Finn v. National Union Fire Ins. Co. v. Pittsburgh, Pennsylvania, 452 Mass. 690, 896 N.E. 2d 1272 (2008)
The court found that no duty to defend arose in a trade secret misappropriation case because an exclusion provided coverage for “any claim arising out of any misappropriation of trade secret” and professional liability policy issued by the defendant, National Union Fire Insurance Company of Pittsburgh, Pennsylvania (“National Union”) to the plaintiff Uniscribe Professional Services, Inc. (“Uniscribe”).
The issue before the Supreme Court of Massachusetts was of the absence of any language as to whose acts may trigger the exclusion for trade secrets results in ambiguity.
National Union, laying emphasis on the words “any claim arising out of,” asserts that the exclusion unambiguously covers all claims alleging misappropriation of a trade secret. Uniscribe responds that the exclusion is silent as to whether it applies to third-party conduct and therefore is ambiguous.
Id. at 697.
An exclusion barred a defense because the exclusionary phrase “arising out of”
must be read expansively.
The expansiveness of the phrase “any claim arising out of” obviates the need to specify that the exclusion applies “whether committed by or at the direction of the insured or third parties.” Liquor Liab. Joint Underwriting Ass’n of Mass. v. Hermitage Ins. Co., supra at 320, 644 N.E.2d 964. Cases from other jurisdictions at in accord.
Id. at 697.
The insured’s objectively reasonable expectations in the court’s view were of no moment as there was no ambiguity. A.W. Chesterton Co. v. Massachusetts Insurers Insolvency Fund, 445 Mass. 502, 518, 838 N.E.2d 1237 (2005);1 B.R. Ostrager & T.R. Newman, Insurance Coverage Disputes § 1.03[b], at 34 (14th ed. 2008) (“The application of the reasonable expectations doctrine is typically limited to cases in which the policy is ambiguous and the mutual intent of the parties cannot be determined”).
Id. at 698.
Jones Day would not have incurred any loss in the absence of the nephew’s misappropriation and thus Jones Day’s claim arose out of same.
