Hardenbergh v. Patrons Oxford Ins. Co.

• Court: Superior Court of Maine
• Decided: July 17, 2012
• Docket: CUMcv-12-34
• Status: Unpublished

Opinion

STATE OF MAINE SUPERIOR COURT CUMBERLAND, ss. CIVIL ACTION DOCKET NO: CV-12-34 I ~J/)i"J .--- C . .t i 1/ - 7, I? /)-F, CHALMERSHARDENBERGH

Plaintiff

v.

PATRONS OXFORD INSURANCE COMPANY

Defendant ;~:: JJ

DECISION AND ORDER ON PENDING MOTIONS

Before the court are several dispositive motions brought regarding the

plaintiffs claim for declaratory judgment and money damages. Patrons Oxford

Insurance Company ("Patrons" or "Defendant") brought a Motion to Dismiss the

Complaint on February 17, 2012. Chalmers Hardenbergh ("Hardenbergh" or

"Plaintiff") opposed this motion, noting that the Defendant was seeking a judgment

on the merits of the case rather than testing the sufficiency of the complaint.

Plaintiff then filed his Motion for Summary Judgment. The Defendant has opposed

this motion and brought its own Motion for Summary Judgment. The positions of

the parties have been fully, extensively, and repetitively briefed. Oral argument was

held on June 29, 2012. Although procedurally there are three pending motions,

because the substantive arguments advanced in each are the same the court will

consider them as a whole.

1 BACKGROUND

On or about September 16, 2011, Pan Am Systems, Inc., Springfield Terminal

Railway Company, and David Andrew Fink filed a complaint in the U.S. District Court

for the District of Maine against the Plaintiff, C.M. Hardenbergh, P.A., and Atlantic

Northeast Rails & Ports, alleging defamation, defamation per se, false light, and

punitive damages. (Pl. SMF ,-r 8.) The basis for the complaint is stated as follows:

"On multiple occasions as indicated below, the Defendants published, without

privilege, as fact untrue information regarding the Plaintiffs 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 the following .... " (Pl. SMF ,-r 11 (emphasis

added).)

Hardenbergh subsequently tendered the defense of the Pan Am lawsuit to

Patrons, with which he had a Homeowner's Insurance Policy. (Pl. SMF ,-r,-r 2, 9.) The

Homeowner's Policy contains an additional coverage endorsement, covering

"personal injury" which is defined to include "libel, slander or defamation of

character." (Pl. SMF ,-r 6.) However, the additional coverage endorsement also

contains exclusions, one of which states that "personal injury" coverage does not

apply to "injury arising out of the business pursuits of any insured." (Pl. SMF ,-r 7.)

Patrons, by letter dated September 25, 2011, declined to defend Hardenbergh on the

grounds that the alleged defamation arose out of his business pursuits and was

specifically excluded from his policy. (Pl. SMF ,-r 7.)

2 The Plaintiff then brought this action, seeking a declaratory judgment that

Patrons has a duty to defend him in the Pan Am litigation and seeking money

damages for costs already incurred in defending himself.

DISCUSSION

The motion to dismiss standard of review requires the court to consider the

facts alleged in the complaint as true and determine whether the plaintiff has stated

a claim upon which relief may be granted. McAfee v. Cole, 637 A.2d 463, 465 (Me.

1994). The summary judgment standard requires the court to determine if there

are any genuine issues of material fact and, if not, when viewing the facts in the light

most favorable to the non-moving party, determine if the movant is entitled to

judgment as a matter of law. M.R. Civ. P. 56( c); johnson v. McNeil, 2002 ME 99, ,-r 8,

800 A.2d 702.

Maine courts employ the "comparison test" to determine whether or not an

insurer has a duty to defendant an insured. The "comparison test" is performed

solely by comparing the allegation of the underlying complaint with the coverage

provided in the insurance policy. Am. Policyholders' Ins. Co. v. Cumberland Cold

Storage Co., 373 A.2d 24 7, 249 (Me. 1977). "The insured is entitled to a defense if

there exists any legal or factual basis, which could be developed at trial, that

would obligate the insurer to pay under the policy." Am. Policyholders' Ins. Co. v.

Kyes, 483 A.2d 337,339 (Me. 1984) (emphasis in original). "The facts alleged in the

complaint need not make out a claim that specifically and unequivocally falls within

the coverage," as long as the events complained of could be shown at trial to fall

within the policy. Mitchell v. Allstate Ins. Co., 2011 ME 135, ,-r10, 36 A.3d 876. The

3 duty to defend is broad and any policy exclusions are construed strictly against the

insurer. !d. at ,-r 11.

Patrons argues that the underlying complaint only complains of defamatory

statements published in the Atlantic Northeast Rails & Port trade newsletter, e-

bulletin, and/or website and that, because Hardenbergh is the editor, publisher,

owner, and principal of Atlantic Northeast Rails & Ports, all of the alleged

defamatory statements were made by Hardenbergh while operating his business.

The underlying complaint does not identify the capacity in which Hardenbergh

made the specific defamatory statements alleged and by using the language

"including, but not limited to" when referring to the those statements, the

underlying complaint leaves open the possibility of pursuing Hardenbergh

individually. The court cannot assume the intentions of the plaintiff in the

underlying action. The facts alleged in that complaint allow for the possibility that

the defamation claims are asserted against Hardenbergh individually. Because the

underlying facts giving rise to the complaint could be shown at trial to come within

the coverage of the policy, the court finds that Patrons has a duty to defend

Hardenbergh.l

The entry is:

Patrons Oxford Insurance Company's Motions to Dismiss and for Summary

Judgment are DENIED. Chalmers Hardenbergh's Motion for Summary Judgment is

GRANTED. Patrons Oxford Insurance Company is directed to defend Hardenbergh

1The Complaint also sought a declaratory judgment on the question of whether Patrons is required to indemnify Hardenbergh. (Compl. ,-r 2.) Patrons argues and the Plaintiff agrees that because the underlying complaint is still pending in the United States District Court, the indemnity question is premature.

4 in the pending case of Pan Am Systems, Inc. eta/. v. Atlantic Northeast Rails & Ports,

Inc. eta!., U.S. District Court for the District of Maine Case No: 2-11-cv-00339.

Patrons Oxford Insurance Company shall reimburse Hardenbergh for attorneys' fees

and costs incurred to date in the defense of the above cited litigation and

Hardenbergh's reasonable attorneys' fees and costs incurred in the prosecution of

this claim, pursuant to 24-A M.R.S. § 2436-8(2). Hardenbergh is directed to submit

an affidavit detailing the defense costs of each action.

The Clerk is directed to incorporate this Order into the docket by reference

pursuant to M.R. Civ. P. 79(a).

DATE: [~Wheeler Justice, Superior Court

Plaintiff-Jeffrey Edwards Esq Defendant-Hillary Bouchard Esq