Westfield Insurance Co. v. Tech Dry, Inc.; Gayle Williamson

*The Honorable William W Schwarzer, Senior United States District
Judge for the Northern District of California, sitting by designation.
1
RECOMMENDED FOR FULL-TEXT PUBLICATION
Pursuant to Sixth Circuit Rule 206
ELECTRONIC CITATION: 2003 FED App. 0230P (6th Cir.)
File Name: 03a0230p.06
UNITED STATES COURT OF APPEALS
FOR THE SIXTH CIRCUIT
_________________
WESTFIELD INSURANCE CO.,
Plaintiff-Appellant,
v.
TECH DRY, INC.; GAYLE
WILLIAMSON,
Defendants-Appellees.
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No. 01-6390
Appeal from the United States District Court
for the Eastern District of Kentucky at Covington.
No. 00-00186—William O. Bertelsman, District Judge.
Argued: June 10, 2003
Decided and Filed: July 15, 2003
Before: MOORE and GIBBONS, Circuit Judges;
SCHWARZER, Senior District Judge.*
2 Westfield Ins. Co. v. Tech Dry et al. No. 01-6390
_________________
COUNSEL
ARGUED: John H. Engle, KOLSTEIN, ENGLE &
PRINCE, Cincinnati, Ohio, for Appellant. Suzanne Cassidy,
O’HARA, RUBERG, TAYLOR, SLOAN & SERGENT,
Covington, Kentucky, for Appellees. ON BRIEF: John H.
Engle, KOLSTEIN, ENGLE & PRINCE, Cincinnati, Ohio,
for Appellant. Suzanne Cassidy, O’HARA, RUBERG,
TAYLOR, SLOAN & SERGENT, Covington, Kentucky, for
Appellees.
_________________
OPINION
_________________
KAREN NELSON MOORE, Circuit Judge. Plaintiff-
Appellant Westfield Insurance Company (“Westfield”)
appeals the district court’s grant of summary judgment to
Defendants-Appellees Tech Dry, Inc. (“Tech Dry”) and Gayle
Williamson (“Williamson”). When Williamson’s mother was
murdered by a Tech Dry employee who had previously done
work at her mother’s home, Williamson filed an action
against Tech Dry. She alleged that Tech Dry proximately
caused the death of her mother by negligently hiring and
retaining the employee who murdered her mother. Westfield
has a duty to defend Tech Dry, its insured, in actions seeking
damages for bodily harm if they are caused by an
“occurrence.” In the present action, Westfield seeks a
declaratory judgment that it is not obligated to defend Tech
Dry in Williamson’s action because Tech Dry’s negligent
hiring and retention of an employee is not an “occurrence”
under the terms of Tech Dry’s insurance liability contract.
Upon cross-motions for summary judgment, the district court
granted summary judgment to Tech Dry and Williamson,
concluding that because the meaning of the policy term
“occurrence” was ambiguous, Westfield was obligated to

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No. 01-6390 Westfield Ins. Co. v. Tech Dry et al. 3
defend Tech Dry in the underlying action. Westfield appeals.
Because the Kentucky courts would likely find that negligent
hiring and retention of an employee constitutes an
“occurrence” under the terms of the policy in question, we
AFFIRM the district court.
I. FACTS AND PROCEDURE
Fred Furnish (“Furnish”) performed work at Ramona
Williamson’s (“Ramona”) home while employed as a carpet
cleaner for Tech Dry. In early June 1998, Tech Dry
terminated Furnish’s employment. Several weeks later,
Furnish broke into Ramona’s home, where he assaulted and
murdered Ramona. Furnish was subsequently convicted of
capital murder in Kentucky state court.
After she was named the executor of her mother’s estate,
Williamson filed a wrongful death action against Tech Dry in
Kentucky state court. Williamson alleged that an employee
of Tech Dry caused her mother’s death and that Tech Dry was
negligent in hiring and retaining Furnish as an employee. Jeff
Cheser (“Cheser”), the Tech Dry franchise owner and
manager who hired Furnish, admits that he did not perform a
criminal background check on Furnish. Moreover, Cheser
retained Furnish as an employee even after receiving
complaints of theft from customers and learning that Furnish
had stolen money from Tech Dry.
