United States Court of Appeals

For the First Circuit

No. 08-1521

CENTENNIAL INSURANCE COMPANY,

Plaintiff, Appellant,

v.

ROBERT PATTERSON,

Defendant, Appellee.

APPEAL FROM THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF MAINE

[Hon. D. Brock Hornby, U.S. District Judge]

[Hon. David M. Cohen, U.S. Magistrate Judge]

Before

Lynch, Chief Judge,

Torruella and Stahl, Circuit Judges.

Jeffrey T. Edwards and Preti, Flaherty, Beliveau & Pachios,

LLP, on brief for appellant.

David M. Sanders, on brief for appellee.

April 23, 2009
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TORRUELLA, Circuit Judge. In this insurance coverage

dispute, appellant-insurer Centennial Insurance Company

("Centennial") seeks review of the district court's grant of

summary judgment to appellee-insured veterinarian Dr. Robert

Patterson. The district court declared that Centennial was

obligated under an insurance policy to legally defend Patterson in

a lawsuit instituted against him by Carol Murphy. After careful

consideration, we affirm the grant of summary judgment in favor of

Patterson.

I. Background

For the purposes of summary judgment the facts are as

follows. Centennial is a New York insurance company authorized to

do business in Maine. Dr. Patterson is a doctor of veterinary

medicine who practices in Maine. Centennial provided insurance

coverage to Patterson pursuant to a Veterinarian's Professional

Liability Policy in effect between the parties during the period

January 1, 2003 through January 1, 2005 ("the Policy").

The Policy states, in relevant part:

II. Defense, Settlement, Supplementary

Payments

With respect to such insurance as is afforded

by this certificate:

A. The Company shall have the right and duty

to investigate any Claim or defend any Suit

brought against the Insured alleging a

Veterinary Incident and seeking damages on

account thereof, to which this insurance

applies, even if such Claim or Suit is

groundless, false, or fraudulent. . . .
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Common Certificate Definitions Form

D. Claim means any of the following: . . .

2. A Suit, arbitration or other

proceeding served on an Insured for damages

resulting from a Veterinary Incident. 

. . .

M. Veterinary Incident means any malpractice,

negligent act or omission, utterance or

publication of a libel or slander, or other

defamatory or disparaging material:

1. in the furnishing of professional

veterinary services, . . . by the Named

Insured or by any person for whom the Named

Insured is legally responsible.

. . .

Relevant to this dispute, the Policy also contains the following

exclusions:

III. Exclusions

This certificate does not apply to Claim or

Suit based upon, arising out of, or related

to: . . .

H. any actual or alleged;

1. dishonest, fraudulent, criminal, malicious

act, or malicious omission by any Insured;

2. willful violation of any law, statute,

ordinance, rule or regulation by any Insured.

In September 2006, Murphy initiated a pro se civil action

in federal court against the State of Maine and eighty or more

defendants, including Dr. Patterson, alleging various claims

arising from proceedings brought against Murphy by the State of

Maine for animal cruelty. Murphy had been charged by the State

with animal cruelty for not providing proper food, water, or

shelter to approximately sixty animals on her farm. She sought

"compensatory and punitive damages" and injunctive relief, namely,

the "return of all [her] property."
 Murphy's complaint, a 60-page document labeled "Second Amended 1

Judicial Brief," included the following claims:

1. This action is brought by the Plaintiff . . . to remedy

[various violations] by State Officials and others . . . that

deprived CAROL MURPHY . . . of rights, privileges or immunities

secured or legally protected by the United States Constitution and

Amendments, Civil Rights and Human Rights and the laws of the

United States.

2. These specifically include but are not limited to those rights,

privileges and immunities found in and secured and/or protected by

the Constitution [and various provisions therein]. . . also the

Constitutional right to be protected from . . . perjury and

subornation of perjury, libel, slander, malfeasance, misfeasance,

nonfeasance . . . etc. . . .

