MAINE SUPREME JUDICIAL COURT Reporter of Decisions Decision: 2013 ME 68 Docket: Cum

- 12

- 387 Argued : April 11 , 2013 Decided: July 16, 2013
Panel: SAUFLEY, C.J., and A LEXANDER , LEVY , SILVER, MEAD, GORMAN , and JABAR, JJ.

CHALMERS HARDENBERGH

v. PATRONS OXFORD INSURANCE COMPANY

LEVY, J

. [¶1] Patrons Oxford Insurance Company appeals from a summary judgment
of the Superior Court (Cumberland County, Wheeler, J

. ) declaring that Patrons Oxford has a duty to defend Chalmers Hardenbergh, pursua nt to his homeowners insurance p olicy, against a third

- party suit

. Patrons Oxford contends that it has no duty to defend Hardenbergh because the third

- party suit is based entirely on activity falling within the policy’s exclusion for the insured’s “business pu rsuits

. ”
We agree, vacate the judgment , and remand the case to the Superior Court for entry of a summary judgment in favor of Pa trons Oxford.
I. BACKGROUND [¶2 ] The following undisputed facts appear in the summary judgment record
unless otherwise indicated

. At all times relevant to this suit, Hardenbergh2 maintained a homeowners insurance policy with Patrons Oxford

. 1 Pursuant t o an endorsement to that p olicy, Patrons Oxford has a duty to defend Hardenbergh from
claims for “personal injury,” including from claims for “injury arising out of . . . libel, slander or defamation of character.” Explicitly excluded from this coverage

a re claims for “injury arising out of the business pursuits of any insured.” [¶3 ] In September 2011, Pan Am Systems, Inc. and two other named plaintiffs (collectively, Pan Am) filed a complaint in the United States District
Court against Hardenbergh ; C.M. Hardenbergh, P.A., a Maine c orp oration; and
A tlantic Northeast Rails & Ports , a publicati on owned by the corporation

. Paragraph 12 of the Pan Am c omplaint alleges that Hardenbergh and/or the other
defendants “published, without privilege, as fact unt rue information regarding [Pan Am] 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 l imited to , ” certain specifically identified state ments made in those publications

. [¶4 ] Paragraph 14 alleges that Hardenbergh and/or the other defendants “published false and defamatory statements about [Pan Am] including , but not limited to, thos e described in paragraph 12

. ” Paragraph 15 state s , “[t] he false and

1 Patrons Oxford issued a one

- year homeowners insurance policy to Hardenbergh in November 2006. Although only the 2006 policy appears in the summary judgment record, the parties do not dispute that the operative language of the 2006 policy is identical to the operative language of the poli cy in effect at the times relevant to this case.3 defamatory statements were published without privilege by Defendants to viewers
of the Atlantic Northeas t Rails & Ports’ Newsletters, E

- Bul letins and website.” [¶5 ] The Pan Am complaint also alleges that “ Atlantic Northeast Rails
& Ports is a widely read weekly trade newsletter and e

- bulletin covering the Northeastern United States, Eastern Quebec and the Canadian Maritimes regions, with a place of business in Yarmouth, Maine.” Further, “ Atlantic Northeast Rails
& Ports maintains a website that contains back issues of its new sletters, maps and a
database about shippers, ports, railroad s and intermodal fa cilities.” Paragraph 7 alleges, “Hardenbergh is the editor, publisher, owner and principal of Atlantic
Northeast Rails & Ports. ” [¶6 ] In response to the Pan Am c omplaint, Hardenbergh tendered defense of
the suit to Patrons Oxf ord. Patrons Oxford declined to defend Hardenbergh

. [¶7] In January 2012, Hardenbe rgh filed in the Superior Court a complaint seeking a declaratory judgment that Patrons Oxford has a duty to defend him in the pending action by Pan Am . Hardenbergh also sought to recover money damages
for costs he had i ncurred to defend himself in that a ction

. Patrons Oxford moved
to dismi ss Hardenbergh’s c omplaint pursuant to M.R. Civ. P. 12(b)(6)

. H ardenbergh opposed that motion and m oved for summary judgment. Patrons
Oxford filed a cross

- motion for summary judgment.4 [¶8 ] In May, while this matter was pending in the Superior Court, the United States District Court dismissed, with leave to amend, the Pan Am c omplaint against Hardenbergh. In June, Pan Am filed an amended c omplaint , which also names Hardenbergh as a defend ant

. [¶9 ] In July, a fter a hearing on the parties’ motions , the Superior Court granted Hardenbergh ’s motion for summary judgment, and denied Patrons
Oxford’s motion s to dismiss and for summary judgment . The court concluded that
Patrons Oxford had a duty to defend Hardenbergh against the original Pan Am complaint based on the c om plaint’s “including, but not limited to” language, which
the court determined could include statements Hardenbergh made in his individual capacity and outside of the p olicy’s “ business pursuits ” exclusion . The court did not address whether Patrons Oxford has a duty to defend against the amended Pan Am complaint.
II. DISCUSSION [¶1 0 ] Patrons Oxford appeals, contending that the trial court should have granted summary judgmen t in its favor because it has no duty to defend Hardenbergh against the Pan Am lawsuit

