Penzer v. Transportation Ins. Co.
| Decision Date | 16 July 2007 |
| Docket Number | No. 04-61243-CIV.,04-61243-CIV. |
| Citation | 509 F.Supp.2d 1278 |
| Parties | Michael PENZER, Plaintiff v. TRANSPORTATION INSURANCE CO., Defendant v. Southeast Wireless, Inc., et al., Third-Party Defendants. |
| Court | U.S. District Court — Southern District of Florida |
Alexander N. Kapetan, Jr., Marc Aaron Wites, Wites & Kapetan, Lighthouse Point, FL, Douglas Scott Wilens, Paul Jeffrey Geller, Stuart Andrew Davidson, Coughlin Stoia Geller Rudman & Robbins LLP, Boca Raton, FL, for Plaintiff.
Laura Besvinick, Hogan & Hartson, Miami, FL, Arthur J. McColgan, II, Walker Wilcox Matousek LLP, Chicago, IL, for Defendant and Third-Party Defendants.
Ryan M. Henderson, Walker Wilcox Matousek LLP, Chicago, IL, William Halladay White, Jr., Bonner Kiernan Trebach & Crociata, Washington, DC, Alan Michael Burger, McDonald Hopkins LLC, Duncan J. Farmer, Burger Trailor & Farmer, West Palm Beach, FL, for Third-Party Defendants.
ORDER ON MOTIONS FOR SUMMARY JUDGMENT AS TO COVERAGE
The coverage issue in this insurance dispute is whether, under Florida law, the transmission of unsolicited commercial advertisements by facsimile constitutes "oral or written publication of material that violates a person's right to privacy," within a commercial liability policy's coverage for "advertising injury," where it is undisputed that the advertisements did not disclose any private facts about anyone. I conclude that the answer is no.
Accordingly, the partial summary judgment motion of Transportation Insurance Co. as to coverage [D.E. 62] is GRANTED, and the corresponding partial summary judgment motion of the plaintiffs [D.E. 58] is DENIED. All other pending motions are DENIED AS MOOT.
Summary judgment is appropriate if there are no genuine issues of material fact and the moving party is entitled to judgment as a matter of law. See Fed. R.Civ.P. 56(c); DA Mortg., Inc. v. City of Miami Beach, 486 F.3d 1254, 1265 (11th Cir.2007). The facts set forth below are not disputed.
Enacted in 1991 by Congress, the Telephone Consumer Protection Act, 47 U.S.C. § 227 et seq., provides in relevant part that it is "unlawful for any person ... to use any telephone facsimile machine, computer, or other device to send an unsolicited advertisement to a telephone `facsimile machine." See § 227(b)(1)( C). An unsolicited advertisement is "any material advertising the commercial availability of any property, goods, or services which is transmitted to any person without that person's prior express invitation or permission." See § 227(a)(5). The TCPA allows a private right of action for a violation, and permits damages comprising "actual monetary loss" or statutory damages of $500 per violation, whichever is greater. See § 227(b)(3)(A)-( C). If a court finds that a defendant violated the TCPA willfully or knowingly, it may, in its discretion, increase the award to an amount not exceeding treble damages. See id.
In June of 2003, Michael Penzer filed a class action complaint in a Florida state court against Nextel South Corporation. Mr. Penzer alleged that, in May of 2003, Nextel (or one of its authorized agents) sent him an unsolicited facsimile advertisement (a so-called "junk fax") for wireless telephone services in violation of the TCPA. Mr. Penzer also alleged that Nextel's potential customers were not afforded the option of whether to receive the facsimile advertisements, since Nextel did not seek or receive such permission from those customers. Finally, Mr. Penzer alleged that Nextel acted willfully and knowingly. Mr. Penzer requested actual or statutory damages, to be trebled due to Nextel's alleged willful and knowing violation of the TCPA.
Several months later, Nextel filed a third-party complaint against Sunbelt, a "blast-fax" advertiser, and Southeast Wireless, an authorized Nextel agent, seeking indemnity and contribution from any liability Nextel might have to the class in the Penzer action.1 Nextel alleged that Southeast hired Sunbelt to create the unsolicited facsimile advertisement, and that Nextel did not authorize the transmission of the facsimiles or the use of its name or marks. According to the authorized representative agreement between `Nextel and Southeast; Southeast was not allowed to use Nextel's name, trademarks, or service marks without Nextel's prior written agreement.
