Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-azd-2_10-cv-02137/USCOURTS-azd-2_10-cv-02137-5/pdf.json

Nature of Suit Code: 320
Nature of Suit: Assault, Libel, and Slander
Cause of Action: 28:1332 Diversity-Libel,Assault,Slander

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WO 

IN THE UNITED STATES DISTRICT COURT 

FOR THE DISTRICT OF ARIZONA 

Michael E. Tennenbaum, 

Plaintiff, 

v. 

Arizona City Sanitary District, et al., 

Defendants.

No. CV-10-02137-PHX-GMS

ORDER 

 Pending before the Court are the Objections to the Magistrate Judge’s 

Recommended Disposition of the Cross-Motions for Summary Judgment on Insurance 

Coverage by Plaintiff Michael Tennenbaum. (Doc. 243.) For the following reasons, the 

Court grants the motion in part and denies the motion in part. The Court orders that the 

“Order” entered by Magistrate Judge Mark E. Aspey (Doc. 242) shall be designated a 

Report and Recommendation (R & R). The Court adopts the R & R in part and rejects it 

in part. 

BACKGROUND 

 Plaintiff Michael Tennenbaum sued Defendants Arizona City Sanitary District, 

Francis J. Slavin PC, Francis J. Slavin, and Carol J. Slavin for libel, slander, and false 

light invasion of privacy. (Doc. 1.) American Guarantee & Liability Insurance Company 

(“American Guarantee”), which insured Francis J. Slavin PC and Francis J. Slavin 

(hereafter, collectively, “Slavin”), defended the lawsuit under a reservation of rights. 

(Doc. 222, Exh. 3 at 1, 8). Slavin’s attorney informed American Guarantee that if it did 

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not settle the case, Slavin and Tennenbaum planned to enter a Morris agreement1 to settle 

the case and stipulate to the judgment. (Id., Exh. 3 at 2, 25). American Guarantee did not 

settle. Slavin and Tennenbaum entered a Morris agreement pursuant to which the Court 

entered judgment against Slavin for $900,000 and Tennenbaum agreed not to collect any 

part of the judgment from Slavin, but rather to “attempt to recover and collect the 

Judgment solely and exclusively against American Guarantee.” (Doc. 208.) 

 Tennenbaum filed an application for a writ of garnishment and summons to 

American Guarantee (Doc. 209), which the Court issued. (Doc. 210.) The Court held a 

status conference and referred the matter to Magistrate Judge Mark E. Aspey “for all 

further proceedings.” (Doc. 220.) Tennenbaum and American Guarantee filed crossmotions for summary judgment, Tennenbaum seeking to enforce the judgment against 

American Guarantee, and American Guarantee denying liability as a matter of law under 

the terms of its contract with Slavin. The magistrate judge held oral argument (Doc. 239) 

and entered an order denying both parties’ motions. (Doc. 242.) Tennenbaum timely 

filed an objection to what he termed the magistrate judge’s “recommended disposition of 

the cross-motions for summary judgment.” (Doc. 243.) 

 This Court has jurisdiction pursuant to 28 U.S.C. § 636(b). 

DISCUSSION 

I. Legal Standard 

 The Federal Magistrates Act, 28 U.S.C. § 631 et seq., “distinguishes between 

nondispositive matters under 28 U.S.C. § 636(b)(1)(A) and dispositive matters heard 

pursuant to 28 U.S.C. § 636(b)(1)(B).” United States v. Abonce-Barrera, 257 F.3d 959, 

968 (9th Cir. 2001). “Under 28 U.S.C. § 636(b)(1)(A), a district judge may designate a 

magistrate judge to hear any nondispositive pretrial matter pending before the court.” 

Estate of Connors v. O’Connor, 6 F.3d 656, 658 (9th Cir. 1993) (emphasis in original). 

