SCOTTSDALE INSURANCE COMPANY, Plaintiff-Appellee, vs. ATTORNEYS PROCESS & INVESTIGATION SERVICES, INC., Defendant-Appellant.
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IN THE COURT OF APPEALS OF IOWA
No. 9-419 / 08-0944
Filed December 17, 2009
SCOTTSDALE INSURANCE
COMPANY,
Plaintiff-Appellee,
vs.
ATTORNEYS PROCESS &
INVESTIGATION SERVICES, INC.,
Defendant-Appellant.
________________________________________________________________
Appeal from the Iowa District Court for Tama County, Denver D. Dillard,
Judge.
Defendant appeals the district court‟s grant of summary judgment to
plaintiff in this declaratory judgment action concerning insurance coverage.
AFFIRMED IN PART, REVERSED IN PART, AND REMANDED.
Steven L. Nelson of Davis, Brown, Koehn, Shors & Roberts, Des Moines,
for appellant.
John Grier of the Grier Law Firm, Marshalltown, and Merrill C. Swartz of
the Swartz Law Firm, Marshalltown, for appellee.
Heard by Vaitheswaran, P.J., Mansfield, J., and Miller, S.J.*
*Senior judge assigned by order pursuant to Iowa Code section 602.9206 (2009).
2
MILLER, S.J.
Attorneys Process & Investigation Services, Inc. (APIS), appeals the
district court‟s grant of summary judgment to Scottsdale Insurance Company on
its petition seeking a declaratory judgment that an insurance policy it had issued
to APIS provided no coverage for acts alleged in a lawsuit filed by the Sac & Fox
Tribe of the Mississippi in Iowa (Tribe) against APIS in tribal court. APIS also
appeals the district court‟s dismissal of its counterclaims against Scottsdale. We
affirm in part, reverse in part, and remand to the district court for further
proceedings.
I.
Background Facts & Proceedings
The Tribe operates the Meskwaki Bingo Casino Hotel near Tama, Iowa. A
dispute arose between two factions in the Tribe—an Elected Tribal Council and
an Appointed Tribal Council. On March 26, 2003, the Appointed Tribal Council
seized control of the Casino, over the objection of the Elected Tribal Council. At
that time the Elected Tribal Council was recognized by the United States
Department of the Interior as the leadership body of the Tribe.
On June 16, 2003, APIS entered into a written agreement with Alexander
Walker, Jr., a member of the Elected Tribal Council, for the purpose of
investigation, security, and law enforcement consulting services. On October 1,
2003, employees of APIS entered the Tribe‟s community center and Casino and
remained on the premises for less than twenty-four hours.
3
The Appointed Tribal Council was later lawfully elected and was
recognized by the federal government as the governing council of the Tribe. The
new governing body created a tribal court.
On August 3, 2005, the Tribe filed a tort action against APIS in the tribal
court.
The petition alleged:
(1) APIS took unauthorized possession of
$1,022,171; (2) APIS intentionally entered and remained on the Tribe‟s property;
(3) APIS intentionally damaged and destroyed property worth at least $7035; (4)
APIS improperly obtained and exercised control over confidential property; (5)
APIS employees committed unlawful assault, battery, and false imprisonment
against Tribal members and employees. The petition raised claims of trespass to
land, trespass to chattel, conversion, and misappropriation of trade secrets. The
Tribe sought compensatory damages or reimbursement, and punitive damages.
APIS had a commercial general liability policy with Scottsdale Insurance
Company, including personal and advertising injury coverage and errors and
omissions coverage. APIS claimed there was coverage under the policy for the
claims made against it by the Tribe, including a duty to defend.
Scottsdale filed a petition for declaratory judgment in Iowa district court on
April 2, 2007, seeking a declaration that there was no coverage under the policy
for the Tribe‟s claims against APIS. In general, Scottsdale claimed there was no
coverage because: (1) the policy does not cover wrongful entry; (2) the policy
does not cover misappropriation of trade secrets; (3) the complaint does not seek
damages as defined in the policy; and (4) the acts described in the complaint
were intentional acts.
