Opinion
16-P-84
02-24-2017
Wayne H. ROBBINS & another v. HINGHAM MUTUAL FIRE INSURANCE COMPANY & another.
MEMORANDUM AND ORDER PURSUANT TO RULE 1:28
The plaintiffs appeal from a judgment that entered following a Superior Court judge's grant of the defendants' cross motion for summary judgment. The plaintiffs argue that the judge erred in concluding that Hingham Mutual Fire Insurance Company (defendant) did not have a duty to defend or indemnify the plaintiffs on an allegation of slander of title under the plaintiffs' insurance policy. We affirm.
Background . The plaintiffs are named insureds on a homeowners' insurance policy issued by the defendant. On October 25, 2011, the plaintiffs submitted a claim for insurance coverage to the defendant, after being served with a third-party complaint. The complaint alleged a count of slander of title, claiming that the plaintiffs "published false claims of ownership of the Land [owned by Stephen Bjorklund], knowing that the statements of ownership are false and/or acted in reckless disregard of its truth." These claims arose from the plaintiffs' involvement as officers and directors of the Maxwell Conservation Trust, Ltd. (trust). The defendant refused the plaintiffs' request for a defense, and indemnity, if necessary, reasoning that the plaintiffs' insurance policy did not provide coverage for slander of title.
The plaintiffs were served with the complaint in November of 2008.
The complaint also alleged counts of interference with advantageous contractual relationship and civil conspiracy, which are not at issue on appeal.
The trust was incorporated under G. L. c. 180 as a charitable entity to preserve land for recreation, conservation, and responsible development. The plaintiffs have not received a salary or other compensation for their services to the trust.
There are two relevant provisions in the insurance policy which implicate "personal injury" coverage for the plaintiffs. The first is a rider, ML-46 (rider), which states in relevant part:
The applicable coverage term for the policy at issue is 2004-2005.
"Personal injury means damages for which an insured is legally liable caused by false arrest, false imprisonment, wrongful eviction, wrongful entry, wrongful detention, malicious prosecution, misrepresentation, libel, slander, defamation of character or invasion of privacy.
"This insurance does not apply to personal injury:
"...
"2. resulting from the willful violation of a law or ordinance by, at the direction of, or with the consent of an insured;
"...
"5. caused by a publication or statement made by, at the direction of, or with the consent of an insured, if the insured knew or had reason to believe that the publication or statement was false;
"6. resulting from business activities of an insured. (This exclusion does not apply to activities in conjunction with business pursuits which are ordinarily considered nonbusiness in nature.); or
"7. arising from civic duties performed for pay by an insured."
This provision contains a liability limit of $500,000 per "occurrence." The second provision is the "Personal Umbrella Liability Endorsement" (umbrella provision) which states in relevant part:
"INSURING AGREEMENT
"In return for payment of premiums when due, and subject to the terms of this endorsement, we will pay damages for which the ‘insured’ becomes legally responsible due to ... ‘personal injury’ caused by an ‘occurrence’[ ]
"...
"DEFENSE AND ADDITIONAL COVERAGES
"A. Defense
"1. We will defend an ‘insured’ if sued as a result of an ‘occurrence’ covered by this endorsement even if the suit is groundless, false, or fraudulent."
"Occurrence" is defined under the umbrella provision as "[a]n accident ... includ[ing] loss from repeated exposure to similar conditions."
The umbrella provision further defines "personal injury" as an "[i]njury caused by any of the following offenses: a. False arrest; b. False detention; c. False imprisonment; d. Malicious prosecution; e. Libel; f. Slander; g. Defamation; h. Violation of right of privacy; i. Wrongful entry; j. Wrongful eviction; or k. Other invasion of right to private occupancy." This provision includes a liability limit of $1,000,000 per loss, subject to a $1,000 self-insured retention per loss.
On July 1, 2013, a judgment was entered against the plaintiffs in favor of Bjorklund for $1,146,000, plus prejudgment interest, amounting to a total of $1,232,039.27. Subsequent to the plaintiffs' appeal, the parties settled the underlying litigation.
Discussion . We review the judge's summary judgment decision de novo. See Federal Natl. Mort. Assn . v. Hendricks , 463 Mass. 635, 637 (2012).
1. Slander of title . The plaintiffs argue that both the rider and umbrella provisions provide broad personal injury coverage to encompass allegations of slander of title with the defamation torts, particularly, the tort of slander.