Regarding pretrial matters heard by a magistrate judge, the Federal Magistrate Act 

 

1 United Servs. Auto. Ass’n v. Morris, 154 Ariz. 113, 741 P.2d 246 (1987). 

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provides, in pertinent part: 

[A] judge may designate a magistrate to hear and determine any pretrial matter pending before the court, except a motion for injunctive relief, for judgment on the pleadings, for summary judgment, . . . to dismiss for failure to state a claim upon which relief can be granted, and to involuntarily dismiss an action. 

28 U.S.C. § 636(b)(1)(A). 

 Pursuant to section 28 U.S.C. § 636(c), dispositive motions can be decided by a 

magistrate judge only “[u]pon special designation by the district court and with the 

consent of the parties.” Estate of Connors, 6 F.3d at 658. Absent party consent, a district 

judge may nonetheless authorize a magistrate judge to “conduct hearings, including 

evidentiary hearings, and to submit to a judge of the court proposed findings of fact, and 

recommendations for disposition” of dispositive motions. 28 U.S.C. § 636(b)(1)(B). 

“The primary difference between subsections 1(A) and 1(B) is that the former allows the 

magistrate to ‘determine’ the matter (subject to the review of the district court for clear or 

legal error) while the latter allows the magistrate only to submit ‘proposed findings and 

recommendations’ for the district court’s de novo review.” Reynaga v. Cammisa, 971 

F.2d 414, 416 (9th Cir. 1992). 

 Here, the parties did not consent to have their cross-motions for summary 

judgment decided by a magistrate judge. Therefore, the magistrate judge was only 

authorized to recommend denial of the motions, subject to this Court’s de novo review. 

Id. at 417 (“[An] order was beyond the magistrate’s authority: it was beyond his 

jurisdiction and was, in essence, a legal nullity.). As such, the Court regards the 

magistrate judge’s “order” as a Report and Recommendation and conducts de novo

review. 

 The Court grants summary judgment when the movant “shows that there is no 

genuine dispute as to any material fact and the movant is entitled to judgment as a matter 

of law.” Fed. R. Civ. P. 56(a). In making this determination, the Court views the 

evidence “in a light most favorable to the non-moving party.” Warren v. City of 

Carlsbad, 58 F.3d 439, 441 (9th Cir. 1995). Where the parties have filed cross-motions 

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for summary judgment, the Court “evaluate[s] each motion independently, ‘giving the 

nonmoving party in each instance the benefit of all reasonable inferences.’” Lenz v. 

Universal Music Corp., 801 F.3d 1126, 1130-31 (9th Cir. 2015) (quoting ACLU v. City of 

Las Vegas, 333 F.3d 1092, 1097 (9th Cir. 2003)). “[A] party seeking summary judgment 

always bears the initial responsibility of informing the district court of the basis for its 

motion, and identifying those portions of [the record] which it believes demonstrate the 

absence of a genuine issue of material fact.” Celotex Corp. v. Catrett, 477 U.S. 317, 323 

(1986). 

 The party opposing summary judgment “may not rest upon the mere allegations or 

denials of [the party’s] pleadings, but . . . must set forth specific facts showing that there 

is a genuine issue for trial.” Fed. R. Civ. P. 56(e); see Matsushita Elec. Indus. Co. v. 

Zenith Radio Corp., 475 U.S. 574, 586–87 (1986); Brinson v. Linda Rose Joint Venture, 

53 F.3d 1044, 1049 (9th Cir. 1995). Substantive law determines which facts are material, 

and “[o]nly disputes over facts that might affect the outcome of the suit under the 

governing law will properly preclude the entry of summary judgment.” Anderson v. 

Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). “A fact issue is genuine ‘if the evidence is 

such that a reasonable jury could return a verdict for the nonmoving party.’” Villiarimo v. 

Aloha Island Air, Inc., 281 F.3d 1054, 1061 (9th Cir. 2002) (quoting Anderson, 477 U.S. 

at 248). Thus, the nonmoving party must show that the genuine factual issues “can be 

resolved only by a finder of fact because they may reasonably be resolved in favor of 

either party.” Cal. Architectural Bldg. Prods., Inc. v. Franciscan Ceramics, Inc., 818 

F.2d 1466, 1468 (9th Cir. 1987) (quoting Anderson, 477 U.S. at 250). 