Specific to the general liability coverage, Scottsdale
4
claimed the complaint failed to allege an “occurrence” resulting in “bodily injury”
or “property damage,” as defined by the policy. Scottsdale also asserted there
was no coverage under the personal and advertising part of the policy because
the complaint did not meet the definitions in the policy and the conduct in the
complaint was specifically excluded by the policy. As to the errors and omissions
coverage, Scottsdale claimed the complaint alleged only intentional conduct,
which was excluded.
Scottsdale also asserted the exclusions for errors and
omissions coverage included dishonest, fraudulent, or criminal conduct.
APIS filed a counterclaim against Scottsdale, raising claims of breach of
contract, breach of implied contract, estoppel, and bad faith. Scottsdale raised
an affirmative defense to the counterclaims that “[n]o damages have ever been
determined in the underlying action, as that action is still in litigation and by
reason thereof, the counterclaim Plaintiff presents no justiciable issue for this
court.”
Scottsdale filed a motion for summary judgment, asserting that under the
terms of the insurance policy it did not have a duty to defend or indemnify APIS.
APIS resisted the motion for summary judgment, and filed a trial court brief to
support its resistance. Scottsdale replied to the resistance filed by APIS.
The district court issued a ruling on April 14, 2008, granting Scottsdale‟s
motion for summary judgment. The court noted it would apply Iowa law, and not
tribal law, which had not been pled or proved. The court found, “The allegations
of fact all stem from allegedly intentional actions taken by APIS.” The court
stated that under the definition of “occurrence” there is no coverage for
5
intentional acts. The court found there was no coverage for property damage
“intended from the standpoint of the insured.” The court additionally found “the
torts alleged to have been committed by APIS specifically are not covered under
the terms of the policy.” The court concluded Scottsdale had no duty to defend
or indemnify APIS. After granting summary judgment to Scottsdale, the court
dismissed APIS‟s counterclaims as a matter of law.
APIS filed a motion pursuant to Iowa Rule of Civil Procedure 1.904(2).
The district court denied the motion, noting “all of the issues were addressed in
the Ruling.” APIS appealed.
II.
Standard of Review
We review the district court‟s ruling on a motion for summary judgment for
the correction of errors of law. Thomas v. Progressive Cas. Ins. Co., 749 N.W.2d
678, 681 (Iowa 2008). Summary judgment is appropriate only when there are no
genuine issues of material fact and the moving party is entitled to judgment as a
matter of law. Iowa R. Civ. P. 1.981(3); Kistler v. City of Perry, 719 N.W.2d 804,
805 (Iowa 2006). A court should view the record in the light most favorable to the
non-moving party. Kern v. Palmer Coll. of Chiropractic, 757 N.W.2d 651, 657
(Iowa 2008).
Construction of an insurance policy—the process of
determining its legal effect—is a question of law for the court.
Interpretation—the process of determining the meaning of words
used—is also a question of law for the court unless it depends on
extrinsic evidence or a choice among reasonable inferences to be
drawn.
Grinnell Mut. Reins. Co. v. Jungling, 654 N.W.2d 530, 536 (Iowa 2002). When,
as here, neither party offers extrinsic evidence as to the meaning of relevant
6
language of an insurance policy, the process of interpretation is for the court to
determine as a matter of law.
See Cairns v. Grinnell Mut. Reins. Co., 398
N.W.2d 821, 823-24 (Iowa 1987).
III.
Facts that May be Considered
As a preliminary matter, we note what may be a disagreement between
the parties concerning what facts a court may consider in resolving a coverage
dispute such as the one before us. APIS asserts that a court may look to the
insurance policy, the petition in the underlying lawsuit (here the complaint against
APIS filed by the Tribe in the tribal court), and any other admissible and relevant
facts in the record. Scottsdale at least appears to urge a narrower scope, stating
at points in its brief that “coverage depends . . . on the facts alleged in the
underlying complaint,” “a court‟s focus should be on the conduct alleged in the
complaint,” “[w]hat governs coverage . . . are the allegations of fact made in the
complaint against APIS,” and “APIS‟s . . . affidavits . . . do not aid its quest for
coverage.”
Central Bearings Co. v. Wolverine Insurance Co., 179 N.W.2d 443 (Iowa
1970), was an action by the plaintiff against its insurer alleging breach of an
insurance policy by failing to defend and indemnify the plaintiff in a lawsuit
against the plaintiff. In discussing whether the district court had erred in granting
summary judgment in favor of the plaintiff the court stated, in part:
[I]f, after construing both the policy in question, the pleadings of the
injured party and any other admissible and relevant facts in the
record, it appears the claim made is not covered by the indemnity
insurance contract issued, the insurer has no duty to defend or
indemnify.