Tech Dry, Westfield’s insured, asked Westfield to provide
a defense and indemnity for the claims asserted against Tech
Dry in Williamson’s wrongful death action. The liability
policy in question obligates Westfield to provide the
following coverage:
a. We will pay those sums that the insured becomes
legally obligated to pay as damages because of “bodily
injury” or “property damage” to which this insurance
applies. We will have the right and duty to defend the
insured against any “suit” seeking those damages.
4 Westfield Ins. Co. v. Tech Dry et al. No. 01-6390
However, we will have no duty to defend the insured
against any “suit” seeking damages for “bodily injury” or
“property damage” to which this insurance does not
apply. We may, at our discretion, investigate any
“occurrence” and settle any claim or “suit” that may
result. . . .
***
b. This insurance applies to “bodily injury” and
“property damage” only if:
(1) The “bodily injury” or “property damage” is
caused by an “occurrence” that takes place in the
“coverage territory;” and
(2) The “bodily injury” or “property damage”
occurs during the policy period.
c. Damages because of “bodily injury” include damages
claimed by any person or organization for care, loss of
services or death resulting at any time from the “bodily
injury.”
Joint Appendix (“J.A.”) at 82 (Policy). The policy defines
“occurrence” as “an accident, including continuous or
repeated exposure to substantially the same general harmful
conditions.” J.A. at 93 (Policy). The policy excludes from
coverage “‘[b]odily injury’ or ‘property damage’ expected or
intended from the standpoint of the insured.” J.A. at 82
(Policy).
In response to Tech Dry’s request for a defense and
indemnity, Westfield filed the present action in United States
District Court. Westfield seeks a declaratory judgment that
Tech Dry’s insurance policy does not require Westfield to
defend Tech Dry or to pay or satisfy any judgment or award
rendered to Williamson in the underlying wrongful death
action.

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No. 01-6390 Westfield Ins. Co. v. Tech Dry et al. 5
The parties submitted a stipulation of facts and filed cross-
motions for summary judgment. The district court denied
Westfield’s motion for summary judgment and granted Tech
Dry’s and Williamson’s motions for summary judgment.
Westfield timely appealed.
II. ANALYSIS
A. Standard of Review
We review the district court’s grant of summary judgment
de novo, employing the same legal standard applied by the
district court. Equitable Life Assurance Soc’y of U.S. v. Poe,
143 F.3d 1013, 1015 (6th Cir. 1998). “We also review de
novo a district court’s order denying summary judgment, if
the denial is based on purely legal grounds.” Black v.
Roadway Express, Inc., 297 F.3d 445, 448 (6th Cir. 2002).
When a district court denies summary judgment to one party
on the ground that it is granting summary judgment to another
party, the denial of summary judgment is based on a legal
conclusion rather than the district court’s finding of a genuine
issue of material fact. Id. Because the district court denied
summary judgment for Westfield on the purely legal ground
that it was granting summary judgment to Tech Dry and
Williamson, we therefore review de novo both the district
court’s grant of summary judgment to Tech Dry and
Williamson and the district court’s denial of summary
judgment to Westfield.
Summary judgment is appropriate “if the pleadings,
depositions, answers to interrogatories, and admissions on
file, together with the affidavits, if any, show that there is no
genuine issue as to any material fact.” Fed. R. Civ. P. 56(c).
A dispute over a material fact is not considered “genuine”
unless a reasonable jury could return a verdict for the
nonmoving party. Anderson v. Liberty Lobby, Inc., 477 U.S.