II. Analysis 

A. Morris Agreements 

 The settlement agreement between Tennenbaum and Slavin stipulates that Slavin 

did not act intentionally or maliciously. (Doc. 226, Exh. F at 5.) Nonetheless, this 

stipulated fact is not binding on American Guarantee. Quihuis v. State Farm Mut. Auto. 

Ins. Co., 235 Ariz. 536, 538, 334 P.3d 719, 721 (2014); United Servs. Auto. Ass’n v. 

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Morris, 154 Ariz. 113, 741 P.2d 246 (1987). 

 In Morris, the Arizona Supreme Court held that an “insurer’s insertion of a policy 

defense by way of reservation or nonwaiver agreement narrows the reach of the 

cooperation clause [in an insurance contract] and permits the insured to take reasonable 

measures to protect himself against the danger of personal liability,” and therefore “an 

insured being defended under a reservation of rights may enter into [a settlement 

agreement establishing the insured’s liability to the claimant] without breaching the 

cooperation clause” as long as the agreement is “made fairly, with notice to the insurer, 

and without fraud or collusion on the insurer.” 154 Ariz. at 119. 

 When a claimant and an insured defendant enter a Morris agreement, “the binding 

effect of stipulated facts depends on whether they prove the liability of the insured or the 

insurer.” Groth v. Owners Ins. Co., No. CV-12-1846-PHX-SMM, 2014 WL 2194801, at 

*3 (D. Ariz. May 27, 2014). “If a stipulated fact establishes an element of coverage, it is 

not binding upon the insurer if the consent judgment could be sustained without that 

fact.” Id.; see also Morris, 154 Ariz. at 120 (“[A]ny stipulation of facts essential to 

establishing coverage would be worthless,” and thus a claimant who enters into a Morris

agreement with an insured “accept[s] the risk that the insureds’ actions would be found 

intentional within the meaning of the exclusion, in which case he would have no source 

from which to recover.”). “[W]hen an injured party obtains a default judgment against an 

insured pursuant to a Damron or Morris agreement, that judgment will bind the insurer in 

a coverage case as to the existence and extent of the insured’s liability.” Quihuis, 235 

Ariz. at 546-47, 334 P.3d at 729-30. “[H]owever, the judgment will not preclude the 

insurer from litigating its identified basis for contesting coverage, irrespective of any 

fault or damages assessed against the insured.” Id. at 547, 334 P.3d at 730. 

 Although an insurer has the right to litigate coverage, it does not have “an absolute 

right to relitigate all aspects of the liability case, including liability and amount of 

damages,” as such relitigation “would destroy the purpose served by allowing insureds to 

enter into [Morris] agreements because claimants would never settle with insureds if they 

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never could receive any benefit.” Morris, 154 Ariz. at 120. On the other hand, “an 

insured being defended under a reservation might settle for an inflated amount or 

capitulate to a frivolous case merely to escape exposure or further annoyance,” and 

indeed might be “quite willing to agree to anything as long as plaintiff promised [the 

insured] full immunity.” Id. Therefore, “neither the fact nor amount of liability to the 

claimant is binding on the insurer unless the insured or claimant can show that the 

settlement was reasonable and prudent.” Id. “The indemnitee need not establish, 

however, that he would have lost the case; he need only establish that given the 

circumstances affecting liability, defense and coverage, the settlement was reasonable.” 

Id. “The test as to whether the settlement was reasonable and prudent is what a 

reasonably prudent person in the insureds’ position would have settled for on the merits

of the claimant’s case.” Id. at 121. 

 Here, for the purposes of the parties’ cross-motions for summary judgment, the 

reasonableness and prudence of the settlement is not at issue because the parties dispute 

the preliminary issue of coverage. American Guarantee asserts that Slavin’s acts are 

excluded from coverage under the policy as a matter of law; whereas Tennenbaum asserts 

that Slavin’s policy provides coverage, as a matter of law. 