7
Central Bearings, 179 N.W.2d at 445 (emphasis added).
In the later case of McAndrews v. Farm Bureau Mutual Insurance Co., 349
N.W.2d 117 (Iowa 1984), the court cited, quoted, and emphasized the aboveemphasized language from Central Bearings, and did so just after stating that
although the facts to be considered
have traditionally been those alleged in the petition in the suit
against the insured . . . [t]he scope of the inquiry . . . must
sometimes be expanded beyond the petition, especially under
“notice pleading” petitions which often give few facts upon which to
assess an insurer‟s duty to defend.
Id. at 119 (emphasis added). The language of these cases indicates that when
determining a coverage dispute the court may consider not only the facts alleged
in the underlying complaint and the language of the insurance policy, but may
also consider at least such other facts as are established by the record to be
undisputed.
In Smithway Motor Express, Inc. v. Liberty Mutual Insurance Co., 484
N.W.2d 192 (Iowa 1992), the court affirmed the district court‟s grant of summary
judgment to the insured and against the insurer on a coverage question. In doing
so it stated, in part:
“Under the record, the known facts are limited to the
insurance policy and the employee‟s petition. No further facts were supplied by
affidavit or otherwise.” Smithway Motor, 484 N.W.2d at 194 (emphasis added).
The emphasized language appears to indicate that when considering, in the
context of a request for summary judgment, the issue of whether insurance
coverage exists, the court may consider all relevant and admissible undisputed
facts.
8
Other cases also indicate, either expressly or by implication, that
undisputed facts beyond the underlying complaint and insurance policy may be
considered in deciding a coverage question in the context of deciding a motion
for summary judgment. See, e.g., Employers Mut. Cas. Co. v. Cedar Rapids
Television Co., 552 N.W.2d 639, 642 (Iowa 1996) (“In determining whether there
is a duty to defend we look „first and primarily to the petition for the “facts at the
outset of the case.”‟”) (emphasis added); Newton Nat’l Bank v. Gen. Cas. Co.,
426 N.W.2d 618, 623 (Iowa 1988) (“We look first and primarily to the petition for
the „facts at the outset of the case.‟ When necessary we expand our scope of
inquiry to any other admissible and relevant facts in the record.”) (citations
omitted); First Nat’l Bank v. Fidelity & Deposit Co., 545 N.W.2d 332, 335 (Iowa
Ct. App. 1996) (same); Kartridg Pak Co. v. Travelers Indem. Co., 425 N.W.2d
687, 688 (Iowa Ct. App. 1988) (holding that in order to determine whether there
is coverage under an insurance policy a court looks not only to the petition
against the insured, but also to “all other admissible and relevant facts in the
record”).
We conclude that in determining whether summary judgment was
appropriate in this case the district court could, and we can on appeal, consider
not only the allegations of the Tribe‟s complaint against APIS and the contents of
APIS‟s policy with Scottsdale, but also all other relevant and admissible facts that
the summary judgment record shows to be undisputed.
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IV.
Commercial General Liability Coverage
APIS asserts there is a duty to indemnify and a duty to defend under its
insurance policy with Scottsdale, which provides that there is coverage for “bodily
injury” and “property damage” only if the “„bodily injury‟ or „property damage‟ is
caused by an „occurrence‟ that takes place in the „coverage territory.‟” If there is
no fact question, and the only conflict concerns the legal consequences flowing
from the undisputed facts, such as in the construction and interpretation of an
insurance policy, summary judgment is appropriate. Grinnell Mut. Reins. Co.,
654 N.W.2d at 535.
In determining the meaning of an insurance contract, the intent of the
parties is controlling, and unless the language is ambiguous, this is determined
by the terms of the policy. Id. at 536. We interpret ambiguous policy provisions
in favor of the insured because insurance policies are in the nature of adhesion
contracts. Id. An insurer has the burden to define any limitations or exclusions in
clear and explicit terms. AMCO Ins. Co. v. Haht, 490 N.W.2d 843, 845 (Iowa
1992). Words undefined in a policy are given their ordinary meaning, rather than
a technical interpretation only a specialist would understand.