In December of 2003, Mr. Penzer filed a third-party complaint against Southeast on behalf of himself and the class. Mr. Penzer sought damages and injunctive relief against Southeast under the TCPA.
Southeast requested that its commercial liability insurer, Transportation Insurance Company, defend the class action complaint filed by Mr. Penzer. In February of 2004, Transportation disclaimed coverage on various grounds, and declined to provide Southeast with a defense as to the Penzer class action or the third-party complaint filed by Nextel.
In April of 2004, Southeast and Mr. Penzer entered into a settlement stipulation which included an agreement based on Coblentz v. American Surety Co. of New York, 416 F.2d 1059 (5th Cir.1969). Pursuant to the stipulation, Mr. Penzer agreed to release Southeast from any liability arising out of the alleged TCPA violations, and in exchange Southeast assigned its right to seek insurance coverage under the policy issued by Transportation. In May of 2004, pursuant to the stipulation, Southeast consented to a $12 million judgment, representing the alleged total number of unsolicited facsimile advertisements sent (24,000) multiplied by $500, the amount of statutory damages allowed by the TCPA for each violation. In August of 2004, a Florida state court issued a final order approving the settlement, certifying a settlement class, entering a permanent injunction, and approving an award of attorney's fees and costs. The state court also dismissed Mr. Penzer's claims against Nextel, as well as Nextel's claims against Southeast and Sunbelt.
In September of 2004, Mr. Penzer, as the assignee of Southeast and pursuant to the settlement stipulation, filed this declaratory judgment action against Transportation. The complaint alleges that Southeast caused 24,000 unsolicited facsimile advertisements to be sent to Mr. Penzer and the class members. The complaint further alleges that coverage for Southeast's conduct exists under the policy's "advertising injury" provision, i.e., "oral or written publication of material that violates a person's right of privacy."2
Transportation answered the complaint, and filed a declaratory judgment counterclaim against Mr. Penzer. In its counterclaim, Transportation alleges that it has no obligation under the policy to defend or indemnify Southeast for any violations of the TCPA.
In construing an insurance policy, Florida courts look to the "plain language" of the document. The policy is "read as a whole," endeavoring to "give every provision its full meaning and operative effect." Swire Pacific Holdings, Inc. v. Zurich Ins. Co., 845 So.2d 161, 165, 166 (Fla.2003). See also Fla. Stat. § 627.419(1) (); Duran v. Owners Ins. Co., 779 So.2d 307, 308 (Fla. 2nd DCA 1999) (). "It is the policy's terms which define the coverage, not the insured's reasonable expectations." State Farm Fire & Cas. Co. v. Castillo, 829 So.2d 242, 245 (Fla. 3rd DCA 2002). See also Deni Ass. of Florida v. State Farm Fire & Cas. Co., 711 So.2d 1135, 1140 (Fla.1998) ().
In Florida, whether or not a policy provision is ambiguous is a question of law. See Arriaga v. Florida Pacific Farms, LLC, 305 F.3d 1228, 1246 (11th Cir.2002). Auto-Owners Ins. Co. v. Anderson, 756 So.2d 29, 34 (Fla. 2000) (citations omitted). The absence of a definition, however, does not necessarily mean that a term is ambiguous. See Deni Ass., 711 So.2d at 1139. Similarly, "just because a provision is complex and requires analysis for application, it is not automatically rendered ambiguous." Swire Pacific, 845 So.2d at 165.
The commercial liability policy that Transportation issued to Southeast affords coverage for "damages because of ... `advertising injury' to which this insurance applies." It specifically states that Transportation "shall have no duty to defend [Southeast] against any `suit' seeking damages for ... `advertising injury' to which this insurance does not apply."
The policy defines "advertising injury" as "injury arising out of one or more of the following offenses:
a. Oral or written publication of material that slanders or libels a person or organization or disparages a person's or organization's goods, products, or services;
b. Oral or written publication of material that violates a person's right of privacy;
c. Misappropriation of advertising ideas or style of doing business; or
d. Infringement of copyright, title, or slogan."
(emphasis added). The terms "publication," "material," and "right of privacy" are not defined by the policy.
There are two relevant exclusions in the policy for "advertising injury." The first excludes coverage for "advertising injury" arising "out of the willful violation of a penal statute or ordinance committed by or with the consent of the insured." The second excludes coverage for ...
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