Federal Ins. Co. v. Applestein

• Decision Date: 20 November 1979
• Docket Number: Nos. 79-316,s. 79-316
• Citation: 377 So.2d 229
• Parties: FEDERAL INSURANCE COMPANY, Appellant, v. Allan H. APPLESTEIN and the Allan H. Applestein Foundation Trust and Robert Mackin, Appellees. to 79-319.
• Court: Florida District Court of Appeals

Page 229

377 So.2d 229

FEDERAL INSURANCE COMPANY, Appellant, v. Allan H. APPLESTEIN and the Allan H. Applestein Foundation Trust and Robert Mackin, Appellees.

Nos. 79-316 to 79-319.

District Court of Appeal of Florida, Third District.

Nov. 20, 1979.

Rehearing Denied Dec. 13, 1979.

Bradford, Williams, McKay, Kimbrell, Hamann & Jennings and A. H. Toothman, Miami, for appellant.

Tew & Spittler and Jeffrey Allen Tew, A. B. Freed and Jerold Feuer, Miami, for appellees.

Before HENDRY, BARKDULL and SCHWARTZ, JJ.

SCHWARTZ, Judge.

Federal Insurance Company appeals from, inter alia, final summary judgments which determined that it was required to defend and to provide coverage for various aspects of an action for intentional tort brought against its alleged insureds in the Dade County Circuit Court. We hold that the allegations of the plaintiff's complaint did not bring the action within Federal's policy and therefore reverse the judgments below.

The underlying action was one brought by Robert Mackin against Allan H. Applestein and the Allan H. Applestein Foundation Trust. It was based upon claims of libel, slander, and the intentional infliction of severe emotional distress, allegedly committed by Applestein individually while acting as an agent and on behalf of the trust. The case is presently at issue in the trial court upon Mackin's fourth amended complaint, which seeks compensatory and punitive damages against both defendants. As to each of the alleged torts, that pleading specifically states, concerning the allegations about Mackin which formed the basis of the action, that

"Defendant Appelstein made said allegations in bad faith, with malice, with reckless and wanton disregard for the rights of Plaintiff in Defendant Applestein's personal quest for financial benefit and in an attempt to discredit Plaintiff."

In connection with the asserted derivative liability of the trust, each pertinent count of the fourth amended complaint alleged that Applestein was the "Managing Trustee of said Foundation" and that

"Said actions were taken with full approval and ratification of the controlling interest of Defendant Foundation . . ."

The fourth amended complaint also named the present appellant, Federal Insurance, as an additional party defendant. The company had issued a "personal excess liability policy" to Applestein in which he was the named insured and the foundation trust an additional or omnibus insured. The policy provided coverage for "personal injury" which, it said,

"includes, but is not limited to:

(1) bodily injury, sickness, disease, disability, shock, mental anguish and mental injury;

(2) false arrest, false imprisonment, wrongful entry or eviction, wrongful detention, malicious prosecution or humiliation; and

(3) libel, slander, defamation of character or invasion of rights of privacy; including death resulting therefrom, sustained by any person."

It also, however, contained an exclusion which stated that the personal injury coverage

"shall not apply . . . to any act committed by or at the direction of the insured with intent to cause personal injury or property damage. . . ."

After Federal denied coverage for the liability asserted in Mackin's action against them, Applestein and the trust brought an independent action, joined by Mackin, which sought a declaratory judgment that the carrier was required to defend, and to pay any judgment recovered in the claim for compensatory damages against Applestein personally, ¹ and in both the compensatory and punitive damages claims against the trust. Following extensive discovery, the trial court entered separate summary judgments in the main case and in the declaratory judgment proceeding which held Federal was bound to defend and to provide coverage for those aspects of the primary action.