A.Y. McDonald
Indus. v. Ins. Co. of N. Am., 475 N.W.2d 607, 619 (Iowa 1991).
Scottsdale claims there was not an “occurrence” under the terms of the
policy. The term “occurrence” is defined in the policy as “an accident, including
continuous or repeated exposure to substantially the same general harmful
10
conditions.” The arguments on appeal relate only to whether there has been an
“occurrence” under the terms of the policy.1
An accident is defined as “an event which, under the circumstances, is
unusual and unexpected.” Weber v. IMT Ins. Co., 462 N.W.2d 283, 287 (Iowa
1990).
In defining “occurrence,” the Iowa Supreme Court has stated, “[a]n
accident, happening, event, or exposure to conditions is an unexpected and
unintended „occurrence‟ so long as the insured does not expect to intend both it
and some injury.” West Bend Mut. Ins. Co. v. Iowa Iron Works, Inc., 503 N.W.2d
596, 601 (Iowa 1993) (quoting First Newton Nat’l Bank, 426 N.W.2d at 625).
We affirm the district court‟s finding there was no “occurrence,” as that
term is defined in the insurance policy. The petition filed by the Tribe does not
seek damages based on an accident, or an event that was unexpected and
unintended. The petition alleges APIS “intentionally entered and remained in the
Tribe‟s Community Center (which houses the Tribe‟s executive offices and
records) and the Casino.” The petition also alleges APIS “intentionally damaged
and destroyed tribal property.” We conclude the court did not err in determining
there was no duty to indemnify under the commercial general liability portion of
the insurance policy because the Tribe‟s petition does not make a claim for
“bodily injury” or “property damage” caused by an “occurrence.”2
1
In its motion for summary judgment, Scottsdale claimed the allegations against APIS
were not for “property damage” under the policy. The district court did not address this
issue. We also do not address the issue of whether the complaint against APIS alleged
“property damage” as the term is defined in the insurance policy because that issue has
not been raised on appeal.
2
The insurance policy excludes, “‟Bodily injury‟ or „property damage‟ expected or
intended from the standpoint of the insured.” Based on our finding there was no
11
V.
Personal and Advertising Coverage
APIS also claims there is a duty to indemnify and a duty to defend under
the personal and advertising coverage portion of the Commercial General
Liability Coverage provisions. Scottsdale argued the complaint filed by the Tribe
against APIS did not include any claims that would trigger personal and
advertising coverage.
Scottsdale contends this issue was not preserved because it was not
specifically addressed by the district court.
The district court set forth the
applicable provisions of the personal and advertising coverage, and the
arguments relating to those provisions.
It is clear the district court‟s legal
conclusions encompassed the issues arising under the personal and advertising
provisions. Additionally, in its resistance to APIS‟s post-trial motion, Scottsdale
asserted, “[t]he court‟s ruling thoroughly addresses all issues raised in the motion
for summary judgment and finds in Plaintiff‟s favor on all counts.” The district
court‟s ruling on the post-trial motion also states “all of the issues were
addressed in the Ruling.” We conclude APIS‟s issues relating to personal and
advertising coverage were adequately preserved for our review.
An insurer may extend liability coverage only to specific torts. Talen v.
Employers Mut. Cas. Co., 703 N.W.2d 395, 402 (Iowa 2005). Under this type of
coverage we look to the type of legal theory brought against the insured, to
determine if it is covered under the policy.
Id.
Also, even if the theory of
“occurrence” under the terms of the policy, we do not address whether “bodily injury” and
“property damage” coverage is excluded by this provision. Thus, we do not address
whether the alleged property damages were expected or intended by APIS.
12
recovery is not listed as being covered under the policy, there may still be
coverage if the operative facts contain allegations expressly covered in the
policy. See Employers Mut. Cas. Co., 552 N.W.2d at 642.
The applicable portion of the definition of “personal and advertising injury”
provides:
“Personal and advertising injury” means injury, including
consequential “bodily injury,” arising out of one or more of the
following offenses:
...
c.
The wrongful eviction from, wrongful entry into, or invasion of
the right of private occupancy of a room, dwelling or premises that
a person occupies, committed by or on behalf of its owner, landlord,
or lessor.