 B. Slavin’s Policy Exclusions 

 1. Purported Ambiguity in Slavin’s Policy 

 Tennenbaum asserts that the language of Slavin’s insurance policy is ambiguous, 

and that therefore it must be construed against American Guarantee in favor of coverage. 

(Doc. 243 at 7.) 

 Under Arizona law, “[p]rovisions of insurance policies are to be construed in a 

manner according to their plain and ordinary meaning.” Sparks v. Republic Nat. Life Ins. 

Co., 132 Ariz. 529, 534, 647 P.2d 1127, 1132 (1982). Where a clause is ambiguous, it 

should be interpreted “by looking to legislative goals, social policy, and the transaction as 

a whole.” First Am. Title Ins. Co. v. Action Acquisitions, LLC, 218 Ariz. 394, 397, 187 

P.3d 1107, 1110 (2008). “If an ambiguity remains after considering these factors,” the 

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ambiguity is construed against the insurer. Id. “[T]he general rule is that while coverage 

clauses are interpreted broadly so as to afford maximum coverage to the insured, 

exclusionary clauses are interpreted narrowly against the insurer.” Scottsdale Ins. Co. v. 

Van Nguyen, 158 Ariz. 476, 479, 763 P.2d 540, 543 (App. 1988). “[T]he insurer bears 

the burden to establish the applicability of any exclusion.” Keggi v. Northbrook Prop. & 

Cas. Ins. Co., 199 Ariz. 43, 46, 13 P.3d 785, 788 (App. 2000). 

 Slavin’s insurance policy provides coverage for damages and “claim expenses,” 

(Doc. 222, Exh. 1 at 5,) defined in part as “fees, costs and expenses charged by attorneys 

retained or approved by the Company for a Claim for Personal Injury brought against an 

Insured.” (Id. at 11.) “Personal Injury” is defined as “an allegation of libel, slander, 

violation of a right of privacy, false arrest, detention, imprisonment, wrongful entry, 

eviction, malicious prosecution or abuse of process arising from the rendering of Legal 

Services for others unless deemed uninsurable under the law pursuant to which this 

policy shall be construed.” (Id. at 12.) Intentional acts are excluded from coverage under 

the policy. (Id. at 6.) 

 Tennenbaum asserts that the policy is ambiguous because “intentional, willful 

and/or malicious conduct are essential elements of the torts of false imprisonment, abuse 

of process, [and] malicious prosecution,” such that “while on the one hand, Slavin’s 

policy provides coverage for these intentional torts, on the other hand, it purports to deny 

coverage for these same torts through the intentional acts exclusion.” (Doc. 243 at 7.) 

Tennenbaum argues that this “internal inconsistency” renders the entire intentional acts 

exclusion ambiguous such that the contract must be construed in favor of coverage. (Id.) 

This argument is not persuasive for two reasons. 

 First, the argument has no bearing on the torts for which Slavin is liable to 

Tennenbaum. Under Arizona law, defamation can be an intentional, reckless, or 

negligent act. Peagler v. Phoenix Newspapers, Inc., 114 Ariz. 309, 315, 560 P.2d 1216, 

1222 (1977). False light invasion of privacy, a tort which is distinct from defamation 

under Arizona law, can be intentional or reckless. Godbehere v. Phoenix Newspapers, 

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Inc., 162 Ariz. 335, 340, 783 P.2d 781, 786 (1989). As such, there is no ambiguity 

regarding the policy’s coverage of defamatory acts: they are covered, except when the 

acts are intentional (or when one of the other delineated exclusions applies). Even if 

Slavin’s policy could be considered ambiguous regarding false imprisonment and other 

necessarily intentional torts, any such ambiguity would not affect the issue of Slavin’s 

coverage for defamation and false light invasion of privacy. 