Our determination to reverse those judgments is based upon the conclusion that the contents of the fourth amended complaint bring the case, as to both defendants, clearly within the terms of the "intentional injury" exclusion. It is well-settled in Florida that an insurer's duty to defend an action against its putative insured is determined by the allegations of the plaintiff's complaint. E. g., National Union Fire Ins. Co. v. Lenox Liquors, Inc., 358 So.2d 533 (Fla.1977); Bennett v. Fidelity & Casualty Co. of New York, 132 So.2d 788 (Fla. 1st DCA 1961). No obligation to defend the action, much less to pay any resulting judgment, arises when the pleading in question shows either the non-existence of coverage or the applicability of a policy exclusion. E. g., Battisti v. Continental Casualty Co., 406 F.2d 1318, 1321 (5th Cir. 1969), and cases cited. This case plainly involves the latter situation.

It has been noted that Mackin's complaint specifically claims that Applestein made his defamatory comments about him "with malice" and in a specific "attempt to discredit" the plaintiff. Notwithstanding the general term providing protection for libel, slander, and the like, these allegations completely negate coverage by conclusively establishing that the exclusion applies. The statement of the court in Employers Commercial Union Ins. Co. of America v. Kottmeier, 323 So.2d 605, 607 (Fla. 2d DCA 1975), is directly applicable here:

Employers Commercial's reliance upon paragraph B.6 of the policy which excludes coverage for 'any act committed by or at the direction of the Insured with intent to cause personal injury' is misplaced. The Florida courts follow the rule that even though the act which causes an injury was intentionally done, liability coverage will not be excluded under an intentional injury exclusion clause unless the insured acted with the specific intent to cause the injury. . . . By the same token, a statement may be intentionally uttered which is ultimately determined to be slanderous, But if the statement was not made with the specific intent to harm the slandered party, liability coverage would not be eliminated by the intentional injury exclusion clause. . . . In essence, a slanderous statement is covered by the policy Unless the statement was made with the specific intent to harm which is equivalent to actual malice. (emphasis supplied)

While the Kottmeier case may be distinguishable, although not meaningfully so, because of the existence in that case of a specific exception to the libel and slander coverage which is not present in the Federal policy, the decision in Shapiro v. Glens Falls Ins. Co., 39 N.Y.2d 204, 383 N.Y.S.2d 263, 347 N.E.2d 624 (1976), is directly on point and most persuasive. At 383 N.Y.S.2d 263-264, 347 N.E.2d 625-626, the court held:

The complaint . . . set forth allegations that Shapiro maliciously spoke of the plaintiffs to one or more of the limited partners in false defamatory words, asserting that the plaintiffs were 'phoneying and doctoring the books and records of the Irving Place Realty Co., that they were flim flamming, cheating and stealing from the investors of the partnership' and, that the words so spoken were false and defamatory, were known to said defendants to be false and defamatory and were spoken willfully and maliciously with intent to injure and damage the plaintiffs and their good name, reputation and credit.

Although 'personal injury' is defined to include 'libel, slander, defamation of character or reputation, invasion of rights or privacy, humiliation or mental anguish', an endorsement to the policy specifically provides that with respect to the definition of 'personal injury', 'such insurance as is afforded by the policy does not apply * * * to any personal injury * * * caused intentionally by or at the direction of the Insured.'

Since appellant seeks coverage for an action in which it was alleged that he spoke falsely, willfully and maliciously with intent to injure, the exclusionary endorsement applies and respondent owes no duty to defend therein or to pay a judgment arising therefrom.

See also Battisti v. Continental Casualty Co., supra; cases collected in Annot., Liability Insurance Willful Injury, 2 A.L.R.3d 1238, 1245, 1249-1250 (1965).

The fourth amended complaint also affirmatively demonstrates the non-existence of coverage for the other defendant, the foundation trust. It is alleged that the tortious acts complained of were committed by Applestein acting as the "managing trustee" of the trust, and that the trust approved and ratified that conduct. Under these allegations, the alleged wrongs must be deemed "committed by or at the direction of" the trust, within the meaning of the exclusion. Roberts v. R & S Liquor Stores, Inc., 164 So.2d 533, 535, 536 (Fla. 1st DCA 1964) is dispositive:

(I)t affirmatively appears without dispute that the assault in this case made by Mackoul on Roberts was either by the insured corporation acting through its manager Mackoul, or was at the direction of the corporation acting through its owner and vice president Schlossman...