The complaint against APIS raises factual allegations that APIS
“intentionally entered and remained at the Tribe‟s Community Center (which
houses the Tribe‟s executive offices and records) and the Casino.”3 The petition
does not allege APIS entered the community center and Casino “on behalf of its
owner, landlord or lessor.” The complaint specifically states, “Such entering and
remaining was not authorized by the Tribe.” The complaint against APIS does
not include an offense giving rise to personal and advertising injury under the
terms of the policy.4
3
One of the allegations contained in the claim for punitive damages is that APIS
committed “assaults and batteries and false imprisonment on tribal members and
employees.” Additional offenses covered by the personal and advertising injury
provisions are “False arrest, detention, and imprisonment.” The claims, however, are
not that the Tribe, the entity that brought the suit, was subjected to false arrest,
detention, and imprisonment. The claims relate to Tribal members and employees, who
are not parties to the suit. We conclude, therefore, there is no coverage for the claims
for punitive damages based on assault and battery and false imprisonment.
4
Scottsdale also raised an argument that the community center and Casino were
occupied by a person. The term “person” is not defined in the policy. We note that
13
We affirm the district court‟s conclusion there was no duty to indemnify
under the personal and advertising provisions of the policy for the claims made
against APIS by the Tribe.
VI.
Errors and Omissions Coverage
APIS further contends there is coverage and a duty to defend under the
errors and omissions coverage provisions of its insurance policy with Scottsdale.
In the motion for summary judgment Scottsdale asserted there was no coverage
under the errors and omissions coverage because the complaint alleges only
intentional conduct, not negligent acts.
Again, Scottsdale claims error was not preserved on this issue because it
was not specifically addressed by the district court.
For the same reasons
discussed above concerning the personal and advertising injury coverage, we
conclude error was preserved on this issue as well.
The term “error or omission” is defined in the insurance policy as “any
negligent act, error or omission while performing any services normal to the
business of the insured described in the Declarations.” On the declarations page
APIS‟s business is listed as “Investigation.” An “error” is a mistake or blunder.
Employers Reins. Corp. v. Mut. Med. Plans, Inc., 504 N.W.2d 885, 888 (Iowa
1993). An “omission” means “apathy toward or neglect of duty.” Id. Errors and
elsewhere the policy distinguishes between persons and organizations. See, e.g., “Any
person or organization having proper temporary custody of your property,” “Any other
person or organization responsible for the conduct of such person,” “Persons or
organizations making claims or bringing „suits.‟” Due to our conclusion, however, that
there were no allegations APIS‟s acts were committed by or on behalf of the owner,
landlord, or lessor of the property, we do not specifically address whether the Tribe is a
person for purposes of this provision in the insurance policy.
14
omissions coverage does not apply to deliberate, as opposed to negligent, acts.
Id.
APIS contends that while the petition alleges it engaged in intentional acts,
a fact finder addressing the merits of the complaint could find APIS negligently or
mistakenly entered the Tribe‟s property or damaged the Tribe‟s property. APIS
points out that it believed it had authority from a member of the Elected Tribal
Council to engage in the acts which are the subject of the complaint. As APIS
claims, there is the possibility it could be found negligent for failing to determine
with complete precision which Tribal faction rightfully controlled the Tribe. See
Restatement (Second) of Torts § 164, at 296 (1965) (addressing trespass under
mistake); 75 Am. Jur. 2d Trespass § 8, at 21 (2007) (recognizing a tort of
negligent trespass); 87 C.J.S. Trespass § 6, at 664 (2000) (noting civil liability
may be predicated upon unintentional trespass, or upon acts done accidentally,
inadvertently, or by mistake).
We conclude there may be a duty to indemnify under the errors and
omissions portion of the insurance policy based on whether a fact finder
determines APIS acted intentionally or negligently.
The policy would provide
such coverage if there is a finding APIS engaged in a “negligent act, error or
omission while performing any services normal to the business of the insured
described in the Declarations.”
If there were a finding that the claims against APIS came within the errors
and omissions coverage, then Scottsdale‟s claim that the Tribe‟s claims for
damages did not meet the definition of “damages” found in the errors and
15
omissions coverage would need to be addressed. The definition of damages
does not include, “Amounts paid to you as fees or expenses for services
performed which are to be reimbursed or discharged as a part of the judgment or
settlement.”
