Heaven Massage and >Wellness> >Center> v.
Continental Casualty

















Filed 6/21/12 Heaven Massage and Wellness
Center v. Continental Casualty
CA2/4









NOT TO BE PUBLISHED IN THE OFFICIAL
REPORTS



California
Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or
relying on opinions not certified for publication or ordered published, except
as specified by rule 8.1115(b). This
opinion has not been certified for publication or ordered published for
purposes of rule 8.1115.







IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA



SECOND APPELLATE DISTRICT



DIVISION FOUR










>

HEAVEN MASSAGE AND WELLNESS CENTER, Cross-complainant and Appellant, v. CONTINENTAL CASUALTY COMPANY, Cross-defendant and Respondent.

B237987 (Los Angeles County Super. Ct. No. BC437342)

APPEAL from
an order of the Superior Court of href="http://www.adrservices.org/neutrals/frederick-mandabach.php">Los Angeles
County, Abraham Khan, Judge.
Reversed.

Mastroianni
Law Firm and A. Douglas Mastroianni for Cross-complainant and Appellant.

Woolls &
Peer, John E. Peer, and Caitlin R. Zapf for Cross-defendant and Respondent.
clear=all >


Jaime
Weinberg (Weinberg) sued appellant Heaven Massage and Wellness Center (HMWC),
alleging that she was sexually assaulted by an HMWC employee during a
massage. HMWC tendered Weinberg’s claim
to its comprehensive general liability insurer, respondent Continental Casualty
Company (Continental), which asserted there was no coverage for Weinberg’s
claim under the policy’s “professional services” exclusion. HMWC then cross-claimed against Continental
for breach of insurance contract and breach of the implied href="http://www.mcmillanlaw.com/">covenant of good faith and fair dealing. The trial court granted summary judgment for
Continental, concluding that there was no coverage and no duty to defend as a
matter of law. We reverse.



>FACTUAL AND PROCEDURAL HISTORY



I. The Underlying Sexual Assault
Complaint

On May 7, 2010,
Weinberg filed a complaint against HMWC and Luiz Baek (Baek). The complaint alleged that Baek, an HMWC
massage therapist, sexually assaulted her during a massage on January 3, 2010,
“when he touched, fondled, rubbed, grabbed and squeezed Plaintiff’s breasts,
buttocks, inner thighs and genitals, all while making and emitting moans,
groans, grunts and other sounds and noises of sexual pleasure.” In five causes of action—for href="http://www.fearnotlaw.com/">sexual battery in violation of Civil Code
section 1708.5 (second cause of action), assault (third cause of action),
battery (fourth cause of action), false imprisonment (fifth cause of action),
and intentional infliction of emotional distress (sixth cause of action)—the
complaint alleged that HMWC was vicariously liable for Baek’s alleged
assault. In two causes of action—for
sexual harassment (first cause of action) and negligence (seventh cause of
action)—the complaint alleged that HMWC was directly liable for its own href="http://www.mcmillanlaw.com/">tortious conduct.



>II. HMWC’s Cross-claim
Against Continental

HMWC
tendered Weinberg’s suit to Continental, which had issued a comprehensive
general liability (CGL) policy to HMWC for the policy period November 10,
2009,
through November 10, 2010.
The following policy provisions are relevant to the instant appeal:

>Coverage.
The policy provided that Continental would “pay those sums that the
insured becomes legally obligated to pay as damages because of ‘bodily injury,’
‘property damage’ or ‘personal and advertising injury’ to which this insurance
applies.” The insurance “applies
. . . [t]o . . . ‘bodily injury’ . . . caused by
an ‘occurrence’ that takes place in the ‘coverage territory’ [and] during the
policy period,” and to “‘personal and advertising injury’ caused by an offense
arising out of your business, but only if the offense was committed in the
‘coverage territory’ during the policy period.”


>“Occurrence” and “personal and advertising
injury.” The policy defined
“occurrence” as “an accident, including continuous or repeated exposure to
substantially the same general harmful conditions.” It defined “personal and advertising injury”
as “injury, including consequential ‘bodily injury,’ arising out of one or more
of the following offenses: [¶] (a) False arrest, detention or
imprisonment . . . .”


>Professional service exclusion. The policy excluded coverage for claims
arising out of professional services, as follows: “This insurance does not apply to” “‘[b]odily
injury,’ ‘property damage,’ ‘personal and advertising injury’ caused by the
rendering or failure to render any professional service.”

