Insurance company seeks declaration over its duty to defend sexual harassment lawsuit

By Andrew Thomason | Feb 28, 2014

An insurance company has asked a federal judge to determine it's not required to defend an ambulance company in a sexual harassment lawsuit.

American Alternative Insurance Corp. (AAIC) filed a complaint for declaratory judgment Feb. 19 in Chicago's federal court against Metro Paramedic Services.

The insurance company's complaint stems from a 2012 lawsuit, in which Shannon Volling, Julie Banser and April Soulak accuse Metro Paramedic Services and Antioch Rescue Squad of failing to prevent ongoing sexual harassment.

Volling, Basner and Soulak's suit consists of multiple pages detailing alleged sexual harassment, including unwanted groping, being exposed to pornographic material, lewd and offensive comments and sexually aggressive text messages, among other things.

“Defendants failed to adequately supervise their employees, and negligently retained those employees … and members of its Board who not only permitted and participated in harming the women in the station, including Plaintiffs, but who also permitted and participated in harming members of the public … which additionally caused emotional, reputational, professional, and other harm to Plaintiffs, who did not engage in this misconduct,” the three women assert in their suit.

Basner and Soulak no longer work at Metro Paramedic Services or Antioch Rescue Services, but Volling does, according to their suit, which accuses Metro Paramedic Services of violating the U.S. Civil Rights Act of 1991 and the Illinois Human Rights Act.

They are seeking punitive and compensatory damages, as well as damages for emotional distress.

The insurance company's complaint names the three women as defendants just so they are bound by the court's judgment. It does not request any relief from them.

Metro Paramedic Services claims it is covered by Antioch Rescue Squad's insurance policy through AAIC in regards to the sexual harassment suit because of a “blanket additional insureds” clause.

The clause in Antioch Rescue Squad’s policy covers any person or organization that works with them and that is liable for Antioch Rescue Squad’s “wrongful acts” and “employment practices,” committed or alleged.

AAIC, however, asserts that the cited clause does not apply in this case because of the idea that Metro Paramedic Services is not being sued for Antioch Rescue Squad’s transgressions while itself remaining innocent.

“That Metro has not been sued for damages by the Claimants for the ‘employment practices’ of Antioch, hence Metro is not entitled to insured status under the additional insured definition” of Antioch Rescue Squad’s policy, the complaint states.

AAIC is asking for a declaratory judgment stating that Metro Paramedic Services is not insured by it in this instance and as such, has no duty to defend Metro in the sexual harassment case under the general liability coverage policy or under the commercial umbrella policy of Antioch Rescue Squad.

The insurance company argues that it is not responsible to defend Metro Paramedic Services because the underlying suit does not constitute bodily injury, property damages, or personal and advertising injury as defined by Antioch Rescue Squad’s insurance policy.

Attorney Robert Marc Chemers of Pretzel & Stouffer Chtd. in Chicago filed the complaint on behalf of AAIC.

More News

The Record Network