The Tribe‟s claims against APIS for trespass to land, trespass to chattel,
and misappropriation of trade secrets do not seek damages based on the fees
paid to APIS for its services. Only the claim for conversion of Tribal funds seeks
damages based on payments received from the Tribe. We conclude that under
the definition of “damages” in the errors and omissions coverage, there is no duty
to indemnify for the claim of conversion of Tribal funds, but there could be such a
duty for the other claims.5
Scottsdale furthermore asserted that there was no coverage for the Tribe‟s
claims against APIS under the errors and omissions coverage due to a provision
that excluded coverage for “a dishonest, fraudulent, malicious or criminal act by
any insured.”
The petition alleged APIS gained access to the casino by
“criminally breaking into and entering the secured areas of the Casino.” The
petition also alleged APIS “unlawfully gained access to tribal trade secret
information and provided tribal trade secret information to others.” The complaint
did not otherwise raise claims of dishonest, fraudulent, or malicious acts. If a fact
5
The claim for punitive damages is based on failure to return Tribal funds, but also the
entry into the community center, access to confidential information, committing assault
and battery and false imprisonment of Tribal members, and allowing a person to have
access to secured areas of the casino. To the extent the claim is based on damages for
expenses or fees for services performed, there is no duty to indemnify. For other claims
there may be such a duty.
16
finder determined APIS had engaged in criminal conduct, there would be no duty
to indemnify for those acts under the errors and omissions provisions.
We turn then to the issue of whether there is a duty to defend under the
errors and omissions portion of the policy. An insurer‟s duty to defend is broader
than its duty to indemnify. Maxim Techs., Inc. v. City of Dubuque, 690 N.W.2d
896, 902 (Iowa 2005).
This is “because a plaintiff‟s basis of recovery is
necessarily indeterminable until a case is tried.” United Fire & Cas. Co. v. Shelly
Funeral Home, Inc., 642 N.W.2d 648, 656 (Iowa 2002). The factual allegations
against an insured are examined to determine whether the insurer must defend
against the claim. Continental Ins. Co. v. Bones, 596 N.W.2d 552, 559 (Iowa
1999). “[T]he duty to defend rests solely on whether the petition contains any
allegations that arguably or potentially bring the action within the policy coverage.
Employers Mut. Cas. Co., 552 N.W.2d at 641 (citation omitted).
If a claim rationally falls within the insurance coverage, the insurer is
required to defend the entire action. Id. Thus, if a claim against an insured
involves both covered and non-covered claims, the insurer has a duty to defend
against the entire action. First Newton Nat’l Bank, 426 N.W.2d at 630. Any
doubts as to the extent of the insured‟s coverage are resolved in favor of the
insured. Maxim Techs., 690 N.W.2d at 902.
Because we have determined there is an arguable or potential duty to
indemnify under the errors and omissions provisions of the policy, there is also a
duty to defend. See Employers Mut. Cas. Co., 552 N.W.2d at 641. Furthermore,
although there are both covered and uncovered claims, Scottsdale‟s duty to
17
defend encompasses the entire action.
See First Newton Nat’l Bank, 426
N.W.2d at 630. We reverse the decision of the district court granting summary
judgment to Scottsdale on the issue of coverage under the errors and omissions
provisions of the policy.
VII.
Counterclaims
APIS contends the district court should not have dismissed its
counterclaims. The district court‟s ruling states, “Because there is no duty to
defend or indemnify, the Counterclaim stated by APIS against Scottsdale should
be dismissed as a matter of law.” We have determined Scottsdale does have a
duty to defend, and it may have a duty to indemnify on some claims. We reverse
the decision of the district court dismissing the counterclaims. The counterclaims
should be remanded to the district court for further proceedings.
VIII.
Summary
We reverse the district court‟s decision regarding the duty to defend.
Scottsdale has the duty to defend APIS against the claims raised by the Tribe.
We also reverse the district court‟s grant of summary judgment to Scottsdale
based on a finding there was no coverage under the errors and omissions
coverage. We conclude there may be a duty to indemnify under the errors and
omissions coverage, depending upon the factual determinations of the fact finder
in this case.