242, 248 (1986) (quotation omitted). When reviewing cross-
motions for summary judgment, we must evaluate each
motion on its own merits and view all facts and inferences in
6 Westfield Ins. Co. v. Tech Dry et al. No. 01-6390
1For diversity purposes, W estfield — an Ohio co rporation with its
principal place of business in Ohio — is consid ered an Ohio citizen, while
Williamson and Tech D ry — a K entucky corporation with its principal
place of business in K entucky — are deemed citizens of Kentucky.
the light most favorable to the nonmoving party. Taft Broad.
Co. v. United States, 929 F.2d 240, 248 (6th Cir. 1991).
Because this court is sitting in diversity,1 see 28 U.S.C.
§ 1332, we apply the law, including the choice of law rules,
of the forum state. Hayes v. Equitable Energy Res. Co., 266
F.3d 560, 566 (6th Cir. 2001) (citing Klaxon Co. v. Stentor
Elec. Mfg. Co., 313 U.S. 487, 496 (1941)). The parties agree
that we should apply Kentucky law. Because the question at
issue has not yet been resolved by the Kentucky Supreme
Court, we must engage in the challenging task of attempting
to predict what the Kentucky Supreme Court would do if
confronted with the same issue. Stalbosky v. Belew, 205 F.3d
890, 893-94 (6th Cir. 2000).
B. Westfield’s Duty to Defend and Indemnify
Tech Dry’s policy provides that Westfield will defend Tech
Dry in suits seeking damages for bodily injury or property
damage caused by an “occurrence.” The policy further
defines occurrence as “an accident, including continuous or
repeated exposure to substantially the same general harmful
conditions.” J.A. at 93 (Policy). The district court found that
the term “accident” is “inherently ambiguous,” J.A. at 17 (Op.
& Order), and construed the ambiguity in favor of finding
coverage, Healthwise of Kentucky, Ltd. v. Anglin, 956 S.W.2d
213, 217 (Ky. 1997). Westfield contests the district court’s
finding of ambiguity, contending that negligent hire and
retention is clearly not an “occurrence” under the terms of the
policy. According to Westfield, the policy therefore does not
provide coverage for a wrongful death suit arising under these
circumstances.

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No. 01-6390 Westfield Ins. Co. v. Tech Dry et al. 7
The interpretation of an insurance contract is a matter of
law. Stone v. Ky. Farm Bureau Mut. Ins. Co., 34 S.W.3d 809,
810 (Ky. Ct. App. 2000). Under Kentucky law, a court
should determine at the outset of litigation whether an
insurance company has a duty to defend its insured by
comparing the allegations in the underlying complaint with
the terms of the insurance policy. DiBeneditto v. Med.
Protective Co., 3 Fed. Appx. 483, 485 (6th Cir. 2001). An
insurance company has a duty to defend its insured if the
language of an underlying complaint against the insured
brings the action within the scope of the insurance contract.
Id.
1. Ambiguity
As an initial matter, we must determine whether the policy
terms “occurrence” and “accident” are ambiguous. The
district court reasoned that “the word ‘accident’ . . . . is
inherently ambiguous.” J.A. at 17 (Op. & Order) (noting that
Black’s Law Dictionary gives more than twenty meanings for
the word). However, the district court also noted that “[i]f
used in an insurance contract, the ordinary meaning of the
term is ‘an event which . . . is unusual and not expected by the
person to whom it happens.’” J.A. at 18 (Op. & Order)
(quoting Black’s Law Dictionary (5th ed. 1979)) (emphasis
omitted).
Where policy terms are not ambiguous, “the ordinary
meaning of the words chosen by the insurer is to be
followed.” James Graham Brown Found. v. St. Paul Fire &
Marine Ins. Co., 814 S.W.2d 273, 279 (Ky. 1991). In other
words, “the terms should be interpreted in light of the usage
and understanding of the average person.” Stone, 34 S.W.3d
at 811 (citing Fryman v. Pilot Life Ins. Co., 704 S.W.2d 205
(Ky. 1986)).