 Second, intentional wrongdoing is uninsurable under Arizona law. Transamerica 

Ins. Grp. v. Meere, 143 Ariz. 351, 356, 694 P.2d 181, 186 (1984) (“[P]ublic policy . . . 

forbids contracts indemnifying a person against loss resulting from his own willful 

wrongdoing . . . [in order to] prevent an insured from acting wrongfully with the security 

of knowing that his insurance company will ‘pay the piper’ for the damages.”). Even 

when an insurance policy is truly ambiguous, it cannot be construed to provide coverage 

for intentional acts of wrongdoing. Wilshire Ins. Co. v. S.A., 224 Ariz. 97, 99-100, 227 

P.3d 504, 506-07 (App. 2010). 

 The Court therefore holds as a matter of law that Slavin’s policy unambiguously 

excludes intentional acts from its coverage of defamation and false light invasion of 

privacy. 

 2. “Actual Malice” versus Intent and/or Maliciousness 

 The insurance policy Slavin purchased from American Guarantee provides that 

American Guarantee will cover “Damages and Claim Expenses because of a Claim . . . 

based on an act or omission in the Insured’s rendering or failing to render Legal Services 

for others.” (Doc. 222, Exh. 1 at 5.) However, the policy excludes from coverage: 

any Claim based upon or arising out of . . . any intentional, criminal, 

fraudulent, malicious, or dishonest act or omission by an Insured; except that this exclusion shall not apply in the absence of a final adjudication or admission by an Insured that the act or omission was intentional, criminal, 

fraudulent, malicious, or dishonest. 

(Id. at 6.) 

 In the underlying case, Slavin moved for summary judgment on the grounds that 

“[t]he statements upon which Tennenbaum’s causes of action are based are not, as a 

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matter of law, defamatory.” (Doc. 171 at 1.) The Court denied the motion, holding as a 

matter of law that the statements were “capable of bearing a defamatory meaning” and 

leaving to the fact-finder the issue of whether the statements were in fact defamatory. 

(Doc. 192 at 6-10) (quoting Yetman v. English, 168 Ariz. 71, 79, 811 P.2d 323, 331 

(1991)). 

 The Court also held that Tennenbaum is a limited-purpose public figure. (Doc. 

192 at 16) (“Tennenbaum did not address ACSD’s argument that he is a limited-purpose 

public figure and that the matter in question was a matter of public concern. . . . The 

Court therefore assumes that ACSD is correct.”). As a public figure, Tennenbaum had 

the heightened standard of proving at trial that Slavin acted with “actual malice.” (Id.) 

(citing Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 255-56 (1986)). Because “actual 

malice” is an element of the claim that Tennenbaum would have had to prove at trial had 

he not entered into the Morris agreement with Defendants, the Morris agreement and 

stipulated judgment conclusively establish that Slavin acted with “actual malice.” The 

judgment cannot be sustained without that fact. Cf. Groth, 2014 WL 2194801, at *3. 

 Nonetheless, the established fact that Slavin acted with “actual malice” does not 

establish that his act was “intentional” or “malicious” under the terms of the insurance 

policy. A statement is made with “actual malice” in defamation law when it is made 

“with knowledge that it was false or with reckless disregard of whether it was false or 

not.” New York Times Co. v. Sullivan, 376 U.S. 254, 279-80 (1964). “Actual malice” is 

a term of art and an unfortunate misnomer—it is unrelated to the ordinary meaning of 

malice as ill will. See, e.g., Masson v. New Yorker Magazine, Inc., 501 U.S. 496, 510 

(1991) (“Actual malice under the New York Times standard should not be confused with 

the concept of malice as an evil intent or a motive arising from spite or ill will.”); HarteHanks Commc’ns, Inc. v. Connaughton, 491 U.S. 657, 666 n.7 (1989) (“The phrase 

‘actual malice’ is unfortunately confusing in that it has nothing to do with bad motive or 

ill will.”); Selby v. Savard, 134 Ariz. 222, 228, 655 P.2d 342, 348 (1982) (differentiating 

between “actual malice” and the separate concept of “common-law malice—spite and ill 

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will”). Neither maliciousness nor intent to harm is a necessary element of defamation 

with “actual malice.” See Selby, 134 Ariz. at 225-26 (finding defamation with “actual 

malice” where defendant “had actual knowledge of the probable falsity of the allegations 

and published them with, at the very least, reckless disregard of whether they were true or 

false”). 