. Before addre ssing Patrons Oxford’s argument s , we consider , sua sponte, whether the United States Dis trict Court’s
dismissal of the Pan Am c omplai nt, and Pan Am’s filin g of an amended c omplaint, renders this appeal moot.5 A. Mootness [¶1 1 ] An appeal is moot “when there is no real and substantial controversy , admitting of specific relief through a judgment of conclusive character

. ” Doe I v.
Williams , 2013 ME 24, ¶ 14, 61 A.3d 718 (quotation marks omitted). Here, t he duty to defend against the original Pan Am c omplaint arose , if at all, upon its filing

. S ee Horace Mann Ins. Co. v. Me. Teachers Ass ’n , 449 A.2d 358, 360 (Me. 1982)

. Regardless of whether Patrons Oxford h as a duty to defend against
the amended c omplaint, an issue that the trial court did not address and thus is not properly before us, Hardenbergh alleges in this action that he has incurred costs in defending against the original c omplaint , and he seeks damages

. Thus, Patrons Oxford’s appeal retains its “ controversial vitality , ” and is therefore not moot

. S

ee Doe I , 2013 ME 24, ¶ ¶ 14 , 18 , 61 A.3d 718; see also Smith & Nephew Inc. v.
Fed. Ins. Co. , 113 F. App ’ x 99, 102, 105 (6th Cir. 2004) (applying Tennessee law
and federal procedural rules to hold that the filing of an amended complaint does

not render moot the issue of whether a duty existed to defend against the original complaint)

. B. Duty to Defend [¶1 2 ] Patrons Oxford argues that the trial court should have concluded that
Patrons Oxford has no duty to defen d against the original Pan Am c omplaint
because the allegations of the c omplaint fall within the p olicy’s “business pursuits”6 exclusion. Our review of whether the trial court erred in granting summary judgment in favor of Hardenbergh is de novo

. 2 See Mitchell v. Allstate Ins. Co. , 2011 ME 133, ¶ 8, 36 A.3d 876

. [¶1 3 ] Whether Patron s Oxford has a duty to defend depends on whether the

c omplaint “contains any allegations that, if proved, could fall within the coverage afforded by the p olicy.” Cox v. Commonwealth Land Title Ins. Co. , 2013 ME 8, ¶ 9, 59 A.3d 1280

. An insurer’s duty to defend arises exclusive ly from the allegations in the c omplaint and the language of the p olicy. See id. Thus, “[a] n insurer may properly refuse to defend a policyholder if the allegations of the complaint fall entirely within a policy exclusion.” Mitchell , 2011 ME 133, ¶ 13 , 36 A.3d 876

. [¶1 4 ] We begin by examining the language of the p olicy to determine the scope of coverage, and th en turn to the language of the original Pan Am c omplaint
to determine whether it fal ls within the scope of the p olicy’s coverage . In construing the language of an insurance policy, we interpret unambiguous
l anguage in accordance with its plain meaning. See Cox , 2013 ME 8, ¶ 8 , 59 A.3d

2 The trial court considered the parties’ competing motions for summary judgment, as well as Patrons Oxford’s motion to dismiss the complaint pursuant to M.R. Civ. P. 12(b)(6). We review the court’s grant of Hardenbergh’s motion for summary judgment , and its denial of Patrons O xford’s cross

- motion for summary judgment, and do not directly review the court’s denial of Patrons Oxford’s m otion to dismiss the complaint. See M.R. Civ. P. 12(b) ( providing that “ [i] f, on a [ Rule 12(b)(6) motion], matters outside the pleading are presented to and not excluded by the court, the motion shall be treated as one for summary judgment and dis posed of as provided in Rule 56 ”)

.7 1280 . We strictly construe policy exclusions in favor of coverage

. See Mitchell , 2011 ME 133, ¶ 11 , 36 A.3d 876

. [¶1 5 ] Pursuant to the endorsement to the p olicy, Patrons Oxford has a duty
to defend Hardenbergh against claim s for damages for “injury arising out of

. . . libel, slander or defamat ion of character

. ” T he endorsement , however, explicitly
exclude s from coverage “injury arising out of the business pursuits of any insured.”
The p olicy does not define the term “b usines s pursuits , ” but defines “ business” to “include[] trade, profession or occupation.” Because the term “busi ness pursuits ” pertains to an exclusion f rom coverage, we strictly construe that term against
Patrons Oxford , interpreting it to mean pursuit of one’s “ trade, profession or occupation.” See id