129. . . . DR. PATTERSON D.V.M. . . . of CLEARWATER VETERINARY

HOSPITAL . . . testified [at the Animal Possession Hearing] that

Ms. Murphy's animals were in horrible condition, no veterinary

care, no food, no water, were filthy, that the house had six inches

of feces on the floors and that the animals had received no food or

water for months. This is again racketeering, perjury, collusion,

color of law crimes, conspiracy to deprive Ms. Murphy of her legal

property, conspiracy to deprive Ms. Murphy of the full enjoyment of

her 30 acre farm, tampering with evidence in a criminal trial,

tampering with the outcome of the trial by falsifying evidence and

more. These acts were committed willfully, knowingly with intent

and malice aforethought for personal gain and for the gain of State

of Maine allowing domestic terrorists free reign.

. . .

184. . . . Patterson of Clearwater testified that two calves that

died expired because they had no food and water. In fact those

animals had been purchased at auction and were dying when

purchased. . . . Patterson had never asked the condition of the

animals when purchased from auction, and he did not know how long

they had been in Ms. Murphy's care. Additionally under the law Ms.

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The claims against Dr. Patterson arose from his alleged

testimony against Murphy at an Animal Possession Hearing, which was

held on March 19, 2004 (the "Hearing"), and also, Dr. Patterson's

alleged examination of her animals in connection with those

proceedings.1
Murphy as the legal owner of the animals did not give permission

for Patterson to do anything to her animals whether they were alive

or dead. Patterson was working in collusion with . . . others in

the domestic terrorist racketeering scheme against Ms. Murphy.

. . . Patterson perjured himself on the witness stand. . . .

Patterson is guilty of treating stolen animals without getting

permission from the legal owner. He is guilty of collusion,

racketeering, tampering with evidence in a criminal trial,

tampering with the jury, tampering with the disposition of a

criminal case and violating Ms. Murphy's right to an impartial

trial. He failed to report the theft of her animals and the

racketeering scheme to the proper authorities for investigation.

All are criminal acts. 

. . .

185. . . . Patterson is guilty of perjury, theft of animals,

transporting stolen animals, receipt of stolen animals, tampering

with the jury, falsifying photographic evidence in a criminal

trial, tampering with the outcome of a criminal trial,

racketeering, domestic terrorism, violating Ms. Murphy's U.S.

Constitutional rights and more.

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Dr. Patterson submitted a copy of Murphy's complaint to

Centennial and requested that Centennial tender a defense on his

behalf, pursuant to the Policy. Centennial denied Dr. Patterson's

request on the ground that it did not have a duty to defend or

indemnify Dr. Patterson with respect to the Murphy suit because the

suit fell outside the Policy's coverage. Centennial then brought

the instant declaratory judgment action in the federal district

court for the District of Maine, seeking a declaration that it did

not have an obligation to defend and indemnify Dr. Patterson

against the claims asserted by Murphy. Meanwhile, Dr. Patterson

hired an attorney and provided for his own defense in the Murphy

suit. On June 25, 2007, while Centennial's action was pending

before the district court, Murphy's complaint was dismissed with
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prejudice. Centennial's subsequent motion to dismiss this action

as moot, based on the dismissal of the underlying suit, was denied

on grounds that a factual dispute remained over "whether [Dr.

Patterson] had incurred attorneys fees and costs and, if so, a

legal dispute over whether they are recoverable from the plaintiff

under a duty to defend." The parties then each filed motions for

summary judgment. A magistrate judge recommended that Dr.

Patterson's motion for summary judgment be granted, and

Centennial's be denied, finding that Centennial had a duty under

the Policy to defend Dr. Patterson in the Murphy action. On

March 26, 2006 the district court entered an order adopting that

recommendation. At that point in time, Dr. Patterson had incurred

$121.00 in attorney's fees defending himself in the underlying

Murphy action, and $3,036 in connection with establishing

Centennial's duty to defend in the instant suit. Centennial now

appeals.

II. Discussion

A. Standard of Review

This case comes before us under our diversity

jurisdiction and the parties agree that we must apply Maine law to

the resolution of the issues in dispute. See Douglas v. York

County, 433 F.3d 143, 149 (1st Cir. 2005).

We apply de novo review to the district court's decision

because the issues were "resolved on summary judgment and because
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under Maine law '[w]hether an insurer has an obligation to defend

its insured against a complaint is a question of law.'" Bucci v.