 “In order to constitute ‘intent’ in an intentional acts exclusion . . . , the insured 

must desire to harm the plaintiff.” Transamerica Ins. Grp. v. Meere, 143 Ariz. 351, 359, 

694 P.2d 181, 189 (1984). “The presumption that a person intends the ordinary 

consequences of his voluntary actions, used in determining responsibility for the 

consequences of [a] voluntary act, has no application to the interpretation of terms used 

in insurance contracts.” Farmers Ins. Co. of Arizona v. Vagnozzi, 138 Ariz. 443, 449, 

675 P.2d 703, 709 (1983). “[T]he trier of fact must inquire into the actor’s subjective 

intent.” Id. “An act may be so certain to cause a particular injury that the intent to cause 

the harm is inferred as a matter of law”—“[f]or example, punching someone in the face 

with a fist.” Id. But summary judgment is inappropriate where the question of 

“[w]hether the injury was the intended result of [the insured’s] act or whether the act 

constituted negligent or grossly reckless conduct is a matter upon which reasonable 

minds can differ.” Id. at 450. 

 Here, reasonable minds could differ as to whether Slavin’s acts of defamation with 

“actual malice”—that is, with knowledge that the statements were false or with reckless 

disregard of whether or not they were false—were done with the intention of harming 

Tennenbaum and/or done with ill will. “The facts in this case are undisputed, but from 

those undisputed facts different inferences can be drawn.” Id. at 449. Whether Slavin’s 

acts were intentional and/or malicious is an open question of fact,2

 and therefore, the 

Court denies both parties’ cross-motions for summary judgment. 

 2

 Slavin’s Declaration asserting that he did not intend to hurt Tennenbaum and had no 

malice toward him, (Doc. 222, Exh. 3,) when viewed in the light most favorable to American Guarantee, fails to meet the burden of making “a prima facie showing that no issue of material fact exists for trial” on the issue of Slavin’s subjective intent. City of Phoenix v. Space Data Corp., 111 Ariz. 528, 528-29, 534 P.2d 428, 428-29 (1975). 

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C. Disingenuousness 

 American Guarantee argued in its cross-motion for summary judgment that 

Tennenbaum’s position that Slavin did not intend to injure him “contradicts the 

allegations that Tennenbaum made against Slavin throughout the underlying litigation.” 

(Doc. 226 at 13.) The magistrate judge interpreted this argument as urging the 

application of the doctrine of judicial estoppel. (Doc. 242 at 19.) The magistrate judge 

“decline[d] to invoke the doctrine,” but nonetheless asserted in dicta that “Plaintiff’s 

present assertions can certainly be characterized as disingenuous.” (Id. at 21-22.) 

Tennenbaum objects. (Doc. 243 at 3-5.) 

 “Judicial estoppel, sometimes also known as the doctrine of preclusion of 

inconsistent positions, precludes a party from gaining an advantage by taking one 

position, and then seeking a second advantage by taking an incompatible position.” In re 

Hoopai, 581 F.3d 1090, 1097 (9th Cir. 2009) (quoting Whaley v. Belleque, 520 F.3d 997, 

1002 (9th Cir. 2008) (quoting Rissetto v. Plumbers & Steamfitters Local 343, 94 F.3d 

597, 600 (9th Cir. 1996))). “It is an equitable doctrine invoked by a court at its 

discretion.” Id. (quoting New Hampshire v. Maine, 532 U.S. 742, 750 (2001) (quoting 

Russell v. Rolfs, 893 F.2d 1033, 1037 (9th Cir. 1990))). Judicial estoppel “is intended to 

protect the integrity of the judicial process by preventing a litigant from playing fast and 

loose with the courts.” Id. (quoting Whaley v. Belleque, 520 F.3d 997, 1002 (9th Cir. 

