Samsco, et al. v. Hartford, et al.

• Court: District Court, D. New Hampshire
• Decided: May 28, 1999
• Docket: CV-92-564-M
• Status: Published

Opinion

Samsco, et al. v. Hartford, et al. CV-92-564-M 05/28/99 UNITED STATES DISTRICT COURT

DISTRICT OF NEW HAMPSHIRE

Samsco, Inc. and Samuel G. Travis, Plaintiffs

v. Civil No. 92-564-M

Hartford Accident & Indemnity Company; Massachusetts Bay Insurance Company; and Maine Bonding & Casualty Company, Defendants

O R D E R

Defendants Hartford Accident and Indemnity Company

("Hartford") and Maine Bonding and Casualty Company ("Maine

Bonding") move for reconsideration of the court's November 6,

1998 order granting Defendant Massachusetts Bay Insurance

Company's ("Massachusetts Bay") motion for summary judgment.

Hartford and Maine Bonding first argue that it was unfair

for the court to dismiss as insufficient for summary judgment

purposes the unsworn statement of Mr. Travis while accepting the

hearsay statements made by Mr. Ohnesorge at his deposition.1 In

its November 6, 1998 order, the court relied on deposition

testimony by Nordale representative Joel R. Ohnesorge that he had

been told by a customer that Mr. Travis informed the customer in

May of 1989 that Nordale had gone out of business. The court

refused to consider, however, the unsworn statement of Mr. Travis

Alternatively, Hartford and Maine Bonding ask for time to obtain Mr. Travis' sworn statement. That reguest is now moot as Hartford and Maine Bonding have since obtained Mr. Travis' affidavit and sought to submit it to supplement the record. That motion was denied on March 5, 1999. that he had made no disparaging statements about Nordale.

Hartford and Maine Bonding argue that the court's failure to

consider Mr. Travis' statement is unfair, considering that Mr.

Ohnesorge's testimony was itself hearsay and therefore would not

be admissible at trial. The court disagrees.

In the context of this action, Mr. Ohnesorge's testimony is

not hearsay because it is not offered to prove the truth of the

matter asserted. See Fed. R. Evid. 801 (c) . Massachusetts Bay

did not have to prove that Mr. Travis actually made a disparaging

statement prior to January 1, 1990 (the effective date of its

first policy insuring Samsco); it only had to prove that Nordale

alleged that he had. Nordale's complaint provided neither

specific allegations of disparaging statements nor a time frame

in which the statements were allegedly made. However, discovery

was undertaken presumably in an effort to flesh out Nordale's

allegations, and, given Hartford's and Maine Bonding's

representation that "all parties agree that discovery undertaken

in the underlying case provides an appropriate basis to determine

the contractual obligations of the litigants,"2 the court will

accept the deposition testimony of a Nordale representative as

evidence of its allegations in the underlying action. Indeed,

far from objecting to the consideration of such "hearsay"

statements by Mr. Ohnesorge, Hartford and Maine Bonding rely on

Memorandum of Law in Support of the Joint Objection of Hartford Accident & Indemnity Company and Maine Bonding & Casualty Company to the Motion for Summary Judgment Filed on the Behalf of Massachusetts Bay Insurance Company at 3.

2 his testimony regarding statements allegedly made by a Samsco

representative to Karsten Manufacturing in 1990 to support their

argument that disparaging statements were allegedly made during

the term of Massachusetts Bay's policy.

For similar reasons, even if the court had considered Mr.

Travis' unsworn denial that he had made the allegedly disparaging

statement, it would not have created a genuine issue of material

fact that would preclude summary judgment. As noted above, the

truth of Nordale's allegations is immaterial; what does matter is

whether "the cause of action against the insured alleges

sufficient facts in the pleadings to bring it within the express

terms of the policy, even though the suit may eventually be found

to be without merit." United States Fidelity & Guar. Co., Inc.

v. Johnson Shoes, Inc., 123 N.H. 148, 151-52 (1983).

Hartford and Maine Bonding next argue that Mr. Travis'

alleged statement that Nordale had gone out of business "does not

constitute product disparagement within the meaning of the

exclusion relied upon by Massachusetts Bay."3 It is difficult to

appreciate how this argument helps Hartford and Maine Bonding.

As they pointed out, "discovery in the underlying case revealed

that the only allegedly disparaging comments made by Samsco

employees with respect to the underlying plaintiff suggested that

the underlying plaintiff was out of business."4 If the

3Hartford and Maine Bonding's Joint Motion for Reconsideration at 5 5.

4Joint Objection of Hartford Accident & Indemnity Company and Maine Bonding & Casualty Company to Massachusetts Bay

3 statements alleging that Nordale had gone out of business are not

disparaging statements covered under the exclusion, neither are

they disparaging statements covered under the policy itself. The

exclusion at issue states that the policy does not cover

"'[p]ersonal injury' or 'advertising injury' . . . [a]rising out

of oral or written publication of material whose first

publication took place before the beginning of the policy

period." (Policy ZDV3519818, § B(2)(a)(2).) If a statement does

fall within the defined terms "personal injury" or "advertising

injury" for purposes of this exclusion, it must not fall within

those defined terms for purposes of the policy's coverage: "We

will pay those sums that the insured becomes legally obligated to

pay as damages because of 'personal injury' or 'advertising

injury' to which this insurance applies." (Policy ZDV3519818, §

B (1) (a) .)

Finally, Hartford and Maine Bonding argue that even if there

had been an allegedly disparaging statement made prior to the

policy period, it would not constitute the same loss or

occurrence as a similar statement made to a different Nordale

customer during the policy period. This argument was considered

and rejected in the court's original order and the court declines

to reconsider it.

Insurance Company's Motion for Summary Judgment at 5 14 (emphasis added). Conclusion

For the foregoing reasons, Hartford and Maine Bonding's

Joint Motion for Reconsideration (document no. 59) is denied.

SO ORDERED.

Steven J. McAuliffe United States District Judge

May 28, 1999

cc: James G. Walker, Esg. E. Tupper Kinder, Esg. Theodore Wadleigh, Esg.