Essex Ins. Co., 393 F.3d 285, 290 (1st Cir. 2005) (quoting Elliot

v. Hanover Ins. Co., 711 A.2d 1310, 1312 (Me. 1998)) (alteration in

original).

B. Applicable Law

Both Centennial and Dr. Patterson agree that Maine law

employs the "comparison test" to determine whether an insurer has

a duty to defend an insured. See Barrett Paving Materials, Inc. v.

Cont'l Ins. Co., 488 F.3d 59, 63 (1st Cir. 2007) (citing Travelers

Indem. Co. v. Dingwell, 414 A.2d 220, 224 (Me. 1980)). "The

reviewing court is required to '[lay] the underlying damage

complaint[ ] alongside the insurance policy and then determine[ ]

[whether] the pleadings [are] adequate to encompass an occurrence

within the coverage of the policy.'" Id. (quoting Dingwell, 414

A.2d at 224) (modifications in original). "Under this comparison

test, the insurer has a duty to defend if the underlying complaint

discloses a 'potential or a possibility' for liability within the

policy's coverage." Bucci, 393 F.3d at 290 (quoting Elliott, 711

A.2d at 1312) (emphasis in original). In other words, "'[g]iven

the possible existence of any legal or factual basis for payment

under a policy, an insurer's duty to defend should be decided

summarily in favor of the insured.'" Id. at 292 (quoting Gibson v.

Farm Family Mut. Ins. Co., 673 A.2d 1350, 1352 (Me. 1996))
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(emphasis in original); see also NE Props., Inc. v. Chi. Title Ins.

Co., 660 A.2d 926, 927 (Me. 1995) ("The insured is entitled to a

defense if there exists any legal or factual basis which could be

developed at trial which would obligate the insurers to pay under

the policy." (internal quotation marks omitted)). "Significantly,

'[t]he duty to defend is broader than the duty to indemnify, and an

insurer may have to defend before it is clear whether there is a

duty to indemnify.'" Bucci, 393 F.3d at 292 (quoting Commercial

Union Ins. Co. v. Royal Ins. Co., 658 A.2d 1081, 1083 (Me. 1995)).

"Maine law is very clear that the inquiry [under the

comparison test] 'is based exclusively on the facts as alleged

rather than on the facts as they actually are.'" Barrett Paving,

488 F.3d at 63 (quoting Dingwell, 414 A.2d at 224). Moreover, we

note that under Maine law, at least in some circumstances, "the

duty of an insurance company to defend one count in a lawsuit

imposes a duty to defend all counts." Gibson, 673 A.2d at 1354.

Finally, as a general rule, "a standard policy of insurance" under

Maine law must be interpreted "most strongly against the insurer."

Id. at 1353 (internal quotation marks omitted).

C. Potential for Coverage within Scope of Policy

Centennial argues that it had no duty to defend Dr.

Patterson in the Murphy action because the Murphy complaint did not

allege a "veterinary incident," as the term is defined in the

Policy. As noted above, the Policy defines "veterinary incident"
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as "any malpractice, negligent act or omission, utterance or

publication of a libel or slander, or other defamatory or

disparaging material . . . [i]n the furnishing of professional

veterinary services." In support of its position that no

"veterinary incident" was alleged, Centennial argues that (a) the

Murphy complaint makes no claims of malpractice or negligence in

the "furnishing of professional veterinary services" and that (b)

the Murphy complaint makes no claims of libel, slander or

defamation against Dr. Patterson - but only against certain media

outlets. We disagree.

As to Centennial's first argument, it is true that the

Murphy complaint does not explicitly assert that Dr. Patterson was

negligent or committed malpractice in the furnishing of

professional veterinary services. However, the complaint does

contain several allegations of wrongful conduct by Dr. Patterson

that could "potentially" be so construed.

As a threshold matter, we reject Centennial's contention

that the claims asserted against Dr. Patterson related "exclusively

to Dr. Patterson's testimony at the Animal Possession Hearing."