The Kentucky Supreme Court has addressed the
significance of the word “accident” in insurance policies,
although in a slightly different context:
8 Westfield Ins. Co. v. Tech Dry et al. No. 01-6390
The words “accident”, “accidental”, and “accidental
means”, as used in insurance policies, have never
acquired a technical meaning in law, and must be
interpreted according to the usage of the average man
and as they would be read and understood by him in the
light of the prevailing rule that uncertainties and
ambiguities must be resolved in favor of the insured. An
accident is generally understood as an unfortunate
consequence which befalls an actor through his
inattention, carelessness or perhaps for no explicable
reason at all. The result is not a product of desire and is
perforce accidental. Conversely, a consequence which is
a result of plan, design or intent is commonly understood
as not accidental.
Fryman, 704 S.W.2d at 206 (citation omitted); see Stone, 34
S.W.3d at 811 (“In the context of an insurance policy, the
word ‘accident’ should be interpreted in accordance with its
common usage.”). The Kentucky Supreme Court
subsequently described Fryman as “hold[ing] that terms of
insurance contracts have no technical meaning in law and are
to be interpreted according to the usage of the average man
and as they would be read and understood by him in the light
of the prevailing rule that uncertainties and ambiguities must
be resolved in favor of the insured.” Brown Found., 814
S.W.2d at 279.
The Kentucky Court of Appeals has relied on Fryman’s
articulation of the average man’s understanding of “accident”
to analyze the definition of “occurrence” that is at issue in this
case. Interpreting the “occurrence” term of a different policy,
the Kentucky Court of Appeals concluded that although the
policy did not define “accident,” it should be read “according
to the usage of the average person,” as explained in Fryman.
Thompson v. W. Am. Ins. Co., 839 S.W.2d 579, 580 (Ky. Ct.
App. 1992). The Kentucky Court of Appeals also cited
Fryman when interpreting a similar policy provision in Stone,
explaining that, “according to its plain meaning, an ‘accident’

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No. 01-6390 Westfield Ins. Co. v. Tech Dry et al. 9
2W estfield argues that this court has previously concluded that where
an employer negligently hires an employee and the em ployee harm s a
customer, the em ployee’s actions “co nstitute the o ccurrence resulting in
injury” under a similarly word ed policy. Monticello Ins. Co. v. Ky. River
Cmty. Care, Inc., No. 98-5372, 1999 W L 2361 90, at *4 (6th Cir. 1999).
But Monticello Insurance did not ad dress whether the negligent hiring and
retention of an employee could constitute an “occurrence” under the terms
of the general liability policy in question. Rather, it distinguished
between the employer’s negligent hiring and the employee’s assault only
for the purpo se of determining whether the “occurrence” in question took
place during the life of a p articular policy.
denotes something that does not result from a plan, design, or
an intent on the part of the insured.” Stone, 34 S.W.3d at 812.
In light of the Kentucky Supreme Court’s analysis of
“accident” in Fryman and the Kentucky Court of Appeals’s
subsequent reliance on Fryman when interpreting the
“occurrence” terms of insurance policies, we conclude that
these terms were not ambiguous in the policy in question.
2. The Conduct at Issue
Because the term “occurrence” is not ambiguous, we must
determine whether the “occurrence” causing Ramona’s
injuries and death was covered by the policy. To do so, we
must identify the “occurrence” at issue. See Farmers Alliance
Mut. Ins. Co. v. Salazar, 77 F.3d 1291, 1295 (10th Cir. 1996)
(“Before we apply the policy’s definition of ‘occurrence,’ we
must first decide what event or events in the causal chain
leading to [the injury] should be the focus of our inquiry.”).