Continental
declined to defend Weinberg’s claim, asserting that it alleged sexual and other
intentional conduct, not an “occurrence.”
Continental also contended that Weinberg’s claim was excluded by the
“professional services” provision because Weinberg alleged that the sexual
assault occurred during a massage by a professional massage therapist.

On December
14, 2010,
HMWC filed a cross-complaint against Continental for breach of insurance
contract and breach of the implied covenant of good faith and fair
dealing.

Continental
moved for summary judgment. It asserted
that the CGL policy excluded coverage for bodily injury “caused by the
rendering or failure to render any professional service,” including health or
therapeutic services. Thus, because
Weinberg “specifically alleges she was injured during the course of [a]
massage, which is an excluded professional service,” Continental contended it
had no duty to defend any of Weinberg’s claims.
Continental also asserted that, as a matter of law, HMWC could not
demonstrate that it acted in bad faith or that HMWC was entitled to punitive
damages.

HMWC opposed
the motion for summary judgment, urging that sexual assault and false
imprisonment could not reasonably be characterized as href="http://www.fearnotlaw.com/">“professional services.” In any event, HMWC said, even if there was no
coverage for Baek’s conduct, the
“separation of insureds” clause required Continental to cover claims against >HMWC.


The trial
court granted the motion for summary judgment.
It explained: “The Court
determines that the policy’s professional-services exclusion applies to the
pleading allegations of sexual battery occurring during medical m[a]ssage
therapy, as matters of law.”

The court entered judgment on December
20, 2011. HMWC timely appealed.



>DISCUSSION



The sole
issue on appeal is whether Continental established as a matter of law that it
did not have a duty to defend HMWC. Our
review is de novo. (County of San Diego v. Ace Property & Casualty Ins. Co. (2005)
37 Cal.4th 406, 414 [“‘“We apply a de novo standard of review to an order
granting summary judgment when, on undisputed facts, the order is based on the
interpretation or application of the terms of an insurance policy.”’”].)



I. General Legal Principles

“‘[A]n
insurer has a duty to defend an insured if it becomes aware of, or if the third
party lawsuit pleads, facts giving rise to the potential for coverage under the
insuring agreement. [Citations.]’ (Waller
v. Truck Ins. Exchange, Inc. (1995) 11 Cal.4th 1, 19
. . . .) The insurer must
defend any claim that would be covered if it were true, even if it is
‘groundless, false or fraudulent.’ (>Gray v. Zurich Insurance Co. (1966) 65
Cal.2d 263, 273 . . . .)
‘Implicit in this rule is the principle that the duty to defend is
broader than the duty to indemnify; an insurer may owe a duty to defend its
insured in an action in which no damages ultimately are awarded. [Citations.]’
(Horace Mann Ins. Co. v. Barbara B.
(1993) 4 Cal.4th 1076, 1081.) ‘Thus,
when a suit against an insured alleges a claim that potentially could subject
the insured to liability for covered damages, an insurer must defend unless and
until the insurer can demonstrate, by reference to undisputed facts, that >the claim cannot be covered. In order to establish a duty to defend, an
insured need only establish the existence of a potential for coverage; while to
avoid the duty, the insurer must establish the absence of any such potential.
[Citation.]’ (>Ringler Associates Inc. v. Maryland Casualty
Co. (2000) 80 Cal.App.4th 1165, 1186, fn. omitted.) Doubts concerning the potential for coverage
and the existence of [a] duty to defend are resolved in favor of the
insured. (Montrose Chemical Corp. v. Superior Court (1993) 6 Cal.4th 287,
299-300 . . . .)

“. . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . .

“‘Interpretation
of an insurance policy is a question of law and follows the general rules of
contract interpretation.’ (>MacKinnon v. Truck Ins. Exchange (2003)
31 Cal.4th 635, 647 (MacKinnon).) ‘“The fundamental rules of contract
interpretation are based on the premise that the interpretation of a contract
must give effect to the ‘mutual intention’ of the parties. ‘Under statutory rules of contract
interpretation, the mutual intention of the parties at the time the contract is
formed governs interpretation. (Civ.
Code, § 1636.) Such intent is to be
inferred, if possible, solely from the written provisions of the contract. (Id.,
§ 1639.) The “clear and explicit”
meaning of these provisions, interpreted in their “ordinary and popular sense,”
unless “used by the parties in a technical sense or a special meaning is given
to them by usage” (id., § 1644),
controls judicial interpretation. (>Id., § 1638.)’”’ (MacKinnon,
supra, 31 Cal.4th at pp. 647-648.)

“. . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . .

“An
insurance policy’s coverage provisions must be interpreted broadly to afford
the insured the greatest possible protection, while a policy’s exclusions must
be interpreted narrowly against the insurer.
(MacKinnon, >supra, 31 Cal.4th at p. 648.) The exclusionary clause must be ‘“>conspicuous, plain and clear.”’ (State
Farm Mut. Auto. Ins. Co. v. Jacober (1973) 10 Cal.3d 193, 202.) ‘This rule applies with particular force when
the coverage portion of the insurance policy would lead an insured to
reasonably expect coverage for the claim purportedly excluded.’ (MacKinnon,
supra, 31 Cal.4th at p. 648.)” (Palp,
Inc. v. Williamsburg National Ins. Co. (2011) 200 Cal.App.4th 282, 288-290.)



>II. The Professional Services
Exclusion Does Not Bar Coverage for Weinberg’s Vicarious Liability Claims

Continental
asserts that a massage is a “professional service,” which is specifically
excluded from coverage under the plain language of its CGL policy. Thus, Continental urges, because the alleged
sexual assault took place in the course of an excluded professional service,
there can be no coverage for any of Weinberg’s vicarious liability claims. For the following reasons, we do not agree.



A. Sexual
Assault Is Not “Caused by the Rendering [of a] “Professional Service”

The parties
agree that a massage is a “professional service” within the meaning of
Continental’s insurance policy.href="#_ftn1"
name="_ftnref1" title="">[1] The question before us, therefore, is whether
Weinberg’s injuries resulted from a
professional service—or, stated differently, whether injuries resulting from a
sexual assault committed during a massage were “caused by the rendering or
failure to render [a] professional service.”

The Court of
Appeal considered a similar question in Marie
Y. v. General Star Indemnity Co. (2003) 110 Cal.App.4th 928 (>Marie Y.). There, plaintiff Marie Y. was sexually
assaulted by her dentist, David Phipps, during a dental procedure. (Id.
at p. 936.) She sued Phipps, who
tendered the claim to his professional liability insurer. The relevant policy provided that the insurer
“‘will pay all sums which the insured shall become legally obligated to pay as
damages because of any claim that is first made against the insured >arising out of a dental incident
. . . and . . . in the practice of the profession of
dentistry by the insured . . . .’” (Id.
at p. 935, italics added.) The policy
defined “dental incident” as “‘any act, error, omission, or mistake in the
rendering of or failure to render services in the profession of dentistry by an
insured . . . .’” (>Ibid.)
The insurer declined to defend or indemnify Phipps, contending that a
sexual battery did not arise out of a “dental incident” or “in the practice of
the profession of dentistry.” (>Ibid.)
Phipps unsuccessfully defended plaintiff’s claim at trial, and then
assigned to her his rights against his insurer.
(Id. at p. 943.)

Plaintiff,
as Phipps’s assignee, sued the insurer for bad faith. (Marie Y.,
supra, 110 Cal.App.4th at p. 943.) The court found that the insurer had a duty
to defend and indemnify Phipps as a matter of law. The insurer appealed. (Id.
at p. 948.)

The Court of
Appeal held that the insurer did not have a duty to indemnify Phipps because
the sexual assault did not arise out of a “dental incident.” (Marie Y.,
supra, 110 Cal.App.4th at p.
949.) It explained: “Marie Y.’s original complaint in the
underlying action, even in its negligence count, specifically alleged that
Phipps engaged in sexual abuse and sexual misconduct toward Marie Y. and
that his behavior was ‘unprofessional and
totally void of a legitimate diagnostic motive.’ (Italics added.) Such behavior, even if performed during a
dental procedure which included ‘the use of drugs [and] anesthetic agents’ (Bus.
& Prof. Code, § 1625), cannot reasonably be construed as ‘rendering
. . . services in the profession of dentistry’ within the meaning of
Phipps’s policy. Therefore, his alleged
acts cannot be considered a ‘dental incident’ covered by the policy, or ‘arising
out of’ such an incident.” (>Id. at p. 952.)href="#_ftn2" name="_ftnref2" title="">>[2]

