Hardenbergh v. Patrons Oxford Ins. Co.
| Decision Date | 16 July 2013 |
| Docket Number | Docket No. Cum–12–387. |
| Citation | 70 A.3d 1237,2013 ME 68 |
| Parties | Chalmers HARDENBERGH v. PATRONS OXFORD INSURANCE COMPANY. |
| Court | Maine Supreme Court |
OPINION TEXT STARTS HERE
James M. Bowie, Esq. (orally), and Hillary J. Bouchard, Esq., Thompson & Bowie, LLP, Portland, for appellant Patrons Oxford Insurance Company.
Jeffrey T. Edwards, Esq. (orally), and Jonathan G. Mermin, Esq., Preti Flaherty Beliveau & Pachios, LLP, Portland, for appellee Chalmers Hardenbergh.
Panel: SAUFLEY, C.J., and ALEXANDER, LEVY, SILVER, MEAD, GORMAN, and JABAR, JJ.
[¶ 1] Patrons Oxford Insurance Company appeals from a summary judgment of the Superior Court (Cumberland County, Wheeler, J.) declaring that Patrons Oxford has a duty to defend Chalmers Hardenbergh, pursuant to his homeowners insurance policy, against a third-party suit. Patrons Oxford contends that it has no duty to defend Hardenbergh because the third-party suit is based entirely on activity falling within the policy's exclusion for the insured's “business pursuits.” We agree, vacate the judgment, and remand the case to the Superior Court for entry of a summary judgment in favor of Patrons Oxford.
[¶ 2] The following undisputed facts appear in the summary judgment record unless otherwise indicated. At all times relevant to this suit, Hardenbergh maintained a homeowners insurance policy with Patrons Oxford.1 Pursuant to an endorsement to that policy, Patrons Oxford has a duty to defend Hardenbergh from claims for “personal injury,” including from claims for “injury arising out of ... libel, slander or defamation of character.” Explicitly excluded from this coverage are claims for “injury arising out of the business pursuits of any insured.”
[¶ 3] In September 2011, Pan Am Systems, Inc. and two other named plaintiffs (collectively, Pan Am) filed a complaint in the United States District Court against Hardenbergh; C.M. Hardenbergh, P.A., a Maine corporation; and Atlantic Northeast Rails & Ports, a publication owned by the corporation. Paragraph 12 of the Pan Am complaint alleges that Hardenbergh and/or the other defendants “published, without privilege, as fact untrue information regarding [Pan Am] in Atlantic Northeast Rails & Ports Newsletters and E–Bulletins, as well as on the Atlantic Northeast Rails & Ports website; such publications contained false and defamatory statements ... including, but not limited to,” certain specifically identified statements made in those publications.
[¶ 4] Paragraph 14 alleges that Hardenbergh and/or the other defendants “published false and defamatory statements about [Pan Am] including, but not limited to, those described in paragraph 12.” Paragraph 15 states, “[t]he false and defamatory statements were published without privilege by Defendants to viewers of the Atlantic Northeast Rails & Ports' Newsletters, E–Bulletins and website.”
[¶ 5] The Pan Am complaint also alleges that “Atlantic Northeast Rails & Ports is a widely read weekly trade newsletter and e-bulletin covering the Northeastern United States, Eastern Quebec and the Canadian Maritimes regions, with a place of business in Yarmouth, Maine.” Further, “Atlantic Northeast Rails & Ports maintains a website that contains back issues of its newsletters, maps and a database about shippers, ports, railroads and intermodal facilities.” Paragraph 7 alleges, “Hardenbergh is the editor, publisher, owner and principal of Atlantic Northeast Rails & Ports.”
[¶ 6] In response to the Pan Am complaint, Hardenbergh tendered defense of the suit to Patrons Oxford. Patrons Oxford declined to defend Hardenbergh.
[¶ 7] In January 2012, Hardenbergh filed in the Superior Court a complaint seeking a declaratory judgment that Patrons Oxford has a duty to defend him in the pending action by Pan Am. Hardenbergh also sought to recover money damages for costs he had incurred to defend himself in that action. Patrons Oxford moved to dismiss Hardenbergh's complaint pursuant to M.R. Civ. P. 12(b)(6). Hardenbergh opposed that motion and moved for summary judgment. Patrons Oxford filed a cross-motion for summary judgment.
[¶ 8] In May, while this matter was pending in the Superior Court, the United States District Court dismissed, with leave to amend, the Pan Am complaint against Hardenbergh. In June, Pan Am filed an amended complaint, which also names Hardenbergh as a defendant.
