AMCO Ins. Co. v. Van Laningham & Assocs.

• Decision Date: 18 July 2022
• Docket Number: 5:20-CV-553-D
• Parties: AMCO INSURANCE COMPANY, and DEPOSITORS INSURANCE COMPANY, Plaintiffs, v. VAN LANINGHAM & ASSOCIATES, PLLC, and ROBERT BRADLEY VAN LANINGHAM, Defendants.
• Court: U.S. District Court — Eastern District of North Carolina

AMCO INSURANCE COMPANY, and DEPOSITORS INSURANCE COMPANY, Plaintiffs, v. VAN LANINGHAM & ASSOCIATES, PLLC, and ROBERT BRADLEY VAN LANINGHAM, Defendants.

No. 5:20-CV-553-D

United States District Court, E.D. North Carolina, Western Division

July 18, 2022

ORDER

JAMES C. DEVER III United States District Judge

On October 20, 2020, AMCO Insurance Company and Depositors Insurance Company (collectively, “Nationwide” or “plaintiffs”) filed suit seeking a declaratory judgment that Nationwide has no duty to defend or indemnify Robert Bradley Van Laningham (“Van Laningham”) and Van Laningham and Associates, PLLC, doing business as Bradley Law Group (“Bradley Law”) (collectively “defendants”) in an underlying lawsuit that arose in the United States District Court for the Middle District of North Carolina [D.E. 1]. On January 8,2021, Van Laningham and Bradley Law answered the complaint and counterclaimed for breach of contract and a declaratory judgment that Nationwide must defend and indemnify them [D.E. 12]. On January 14 2022, Nationwide moved for summary judgment and filed a memorandum, a statement of material facts, and exhibits in support [D.E. 20-23]. On February 4,2022, defendants responded in opposition [D.E. 25-26]. On February 18, 2022 Nationwide replied [D.E. 27]. As explained below, the court grants Nationwide's motion for summary judgment.

I.

On September 30, 2019, William Parker Garey and five other plaintiffs filed a second amended complaint in the underlying lawsuit in the United States District Court for the Middle District of North Carolina. See Garey Compl. [D.E. 1-4]; Defs.' Stmt Mat. Fact (“SMF”) [D.E. 22] ¶¶ 1-2; Pls.' Resp. Stmt. Mat. Facts (“Resp. SMF”) [D.E. 26] ¶¶ 1-2. The plaintiffs named numerous parties as defendants, including Van Laningham and Bradley Law. See Garey Compl. ¶¶ 15-16; SMF ¶ 1; Resp. SMF ¶ 1. Plaintiffs'putative class action alleged violations of the Driver's Privacy Protection Act 18 U.S.C. §§ 2721 et seq. (“DPPA”). See Garey Compl. ¶¶ 147-58.

In North Carolina, when law enforcement officers investigate reported traffic accidents, they report their investigations on a standard form called a “DMV-349.” See Garey Compl. ¶¶ 36-38. Reports created on a DMV-349 include the personal information of the drivers involved, including their names, dates of birth, addresses, and driver's license numbers. See id. ¶¶ 39-40,51. Plaintiffs in the Garey lawsuit alleged they each were involved in a traffic accident and the investigating law' enforcement officer created a DMV-349. See Id. ¶¶ 42-53. All the plaintiffs but one alleged that Van Laningham and Bradley Law “knowingly obtained the DMV-349s as described above with the intent of obtaining names and addresses of wreck victims for the purpose of using those names and addresses to send targeted direct mail solicitation letters for the purpose of marketing [their] legal services.” Garey Compl. ¶¶ 54,56-60,62-63,72; SMF ¶¶ 3-4; Resp. SMF ¶¶ 3-4. Alternatively, the Garey plaintiffs alleged that even if Van Laningham and Bradley Law did not obtain the DMV-349 reports, they obtained the personal information in the reports through a third party that did obtain the reports. See Garey Compl. ¶ 61; SMF ¶ 3; Resp. SMF ¶ 3.

Van Laningham and Bradley Law allegedly used the personal information in the DMV-349 reports to mail to the plaintiffs marketing materials for legal services. See Garey Compl. ¶¶ 66, 68-71,110; SMF ¶¶ 2-4; Resp. SMF ¶¶ 2-4. The marketing materials included the statement, “This is an advertisement for legal services.” Garey Compl. ¶ 122. The Garey plaintiffs alleged that this conduct constituted the knowing acquisition of personal information from a motor vehicle record for a purpose the DPPA does not authorize. See Id. ¶¶ 115-27. According to the Garey plaintiffs, this unlawful acquisition and disclosure invaded their privacy. See id. ¶¶ 125,127. Plaintiffs sought liquidated damages and injunctive relief. See Garey Compl. [D.E. 1-4] 66-67; SMF ¶¶ 6-7; Resp. SMF ¶¶ 6-7.

