist settled with the Department of Health. Subsequently, the dentist made a demand against his partnership for several business torts, some of which were tangentially related to the sexual misconduct complaint. The dentist and the partnership settled the business tort demand, and the partnership assigned its rights under the partnership’s EPL policy to the dentist. The dentist brought suit against the EPL carrier seeking coverage for the Department of Health’s complaint and the business tort demand.

The court granted summary judgment for the insurer, opining that this was “not a close case” and “only little discussion is required.” The court held that the Department of Health’s complaint and the business tort demand were not covered under the EPL policy for several independently-sufficient reasons. First, the EPL policy provided coverage only for claims brought by or on behalf of “any natural person who is a customer, vendor, service provider, client, or other business invitee of the Company.” The dentist argued that the sedated minor patients fell within this definition. The court held that the claim was not “brought by or on behalf of” those minor patients; rather, it was brought by the Department of Health, which did not fall within the definition.

Second, the EPL policy provided specified coverage for “harassment,” which the court in part determined meant conduct that “annoys, alarms, or causes substantial emotional distress” to a person. The court stated that the dentist’s alleged sexual misconduct was not harassment; the court stated that the alleged conduct could not have been designed to annoy or alarm the patients because the patients were sedated. The court also noted that Florida public policy likely would preclude coverage for sexual abuse, particularly against a minor.

Third, the court held that the insurer was “obviously not given timely written notice” of the Department of Health’s complaint. Although the insurer had received notice that a partner was charged with sexual misconduct, an employee of the dental partnership subsequently stated that no claim had been filed and that the matter had already been “settled.” Therefore, the insurer was never given the opportunity to consent to a settlement or defense costs as required by the terms of the policy.

The dentist did not address the business tort demand in his motion for summary judgment, and the court held that coverage was precluded for substantially the same reasons applicable to the Department of Health’s complaint.