Aetna Cas. and Sur. Co. v. Ericksen

• Decision Date: 27 October 1995
• Docket Number: No. 4:CV-94-0953.,4:CV-94-0953.
• Citation: 903 F. Supp. 836
• Parties: AETNA CASUALTY AND SURETY COMPANY, Plaintiff, v. Mary K. ERICKSEN, Duane Ericksen, and Salim Qureshi, Defendants.
• Court: U.S. District Court — Middle District of Pennsylvania

903 F. Supp. 836

AETNA CASUALTY AND SURETY COMPANY, Plaintiff, v. Mary K. ERICKSEN, Duane Ericksen, and Salim Qureshi, Defendants.

No. 4:CV-94-0953.

United States District Court, M.D. Pennsylvania.

October 27, 1995.

Douglas B. Marcello, Thomas Thomas & Hafer, Harrisburg, PA, for plaintiff.

Anthony J. Primerano, Kennedy and Lucadamo, Hazleton, PA, Robert S. Mirin, Harrisburg, PA, for defendants.

MEMORANDUM

McCLURE, District Judge.

BACKGROUND:

On June 20, 1994, plaintiff Aetna Casualty and Surety Co. initiated this action with the filing of a complaint seeking a declaratory judgment pursuant to 28 U.S.C. §§ 2201, 2202. Plaintiff seeks a ruling that it is not liable to defend and indemnify defendants Mary K. and Duane Ericksen (collectively, "Ericksens") with respect to claims against them by defendant Salim Qureshi. The Ericksens have asserted counterclaims against Aetna for breach of contract, violation of the Pennsylvania Unfair Trade Practices and Consumer Protection Law, and bad faith.

Before the court are cross-motions for summary judgment.

DISCUSSION:

I. STANDARD OF REVIEW

Summary judgment is appropriate if the "pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law." Fed.R.Civ.P. 56(c) (emphasis added).

... The plain language of Rule 56(c) mandates the entry of summary judgment, after adequate time for discovery and upon motion, against a party who fails to make a showing sufficient to establish the existence of an element essential to that party's case, and on which that party will bear the burden of proof at trial. In such a situation, there can be `no genuine issue as to any material fact,' since a complete failure of proof concerning an essential element of the nonmoving party's case necessarily renders all other facts immaterial. The moving party is `entitled to judgment as a matter of law' because the nonmoving party has failed to make a sufficient showing on an essential element of her case with respect to which she has the burden of proof.

Celotex v. Catrett, 477 U.S. 317, 322-323, 106 S.Ct. 2548, 2552, 91 L.Ed.2d 265 (1986).

The moving party bears the initial responsibility of stating the basis for its motions and identifying those portions of the record which demonstrate the absence of a genuine issue of material fact. He or she can discharge that burden by "showing ... that there is an absence of evidence to support the nonmoving party's case." Celotex, 477 U.S. at 323, 325, 106 S.Ct. at 2552-2553, 2554.

Issues of fact are genuine "only if a reasonable jury, considering the evidence presented, could find for the non-moving party." Childers v. Joseph, 842 F.2d 689, 694 (3d Cir.1988) (citing Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 249, 106 S.Ct. 2505, 2510-2511, 91 L.Ed.2d 202 (1986)). Material facts are those which will affect the outcome of the trial under governing law. Anderson, 477 U.S. at 248, 106 S.Ct. at 2510. In determining whether an issue of material fact exists, the court must consider all evidence in the light most favorable to the non-moving party. White v. Westinghouse Electric Company, 862 F.2d 56, 59 (3d Cir.1988).

II. STATEMENT OF FACTS

On October 13, 1993, defendant Salim Qureshi filed a complaint in the Court of Common Pleas of Columbia County, Pennsylvania, naming the Ericksens as defendants. In that action, Qureshi alleged that Mary K. Ericksen was liable for falsely and publicly accusing Salim Qureshi of sexual harassment. Also, Qureshi claimed that he was assaulted by Duane Ericksen. The complaint arose out of events occurring while both Qureshi and Mary K. Ericksen were employed as faculty members by Bloomsburg University.

A. Qureshi's Claims

The events giving rise to Qureshi's claim against Mary K. Ericksen began with a department meeting on September 28, 1992. Mary K. Ericksen had circulated the results of an unauthorized student survey which was critical of Qureshi, and she was forced to apologize to Qureshi during the meeting. The next day, Mary K. Ericksen submitted to the Dean of the College of Business a complaint alleging sexual harassment by Qureshi. Qureshi claims that the memorandum was drafted in retaliation for his complaint concerning the student survey.

