Nationwide Mut. Ins. Co. v. Harris Med. Assocs., LLC, 4:13–CV–7 CAS.

• Decision Date: 23 September 2013
• Docket Number: No. 4:13–CV–7 CAS.,4:13–CV–7 CAS.
• Citation: 973 F.Supp.2d 1045
• Parties: NATIONWIDE MUTUAL INSURANCE COMPANY, et al., Plaintiffs, v. HARRIS MEDICAL ASSOCIATES, LLC, et al., Defendants.
• Court: U.S. District Court — Eastern District of Missouri

973 F.Supp.2d 1045

NATIONWIDE MUTUAL INSURANCE COMPANY, et al., Plaintiffs,

v.HARRIS MEDICAL ASSOCIATES, LLC, et al., Defendants.

No. 4:13–CV–7 CAS.

United States District Court,

E.D. Missouri,

Eastern Division.

Sept. 23, 2013.

Philip W. Savrin, Freeman and Mathis, Atlanta, GA, Kevin E. Myers, Danna McKitrick, P.C., St. Louis, MO, for Plaintiff.

David B. Helms, Sarah Anne Pohlman, Lewis, Rice, & Fingersh, L.C., St. Louis, MO, Max G. Margulis, Margulis Law Group, Chesterfield, MO, David Max Oppenheim, Jeffrey A. Berman, Anderson And Wanca, Rolling Meadows, IL, for Defendant.

MEMORANDUM AND ORDER

CHARLES A. SHAW, District Judge.

This declaratory judgment matter is before the Court on plaintiffs' Motion for Judgment on the Pleadings. Defendant St. Louis Heart Center, Inc. (“St. Louis Heart”) opposes the motion, and its opposition is joined in by defendant Harris Medical Associates, LLC (“Harris Medical”). The motion is fully briefed and ready for decision. For the following reasons, the motion will be denied.

Background

Plaintiffs filed this action seeking a declaration that they have no duty to defend their insured Harris Medical for claims asserted in underlying litigation filed by St. Louis Heart. See St. Louis Heart Center, Inc. v. Harris Medical Center, Inc., No. 4:12–CV–1555 JCH (E.D.Mo.).¹ In the underlying litigation, St. Louis Heart asserted three causes of action arising from Harris Medical's alleged transmission of six unsolicited fax advertisements to St. Louis Heart in 2011: (1) violation of the Telephone Consumer Protection Act (“TCPA”); (2) conversion under Missouri common law; and (3) violation of the Missouri Consumer Fraud and Deceptive Business Practices Act. Plaintiffs voluntarily dismissed the deceptive business practices claim, so the only remaining counts are for violations of the TCPA and common law conversion.

Plaintiffs are currently defending Harris Medical in the underlying litigation under a reservation of rights, and in this action seek a declaration of coverage under the following policies:

(1) Businessowners policy 7710 BO 8427593001, issued by Nationwide Mutual Insurance Company with effective dates February 13, 2007 to February 13, 2008 (the “Nationwide Policy”);

(2) Premier Businessowners policies ACP BPOK 2302991511, ACP BPOK 2312991511 & ACP BPOK 2322991511, issued by Nationwide Property and Casualty Insurance Company with effective dates February 13, 2008 to February 13, 2009, February 13, 2009 to February 13, 2010, and February 13, 2010 through the policy's cancellation on March 13, 2010 (the “Nationwide Property Policies”); and

(3) Commercial Umbrella Liability Policy No. ACP CAF 2312991511, issued by Nationwide Mutual Fire Insurance Company with effective dates September 4, 2009 to February 13, 2010 (the “Nationwide Mutual Fire policy”).

A. The Nationwide and Nationwide Property Policies

According to the complaint, the Nationwide and Nationwide Property Policies (collectively referred to as the “Primary Policies”) were issued on a primary basis for successive periods that commenced February 13, 2007 and ended March 13, 2010. (Doc. 1, Exs. C–F). Each of the policies cover claims of “property damage” occurring during the policy period caused by an “occurrence,” as well as “personal and advertising injury” caused by an “offense” committed during the policy period. (Doc. 1, Ex. C at 27; Ex. D at 49, 57; Ex. E at 48, 56; Ex. F at 47, 55.)

In the Primary Policies, “property damage” is defined in pertinent part as “[p]hysical injury to tangible property, including all resulting loss of use of that property” and “[l]oss of use of tangible property that is not physically injured.” (Doc. 1, Ex. C at 39; Ex. D at 71; Ex. E at 70; Ex. F at 69.) “Occurrence” is defined as “an accident, including continuous or repeated exposure to substantially the same general harmful conditions.” (Doc. 1, Ex. C at 39; Ex. D at 70; Ex. E at 69; Ex. F at 68.) Coverage for “property damage” is subject to exclusions including damage that is “expected or intended from the standpoint of the insured.” (Doc. 1, Ex. C at 29; Ex. D at 50; Ex. E at 49; Ex. F at 48.)

In addition, the Primary Policies cover “personal injury” and “advertising injury” caused by an “offense” committed during the policy period. (Doc. 1, Ex. C at 27; Ex. D at 57; Ex. E at 56; Ex. F at 55.) In pertinent part, “offense” includes “oral or written publication of material that violatesa person's right of privacy.” (Doc. 1, Ex. C at 39; Ex. D at 70; Ex. E at 69; Ex. F at 68.)