. Thus, the p olicy requires Patrons Oxford to defend Hardenbergh against claim s of injury arising out of “ libel, slander or defamation of
character , ” unless the injury arose out of Hardenbergh’s pursuit of his “ trade, profession or occupation

. ” [¶1 6 ] We now turn to the original Pan Am c omplaint to determine whether
it “ contain s any allegations that, if proved, could fall within the c overage afforded by the p olicy. ” See Cox , 2013 ME 8, ¶ 9, 59 A.3d 1280

. Because the c omplaint
in cludes claims for defamation, Patrons Oxford properly concedes that it has a duty to defend Hardenbergh un less the allegations of the c omplaint fall entirely within
the “business pursuits” exclusion. To make this determination, we consider the8 allegations in the c omplaint regarding the publications in which the allege d defamatory statements appeared, and Hard enbergh’s relationship to those publications. [¶1 7 ] According to the c omplaint, all of the alleged false or defamatory statements appeared in Atlantic Northeast Rails & Ports publications. Although paragraph 12 of the c omplaint alleges defamation arising from statements “including, but not limited to , ” statements specifi cally described in the c omplaint , it also unequivocally alleges that all of the actionable statements appeared in Atlantic Northeast Rails & Ports publications

. Similarly, although paragraph 14 alleges that Hardenbergh and/or other defendants “published false and defamatory
statements about [Pan Am] including, but not limited to, t hose described in paragraph 12,” p aragrap h 15 alleges that “[t]he false and defamatory statements

were published without privilege by Defendants to viewers of the Atlantic
Northeast Rails & Port s’ Newsletters, E

- Bulletins and website.” Read in its entirety, the c omplaint alleges defamation arising only out of statements appearing
in Atlantic Northeast Rail s & Ports publications. [¶1 8 ] We therefore turn to the question of whether Hardenbergh’s activity with regard to Atlantic Northeast Rails & Ports falls within the definition of a “business pursuit.” The c omplaint describes Hardenbergh as the “editor, pu blisher, owner and principal of Atlantic Northeast Rails & Ports,” which is “a widely read9 weekly trade newsletter and e

- bulletin ” that has “a place of business in Yarmouth,
Maine .” As the p olicy states, “‘ [b] usiness ’ includes trade.” In short, all of the alleged defamatory statements appeared in a trade publication , which has a place of
business and for which Hardenbergh is the “editor, publisher, owner an d principal.” [¶1 9 ] T he “including, but not limited to” language of paragraphs 12 and 14
of the c omplaint does not support the opposite conclusion. A lthough that language
is indefinite as to the specific statements suppor ting the defamation claim, the

c omplaint is definite that the statements Hardenberg h allegedly made all appeared
in pursuit of a trade

— the publishing of an electronic and print trade publication for
which he serves as the “editor, publisher, owner and principal.” S tatements published in a trade publication by that publication’s “editor, publisher, owner and principle” arise out of that person’s “ business pursuits.” [¶20 ] Because the allegations in the original Pan Am c omplaint fall entirely within the “business pu rsuits” exclusion of the p olicy , Patrons Oxford has no duty to defend Hardenbergh aga inst that complaint

. See id. Accordingly, the trial court erred in granting summary judgment for Hardenbergh, and sho uld have granted10 Patrons Oxford ’s motion for summary judgment. 3 See Mitchell , 2011 ME 133, ¶ 8 , 36 A.3d 876

. The entry is: Judgment vacated

. Remanded for entry of a summary judgment in favor of Patrons Oxford declaring that Patrons Oxford had no duty to defend Hardenbergh against the original Pan Am complaint

.

On the briefs: James M. Bowie, Esq., and Hil l ary J. Bouchard, Esq. , Thompson & Bowie, LLP, Portland, for appellant Patrons Oxford Insurance Company Jeffrey T. Edwards, Esq., and Jonathan G. Mermin, Esq., Preti Flaherty Beliveau & Pachios, LLP, Portland, for appellee Chalmers Hardenbergh

At oral argument:
James M. Bowie, Esq. , for appellant Patrons Oxford Insurance Company Jeffrey T. Edwards, Esq., for appellee Chalmers Hardenbergh

Cumberland County Superior Court docket number CV

- 2012

- 00034 F OR CLERK REFERENCE ONLY

3 The parties do not contest the Superior Cou rt’s conclusion that, insofar as Hardenbergh’s complaint for declaratory relief and the parties’ motions for summary judgment requested a determination of whether Patrons Oxford has a duty to indemnify Hardenbergh in the underlying action, such a claim is premature. Accordingly, we do not address this issue. Further, we do not consider and express no opinion regarding Patrons Oxford’s duty, if any, to defend against the amended Pan Am complaint, a question not addressed by the Superior Court and therefore not properly before us.