Title: Select Design, Ltd. v. Union Mutual Fire Insurance Co.

State: vermont

Issuer: Vermont Supreme Court

Document:

Select Design, Ltd. v. Union Mutual Fire Insurance Co.  (95-203); 165 Vt 69;
674 A.2d 798

[Opinion Filed 22-Mar-1996]

       NOTICE:  This opinion is subject to motions for reargument under
  V.R.A.P. 40 as well as formal revision before publication in the Vermont
  Reports.  Readers are requested to notify the Reporter of Decisions,
  Vermont Supreme Court, 109 State Street, Montpelier, Vermont 05609-0801 of
  any errors in order that corrections may be made before this opinion goes
  to press.


                                 No. 95-203


Select Design, Ltd., Kevin Owens,                 Supreme Court
Jeffrey Beer and Glen Cousins
                                                  On Appeal from
     v.                                           Chittenden Superior Court

Union Mutual Fire Insurance Company               November Term, 1995


Linda Levitt, J.

       Shapleigh Smith, Jr., of Dinse, Erdmann & Clapp, Burlington, for
  plaintiffs-appellants

       Bruce C. Palmer of Downs Rachlin & Martin, P.C., St. Johnsbury, for
  defendant-appellee


PRESENT:   Gibson, Dooley, Morse and Johnson, JJ.

       DOOLEY, J.  Plaintiffs, Select Design, Ltd. (SDL) and certain of its
  officers and employees, sought a declaration that defendant Union Mutual
  Fire Insurance Co. owes them a duty to defend an action brought against
  them by RMH Associates, Inc. (RMH), pursuant to a business owner's
  liability policy defendant issued to SDL.  Plaintiffs appeal from an order
  of the Chittenden Superior Court granting defendant's motion for summary
  judgment and denying plaintiffs' cross-motion for partial summary judgment. 
  We affirm.

       SDL is in the custom design screen-printing business in Burlington,
  and in March 1994 hired Glen Cousins, sales manager of RMH, SDL's
  competitor in Burlington.  At the time, SDL was covered by a business
  owners' liability insurance policy issued by defendant.  Cousins stopped
  working for RMH on March 7, 1994 and immediately began working for SDL.

       On March 10, 1994, RMH sued SDL, along with its president, secretary,
  and Cousins, in Chittenden Superior Court, alleging that, on leaving RMH,
  Cousins took with him proprietary information, including a customer list,
  and then tried to lure RMH customers to SDL using the proprietary
  information he had taken.  The RMH complaint specifically alleged breach of

 

  contract, tortious interference with contractual relations, breaches of
  fiduciary duties by Cousins before and after leaving RMH's employ, unlawful
  destruction of commercial opportunity by disrupting a private stock
  offering, and fraud.  It requested both injunctive relief and damages.

       SDL notified defendant of the RMH lawsuit and requested that it defend
  and indemnify them all in that suit.  Defendant denied coverage, refusing
  to defend or indemnify SDL and its officers.  Plaintiffs thereafter sought
  a declaration that defendant owes a duty to defend and indemnify them in
  the RMH action.

       The policy provides coverage for "bodily injury," "property damage,"
  "personal injury," and "advertising injury."  Plaintiffs' main theory was
  that RMH's damages, if any, arise out of an advertising injury.  Plaintiffs
  also argued that RMH's allegation of unexpected and unintended property
  damage triggered a duty to defend under the coverage for property damage. 
  Finally, plaintiffs argued that RMH's suit also fell under the policy's
  "personal injury" coverage.

       Defendant moved for summary judgment on the ground that it had no
  obligation to defend or indemnify plaintiffs because there was no coverage
  under any of the pertinent policy provisions.  The court ruled that no
  "advertising," as that term is commonly understood, had been alleged in
  RMH's suit.  As to the personal injury and property damage claims, it ruled
  that neither involved an "accident," as required by the policy, which the
  court defined as an unexpected happening without intention and design.  The
  court granted defendant's motion for summary judgment, and the present
  appeal followed.

       We have decided a number of recent cases involving insurance coverage
  disputes that come to us on appeal from the grant of summary judgment to
  the insurer, and the basic principles governing such disputes are clear. 
  See, e.g., City of Burlington v. Associated Elec. & Gas Ins. Servs.,
  ___Vt.___,