On July 23,2020, the United States District Court for the Middle District of North Carolina denied the Garey plaintiffs' motion for class certification. See Garey v. James S. Farrin, P.C., No. 1:16CV542,2020 WL 4227551 (M.D. N.C. July 23,2020) (unpublished); see also SMF ¶ 4; Resp. SMF ¶ 4. On January 22, 2021, the court granted the Garey defendants' motions for summary judgment, concluding their conduct did not violate the DPPA. See Garey v. James S. Farrin, P.C., 514 F.Supp.3d 784 (M.D. N.C. 2021); see also SMF ¶ 8; Resp. SMF ¶ 8. On June 3,2022, the Fourth Circuit affirmed. See Garey v. James S. Farrin, P.C., 35 F.4th 917 (4th Cir. 2022). Nationwide, which insures Bradley Law, defended Van Laningham and Bradley Law in the Garey c lawsuit pursuant to a reservation of rights. See SMF ¶¶ 8,24; Resp. SMF ¶¶ 8,24; [D.E. 1-5]; [D.E. 23-2].

Nationwide argues the insurance policies it issued to Van Laningham and Bradley Law do not require it to defend or indemnify them in the Garey action and filed this action seeking a declaratory judgment to that effect. AMCO Insurance Company issued a primary policy to Bradley Law for the period June 7, 2011, to June 7, 2012. See SMF ¶ 9; Resp. SMF ¶ 9; [D.E. 23-3]. Depositors Insurance Company issued primary policies to Bradley Law for the period November 19, 2013, to November 19, 2016. See SMF ¶ 9; Resp. SMF ¶ 9; [D.E. 23-5, 23-7, 23-9]. Both also issued umbrella policies to Bradley Law. The parties agree that the relevant coverages and exclusions in the umbrella policies are the same as in the primary policies. See SMF ¶¶ 21-23;, Resp. ¶¶ 21-23.

The Nationwide policies include Coverage A and Coverage B, and both are subject to exclusions.^[1] Except as discussed, the policies all contain the same relevant provisions.^[2] Compare [D.E. 23-3], with [D.E. 23-5], and [D.E. 23-7], and [D.E. 23-9]. Under Coverage A, Nationwide insured Bradley Law against claims for bodily injury and property damage. See [D.E. 23-3] 67. Coverage A applies when ‘“bodily injury' or ‘property damage' is caused by an ‘occurrence' that takes place in the ‘coverage territory'” during the policy period. Id. The policies define “bodily injury” to mean “bodily injury, sickness or disease sustained by a person, including death resulting from any of these at any time.” Id. at 84. The policies define “property damage” to mean “[p]hysical injury to tangible property, including all resulting loss of use of that property” or “[l]oss of use of tangible property that is not physically injured.” Id. at 87.

Under Coverage B, Nationwide insured Bradley Law against sums “the insured becomes legally obligated to pay as damages because of ‘personal and advertising injury' to which this insurance applies.” Id. at 74. A “personal and advertising injury” is an injury, including consequential ‘bodily injury', arising out of one or more of the following offenses:

a. False arrest, detention or imprisonment;

b. Malicious prosecution;

c. The wrongful eviction from, wrongful entry into, or invasion of the right of private occupancy of a room, dwelling or premises that a person occupies, committed by or on behalf of its owner, landlord or lessor;

d. Oral or written publication, in any manner, of material that slanders (or libels a person or organization or disparages a person's or organization's goods, products or services;

e. Oral or written publication, in any manner, of material that violates a person's right of privacy; f. The use of another's advertising idea in your “advertisement”; or g. Infringing upon another's copyright, trade dress or slogan in your ‘advertisement'.

Id. at 86.

Coverage B is subject to several exclusions. The exclusions include the “criminal act” exclusion, which removes from Coverage B personal and advertising injuries “[a]rising out of a criminal act committed by or at the direction of any insured or a criminal act committed by another for which any insured is held to be vicariously liable.” Id. at 75. The exclusion for “recording and c distribution of material in violation of law” states that Coverage B does not apply to personal and advertising injuries “[a]rising directly or indirectly out of any action or omission that violates or is alleged to violate:

(1) The Telephone Consumer Protection Act (TCPA), including any amendment of or addition to such law;

(2) The CAN-SPAM Act of2003, including any amendment of or addition to such law;

(3) The Fair Credit Reporting Act (FCRA), and any amendment of or addition to such law, including the Fair and Accurate Credit Transaction Act (FACTA); or

(4) Any federal, state or local statute, ordinance or regulation, other than the TCPA, CANSPAM Act of2003 or FCRA or their amendments and additions, that addresses, prohibits, or limits the printing, dissemination, disposal, collecting, recording, sending, transmitting, communicating or distribution of material or information.

Id. at 76.

Both Coverage A and Coverage B are subject to an exclusion for the “violation of consumer protection statutes.” That exclusion is materially indistinguishable from the “recording and distribution of material in violation of law” exclusion to Coverage B, except that its catch-all provision in subpart four is limited to the “electronic printing, dissemination, disposal, sending, transmitting, communicating or distribution of material or information.” Id. at 108.

II.

Summary judgment is appropriate when, after reviewing the record as a whole, the court determines that no genuine issue of material fact exists and the moving party is entitled to judgment as a matter of law. See Fed.R.Civ.P. 56(a); Scott v. Harris, 550 U.S. 372, 378, 380 (2007); Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247-48 (1986). The party seeking...