Klamath Pacific Corp. v. Reliance Insurance

950 P.2d 909, 151 Or. App. 405, 1997 Ore. App. LEXIS 1856, 1997 WL 749486
CourtCourt of Appeals of Oregon
DecidedNovember 26, 1997
Docket9302944CV; CA A91172
StatusPublished
Cited by21 cases

This text of 950 P.2d 909 (Klamath Pacific Corp. v. Reliance Insurance) is published on Counsel Stack Legal Research, covering Court of Appeals of Oregon primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Klamath Pacific Corp. v. Reliance Insurance, 950 P.2d 909, 151 Or. App. 405, 1997 Ore. App. LEXIS 1856, 1997 WL 749486 (Or. Ct. App. 1997).

Opinions

[407]*407LANDAU, J.

At issue in this case is whether defendant Reliance Insurance Company (Reliance) had a duty to defend plaintiffs Robert Stewart and Klamath Pacific Corporation (Klamath Pacific) in lawsuits brought by former employees of Klamath Pacific. The trial court held that Reliance did owe plaintiffs such a duty to defend in the underlying actions. Reliance appeals.

In February 1990, two former employees of Klamath Pacific, Ballinger and Sutfin, filed actions in federal district court against Klamath Pacific, against Stewart, as principal shareholder and president of Klamath Pacific, and against two supervisors employed by Klamath Pacific, Pearce and Mahoney. Although Ballinger and Sutfin alleged various federal claims in those actions, the claims now at issue are their pendent state claims of intentional infliction of emotional distress. Those claims (presented the same in both Ballinger’s and Sutfin’s pleadings), included the following allegations:

“2.
“At all relevant times hereto, Defendant Klamath Pacific Corporation (‘Klamath Pacific’) was an Oregon Corporation doing business in the state of Oregon.
‡ $ * *
“4.
“On or about August 1988, Plaintiff was hired by Klamath Pacific as a traffic control person. Defendant Kevin Mahoney (‘Mahoney’) and Defendant Michael Pearce (‘Pearce’) were employees of Klamath Pacific and were Plaintiffs supervisors.
“5.
“Beginning from the time of Plaintiffs initial employment with Klamath Pacific, and continuing throughout her employment, Plaintiff was subjected to unwelcome sexual harassment by Mahoney, Pearce and Klamath Pacific. The sexual harassment was undesirable and offensive to Plaintiff and was based upon Plaintiffs sex. Such harassment affected the term, condition or privilege of Plaintiff’s [408]*408employment, and created a hostile and abusive working environment.
“6.
“Defendant Robert Stewart (‘Stewart’), principal shareholder and President of Klamath Pacific knew or should have known of the harassment, and failed to take prompt remedial action.
*
“15.
“While employed at Klamath Pacific, Plaintiff was subjected to conduct intending to inflect [sic] severe mental or emotional distress. The intentional conduct included in part, but is not limited to, the following:
“a. Pearce and Mahoney intentionally grabbed or rubbed Plaintiffs breasts and buttocks.
“b. Mahoney grabbed his crotch and made gestures to Plaintiff to indicate the size of his penis.
“c. Mahoney gestured to Plaintiff with his hand on his throat and then spit, simulating masturbation and ejaculation.
“d. Pearce and Mahoney made sexually explicit comments and gestures to and about Plaintiff.
“16.
“The acts of Defendants caused Plaintiff severe mental or emotional distress including shame, humiliation, embarrassment and severe emotional distress, as well as physical illness.
“17.
“The comments and conduct of the Defendants amounted to an extraordinary transgression of the bounds of socially tolerable conduct.
“18.
“As a result of the above conduct by Defendants, Plaintiff is entitled to general damages, compensatory damages and punitive damages.”

[409]*409Ballinger’s and Sutfin’s claims for intentional infliction of emotional distress eventually were dismissed by the federal district court, and both filed similar claims in state court, making the following allegations:

“1.
“At all relevant times hereto, Defendant Klamath Pacific Corporation (‘Klamath Pacific’) was an Oregon Corporation doing business in the state of Oregon.
“2.
“In August 1988, Plaintiff was hired by Klamath Pacific as a traffic control person.
%
“19.
“At all relevant times hereto, Klamath Pacific was Plaintiffs employer, Pearce was Plaintiffs acting supervisor, and Mahoney acted as Plaintiffs supervisor in the absence of Pearce. While on the job at Klamath Pacific, Pearce and Mahoney abused their positions as supervisors over Plaintiff in one or more of the following instances of their intentional conduct (conduct is not limited to these specific acts):
“(a) On at least one occasion, Pearce and Mahoney intentionally rubbed their arms against Plaintiffs breasts.
“(b) Mahoney grabbed his crotch and made gestures to Plaintiff to indicate the size of his penis.
“(c) Mahoney gestured to Plaintiff with his hand on his throat and then spit, simulating masturbation and ejaculation.
“(d) On numerous occasions, Pearce and Mahoney grabbed, or attempted to grab, Plaintiffs breasts and buttocks.
“(e) On numerous occasions, Pearce and Mahoney made sexually explicit comments and gestures to and about Plaintiff.
[410]*410“20.
“Defendants knew that the above acts would cause Plaintiff severe mental or emotional distress, and Defendants Pearce and Mahoney committed the above acts with the intent to cause Plaintiff severe mental or emotional distress.
“21.
“The comments and conduct by Defendants were outrageous in the extreme and were an extraordinary transgression of the bounds of socially tolerable conduct, and caused Plaintiff shame, humiliation, embarrassment and severe physical and emotional distress.
“22.
“As a result of the above acts and conduct by Defendants Pearce and Mahoney, Plaintiff is entitled to general damages, compensatory damages [and] punitive damages against Pearce and Mahoney directly, and against Stewart and Klamath Pacific vicariously under the doctrine of Respondeat Superior.”

In their state court actions, Ballinger and Sutfin also added a new state law claim for battery. The state claims again alleged that Klamath Pacific was an Oregon Corporation and that Ballinger and Sutfin were hired as traffic controllers in August 1988. Those claims further alleged:

“28.
“During Plaintiffs period of employment with Klamath Pacific from August 1988 through August 1989, Defendants Pearce and Mahoney voluntarily and intentionally committed the following (not exclusive list) acts:
“(a) On at least one occasion, both Pearce and Mahoney intentionally rubbed their arms against Plaintiffs breasts.

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Klamath Pacific Corp. v. Reliance Insurance
950 P.2d 909 (Court of Appeals of Oregon, 1997)

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Bluebook (online)
950 P.2d 909, 151 Or. App. 405, 1997 Ore. App. LEXIS 1856, 1997 WL 749486, Counsel Stack Legal Research, https://law.counselstack.com/opinion/klamath-pacific-corp-v-reliance-insurance-orctapp-1997.