Wilson Works, Inc. v. Great American Insurance, No. 12-1487 (4th Cir. 2012)
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UNPUBLISHED UNITED STATES COURT OF APPEALS FOR THE FOURTH CIRCUIT No. 12-1487 WILSON WORKS, INC., a West Virginia Corporation, Plaintiff - Appellant, v. GREAT AMERICAN INSURANCE GROUP; GREAT AMERICAN E&S INSURANCE COMPANY; COLUMBIA CASUALTY COMPANY, d/b/a CNA; NATIONAL UNION FIRE INSURANCE COMPANY OF PITTSBURGH, PA; THE TRAVELERS INDEMNITY COMPANY; TRAVELERS PROPERTY CASUALTY COMPANY OF AMERICA; TRAVELERS GROUP; THE CHARTER OAK FIRE INSURANCE COMPANY, Defendants - Appellees, and WELLS FARGO INSURANCE SERVICES; AMERICAN INTERNATIONAL GROUP, INC.; AMERICAN INTERNATIONAL COMPANIES, d/b/a AIG, Defendants. Appeal from the United States District Court for the Northern District of West Virginia, at Clarksburg. John Preston Bailey, Chief District Judge. (1:11-cv-00085-JPB-JES) Submitted: October 5, 2012 Decided: October 23, 2012 Before WILKINSON, DAVIS, and DIAZ, Circuit Judges. Affirmed by unpublished per curiam opinion. S. Sean Murphy, LAW OFFICES OF S. SEAN MURPHY, LC, Morgantown, West Virginia, for Appellant. John A. Smith, FLAHERTY SENSABAUGH BONASSO PLLC, Charleston, West Virginia; Stephen J. Dalesio, SWARTZ CAMPBELL, LLC, Pittsburgh, Pennsylvania, for Appellees. Unpublished opinions are not binding precedent in this circuit. 2 PER CURIAM: Wilson Works, Inc. brought suit against its insurers seeking a declaratory judgment that they are obligated to defend it in an action filed against it by Walhonde Tools, Inc. district court granted the insurers motions judgment, and Wilson Works now appeals. record and find no reversible error. In 2009, Walhonde for The summary We have reviewed the Accordingly, we affirm. Tools filed suit against Wilson Works, alleging patent infringement, tortious interference with business relations, and conspiracy to interfere with business relations, based on Wilson Works alleged manufacture, sale, and marketing of tools that infringe Walhonde Tools patent. Wilson Works argues that the infringement was an accident that in fulfilling custom orders it was deceived by its clients into manufacturing infringing tools. In insurers 2011, through Wilson which Works it filed maintained suit against commercial several liability policies, seeking a declaration of their duty to defend. insurers granted moved their for summary motions. judgment, The and district the court district first The court looked to Walhonde Tools complaint, and found that it stated claims for patent infringement, tortious interference with business relations, and conspiracy to interfere with business relations. The district court then looked 3 to the various policies, and found that they did not cover injuries arising from intentional torts and patent infringement. While the policies covered property damage caused by an occurrence, the district court found that occurrences are accidents, necessarily excluding intentional torts, and that property damage is limited to physical injury to or loss of use of tangible property, thereby excluding damage to intangible property like patents. The policies also provided coverage for advertising injuries, but this explicitly excluded intentional tort-based injuries, and excluded patent infringement-based injuries either explicitly or implicitly via the notable absence of the word patent from the list of covered offenses. provide coverage because Finally, certain policies did not Walhonde Tools occurred outside of the policy periods. alleged injuries Wilson Works timely appealed. We review judgment de novo. the district court s grant of summary Temkin v. Frederick Cnty. Comm rs, 945 F.2d 716, 718 (4th Cir. 1991). Summary judgment shall be granted if the movant shows that there is no genuine issue of material fact and that it is entitled to judgment as a matter of law. Civ. P. 56(a). Fed. R. The movant initially bears the burden of showing the absence of any genuine issue of material fact; then the burden shifts to the nonmovant to present facts sufficient to create a triable issue. Temkin, 945 F.2d at 718. 4 A party opposing or asserting the existence of a genuine issue of material fact must support its position by citing to particular parts of materials in the record, including depositions, documents, affidavits, stipulations, admissions, and answers to interrogatories. In a Fed. R. Civ. P. 56(c). diversity action, construction of an insurance policy. state law controls the Nationwide Prop. & Cas. v. Comer, 559 F. Supp. 2d 685, 690 (S.D. W. Va. 2008). Here, there is no dispute that West Virginia law governs construction of the policy. defend Under West Virginia law, an insurer has a duty to only if the claim stated in the underlying complaint could, without amendment, impose liability for risks that the insurance policy covers. W. Va. Fire & Cas. Co. v. Stanley, 602 S.E.2d 483, 490 (W. Va. 2004). In determining coverage, the insurer must look beyond the bare allegations in the underlying complaint and conduct a reasonable inquiry into the facts to determine whether the claims might be interpreted as falling within the scope of coverage. State Auto. Mut. Ins. Co. v. Alpha Eng g Servs., Inc., 542 S.E.2d 876, 879 (W. Va. 2000). The policies at issue provide coverage for property damage caused by occurrences, and for advertising injury. On appeal, Wilson Works asserts that the district court erred in constraining its coverage determination to the four corners of Walhonde Tools complaint. Wilson Works argues that had the 5 district court reasonable there followed inquiry was an into West the occurrence, Virginia facts, that law it and would Wilson conducted have Works a found that actions were accidental, and that Walhode Tools injuries are property damage covered by the insurance policies. However, the district court applied the appropriate standard and correctly concluded that the insurers have no duty to defend Wilson Works in the Walhonde Tools action. district court properly looked beyond Walhonde First, the Tools bare allegations and determined that its claims could not reasonably be interpreted as falling within the scope of coverage. The court s opinion specifically cites to materials in the record other than Walhonde Tools complaint, and includes the very same standard that Wilson Works proposes. Second, the district court correctly concluded that the insurance companies have no duty to defend Wilson Works against Walhonde Tools claims. Its conclusions that patent infringement is not damage to physical property, intentional torts are not occurrences or accidents, both types of claims are affirmatively excluded from coverage, and in some cases Walhonde Tools alleged injuries did not occur within the policy period, are unassailable. district court properly granted insurers favor. 6 summary Accordingly, the judgment in the Based on the foregoing, we affirm the judgment of the district facts court. and materials legal before We dispense with oral argument contentions are adequately the and argument court because presented would not the in the aid the decisional process. AFFIRMED 7
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