2008) (quoting Wagner v. Prof’l Eng’rs in Cal. Gov’t, 354 F.3d 1036, 1044 (9th Cir. 

2004))). In determining whether to apply the doctrine, a court “typically consider[s] 

(1) whether a party’s later position is clearly inconsistent with its original position; 

(2) whether the party has successfully persuaded the court of the earlier position, and 

(3) whether allowing the inconsistent position would allow the party to derive an unfair 

advantage or impose an unfair detriment on the opposing party.” Id. (quoting United 

States v. Ibrahim, 522 F.3d 1003, 1009 (9th Cir.2008) (quoting New Hampshire v. Maine,

532 U.S. at 750-51)). 

/ / / 

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 The magistrate judge began with the premise that “Plaintiff vigorously argued in 

defending against the motions for [summary judgment] before Judge Snow that 

Defendant’s statements were defamatory and that, even under a heightened pleading 

standard, Plaintiff could present sufficient evidence to a jury that the statements were 

made with malice,” and that this Court adopted Tennenbaum’s view “that the statements 

could be found to be malicious.” (Doc. 242 at 20.) This is an incorrect premise. 

Tennenbaum maintained that he could prove that the statements were made with 

actual malice, this Court held that the statements could be found to be defamatory with 

actual malice, and the Morris agreement conclusively determines that the statements 

were made with actual malice. As discussed earlier in this Order, a determination that 

the statements were made with “actual malice” is not determinative as to the present 

question of whether the statements were made maliciously (with ill will) or intentionally 

(with intent to harm). Masson, 501 U.S. at 510 (“Actual malice under the New York 

Times standard should not be confused with the concept of malice as an evil intent or a 

motive arising from spite or ill will.”); Harte-Hanks, 491 U.S. at 666 n.7 (1989) (“The 

phrase ‘actual malice’ is unfortunately confusing in that it has nothing to do with bad 

motive or ill will.”). 

 Tennenbaum did plead in his Complaint that “Slavin’s and the District’s conduct 

was gross, wanton, malicious and oppressive, and showed spite, ill-will and reckless 

indifference to the interest of others.” (Doc. 1 at 7). However, he pled in the alternative 

that “Slavin and the District: (i) knew that the Letter contained false Statements; and/or 

(ii) acted with reckless disregard or negligence in failing to ascertain the truth of the 

Statements.” (Id.) It is well established that a party may plead in the alternative, and 

such pleading does not suggest bad faith or disingenuousness. Federal Rule of Civil 

Procedure 8(d) specifically provides: 

(2) Alternative Statements of a Claim or Defense. A party may set out 2 or more statements of a claim or defense alternatively or hypothetically, either in a single count or defense or in separate ones. If a party makes alternative statements, the pleading is sufficient if any one of them is sufficient. (3) Inconsistent Claims or Defenses. A party may state as many separate claims or defenses as it has, regardless of consistency. 

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 Moreover, the Ninth Circuit has recognized that the demands of litigation often 

necessitate pleading in the alternative: 

At the time a complaint is filed, the parties are often uncertain about the 

facts and the law; and yet, prompt filing is encouraged and often required by a statute of limitations, laches, the need to preserve evidence and other 

such concerns. In recognition of these uncertainties . . . we allow pleadings in the alternative—even if the alternatives are mutually exclusive. As the 

litigation progresses, and each party learns more about its case and that of 

its opponents, some allegations fall by the wayside as legally or factually unsupported. This rarely means that those allegations were brought in bad faith or that the pleading that contained them was a sham. Parties 

usually abandon claims because, over the passage of time and through 

diligent work, they have learned more about the available evidence and 

viable legal theories, and wish to shape their allegations to conform to these 

newly discovered realities. We do not call this process sham pleading; we call it litigation. 