[¶ 9] In July, after a hearing on the parties' motions, the Superior Court granted Hardenbergh's motion for summary judgment, and denied Patrons Oxford's motions to dismiss and for summary judgment. The court concluded that Patrons Oxford had a duty to defend Hardenbergh against the original Pan Am complaint based on the complaint's “including, but not limited to” language, which the court determined could include statements Hardenbergh made in his individual capacity and outside of the policy's “business pursuits” exclusion. The court did not address whether Patrons Oxford has a duty to defend against the amended Pan Am complaint.
[¶ 10] Patrons Oxford appeals, contending that the trial court should have granted summary judgment in its favor because it has no duty to defend Hardenbergh against the Pan Am lawsuit. Before addressing Patrons Oxford's arguments, we consider, sua sponte, whether the United States District Court's dismissal of the Pan Am complaint, and Pan Am's filing of an amended complaint, renders this appeal moot.
[¶ 11] An appeal is moot “when there is no real and substantial controversy, admitting of specific relief through a judgment of conclusive character.” Doe I v. Williams, 2013 ME 24, ¶ 14, 61 A.3d 718 (quotation marks omitted). Here, the duty to defend against the original Pan Am complaint arose, if at all, upon its filing. See Horace Mann Ins. Co. v. Me. Teachers Ass'n, 449 A.2d 358, 360 (Me.1982). Regardless of whether Patrons Oxford has a duty to defend against the amended complaint, an issue that the trial court did not address and thus is not properly before us, Hardenbergh alleges in this action that he has incurred costs in defending against the original complaint, and he seeks damages. Thus, Patrons Oxford's appeal retains its “controversial vitality,” and is therefore not moot. See Doe I, 2013 ME 24, ¶¶ 14, 18, 61 A.3d 718;see also Smith & Nephew Inc. v. Fed. Ins. Co., 113 Fed.Appx. 99, 102, 105 (6th Cir.2004) ().
[¶ 12] Patrons Oxford argues that the trial court should have concluded that Patrons Oxford has no duty to defend against the original Pan Am complaint because the allegations of the complaint fall within the policy's “business pursuits” exclusion. Our review of whether the trial court erred in granting summary judgment in favor of Hardenbergh is de novo.2See Mitchell v. Allstate Ins. Co., 2011 ME 133, ¶ 8, 36 A.3d 876.
[¶ 13] Whether Patrons Oxford has a duty to defend depends on whether the complaint “contains any allegations that, if proved, could fall within the coverage afforded by the policy.” Cox v. Commonwealth Land Title Ins. Co., 2013 ME 8, ¶ 9, 59 A.3d 1280. An insurer's duty to defend arises exclusively from the allegations in the complaint and the language of the policy. See id. Thus, “[a]n insurer may properly refuse to defend a policyholder if the allegations of the complaint fall entirely within a policy exclusion.” Mitchell, 2011 ME 133, ¶ 13, 36 A.3d 876.
[¶ 14] We begin by examining the language of the policy to determine the scope of coverage, and then turn to the language of the original Pan Am complaint to determine whether it falls within the scope of the policy's coverage. In construing the language of an insurance policy, we interpret unambiguous language in accordance with its plain meaning. See Cox, 2013 ME 8, ¶ 8, 59 A.3d 1280. We strictly construe policy exclusions in favor of coverage. See Mitchell, 2011 ME 133, ¶ 11, 36 A.3d 876.
[¶ 15] Pursuant to the endorsement to the policy, Patrons Oxford has a duty to defend Hardenbergh against claims for damages for “injury arising out of ... libel, slander or defamation of character.” The endorsement, however, explicitly excludes from coverage “injury arising out of the business pursuits of any insured.” The policy does not define the term “business pursuits,” but defines “business” to “include[ ] trade, profession or occupation.” Because the term “business pursuits” pertains to an exclusion from coverage, we strictly construe that term against Patrons Oxford, interpreting it to mean pursuit of one's “trade, profession or occupation.” See id. Thus, the policy requires Patrons Oxford to defend Hardenbergh against claims of injury arising out of “libel, slander or defamation of character,” unless the injury arose out of Hardenbergh's pursuit of his “trade, profession or occupation.”
[¶ 16] We now turn to the original Pan Am complaint to determine whether it “contains any allegations that, if proved, could fall within the coverage afforded by the policy.” See Cox, 2013 ME 8, ¶ 9, 59 A.3d 1280. Because the complaint includes claims for defamation, Patrons Oxford properly concedes...
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