Mary K. Ericksen withdrew her complaint so that the matter could be resolved informally, but the process was not productive. She therefore filed a second complaint with the University alleging sexual harassment in the workplace and an unpleasant work environment. The University Provost found that Qureshi had sexually harassed Mary K. Ericksen and ordered him to report to the dean and watch tapes on sexual harassment. Also, a letter regarding the charges was placed in Qureshi's personnel file.

The disposition was unsatisfactory to Mary K. Ericksen. She spoke to a reporter from a local newspaper, which published an article describing the hearing process, the allegations of sexual harassment, and Mary K. Ericksen's opinion as to the outcome.

Qureshi's other claim, that against Duane Ericksen, related to an incident following a fact-finding hearing on November 10, 1992. Duane Ericksen appeared in the hearing room, rushed at Qureshi, and physically menaced and verbally threatened Qureshi. Qureshi's complaint alleges that the actions of Duane Ericksen constitute assault.

B. The Aetna Policy

Aetna issued to the Ericksens a homeowner's insurance policy which reads in part:

If a claim is made or a suit is brought against any insured for damages because of bodily injury, personal injury or property damage caused by an occurrence to which the coverage sic applies, we will:

a. pay up to our limit of liability for the damages for which the insured is legally liable; and

b. provide a defense at our expense by counsel of our choice. We may make any investigation and settle any claim or suit that we decide is appropriate. Our obligation to defend any claim or suit ends when the amount we pay for damages resulting from the occurrence equals our limit of liability.

Complaint, Exhibit A at 25 (rider appended to policy, captioned "SECTION II — LIABILITY

COVERAGES, COVERAGE E — PERSONAL LIABILITY").

Relevant terms defined in the policy include:

"bodily injury" means bodily harm, sickness or disease, including required care, loss of services and death that results.

"business" includes trade, profession or occupation.

. . . . .

"occurrence" means an accident, including continuous or repeated exposure to substantially the same generally harmful conditions which results, during the policy period, in:

a. bodily injury; or

b. property damage.

"property damage" means physical injury to, destruction or, or loss of use of tangible property.

Complaint, Exhibit A at 1-2 ¶¶ 2, 3, 6, 7.

The following definition is added by the rider to the policy:

"personal injury" means injury arising out of one or more of the following:

a. false arrest, detention or imprisonment, or malicious prosecution;

b. libel, slander or defamation of character; or

c. invasions of privacy, wrongful eviction or wrongful entry.

Complaint, Exhibit A at 23 ¶ 9 (first paragraph so numbered).

The "EXCLUSIONS" section of the policy states:

Coverage E — Personal Liability and Coverage F — Medical Payments to Others do not apply to bodily injury or property damage:

. . . . .

b. Arising out of or in connection with a business engaged in by any Insured. This exclusion applies but is not limited to an act or omission, regardless of its nature or circumstances involving a service or duty rendered, promised, owed or implied to be provided because of the nature of the business;

Complaint, Exhibit A at 14 ¶ 1(b).

Moreover, the rider to the policy provides that Coverage E — Personal Liability does not apply to "personal injury ... arising out of the business of any insured ..." Complaint, Exhibit A at 25-26 ¶ 2(f)(4).

C. Issue Presented

Based on a reading of Qureshi's complaint in the Court of Common Pleas and the insurance policy at issue, the issue before the court is whether Qureshi's allegation of libel based on (1) a complaint to an employer and (2) discussion of the complaint with a newspaper arises out of Mary K. Ericksen's employment as a professor at Bloomsburg University.

III. BUSINESS PURSUITS EXCLUSION

In determining whether an insurance company has a duty to defend an action filed against an insured, the court reviews the language of the complaint filed against the insured. Sun Alliance Insurance Co. of Puerto Rico v. Soto, 836 F.2d 834, 835 (3d Cir.1988). An activity is a "business pursuit" when there is (1) continuity and (2) profit motive. Sun Alliance, 836 F.2d at 836. In this case, it is clear that Mary K. Ericksen's activities as a professor were a business pursuit, especially since the definition of "business" in the policy includes "profession" and "occupation." The question then becomes whether the statements made by Mary K. Ericksen which caused the alleged injury "arose out of" that employment.

Neither party cites a case which purports to define "arising out of" for purposes of a business pursuits exclusion in a homeowner's insurance policy. As argued by Aetna, the most analogous law appears to be that of workers' compensation, which generally provides for the compensation of employees for injuries "arising out of and in the course of employment." Black's Law Dictionary 108 (6th ed. 1990). More specifically:

Workers' compensation acts provide for compensating an

employee whose injury is one "arising out of and in the course of the employment." These words describe an injury directly and naturally resulting in a risk reasonably incident to the employment.... They mean that there must be some causal connection between the conditions under which the employee worked and the injury which he received.

The words "arising out of

...