The court
reached a similar result in State Farm
Fire & Casualty Co. v. Century Indemnity Co. (1997) 59 Cal.App.4th 648
(State Farm). There, three teenage girls alleged that a
teacher sexually molested them. The
teacher tendered his defense to the school district’s insurer, INA, pursuant to
a policy that obligated the insurer to pay “all sums” the “Insured” (defined to
include teachers) “‘while acting within the scope of their duties as such’” (>id. at p. 652), became legally obligated
to pay as damages because of personal injury.
INA declined to defend. The
teacher then tendered his defense to his homeowner’s insurer, State Farm, which
defended and subsequently sued INA’s successor, Century, to recover its defense
costs. The trial court granted summary
judgment for State Farm. (>Id. at p. 653.)

The Court of
Appeal reversed. It concluded that INA
had no duty to defend because the teacher was not “acting within the scope of
[his] duties as such” when he sexually molested his students. The court explained: “In John
R. v. Oakland Unified School Dist. (1989) 48 Cal.3d 438, the court held
that a school district could not be vicariously liable to the victim of a
teacher’s alleged acts of molestation because such misconduct was outside the
course and scope of the teacher’s employment.
[Fn. omitted.] [Citations.] As the court later explained in >Farmers Ins. Group v. County of Santa Clara
(1995) 11 Cal.4th 992 . . . , the connection between a teacher’s
instructional and supervisory authority and the abuse of that authority to
indulge in personal, sexual misconduct ‘“is simply too attenuated to deem a
sexual assault as falling within the range of risks allocable to a teacher’s
employer.”’ (Id. at p. 1007.) Indeed,
except where sexual misconduct by on-duty police officers against members of
the public is involved [citations], it is generally held that an employer is
not vicariously liable to a third party victim for sexual misconduct by an
employee because ‘. . . it could not be demonstrated that the various
acts of sexual misconduct arose from the conduct of the respective
enterprises.’ [Citation.] Rather, in most instances, the sexual
misconduct is undertaken for personal gratification and not for a purpose
connected to employment. Moreover, such
misconduct is usually not engendered by events or conditions relating to any
employment duties or tasks; nor is it necessary to the employees’ comfort,
convenience, health, or welfare while at work.
[Citation.] [¶] Since a school district is not potentially
vicariously liable for damages arising from a teacher’s molestation of a
student [fn. omitted], it follows that the district’s liability insurer has no
duty to defend the teacher against an action by the student and, therefore,
would not become obligated to reimburse the carrier who provides a
defense.” (State Farm, supra, 59
Cal.App.4th at pp. 657-658.)

>Marie Y. and State Farm are instructive.
They suggest that a sexual assault does not “arise out of” the rendering
of a professional service within the meaning of a professional services clause,
even if the assault occurs while a professional service is being rendered. This is so, moreover, even if the abuser
would not have had access to his victim but for the professional relationship,
and even if—as in both Marie Y. and >State Farm—the provision of the
professional service caused the victim to be unusually vulnerable to abuse.href="#_ftn3" name="_ftnref3" title="">[3] As relevant here, these cases support our
conclusion that coverage for Weinberg’s claims of sexual assault are not
excluded by the professional services clause.


Continental
contends that Marie Y. is inapposite
because the policy in that case covered a “dental incident”—defined as an act
or omission in the rendering of “services in the profession of dentistry”—not,
as here, injury caused by the rendering or failure to render any “professional
service.” While we agree with
Continental that the language of the two policies is not identical, the cases
nonetheless raise analogous questions:
whether sexual assaults committed in
the course of rendering professional services are therefore >caused by the rendering of the
service. As to this issue, we find >Marie Y.’s analysis persuasive.

Continental
also contends that State Farm is
distinguishable because it considered whether a teacher was acting within the
scope of his duties when he sexually molested a student, while in the present
case Baek was not an employee and “[c]overage under the Policy does not turn on
whether Baek was acting within the scope of any employment duties.” Again, while we acknowledge that the language
of the State Farm policy differs in
important respects from the language of the policy in the present case, we do
not agree that State Farm therefore
is not relevant to our analysis. Rather,
we conclude that the court’s discussion of a sexual assault committed in an
employment context is highly relevant here.




>B. >The Cases Cited by Continental Are
Inapposite

Continental
cites a series of cases which it says exclude coverage for intentional torts
committed during the rendering of professional service. For the reasons that follow, the cases are
inapposite.



