The owners of a pet feed and supplies business, who were insured under a commercial general liability policy, appealed a lower court's decision. The trial court's summary judgment was in favor of their insurance company, finding that the insurer owed no obligation to defend or provide coverage. The claim involved the insureds' negligent hiring of employees accused of child molestation. The acts, allegedly, being committed at the business premises, after work hours. Note, the employees had living quarters that are a part of the business location.

The court of appeals reviewed the lower court's assumption regarding the knowledge of the named insureds. The summary judgment was based on the presumption that the named insureds had hired the employees while having actual knowledge of their abusive inclinations. Further, after the abuses came to light, they failed to take any remedial action. The insurer filed for summary judgment, saying that the insured's employees' actions do not qualify as an "occurrence" under the policy, and the acts are excluded since they were intentional.

The appeals court found fault with the lower court decision. In its opinion, the question concerning whether the molestation was an occurrence or intentional act is moot. The action against the named insureds was based on negligence in hiring the employees who allegedly committed the acts. The appeals court also found that the circumstances of the case could support the argument that the named insureds only had constructive and not actual knowledge of their employees' proclivities. While the appeals court believe that the insureds could have confirmed their information, failure to do so was not grounds for denying the right to their policy's obligation to defend them against the negligence action.

The appeals court reversed the decision and remanded the case for proceedings consistent with the higher court's opinion.

(SUNSHINE BIRDS AND SUPPLIES, INC. ET AL., Appellants v. UNITED STATES FIDELITY AND GUARANTY COMPANY ET AL., Appellees. Florida District Court of Appeals. No. 96-1351. July 2, 1997. CCH 1997 Fire and Casualty Cases, Paragraph 6189.)