Beyond the 1998 ISO - Internet Multimedia/Cyberspace Coverage Policies
(1) Greektown Casino, LLC v. Zurich Am. Ins. Co.
No. 07-CV-13583, 2008 WL 597814 (E.D. Mich. Feb. 29, 2008)
At issue was tortious interference with contract claims. The court found, under a number of different policies, no duty to defend. The court found that Exclusion h to the American Home Assurance policy entitled “Directors, Officers and Private Company Liability Insurance Policy” precluded a defense. It excepts from coverage claims “alleging, arising out of, based upon or attributable to any actual or alleged contractual liability of the Company or any other Insured under any express contract or agreement.” Id. at *6.
The court reasoned:
Lane’s complaint plainly alleges that Greektown breached an express contract for his services as an agent of record. Whether or not Greektown was actually a party or signatory to this alleged contract may be relevant to the merits of the underlying action – but not to the clear and unambiguous policy exclusion.
Id. at *6.
A further exclusion references various types of claims, including antitrust, business competition, unfair trade practices, and tortious interference in another’s business or contractual relationships. The court found that the tortious interference claim was excluded by the anti-competitive behavior exclusion.
Looking at a separate “advertising injury” coverage policy by Zurich American, the court found that fact allegations of disparagement were sufficiently inarticulate under the tortious interference count to trigger a defense. The court analyzed and distinguished several unpublished Michigan cases – Veterans of Foreign Wars v. Auto-Owners Ins. Co., No. 202664, 1999 WL 33444142 (Mich. Ct. App. May 25, 1999) (per curiam) (unpublished), and National Union Fire Ins. Co. of Pittsburgh v. Alticor, Inc., No. 05-15, 2005 WL 2206461 (W.D. Mich. Sept.12, 2005) (unpublished), aff'd, Nos. 05-2479 & 06-2538, 2007 WL 2733336 (6th Cir. Sept. 19, 2007) (per curiam) (unpublished). Id. at *8.
The National Union case criticized the absence of any “actual allegation of product disparagement, slander or libel.” Id. at *9. The court noted that this determination was subsequently affirmed by the Sixth Circuit. The Sixth Circuit found the absence of a claim for damages “because of” the alleged misrepresentations or disparagement determinative and the mere recitation of terms such as “disparagement” or “misrepresentation” insufficient. National Union, 2007 WL 2733336, at *6. The court stated:
Plaintiffs’ argument is that there is a necessary inference from the wording of the tortious interference allegations in the complaint that Kewadin’s employees must have used disparaging or defamatory remarks. The Court agrees with the reasoning of the Michigan Court of Appeals in Veterans of Foreign Wars – and an insured’s assertion that an individual may have “possibly” used defamatory language in connection with a tortious interference claim is not sufficient, in itself, to show that the tortious interference claim is “arguably” within the “personal or advertising injury” policy coverage.
Id. at *9.
Finding no defense, no bad faith also was pertinent in the court’s view. The court found that there was no right to a Rule 12(b) sanction for bringing the action against the insurer, however, because the illegal contentions were not necessarily frivolous, and there was legal support for the primary contention that the insurance contract exclusion provision should be read broadly to favor the insured.
No. 07-CV-13583, 2008 WL 597814 (E.D. Mich. Feb. 29, 2008)
At issue was tortious interference with contract claims. The court found, under a number of different policies, no duty to defend. The court found that Exclusion h to the American Home Assurance policy entitled “Directors, Officers and Private Company Liability Insurance Policy” precluded a defense. It excepts from coverage claims “alleging, arising out of, based upon or attributable to any actual or alleged contractual liability of the Company or any other Insured under any express contract or agreement.” Id. at *6.
The court reasoned:
Lane’s complaint plainly alleges that Greektown breached an express contract for his services as an agent of record. Whether or not Greektown was actually a party or signatory to this alleged contract may be relevant to the merits of the underlying action – but not to the clear and unambiguous policy exclusion.
Id. at *6.
A further exclusion references various types of claims, including antitrust, business competition, unfair trade practices, and tortious interference in another’s business or contractual relationships. The court found that the tortious interference claim was excluded by the anti-competitive behavior exclusion.
Looking at a separate “advertising injury” coverage policy by Zurich American, the court found that fact allegations of disparagement were sufficiently inarticulate under the tortious interference count to trigger a defense. The court analyzed and distinguished several unpublished Michigan cases – Veterans of Foreign Wars v. Auto-Owners Ins. Co., No. 202664, 1999 WL 33444142 (Mich. Ct. App. May 25, 1999) (per curiam) (unpublished), and National Union Fire Ins. Co. of Pittsburgh v. Alticor, Inc., No. 05-15, 2005 WL 2206461 (W.D. Mich. Sept.12, 2005) (unpublished), aff'd, Nos. 05-2479 & 06-2538, 2007 WL 2733336 (6th Cir. Sept. 19, 2007) (per curiam) (unpublished). Id. at *8.
The National Union case criticized the absence of any “actual allegation of product disparagement, slander or libel.” Id. at *9. The court noted that this determination was subsequently affirmed by the Sixth Circuit. The Sixth Circuit found the absence of a claim for damages “because of” the alleged misrepresentations or disparagement determinative and the mere recitation of terms such as “disparagement” or “misrepresentation” insufficient. National Union, 2007 WL 2733336, at *6. The court stated:
Plaintiffs’ argument is that there is a necessary inference from the wording of the tortious interference allegations in the complaint that Kewadin’s employees must have used disparaging or defamatory remarks. The Court agrees with the reasoning of the Michigan Court of Appeals in Veterans of Foreign Wars – and an insured’s assertion that an individual may have “possibly” used defamatory language in connection with a tortious interference claim is not sufficient, in itself, to show that the tortious interference claim is “arguably” within the “personal or advertising injury” policy coverage.
Id. at *9.
Finding no defense, no bad faith also was pertinent in the court’s view. The court found that there was no right to a Rule 12(b) sanction for bringing the action against the insurer, however, because the illegal contentions were not necessarily frivolous, and there was legal support for the primary contention that the insurance contract exclusion provision should be read broadly to favor the insured.