1. >Cranford Insurance Co., Inc. v. Allwest
Insurance Co.

In >Cranford Insurance Co., Inc. v. Allwest
Insurance Co. (N.D.Cal. 1986) 645 F.Supp. 1440 (Cranford), a psychiatrist, Dr. R., entered a sexual relationship
with his patient, who subsequently sued him for medical malpractice and
infliction of emotional distress. Dr. R.
tendered the claim to his malpractice carrier, Cranford, which accepted under a
reservation of rights and, in turn, tendered the defense to Industrial, Dr.
R.’s personal liability insurer.
Industrial rejected the tender.
Cranford settled with the patient and then sought contribution from Industrial. (Id.
at p. 1441.)

Cranford’s
malpractice policy provided coverage for damages awarded against the insured
“in respect of professional services
rendered by him in his practice of psychiatry, or which should have been
rendered by the Assured.” (>Cranford, supra, 645 F.Supp. at p. 1442.)
Industrial’s personal liability policy specifically excluded liability
for bodily injury “arising out of the rendering of or failure to render
professional services.” (>Id. at p. 1444.)

Industrial
moved for summary judgment in the contribution action. In support, it submitted the declaration of
Dr. Diebel, who stated that Dr. R. breached his duty of care as a psychiatrist
by mishandling the transference process and abandoning his patient. Specifically, Dr. Diebel stated that Dr. R.
knew or should have known that entering a sexual relationship with the patient,
an incest victim, would “recreate[] for the patient the incestuous relationship
she had previously experienced with her stepfather.” (Cranford,
supra, 645 F.Supp. at p. 1443.) The patient’s resulting psychiatric injuries
“could have been anticipated.” (>Ibid.)
Further, Dr. R.’s termination of the patient’s treatment was “in and of
itself a breach of the standards of practice of href="http://www.sandiegohealthdirectory.com/">psychiatrists in this
State.” (Ibid.) Cranford opposed the
summary judgment motion but did not offer any expert testimony in support. (Ibid.)


The court
concluded that the patient’s claim fell within the basic coverage of the
malpractice policy and outside of the personal liability policy. (Cranford,
supra, 645 F.Supp. at p. 1444.) It noted that the testimony of Industrial’s
expert witness, to the effect that Dr. R. violated the applicable standard of
care, was unrebutted. The testimony thus
“establishes that Dr. R.’s conduct arose out of the rendering of professional
services. . . . It
follows that the claim falls within the exclusion in the Industrial
policy.” (Id. at pp. 1442-1444.)

>Cranford does not suggest, as
Continental would have us believe, that claims arising out of sexual conduct
between doctor and patient necessarily
arise out of the rendering or failure to render professional services. Rather, Cranford
found that the conduct at issue was within the professional services exclusion
based on the particular facts of the case—specifically, the expert declaration
that stated that entering into a sexual relationship with a molestation victim
constituted professional malpractice. In
other words, the court did not find that a sexual assault in the course of the
rendering of professional services is per se an excluded professional service;
instead, it found on the strength of expert testimony that the psychiatrist’s
entry into this particular (consensual) sexual relationship was psychiatric
malpractice. And, in any event, the court found a duty to defend (although not a
duty to indemnify) because although the original complaint alleged only medical
malpractice, the insurer subsequently discovered facts suggesting that the
psychiatrist might be liable for
conduct committed outside of his professional activities. (Cranford,
supra, 645 F.Supp. at pp. 1444-1445.)



2. Uhrich
v. State Farm Fire & Casualty Co.

In >Uhrich v. State Farm Fire & Casualty Co.
(2003) 109 Cal.App.4th 598 (Uhrich),
State Farm issued a psychologist a personal liability umbrella policy, which
defined a “loss” as “‘an accident that results in personal injury or property
damage.’” “Personal injury” was defined
as “‘bodily harm, sickness, disease, shock, mental anguish or mental injury,’
as well as specified torts such as false imprisonment, defamation, invasion of
privacy and assault and battery.” The
policy excluded personal injury “‘expected or intended by you,’” “‘any loss
caused by providing or failing to provide a professional service,’” and “‘any
loss caused by your business operations or arising out of business
property.’” (Id. at p. 604.)