By endorsement titled “Exclusion—Violation of Statutes That Govern E–Mails, Fax, Phone Calls or Other Methods of Sending Material or Information,” the Primary Policies do not apply to “distribution of material in violation of statutes” and exclude coverage for “ ‘bodily injury’ or ‘property damage’ arising directly or indirectly out of any action or omission that violates or is alleged to violate:

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

....

c. Any statute, ordinance or regulation, other than the TCPA ..., that prohibits or limits the sending, transmitting, communicating or distribution of material or information.”

(Doc. 1, Ex. C at 26; Ex. D at 86; Ex. E at 85; Ex. F at 85.)

B. The Nationwide Mutual Fire Policy

According to the complaint, in addition to the Primary Policies, the Nationwide Mutual Fire Policy was issued on an umbrella basis for the period September 4, 2009 to February 13, 2010. (Doc. 1, Ex. G.) Coverage A of the umbrella policy covers “loss” in excess of the policy limits of “underlying insurance,” so long as the injury or offense occurs during the policy period of the commercial umbrella liability policy. ( Id. at 11.) “[L]oss” is defined in pertinent part as “those sums actually paid in the settlement or satisfaction of a claim which the ‘insured’ is legally obligated to pay as damages because of injury or offense.” ( Id. at 16.) “Underlying insurance,” according to the terms and definitions of the umbrella policy, refers to the Nationwide Property policy with a policy period of February 13, 2009 to February 13, 2010. ( Id. at 6, 9, 16.)

Coverage B of the Nationwide Mutual Fire umbrella policy requires, in the first instance, that there is no coverage under the 2009 Nationwide Property policy. (Doc. 1, Ex. G at 11.) If there is no coverage under the 2009 Nationwide Property policy, Coverage B of the umbrella policy applies to “property damage” and “personal and advertising injury” that takes place during the policy period and is caused by an “occurrence.” ( Id.) The definitions of “property damage” and “personal and advertising injury” are the same as in the Primary Policies. ( Id. at 13.) “[O]ccurrence” includes “a covered offense.” ( Id.)

Coverage is excluded in pertinent part for “bodily injury” or “property damage” that is “expected or intended from the standpoint of the ‘insured.’ ” (Doc. 1, Ex. G at 15.) Similar but not identical to the Primary Policies, the Nationwide Mutual Fire umbrella policy has an endorsement titled “Exclusion—Violation of Consumer Protection Statutes,” that excludes coverage for “ ‘bodily injury’, ‘property damage’, or ‘personal and advertising injury’ arising directly or indirectly out of any action or omission that violates or is alleged to violate” the TCPA, or any “statute, ordinance or regulation ... that addresses, prohibits or limits the electronic printing, dissemination, disposal, sending, transmitting, communicating or distribution of material or information. ( Id. at 31.)

Legal Standard

Rule 12(c) of the Federal Rules of Civil Procedure provides that after the pleadings are closed, a party may move for judgment on the pleadings. This Court has previously stated that “[j]udgment on the pleadings is appropriate only when there is no dispute as to any material facts and the moving party is entitled to judgment as a matter of law.” Ginsburg v. InBev NV/SA, 649 F.Supp.2d 943, 946 (E.D.Mo.2009) (citing Porous Media Corp. v. Pall Corp., 186 F.3d 1077, 1079 (8th Cir.1999), and Westcott v. City of Omaha, 901 F.2d 1486, 1488 (8th Cir.1990)). “A grant of judgment on the pleadings is appropriate ‘where no material issue of fact remains to be resolved and the movant is entitled to judgment as a matter of law.’ ” Poehl v. Countrywide Home Loans, Inc., 528 F.3d 1093, 1096 (8th Cir.2008) (quoted case omitted). Thus, a motion under Rule 12(c) is determined by the same standards that are applied to a motion under Rule 12(b)(6). Ginsburg v. InBev NV/SA, 623 F.3d 1229, 1233 n. 3 (8th Cir.2010).

“For purposes of a motion for judgment on the pleadings, all well-pleaded material allegations of the pleadings of the opposing party must be taken as true, and the motion may be granted only if the moving party is nevertheless clearly entitled to judgment.” JPMorgan Chase Bank, N.A. v. Winget, 510 F.3d 577, 581 (6th Cir.2007) (internal citation and quotation marks omitted); see also United States ex rel. Cafasso v. General Dynamics C4 Sys., Inc., 637 F.3d 1047, 1053 (9th Cir.2011) (“When considering a Rule 12(c) dismissal, we must accept the facts as pled by the nonmovant [.]”).² The principle that a court must accept as true all of the allegations contained in a pleading is inapplicable to legal conclusions, however. Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009). In considering a Rule 12(c) motion, the Court may consider the pleadings themselves, materials embraced by the pleadings, exhibits attached to the pleadings, and matters of public record. Porous Media, 186 F.3d at 1079. In this case, the policies at issue were attached to the complaint as exhibits.

DiscussionA. Choice of Law

Federal jurisdiction of this case is based on diversity of citizenship, 28 U.S.C. § 1332(a). In diversity cases, the choice of law rules of the forum state determine which state's substantive law applies. Klaxon Co. v. Stentor Elec. Mfg. Co., 313 U.S....