Rather, Murphy's statement, at paragraph 184 of the complaint, that

Dr. Patterson "testified that two calves that died expired because

they had no food and water" implies that Dr. Patterson examined the

deceased calves in order to reach a professional conclusion

regarding their cause of death, and that Murphy's claims arise, in
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part, from that examination. This inference, that Dr. Patterson

examined the animals, is further supported by Murphy's statement

that she "did not give permission to Patterson to do anything to

her animals whether they were alive or dead." Furthermore,

Murphy's allegation that "Patterson is guilty of treating stolen

animals without getting permission from the legal owner," is a

claim against Dr. Patterson which does not arise solely from his

testimony against Murphy but also from actions taken by Dr.

Patterson toward Murphy's animals, either when they were living, or

after they had died.

Taken together, Murphy's allegations suggest that Dr.

Patterson not only testified against Murphy, but performed some

type of professional veterinary service on Murphy's animals, which

Murphy regarded as wrongful in being carried out without her

authorization, wrongful in approach (because Dr. Patterson did not

ask her about the calves' origin and prior condition), and wrongful

in result (because Dr. Patterson erroneously faulted Murphy for

their death). As such, Murphy's complaint can be construed as

including claims arising out of veterinary malpractice or

negligence; claims which, if proven, potentially fall within the

Policy's coverage. We reiterate that a "potential" of a "claim

within the policy" is all that is required, under Maine law, to

trigger Centennial's duty to defend. See J.A.J., Inc. v. Aetna

Cas. & Sur. Co., 529 A.2d 806, 808 (Me. 1987) (stating that "[i]t
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is not essential that the complaint specifically and unequivocally

make out a claim within the policy" but only that it raise "a

potential . . . that the facts ultimately proved may come within

the coverage").

We hold that the allegations of the complaint contain

sufficient facts to state a claim of negligence or malpractice

potentially covered by the Policy. We need not go any further, as

this conclusion is sufficient to activate Centennial's duty to

defend Dr. Patterson in the underlying suit. Nevertheless, we also

hold, contrary to Centennial's assertions, that the duty to defend

is independently triggered by our view that Murphy potentially

alleged that Dr. Patterson, among other defendants, committed libel

and slander against her.

The Policy language clearly includes within the scope of

coverage claims against the insured alleging the "utterance or

publication of a libel or slander, or other defamatory or

disparaging material . . . in the furnishing of professional

veterinary services." Centennial disputes the applicability of

this provision by arguing that Murphy's allegations of libel,

slander and defamation were directed at defendants in the complaint

other than Dr. Patterson, namely, certain media outlets that

published newspaper accounts of the proceedings against Murphy.

This is certainly one plausible interpretation of the complaint, in

that the specific claims of libel and slander enumerated in the
 For example, at paragraph 151 of the Complaint Murphy alleges 2

that the Morning Sentinel newspaper committed "libel and slander"

by "print[ing] the story without checking their facts." At para.

157 of the Complaint Murphy makes similar claims against the

Kennebec Journal, alleging that this publication was also "guilty

of libel and slander" in printing a story about the conditions on

Murphy's farm.

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complaint were directed towards various media outlets.2

Nevertheless, there is another plausible interpretation. In

paragraph 2 of her complaint, Murphy makes general claims of libel

and slander which, at paragraph 1, she directs towards "State

Officials and others." Based on these broadly worded provisions,

the complaint may be reasonably construed as potentially stating a

defamation claim against any of the defendants, including Dr.

Patterson. See Dingwell, 414 A.2d at 227 (noting that with "the

great latitude with which pleadings are construed today, and the

great latitude of amendment, an insured's right to a defense should

not be foreclosed unless such a result is inescapably necessary"

(quoting Donnelly v. Transp. Ins. Co., 589 F.2d 761, 765 (4th Cir.

1978)). Moreover, this construction of paragraph 2's libel and

slander claim as potentially applicable to Dr. Patterson, is

bolstered by the language of the complaint at paragraph 129, where

Murphy alleges that Dr. Patterson provided untruthful and damaging

testimony against her at the animal repossession hearing. Reading

these portions of the complaint together, we can reasonably infer

that Murphy may have intended to state a claim against Dr.