The
plaintiff sued the psychologist, alleging that while she was his patient, he
hired her to form and direct a residential treatment program; later, he falsely
accused her of stealing patient files and records. She alleged malpractice, malicious
prosecution, stalking, assault and battery, false imprisonment, conversion,
defamation, and negligence, among other torts.
(Uhrich, supra, 109 Cal.App.4th at pp. 604-605.) The psychologist tendered the complaint to
his insurer, which initially defended under a reservation of rights, but
withdrew its defense after the psychologist pleaded guilty to conspiracy to
pervert and obstruct justice. (>Id. at p. 606.)

The trial
court granted summary judgment for the insurer, and the Court of Appeal
affirmed. As relevant here, the court
found that because plaintiff alleged that her injuries resulted from
“transference and countertransference,” the professional services exclusion
barred plaintiff’s claim: “In
[plaintiff’s] memorandum in support of a motion for summary adjudication, she
asserted State Farm knew [the psychologist] negligently allowed the ‘phenomenon
of transference and countertransference’ to occur, which constituted
malpractice. Further, State Farm knew
‘the conduct giving rise to’ various counts, including NIED and defamation,
‘sprang from the phenomenon of transference and countertransference.’ [Plaintiff] persisted in basing liability on
‘countertransference’ in her memorandum opposing summary judgment, stating the
complaint ‘alleges the other [non-defamation] href="http://www.sandiegohealthdirectory.com/">personal injuries were
caused not by motivation related to [the psychologist’s] business pursuits, but
because of the onset of countertransference.’ . . . The complaint itself explicitly ascribes [the
psychologist’s] ‘harmful [mental] state’ to his failure to prevent
countertransference ‘[d]uring the course of treatment and continuing
thereafter.’ [¶] Uhrich contends the professional services
exclusion is ambiguous and should be interpreted to cover injuries during ‘an
on-going professional relationship.’ But
she alleged ongoing duties were breached.
The fact that [the psychologist’s] campaign continued after severance of
the professional relationship does not obviate the fact that her losses were
‘caused by providing or failing to provide a professional service.’” (Uhrich,
supra, 109 Cal.App.4th at p. 620.)

Continental
urges that, applying Uhrich’s
analysis, the professional services exclusion in its policy should bar coverage
for HMWC’s claim because that exclusion is “substantially similar” to the
professional services exclusion in Uhrich
and, in both cases, “[s]everal of the same causes of action were alleged
. . . such as assault and battery and false imprisonment.” We do not agree. Uhrich
held that the professional services exclusion applied not because a
psychiatrist-patient relationship existed, but rather because the plaintiff
specifically alleged that her injuries resulted from the negligent manner in
which that relationship was carried out.
The same cannot be said here, where Weinberg alleged that her href="http://www.sandiegohealthdirectory.com/">injuries resulted from the
sexual assault, not the massage.



3. Antles
v. Aetna Casualty & Surety Co.

In >Antles v. Aetna Casualty & Surety Co.,
supra, 221 Cal.App.2d 438 (>Antles), a chiropractor obtained an
insurance policy from Aetna that excluded claims for injuries “‘due to the
rendering of or failure to render any professional service.’” (Id.
at pp. 438-439.) While the policy was in
effect, a patient was burned when an infrared lamp used during treatment fell
off the wall and onto the patient’s back.
(Id. at p. 440.) The insurer declined to defend the patient’s
resulting claim, and the chiropractor sued to recover the amounts awarded
against him. (Id. at p. 439.) In support
of his claim, the chiropractor contended that the injury did not arise out of
the rendering of a professional service because “the act of affixing the
bracket and lamp to the wall was a mechanical act and was not a professional
service.” (Id. at p. 441.) The court
disagreed: “In the present case, the
lamp was the principal article or instrument used in giving the treatment, and
preparatory to using it the doctor was required, in the exercise of his
professional skill and judgment, to swing it from the wall to a proper place
over the table and to adjust it to the proper height above the patient; and
while the lamp heat was being applied, the doctor was required, in the further
exercise of his professional skill and judgment, to observe the time during
which the heat was applied, so that only the proper amount of heat for the
specific treatment would be applied—and that a burn would not result from too
much heat. Also in the present case, the
doctor remained in the room while the lamp heat was being applied. As above stated, the doctor testified that
the adjustment of the height of the lamp from the patient, and the matter of
the length of time the patient stayed under the lamp, required his supervision
in his capacity as a chiropractor. The
finding of the trial court that the lamp was adjusted as a part of the doctor’s
professional services is supported by the evidence. It is apparent that the injury occurred
during the performance of professional services.” (Id.
at pp. 442-443.)

