OFF-DUTY EMPLOYEE NOT CONSIDERED AN INSURED

A woman was injured in a skiing accident by the resort's off-duty food manager, who was enjoying the ski slopes on his day off. She sued and obtained a default judgment against the food manager of almost a quarter million dollars.

The resort's general liability insurer had refused to defend the off-duty food manager, contending that he was not an additional insured under the policy concerning the accident. However, the insurer did defend the resort, also named in the suit, and obtained summary judgment in its favor based on its having no liability for its off-duty employee's actions.

The injured woman then brought an action against the insurer as the resort employee's judgment creditor, alleging that he was an insured under the policy, that the insurer allowed judgment against him by failing to defend him, and that it refused her demand to pay the judgment.

The trial court granted the insurer's motion for summary judgment, determining that the employee was not an insured (with respect to the claim) under the policy and that, accordingly, it did not have an obligation to defend him or pay the underlying judgment. Appeal followed.

The appeal court noted that the subject employee was engaged in recreational skiing at the time of the accident. He used a free ski pass of a type the resort gave to all of its employees. His work was not, in any manner, related to the ski operations.

The court underscored the following pertinent provision in the policy under the "Additional Insured" caption: "It is agreed that the 'Persons Insured' provision is amended to include any employee....of the named insured while acting within the scope of his (sic) duties as such...."

It was concluded that the manager was not performing his duties as an employee at the time of the accident and, therefore, was not an "additional insured" under the terms of the policy with respect to the claim.

The trial court's judgment was affirmed in favor of the insurance company and against the judgment creditor.

Editor's Note: This sets the stage for discussions, with personal insureds, of homeowners personal liability coverage for situations when business liability insurance is not applicable and why high limits are desirable.

Miller, Plaintiff-Appellant v. American Home Assurance Company, Defendant-Respondent. California Court of Appeal, First Appellate District. No. A071500. July 3, 1996. CCH 1996 Fire and Casualty Cases, Paragraph 5815.