Patterson for defamation -- a claim that, if proven, would
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potentially trigger coverage under the Policy. See Me. State Acad.

of Hair Design, Inc. v. Commercial Union Ins. Co., 699 A.2d 1153,

1156 (Me. 1997) ("'Even a complaint which is legally insufficient

to withstand a motion to dismiss gives rise to a duty to defend if

it shows an intent to state a claim within the insurance

coverage.'" (quoting Dingwell, 414 A.2d at 226) (emphasis added)).

Finally, that Murphy had such intent is supported by the overall

nature of the complaint, which evidences a general intent on the

part of the pro se plaintiff to state the broadest array of claims

against the greatest number of potential defendants, in hopes of

maximizing the potential for recovery.

Centennial further disputes the applicability of the

"libel and slander" provision on grounds that any libel or slander

alleged to have been committed by Dr. Patterson took place during

his testimony at the Hearing, and thus, was not delivered "in the

furnishing of professional veterinary services," as required to

trigger coverage under the Policy. Centennial suggests that the

furnishing of "professional veterinary services" must necessarily

involve some form of malpractice or negligence in the treatment of

an animal. However, we hold that the Policy definition, which

specifically includes within the scope of coverage the "utterance

or publication of a libel or slander," an event which, as noted by

the district court is "unlikely to occur while a veterinarian is

physically treating an animal," suggests that the provision has
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broader applicability. In any event, courts interpreting the term

"professional services" in the context of determining coverage

under an insurance policy have generally defined the term broadly,

so as to embrace all activities for which the specialized training

of the particular profession is required. See, e.g., Med. Records

Assoc., Inc. v. Am. Empire Surplus Lines Ins., 142 F.3d 512, 515

(1st Cir. 1998) (defining "professional services" under

Massachusetts law as "embrac[ing] those activities that distinguish

a particular occupation from other occupations -- as evidenced by

the need for specialized learning or training -- and from the

ordinary activities of life and business"); W. World Ins. Co. v.

Am. & Foreign Ins. Co., 180 F. Supp. 2d 224, 231 (D. Me. 2002)

(defining "'professional' act or service" under Maine law as "one

arising out of a vocation, calling, occupation, or employment

involving specialized knowledge, labor, or skill" (quoting Marx v.

Hartford Accident & Indem. Co., 157 N.W.2d 870, 871-72 (Neb.

1968)). Thus, we agree with the district court that "[Patterson]

could only have been testifying in that proceeding as a

veterinarian," that "[t]estifying as a professional veterinarian,

as an expert witness, must logically be included in the scope of

'professional veterinary services' [absent an applicable

exclusion]," and therefore, Dr. Patterson's "act of testifying

constituted 'the furnishing of professional veterinary services'

within the meaning of that term as used in the policy." We thus
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find that at least some of the claims against Dr. Patterson

contained in the Murphy complaint arise out of a "veterinary

incident," and as a result, potentially fall within the scope of

coverage.

D. Effect of Policy Exclusions

Alternatively, Centennial argues that it had no duty to

defend Dr. Patterson because it was relieved of any such duty by

Exclusion H in the Policy, a provision which excludes from coverage

any suit arising out of or related to "[a]ny actual or alleged

. . . dishonest, fraudulent, criminal, malicious act, or malicious

omission" or any "willfull violation" by the insured. Centennial

contends that, even if the allegations in the Murphy complaint do

arise out of an otherwise covered veterinary incident, "[a]ll of

the allegations against Patterson describe dishonest, fraudulent or

criminal conduct on his part," and thus, fall within the scope of

Exclusion H. According to Centennial, "there is no potential that

Patterson's alleged conduct did not involve a dishonest,

fraudulent, criminal, malicious act, or malicious omission."

Centennial acknowledges that a full trial might have ultimately

disclosed that Dr. Patterson's actions were not, in fact,

dishonest, fraudulent, or criminal, but argues that such

considerations are irrelevant under the comparison test, which

hinges the duty to defend "exclusively on the facts as alleged

rather than on the facts as they actually are." Barrett Paving,
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488 F.3d at 63 (emphasis added & internal quotation marks omitted).

