National Union Fire Ins. Co. of Pittsburgh, PA v. Starplex Corp., 220 Or. App. 560, 188 P.3d 332 (2008)
In a decision which took over a year to issue from date of submission, the court found a defense arose for fact allegations for defamation, affirming the trial court’s ruling. At issue were allegations that Starplex intentionally interfered with the Pierre plaintiffs’ business relationships based on their race or national origin; and that the Port intentionally discriminated against the plaintiffs by impairing their ability to contract with fair paying customers based on the plaintiffs’ race or national origin.
In a section of the verdict form captioned “Hostile Environment,” the jury found that the Starplex employees and the Port intentionally discriminated against the plaintiffs by creating a hostile work environment based on the plaintiffs’ race or national origin. Id. at 338.
The trial court, finding defamation and disparagement, ultimately determined that one of the carriers, Scottsdale, had indemnity obligations. Nevertheless, it reasoned that statements allegedly made to the Pierre plaintiffs were “derogatory and defamatory,” that, under the circumstances, they were published, and that the plaintiffs suffered special harm consisting of loss of business and wages and injury to their reputations. Id. at 339 n.2.
Finding defamation from the use of racial epithets, the court noted:
We conclude that there were sufficient allegations in each of the Pierre plaintiffs' complaints that, reasonably interpreted, possibly gave rise to coverage under Nautilus's policy-specifically, coverage of defamation claims. First, each of the complaints included allegations that the starters referred to the Pierre plaintiffs “in racially offensive terms” and that the defendants used “racial epithets.” Those allegations were sufficient to show that statements made by the Starplex starters were defamatory under the definition of such statements set out above. In addition, where each complaint alleged that the statements “referred to” the Pierre plaintiffs in those terms, that the statements were made at the airport, that the Pierre plaintiffs suffered “humiliation” as a result, that the statements were intended to interfere with the Pierre plaintiffs' business relations, and that the plaintiffs lost business as a result, we conclude that, for purposes of the duty to defend, the complaints adequately alleged or gave rise to an inference that the statements were published to third parties. Finally, even assuming that the statements were not defamatory per se because, on their face, they lacked the required nexus to the Pierre plaintiffs' competence to perform their jobs, we agree with the trial court that the Pierre plaintiffs alleged special harm in the form of detriment to their business operations.
Id. at 347.
The employment-related practices exclusion did not bar a defense, even though it stated, “This insurance does not apply to: ‘Bodily injury’ or ‘personal injury’ to: (1) A person arising out of any: . . . (c) Employment-related practices, policies, acts, or omissions, such as coercion, demotion, evaluation, reassignment, discipline, harassment, humiliation or discrimination directed at that person:”
Nothing in the analysis of the language in [Clinical Research Institute v. Kemper Ins. Co., 191 Or. App. 595, 84 P.3d 147 (2004)] suggests that the relevant wording, albeit broad, applies to nonemployees. As discussed above, in that case, the court determined that the term “employment-related” means connected or linked to employment, whether past, current, or future. However, the Pierre plaintiffs were not employed by either of the defendants in the Pierre litigation. Accordingly, the trial court's conclusion that the employment-related practices exclusion did not apply here was correct.
Id. at 349.
The court did not address the issue of what might have occurred had co-employees acted improperly in a way not overseen or corrected by the employer. While there is an express employee-employee exclusion available to carriers, none was included in this form of policy. Conduct that served no employment purpose and was not related to the supervisorial activities of the employer vis-à-vis the employee directly would appear outside the scope of this exclusion as well.