Continental
contends that Antles is analogous to
the present case because “[n]ot only did Weinberg’s injuries arise contemporaneously
with the performance of the massage, but her injuries arose from the
very instrumentality of the massage:
Baek’s hands.” This contention
ignores the analyses of Marie Y. and >State Farm, to the effect that a sexual
assault committed in the course of rendering a professional service is
different than other torts committed in the same context because it is
undertaken for personal gratification, not for any valid professional
purpose. Injuries from a sexual assault
therefore cannot be said to be “caused by the rendering or failure to render
[a] professional service.”

Based on all
the authority discussed above, we conclude that Baek’s alleged sexual assault
of Weinberg was not “caused by the rendering or failure to render [a]
professional service” within the meaning of Continental’s CGL policy. The trial court erred in concluding
otherwise.href="#_ftn4" name="_ftnref4" title="">[4]



>III. The Professional Services
Exclusion Does Not Bar Coverage for Weinberg’s Direct Liability Claims

In two
causes of action, the complaint alleged that HMWC was directly liable for its
own tortious conduct. The first cause of
action, for sexual harassment, alleged as follows:

“8. Beginning in or around April 2007 and
lasting at least through May 9, 2007, and continuing, Defendants, and DOES
1-100, and each of them, while acting in the course and scope of their
employment with Defendants and DOES 1-100, and in carrying out the policies and
practices of Defendants and DOES 1-100, failed to properly implement policies,
practices, and procedures to investigate sexual harassment, failed to
investigate sexual harassment, failed to properly investigate sexual
harassment, failed to properly train, failed to stop[/]prevent the hostile
atmosphere, failed to provide a neutral party for clients to complain to
without fear of retaliation and
retribution.

“9. By the acts and conduct described above,
Defendants, and each of them, in violation of said statutes, knew about, or
should have known about, and failed to investigate, and failed to properly
investigate, prevent, or remedy the sexual harassment. The acts of harassment described herein were
sufficiently severe and pervasive so as to alter the conditions of the
relationship, and created a quid pro quo and hostile working environment.”

The seventh
cause of action, for negligence, alleged as follows:

“79. Defendants, and each of them, so
negligently, carelessly, recklessly and unlawfully maintained, operated,
entrusted, controlled, directed, hired, trained, supervised, employed, continue
to employ, contracted with, continued to contract with, their facilities and
the Massage Therapists therein, including Defendant BAEK, thereby directly and
legally causing the injuries and damages to Plaintiff as herein alleged.

“. . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . .

“81. Defendants, and each of them, knew or
should have known about the offensive proclivities of Defendant BAEK, yet
unreasonably continued to employ and/or contract with BAEK in a capacity where
he had unrestricted access to clients, such as Plaintiff, where he could, and
did, cause harm to them.”

In its
motion for summary judgment, Continental contended that HMWC’s alleged
negligence was not an independent source of Weinberg’s injuries, and thus
Weinberg’s direct liability claims, like her vicarious liability claims, were excluded
by the professional services exclusion.
Continental repeats this contention on appeal, asserting that under >Century Transit Systems, Inc. v. American
Empire Surplus Lines Ins. Co. (1996) 42 Cal.App.4th 121 (>Century Transit) and related authority, there can be no coverage for
negligent hiring if there is no coverage for the underlying act that caused the
injury. HMWC disagrees, urging that
under Underwriters Ins. Co. v. Purdie
(1983) 145 Cal.App.3d 57 (Purdie),
there may be coverage for an employer’s negligence in hiring or retaining an
employee who is incompetent or unfit, even if there is no coverage for the
employee’s tort against a third person.

We need not
resolve the apparent split of authority between Century Transit and Purdie. Continental’s reliance on >Century Transit is premised on its
assumption that the professional services exclusion excludes coverage for
Baek’s alleged sexual assault, an assumption we have rejected. We therefore need not decide whether, >if such exclusion did exclude coverage
for the assault, it would also
exclude coverage for HMWC’s alleged negligent hiring, retention, and
supervision of Baek.



DISPOSITION



The summary
judgment is reversed. HMWC shall recover
its costs on appeal.



NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS







SUZUKAWA,
J.



We
concur:







WILLHITE, Acting P. J.







MANELLA, J.