In Hardenbergh v. Patrons Oxford Ins. Co., --- A.3d
---, 2013 WL 3752665, (Me. July 16, 2013), the Supreme Judicial
Court of Maine applied Maine law and held that the "business
pursuits" exclusion in a homeowners policy excluded a defense
obligation for a lawsuit alleging that the insured made defamatory
statements in a trade publication that he edited, published, and
owned.
The case arose out of a defamation complaint filed against the
insured. Id. at *1. The complaint alleged that
the insured was the editor, publisher, owner, and principal of
Atlantic Northeast Rails & Ports, a trade publication.
The complaint also alleged the he published defamatory statements
in the publication's newsletter and e-bulletin, as well as on
its website. Id. Specifically, the complaint
alleged that the insured "published false and defamatory
statements about [the plaintiffs] including, but not limited
to, those described in paragraph 12" of the complaint.
Id. (emphasis added).
After receiving the complaint, the insured sought a defense under
his homeowners policy. Id. at *1. The
homeowners policy applied to "personal injury" including
"injury arising out of . . . libel, slander or defamation of
character." Id. The policy, however,
excluded coverage for "injury arising out of the business
pursuits of any insured." Id. (internal
quotations omitted). Although the policy did not define
"business pursuits," it defined "business" to
"include[] trade, profession or occupation."
Id. at *3. Determining that the "business
pursuits" exclusion precluded coverage for the complaint's
allegations, the homeowners insurer declined to defend.
Id. at *1.
Disagreeing with the insurer, the insured filed a declaratory
judgment action seeking a defense and indemnity for the defamation
complaint. Id. at *2. The trial court
granted summary judgment on the duty to defend for the insured,
concluding a duty to defend existed because the "including,
but not limited to" language in the complaint, "could
include statements [the insured] made in his individual capacity
and outside the policy's 'business pursuits'
exclusion." Id. at *2.
On appeal, the Supreme Judicial Court of Maine vacated the trial
court's ruling. Id. at *4. The court found that,
even though the complaint alleged defamation arising from
statements "including but not limited to" those
specifically described in paragraph 12 of the complaint, it also
alleged that all of the defamatory statements appeared in the
insured's trade publication, "which has a place of
business and for which [the insured] is the 'editor, publisher,
owner and principal.'" Id. The court
reasoned that "[s]tatements published in a trade publication
by that publication's 'editor, publisher, owner and
princip[al] arise out of that person's 'business
pursuits.'" Id. Accordingly, no duty
to defend existed because the allegations in the complaint fell
within the "business pursuits" exclusion.
Id.
The Hardenbergh decision addresses the "business
pursuits" exclusion -- an exclusion found in most homeowners
policies. It confirms that a court will not strain to find a
defense obligation when a complaint's allegations clearly fall
within the scope of an exclusion that precludes coverage for an
insured's business pursuits or operations.
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