Williamson’s complaint in the underlying wrongful death
action alleges that Tech Dry’s negligence was the proximate
cause of Ramona’s wrongful death and Westfield does not
dispute it. Our inquiry will therefore focus on whether Tech
Dry’s allegedly negligent decision to hire and retain an
employee is a qualifying “occurrence” under the policy.2
The issue of whether negligent hiring and retention of an
employee can constitute an “occurrence” in the context of a
10 Westfield Ins. Co. v. Tech Dry et al. No. 01-6390
3Although some of the cases discussed herein analyze different types
of policies and/or slightly different definitions of “occurrence” and
“accid ent,” it is nevertheless helpful to consider their analyses of these
terms to resolve the issue at hand. As is the case here, most policies
require an “occurrence” to trigger coverage and define that term as an
“accid ent.” Furthermore, most policies exclude coverage for injuries
“expected or intended from the standpoint of the insured,” J.A. at 82
(Policy), either by incorporating self-excluding language in the definition
of “occurrence” or in a separate exclusion clause. See N. Sec. Ins. Co. v.
Perron, 777 A.2d 151, 157-58 (Vt. 2001) (explaining that the effect of
“expected or intended” language is the same regardless of whether it is
included in the definition of “occurrence” or in a separate exclusion
clause).
general liability policy is a matter of first impression in
Kentucky. Therefore, we must predict how the Kentucky
Supreme Court would resolve this issue. Stalbosky, 205 F.2d
at 893-94. Other courts have reached differing conclusions
about whether negligent hiring constitutes an accident and,
more specifically, about whether negligent hiring claims are
covered “where the person hired or supervised has committed
an intentional tort.”3 7 Couch on Insurance 3d § 103:31, at
103-74 (1997).
Several courts have held that because the decision to hire or
retain an employee is an intentional business decision, even
when the decision is negligently made, it is not accidental.
See, e.g., Erie Ins. Co. v. Am. Painting Co., 678 N.E.2d 844,
846 (Ind. Ct. App. 1997). As one court explained, “a
volitional act — which is always intended — does not
constitute an accident, even where the results may be
unexpected or unforeseen.” Allstate Ins. Co. v. Norris, 795 F.
Supp. 272, 275 (S.D. Ind. 1992). Thus, because the employer
“intended to commit the act that resulted in injury” — here,
the hiring and retention of Furnish — these courts would
conclude that the injury to Ramona was not caused by an
accident. Allstate Ins. Co. v. Davis, 6 F. Supp. 2d 992, 996
(S.D. Ind. 1998).

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No. 01-6390 Westfield Ins. Co. v. Tech Dry et al. 11
4The district court for the Northern District of Illinois emphasized
that “[t]he tort of negligen t hiring is a well-recognized claim . . . and is
brought against an employer for its negligent hiring of an employee who
intentionally injures a third party,” Un ited States F idelity and G uaranty
Co. v. Open Sesa me C hild Care Center, 819 F. Supp. 756, 760 (N.D . Ill.
1993), suggesting that the nature of the tort itself should guide courts in
distinguishing between the employer’s and employee’s conduct for the
Other courts have reached the opposite conclusion,
assuming that negligence is inherently not intentional. See
United Fire & Cas. Co. v. Shelly Funeral Home, 642 N.W.2d
648, 654 (Iowa 2002) (listing cases in which “other courts
faced with similar facts and the identical ‘occurrence’ and
intentional act provisions before us have found coverage for
negligent hiring and supervision”); Silverball Amusement,
Inc. v. Utah Home Fire Ins. Co., 842 F. Supp. 1151, 1165
(W.D. Ark. 1994) (“[A]n insurer must provide coverage and
a legal defense to an insured where a complaint alleges that an
employer was negligent in hiring and supervision of an
employee who subsequently committed an intentional tort.
An insurance policy would require an exceedingly precise
exclusionary clause to avoid that fundamental principle, and
there is no such clause in the instant case. . . . The policy
covers negligent acts.”), aff’d, 33 F.3d 1476 (8th Cir. 1994).
These courts caution against confusing the evaluation of an
employee’s intentional conduct and the employer’s negligent
conduct. For example, one court reasoned,
In refusing to separate the employer’s alleged negligence
from the employee’s intentional conduct, . . . courts
impermissibly ignored the employer’s independent acts
which gave rise to the alleged tort. Consequently, in
holding that the employee’s intentional conduct places
the insured’s negligence outside the definition of
“occurrence,” . . . courts read the exclusion too broadly.