However, in the judge's well-written memorandum of decision, he properly concluded that slander and slander of title are distinct legal claims. Liability for slander of title, also referred to as injurious falsehood, occurs when "[o]ne who publishes a false statement harmful to the interests of another ... and (a) he intends for publication of the statement to result in harm to the interests of the other having a pecuniary value, or either recognizes or should recognize that it is likely to do so, and (b) he knows that the statement is false or acts in reckless disregard of its truth or falsity." Dulgarian v. Stone , 420 Mass. 843, 852 (1995), quoting from Restatement (Second) of Torts § 623A (1977). The judge appropriately recognized that while a claim of slander encompasses a "publication of a false and defamatory statement by spoken words of and concerning the plaintiff ," slander of title concerns "disparagement of a person's title to real or personal property ." Despite the defendant's reliance on McDonald v. Green , 176 Mass. 113 (1900), in arguing that the tort of slander includes slander of title, the judge properly concluded that the court's holding in McDonald "was limited to whether slander, as it was used by the [trustee process] statute , included slander of title claims." Indeed, the judge's thorough analysis highlighted the "important differences" between personal defamation (slander) and defamation of property (slander of title) that the Supreme Judicial Court recognized more than a century later, in HipSaver, Inc . v. Kiel , 464 Mass. 517, 522-523 (2013). Therefore, we agree with the judge's conclusion that the defendant did not have a duty to defend or indemnify the plaintiffs under the appropriate policy provisions for the allegations of slander of title. See Billings v. Commerce Ins. Co ., 458 Mass. 194, 201 (2010), quoting from Herbert A. Sullivan, Inc . v. Utica Mut. Ins. Co ., 439 Mass. 387, 394-395 (2003) (no duty to defend where allegations "lie expressly outside the policy coverage").
See Restatement (Second) of Torts § 623A & comment a, § 624 (1977).
This case is also distinguishable from Dilbert v. Hanover Ins. Co ., 63 Mass. App. Ct. 327, 331-333 (2005), where the court held that the term "wrongful entry" as provided by an insurance policy encompassed a claim of "trespass" because the court determined that "trespass equates to wrongful entry." Here, slander and slander of title are legally distinct.
The court in HipSaver, Inc ., used the term "commercial disparagement" interchangeably with "injurious falsehood." See HipSaver, Inc ., supra at 518 n.1.
We also reject the plaintiffs' argument that the appropriate insurance policy provisions are ambiguous and therefore, should be interpreted to consider what an "objectively reasonable insured, reading the relevant policy language, would expect to be covered." Metropolitan Life Ins. Co . v. Cotter , 464 Mass. 623, 635 (2013), quoting from Hazen Paper Co . v. United States Fid. & Guar. Co ., 407 Mass. 689, 700 (1990). To the contrary, both the rider and the umbrella provisions expressly list a series of offenses that define the plaintiffs' personal injury coverage. See Bank v. Thermo Elemental Inc ., 451 Mass. 638, 648 (2008) ; Boazova v. Safety Ins. Co ., 462 Mass. 346, 351 (2012).
2. Misrepresentation . The plaintiffs further argue that the third-party complaint included allegations of misrepresentation, which is expressly listed as a personal injury offense under the rider.
The umbrella provision does not include "misrepresentation" as a covered offense.
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"An insurer has a duty to defend an insured when the allegations in a complaint are reasonably susceptible of an interpretation that states or roughly sketches a claim covered by the policy terms." Billings , supra at 200. This determination is "based on the facts alleged in the complaint, and on facts known or readily knowable by the insurer that may aid in its interpretation of the allegations in the complaint." Ibid .
In "generously consider[ing] the facts alleged in the [t]hird [p]arty [c]omplaint, and facts known or readily knowable by [the defendant] that may have aided in its interpretation of [that complaint]," the judge properly concluded that the allegations against the plaintiffs did not even "roughly sketch a claim for misrepresentation." We agree with the judge's well-analyzed conclusion that the third-party complaint failed to allege the reliance element that is required for a misrepresentation claim. See Cumis Ins. Soc., Inc . v. BJ's Wholesale Club, Inc ., 455 Mass. 458, 471 (2009). Therefore, the defendant did not have a duty to defend or indemnify the plaintiffs against the allegations in the third-party complaint.
Judgment affirmed .