E.E.O.C. v. Southern Pub. Co., Inc.
| Decision Date | 23 February 1990 |
| Docket Number | No. 89-4176,89-4176 |
| Parties | 52 Empl. Prac. Dec. P 39,709 EQUAL EMPLOYMENT OPPORTUNITY COMMISSION, et al., Plaintiffs, and Southern Guaranty Insurance Co., Intervenor-Appellee Cross-Appellant, v. SOUTHERN PUBLISHING CO., INC., Defendant-Appellant Cross-Appellee. |
| Court | U.S. Court of Appeals — Fifth Circuit |
Paul M. Neville, Jackson, Miss., for defendant-appellant cross-appellee.
William F. Ray and James L. Carroll, Watkins & Eager, Jackson, Miss., for intervenor-appellee cross-appellant.
Appeals from the United States District Court for the Southern District of Mississippi.
Before REAVLEY and KING, Circuit Judges, and LAKE, * District Judge.
Southern Publishing Company, Inc., and its insurer, Southern Guaranty Insurance Company, both appeal from a judgment of the district court requiring Southern Guaranty to reimburse Southern Publishing for reasonable costs in defending tort actions brought against Southern Publishing and two of its employees. We affirm the district court's judgment.
On January 12, 1987, the Equal Employment Opportunity Commission ("EEOC") filed a complaint in the United States District Court for the Southern District of Mississippi against Southern Publishing, a magazine publisher in Meridian, Mississippi. The EEOC alleged sexual harassment resulting in constructive and retaliatory discharge based on complaints by two former Southern Publishing employees, Debra Corn and Peggy Honeycutt. On April 30, 1987, Corn and Honeycutt moved to intervene as plaintiffs. In addition to the relief sought by the EEOC, Corn and Honeycutt sought to present state common law claims for assault and battery against Southern Publishing and an employee, Robert Thompson, and Corn sought to present a state common law claim for slander against Southern Publishing and its president, Thelma Thompson.
Southern Publishing was insured under two policies issued by Southern Guaranty: a workers' compensation and employers liability policy and a special multi-peril policy. On May 20, 1987, Southern Publishing notified Southern Guaranty of the motion to intervene and the assertion by Corn and Honeycutt of the new, non-Title VII, claims against it and Thelma and Robert Thompson and tendered the defense of the case to Southern Guaranty. On July 14, 1987, Southern Publishing, through its own counsel, filed a motion to deny the intervention of Corn and Honeycutt to the extent it sought to add additional defendants and to assert state law claims. Among its arguments against intervention, Southern Publishing contended that the state law claims were barred by the Mississippi statute of limitations. On July 28, 1987, the district court allowed the intervention of Corn and Honeycutt. Southern Publishing's motion to reconsider was denied, and on August 12, 1987, Corn and Honeycutt filed their intervention.
Because of the issues raised by this appeal it is necessary to chronicle Corn and Honeycutt's allegations in some detail. Paragraph 10 of their complaint alleges that Robert Thompson was guilty of "continued and persistent grabbing and touching of private parts of Peggy Honeycutt's body against her consent." Paragraph 16 alleges that "Robert Thompson had committed assault and battery on the Plaintiffs Peggy Honeycutt and Debra Corn." Paragraph 12 alleges that Thelma Thompson told Corn's new employer "that Debra Corn was fired because she had sabotaged the office computer, or words to that effect." Paragraph 18 alleges:
The statement of Defendant Thelma G. Thompson to Debra Corn's new employer was false and without justification, and was known by the said Defendant to be false or was stated with gross and reckless disregard of the truth, and was spoken with such malicious intent as to arise to the level of slander per se.
Paragraph 21 alleges that both Corn and Honeycutt "have suffered physical pain as well as embarrassment, humiliation and emotional distress."
On September 4, 1987, Southern Guaranty notified Southern Publishing of its denial of coverage and refusal to defend. Southern Guaranty was allowed to intervene to seek a declaration that there was no coverage and no duty to defend under its policies. Southern Guaranty, as intervenor, also moved for dismissal of Corn and Honeycutt's tort claims based upon the Mississippi one-year statute of limitations. Southern Publishing counterclaimed for a declaration of coverage and that Southern Guaranty owed it a duty to defend and to reimburse it for "all costs and attorneys' fees, including those paid or incurred to date." The parties filed cross-motions for summary judgment on the pleadings.
On November 7, 1988, the district court dismissed all of the tort claims of Corn and Honeycutt on limitations grounds. In a separate memorandum opinion and order entered on the same day the court also addressed the insurance coverage issues. The court found that the claims of Corn and Honeycutt for assault and battery were potentially covered under Southern Guaranty's employers liability policy and that Southern Guaranty's failure to defend these claims was a breach of its policy obligations. The court found that Corn's claim for slander was not covered under either policy because it did not allege a "bodily injury" within the meaning of the policies. The court ruled that only those expenses incurred by Southern Publishing in defending against the assault and battery claims should be reimbursed to Southern Publishing and requested affidavits to establish those expenses. The district court's memorandum and order does not mention expenses incurred by Southern Publishing in defending the Title VII claims.
Southern Publishing moved to amend the court's findings and conclusions on two grounds relevant to this appeal: (1) the slander claim was covered as a "personal injury" under the multi-peril policy, and (2) since Southern Guaranty had wrongfully denied coverage, it was obligated for the full cost of Southern Publishing's defense, including the Title VII claims.