PAE Gov’t Servs., Inc. v. MPRI, Inc., 514 F.3d 856, 858-59 (9th Cir. 2007) (emphasis 

added). 

 It is difficult to know another person’s subjective intentions, and it is reasonable 

for a plaintiff to plead in the alternative that a defendant behaved intentionally, 

recklessly, or negligently—and then following a Morris agreement, to assert against the 

insurer that the insured acted without intent to harm.3

 Indeed, the plaintiff in Morris

alleged that the insured parties had injured him intentionally. 154 Ariz. at 115, 741 P.2d 

at 248. The Arizona Supreme Court did not factor that pleading into its detailed analysis 

but rather held that the parties were “free to litigate the facts of the coverage defense.” 

 

3 See Fuisz v. Selective Ins. Co. of Am., 61 F.3d 238, 244-45 (4th Cir. 1995) 

(“Notwithstanding [plaintiff’s] repeated allegations that [defendant] “willfully intended to injure,” by also pleading that [defendant] acted with actual malice [plaintiff] has left open the possibility of another avenue of recovery if it is unable to establish [defendant’s] 

intent to harm [plaintiff’s] reputation. If the evidence at trial fails to establish that 

[defendant] intentionally harmed [plaintiff], the complaint permits [plaintiff] nonetheless to prevail on its claims by proving that [defendant] intended no harm, but acted with 

reckless disregard for the falsity of his statements. [Insurer] concedes that the intentional 

acts exclusion does not apply to such a claim.”); cf. Safeguard Scis., Inc. v. Liberty Mut. 

Ins. Co., 766 F. Supp. 324, 333 (E.D. Pa. 1991) aff’d in relevant part, rev’d in part, 961 

F.2d 209 (3d Cir. 1992) for text, see No. 91-1480, 1992 WL 12915247, at *3-4 (3d Cir. 

Mar. 19, 1992). (holding that although complaint only alleged “intentional slander,” insured should not be denied coverage on basis of intentional acts exclusion because 

complaint could be amended to conform to proof at trial of lesser intent). 

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Id. at 121, 741 P.2d at 254. Manifestly, the plaintiff was free to take the position that the 

insured parties had not intended to injure him, notwithstanding his earlier pleading to the 

contrary. 

 A plaintiff is not “disingenuous” for advancing a position inconsistent with one of 

the alternative pleadings in the plaintiff’s complaint. This “would undermine the clear 

intent of the Federal Rules of Civil Procedure, which explicitly authorize litigants to 

present alternative and inconsistent pleadings.” Molsbergen v. United States, 757 F.2d 

1016, 1019 (9th Cir. 1985). 

CONCLUSION 

 The provision of Slavin’s insurance policy excluding intentional and malicious 

acts does not render the policy ambiguous as to its coverage of acts of defamation and 

false light invasion of privacy. A genuine dispute exists as to the material fact of Slavin’s 

subjective intent, and therefore the Court accepts the magistrate judge’s recommendation 

to deny the parties’ cross-motions for summary judgment. 

 Tennenbaum’s current position that Slavin did not act with an intention to harm 

him or with malice is not “disingenuous.” 

IT IS THEREFORE ORDERED that the Objections to the Magistrate Judge’s 

Recommended Disposition of the Cross-Motions for Summary Judgment on Insurance 

Coverage by Plaintiff Michael Tennenbaum (Doc. 243) are GRANTED IN PART AND 

DENIED IN PART. 

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IT IS FURTHER ORDERED that the “Order” entered by Magistrate Judge 

Mark E. Aspey (Doc. 242) shall be designated a Report and Recommendation and shall 

be ACCEPTED BUT NO DISINGENOUSNESS WILL BE PRESUMED 

RESULTING THEREFROM. 

 Dated this 1st day of December, 2015. 

Honorable G. Murray Snow

United States District Judge

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