The "triggering of Exclusion H," according to Centennial,

"eliminates any potential for coverage under the [Policy]."

We disagree with the premise upon which Centennial's

argument rests -- that there was "no potential" that the

allegations against Patterson involved a claim not barred under

Exclusion H. It is true that many of Murphy's claims, albeit in a

conclusory manner, allege that Patterson committed various crimes,

such as racketeering and perjury. If proven, these would clearly

fall within the exclusion and therefore, outside the scope of

coverage. Nevertheless, it is not essential, under Maine law, that

all claims against the insured in the underlying complaint raise

the possibility of coverage for the insurer's duty to defend to be

triggered, at least where the claims arise from common issues of

fact. See Gibson, 673 A.2d at 1354.

As explained above, we find that Murphy's complaint can

be construed to also state claims against Dr. Patterson for

slander, libel, negligence and malpractice -- claims which, if

proven, would fall outside the scope of Exclusion H, and at least

potentially, within the scope of coverage. The fact that Murphy

also alleged that Dr. Patterson committed various uncovered crimes

in the course of the single factual scenario at issue, does not,

under Gibson, relieve Centennial of the duty to defend. Id.

Moreover, the fact that Murphy, a pro se plaintiff bringing a civil
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action and seeking damages, characterizes all of Dr. Patterson's

actions as "criminal acts" (paragraph 184 of the complaint), and

uses words such as "guilty" rather than "liable" to describe

Patterson's culpability, does not mean that Murphy, has, in fact,

alleged criminal conduct. See Dingwell, 414 A.2d at 226 ("Whether

[the insured] can obtain a defense from his insurer must depend not

on the caprice of the plaintiff's draftsmanship, nor the limits of

his knowledge, but on a potential shown in the complaint that the

facts ultimately proved may come within the coverage.").

Regardless of how Murphy chooses to classify Dr. Patterson's

allegedly wrongful conduct, "the facts ultimately proved" could

have potentially shown, for example, that Patterson was negligent

in concluding that Murphy had caused the death of her calves, or

that Patterson's statements regarding Murphy's treatment of her

animals were defamatory, both non-criminal wrongs which could

potentially "come within [the Policy's] coverage." See J.A.J.,

Inc., 529 A.2d at 808 (quoting Dingwell, 414 A.2d at 226).

Ultimately, Maine law "place[s] the burden of uncertainty

as to the policy's coverage on the insurer." Dingwell, 414 A.2d at

227 (citation omitted). Because we find that Exclusion H does not

necessarily foreclose coverage under the Policy, we hold that Dr.

Patterson's right to a defense remains intact.

Based on the allegations in the Murphy complaint, we hold

that the Centennial Policy potentially covered Murphy's claims
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against Dr. Patterson, and therefore, Centennial had a duty to

defend its insured. Because we conclude that Centennial had a duty

to defend, we further conclude that the district court correctly

granted summary judgment for Dr. Patterson.

E. Attorney's Fees

Dr. Patterson contends that if he prevails in defending

against the instant declaratory judgment action, he is entitled to

recover not only the costs of his defense in the Murphy suit, but

also the costs of establishing Centennial's duty to defend in this

action.

Maine law provides by statute that "when there is a

declaratory judgment action 'to determine an insurer's contractual

duty to defend an insured under an insurance policy, if the insured

prevails in such action, the insurer shall pay court costs and

reasonable attorney's fees.'" Foremost Ins. Co. v. Levesque, 926

A.2d 1185, 1188 (Me. 2007) (quoting 24-A M.R.S. § 2436-B(2)).

However, we find, as did the district court, that Dr. Patterson's

request for attorney's fees remains premature. See D. Me. R. 54.2

(providing that application for attorney's fees "shall be filed

within 30 days of the filing of the appellate mandate providing for

the final disposition of any appeal to the Court of Appeals").

Thus, we leave it to the district court to resolve this issue at

the appropriate time.
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III. Conclusion

For the foregoing reasons, the summary judgment entered

in favor of Patterson and against Centennial is affirmed.

Affirmed.