On December 23, 1988, the district court withdrew its original opinion and order and substituted a new memorandum opinion and order. 705 F.Supp. 1213. The court concluded that the slander claim came within the special multi-peril policy definition of "personal injury," but held that the claim was not covered because of a policy exclusion for slander made by or at the direction of the insured with knowledge of its falsity. Even though the Court found that Southern Guaranty owed no duty to defend the slander claim, the court held that "Southern Guaranty should be required to pay defendants their costs, including attorney's fees, in defending the tort claims ..." 705 F.Supp. at p. 1219, (emphasis added). The Court held, however, that in light of the equities of the case Southern Guaranty was not obligated for defense costs associated with the defense of the Title VII claims.
After affidavits of attorney's fees and expenses were submitted, the court entered an order on February 15, 1989, that Southern Publishing recover $150.00 from Southern Guaranty for defending against the "tort claims" of Corn and Honeycutt. The order makes no distinction between expenses incurred in defending the assault and battery and slander claims. Indeed, the order repeatedly refers to the "tort claims" that the court previously dismissed on limitations grounds.
On February 23, 1989, a final judgment was entered from which both parties appeal. Southern Guaranty argues that the district court erred in holding that the assault and battery claims were covered, while Southern Publishing argues that the district court erred in holding that the slander claim was excluded from coverage and in refusing to require Southern Guaranty to reimburse it for all defense costs.
For summary judgment to be granted, the movant must demonstrate that there is no genuine issue as to any material fact. Ayo v. Johns-Manville Sales Corp., 771 F.2d 902, 904 (5th Cir.1985). Fed.R.Civ.P. 56(c). See also Celotex Corp. v. Catrett, 477 U.S. 317, 322-24, 106 S.Ct. 2548, 2552-53, 91 L.Ed.2d 265 (1986). Under this standard fact questions are considered with deference to the non-movant. Reid v. State Farm Mut. Auto. Ins. Co., 784 F.2d 577, 578 (5th Cir.1986). The construction and effect of an insurance policy are questions of law reviewable de novo on appeal. Diversified Group, Inc. v. Van Tassel, 806 F.2d 1275, 1277 (5th Cir.1987).
The workers' compensation and employers liability policy issued by Southern Guaranty to Southern Publishing provides in pertinent part:
PART TWO--EMPLOYERS LIABILITY INSURANCE
This employers liability insurance applies to bodily injury by accident or bodily injury by disease.
. . . . .
We will pay all sums you legally must pay as damages because of bodily injury to your employees, provided the bodily injury is covered by this Employers Liability Insurance.
. . . . .
This insurance does not cover:
. . . . .
5. bodily injury intentionally caused or aggravated by you;
. . . . .
7. damages arising out of the discharge of, coercion of, or discrimination against any employee in violation of law.
We have the right and duty to defend, at our expense, any claim, proceeding or suit against you for damages payable by this insurance.
. . . . .
We have no duty to defend a claim, proceeding or suit that is not covered by this insurance.
Southern Guaranty argues that Corn and Honeycutt's allegations of assault and battery were not covered as "bodily injuries" under this policy because Corn and Honeycutt alleged that the assault and battery resulted in purely emotional rather than physical or "bodily" injury. We disagree.
In determining an insurer's duty to defend its insured, Mississippi has adopted "the allegations of the complaint" rule....
To continue reading
Request your trial
-
SL Industries, Inc. v. American Motorists Ins. Co.
...the policy, provided that the defense costs can be apportioned between covered and non-covered claims. See E.E.O.C. v. Southern Publishing Co., 894 F.2d 785, 791 (5th Cir.1990); Budd Co. v. Travelers Indem. Co., 820 F.2d 787, 790-91 (6th Cir.1987); Insurance Co. of N. Am. v. Forty-Eight Ins......
-
Voorhees v. Preferred Mut. Ins. Co.
...(1975). A different rule has been applied where defense costs can be readily apportioned. See Equal Employment Opportunity Comm'n v. Southern Publishing Co., Inc., 894 F.2d 785, 791 (5th Cir.1990); Budd Company v. Travelers Indemnity Company, 820 F.2d 787, 790 (6th Cir.1987); Insurance Co. ......
-
Trinity Universal Ins. Co. v. Cowan
...F.2d 713 (11th Cir.1990); E.E.O.C. v. Southern Pub. Co., Inc., 705 F.Supp. 1213, 1219 (S.D.Miss.1988), aff'd in pertinent part, 894 F.2d 785 (5th Cir.1990); State Farm Fire & Cas. Co. v. Hiermer, 720 F.Supp. 1310, 1315 (S.D.Ohio 1988), aff'd, 884 F.2d 580 (6th Cir.1989); Continental Cas. Co......
-
Great Northern Nekoosa v. Aetna Cas. and Sur. Co.
...Aetna has requested that the court prorate the costs of defense for the covered and noncovered claims. See EEOC v. Southern Pub. Co., Inc., 894 F.2d 785, 791 (5th Cir.1990) (quoting Insurance Company of North America v. Forty-Eight Insulations, Inc., 633 F.2d 1212, 1224 (6th Cir.1980)). At ......
-
CHAPTER 8
...(D.N.J. 1996) 929 F. Supp. 764, 771 [applying N.J. law, but speaking generally]; see also E.E.O.C. v. Southern Pub. Co. (5th Cir. 1990) 894 F.2d 785, 791 [apparently applying Miss. law, but speaking generally].) Whatever hopes such an insured may have had based on the decisional law’s impos......
-
The art of risk management for lawyers representing lawyers.
...764, 769-770 (D.N.J. 1996); SL Indus., Inc. v. Am. Motorists Ins. Co., 607 A.2d 1266 (N.J. 1992); E.E.O.C. v. Southern Publ. Co., Inc., 894 F.2d 785, 791 (5th Cir. 1990) (Mississippi law); Ins. Co. of North America v. Forty-Eight Insulations, 633 F. 2d 1212, 1224-25 (6th Cir. 1980) (Illinoi......