U.S. Fid. & Guar. Co. v. Open Sesame Child Care Ctr., 819
F. Supp. 756, 760 (N.D. Ill. 1993).4 When courts deny
12 Westfield Ins. Co. v. Tech Dry et al. No. 01-6390
purp ose o f determ ining co verage. See U.S. Fid. & Gua r. v. Towa rd, 734
F. Supp. 465, 470 (S.D. Fla. 1990) (recognizing the tort of negligent
hiring and supervision and exp laining that “[t]he focus of these torts is the
first wrong, the de fendant’s negligence, not the second wrong, the third-
party’s wrongful conduct which leads to the plaintiff’s injury”). Like
Illinois and Florida, Kentucky also clearly “recognizes that an employer
can be held liable when its failure to exercise ordinary care in hiring or
retaining an employee creates a foreseeab le risk of harm to a third
perso n.” Oakley v. Flor-Shin, Inc., 964 S.W.2d 438, 442 (Ky. Ct. App.
1998).
coverage in negligent hiring cases, they arguably transform an
employer’s negligent acts into intentional acts, dissolving the
distinction between negligent and intentional conduct. See
Doe v. Shaffer, 738 N.E.2d 1243, 1247 (Ohio 2000). To
avoid this problem, we will “look to the actions of the insured
and not the perpetrator of the intentional act in determining
whether there is coverage” of Tech Dry for its alleged
negligent hiring and retention of Furnish. 14 Couch on
Insurance 3d § 201:18, at 201-41 (1999).
In analyzing whether Tech Dry’s conduct was an
“occurrence,” we note the Kentucky Supreme Court’s
recognition that “[c]ourts and commentators alike are in
agreement that the term ‘occurrence’ is to be broadly and
liberally construed in favor of extending coverage to the
insured.” Brown Found., 814 S.W.2d at 278; see Thompson,
839 S.W.2d at 580 (“Our Supreme Court has pronounced that
‘occurrence’ is to be given broad and liberal construction in
favor of extending coverage.”). However, “[w]e must give
the policy its plain meaning and are constrained from
enlarging the risks contrary to the natural and obvious
meaning of the insurance contract.” Walker v. Econ.
Preferred Ins. Co., 909 S.W.2d 343, 346-47 (Ky. Ct. App.
1995).
Under Kentucky law, even if Tech Dry’s conduct in hiring
and retaining Furnish was intentional and the injury to
Ramona was foreseeable, the policy in question nevertheless

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No. 01-6390 Westfield Ins. Co. v. Tech Dry et al. 13
provides coverage to Tech Dry as long as “the injury was not
actually and subjectively intended.” Thompson, 839 S.W.2d
at 580. An insurer cannot deny coverage on grounds that
conduct was intentional rather than accidental if the insured
did not possess the requisite intent to do injury. Brown
Found., 814 S.W.2d at 277. Kentucky courts will infer intent
to injure from “inherently injurious” acts, such as sexual
molestation, Thompson, 839 S.W.2d at 581, or punching
someone in the face, Walker, 909 S.W.2d at 345. But conduct
is not considered inherently injurious unless it is
“substantially certain to result in some injury.” Thompson,
839 S.W.2d at 581. By nature, negligently hiring and
retaining an employee is not substantially certain to result in
some injury and therefore is not inherently injurious.
We therefore conclude that the Kentucky Supreme Court
would hold that Tech Dry is entitled to coverage because
Tech Dry’s negligent hiring and retention of Furnish
constitutes an “accident,” and therefore an “occurrence,”
under the terms of the governing policy.
III. CONCLUSION
For the reasons explained above, we AFFIRM the district
court’s grant of summary judgment for Tech Dry and
Williamson. Although the district court erred by concluding
that the insurance policy was ambiguous, Tech Dry’s
negligent hiring and retention of Furnish nevertheless
constitutes an “occurrence” under the policy.

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