There is no duty to indemnify under the General Commercial
Liability or personal and advertising portions of the policy, and we affirm the grant
of summary judgment on these issues. We remand to the district court for further
18
proceedings not inconsistent with this opinion. Costs of this appeal are assessed
one-half to each party.
AFFIRMED IN PART, REVERSED IN PART, AND REMANDED.
Vaitheswaran, P.J., concurs; Mansfield, J., concurs specially.
19
MANSFIELD, J. (concurring specially)
The majority opinion is a very thorough and thoughtful treatment of this
complex insurance dispute. I agree with the result, and join in most of the court‟s
opinion. My only disagreement is a narrow one pertaining to part V of the court‟s
opinion.
The relevant policy language discussed in part V provides coverage for
injury arising out of “wrongful entry into . . . a room, dwelling or premises that a
person occupies, committed by or on behalf of its owner . . . .” APIS is being
sued, in part, for wrongfully entering and remaining on the Casino and
Community Center on or about October 1, 2003. APIS maintains that it entered
these buildings at the behest of an entity that it believed to be the true owner.
Accordingly, APIS contends that coverage exists under the personal and
advertising injury provisions.
Scottsdale disputes these points, asserting (1)
APIS did not enter the Casino and Community Center on behalf of its true
“owner” and (2) these buildings were not occupied by a natural “person.” The
majority opinion accepts Scottsdale‟s first argument and does not reach the
second. I would rely on Scottsdale‟s second argument, because I disagree with
Scottsdale‟s first argument.
It is true that any wrongful entry must have been committed by or on
behalf of the owner to trigger coverage. See U.S. Fid. & Guar. Co. v. Goodwin,
950 F. Supp. 24, 27 (D. Me. 1996) (“the provision unambiguously requires that
the wrongful entry be committed by the owner, landlord, or lessor of the room,
dwelling, or premises”). The problem here is that it remains unclear who was the
20
“owner” of the Casino and Community Center as of October 1, 2003. Although
the Tribe alleges in its petition that APIS lacked authority from the Tribe to enter
the Casino and Community Center, the underlying facts are more complicated.
As set forth in the summary judgment record and part I of the court‟s opinion, two
different councils claimed to represent the Tribe at that time. APIS had authority
from one of those councils. Thus, it is possible, given the record before us, that
APIS could successfully defend the Tribe‟s lawsuit by establishing that it had
permission to enter from an entity that had ownership rights to the buildings as of
October 1, 2003. That being the case, if only this portion of the policy language
were at issue, I believe Scottsdale would have a duty to defend and, potentially,
a duty to indemnify.
As demonstrated very ably in part III of the court's opinion, the “facts that
may be considered” in this case are not limited to the petition that has been filed
against the insured. In part V of the opinion, I respectfully believe the majority
may have disregarded that lesson and focused solely on the wording of the
petition, to the exclusion of the broader factual context of this dispute.
However, I nonetheless agree with the majority‟s ultimate determination
that the personal and advertising injury provisions do not afford coverage to APIS
in this case.
In my view, those provisions do not apply here because, as
Scottsdale points out, the Casino and Community Center were not occupied by a
natural “person.”
Case law from certain other jurisdictions offers support for
Scottsdale‟s position. See 47 Mamaroneck Ave. Corp. v. Hartford Fire Ins. Co.,
857 N.Y.S.2d 610, 611 (N.Y. App. Div. 2008) (holding that eviction of a
21
commercial tenant that was not a natural person was “not covered by the
definition of „personal and advertising injury‟”); Mirpad, L.L.C. v. Calif. Ins.
Guarantee Ass’n, 34 Cal. Rptr. 3d 136, 144-47 (Cal Ct. App. 2005) (“such
coverage should not extend to the wrongful eviction of „organizations‟”). While
the Seventh Circuit apparently has a different view, see Supreme Laundry Serv.,
L.L.C. v. Hartford Cas. Ins. Co., 521 F.3d 743, 747-48 (7th Cir. 2008) (“we will
not read „person‟ in this CGL policy to refer to simply natural persons when it can
plausibly apply to a corporate entity”), from my reading of the policy language
and the case law I am more persuaded by the decisions of the intermediate
appellate courts in California and New York.
With the foregoing qualification, I join in my colleague‟s excellent opinion.
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