Opinion ID: 57522
Heading Depth: 2
Heading Rank: 2

Heading: Property DamageCoverage A

Text: LCI also argues that there is a possibility of coverage under Coverage A of the Policy, which covers property damage caused by an occurrence. We reject this argument for three independent reasons. First, the Policy only covers property damage caused by an `occurrence' that takes place in the `coverage territory.' Here, there is no suggestion that the alleged slanderous statements took place in Lake Caroline. Second, it is doubtful that the allegations in the AFP complaint satisfy the Policy's definition of occurrence, which limits coverage to property damage resulting from an accident. The Mississippi Supreme Court has cited with favor the following definition of accident for insurance coverage purposes: An accident is anything that happens or is the result of that which is unanticipated and takes place without the insured's foresight or anticipation. . . . As used in insurance policies it is simply an undersigned, sudden, and unexpected event, usually of an afflictive or unfortunate character, and often accompanied by a manifestation of force, but it does not mean the natural and ordinary consequences of a negligent act. Allstate Ins. Co. v. Moulton, 464 So.2d 507, 509 (Miss.1985) (quoting 7A Appleman, Insurance Law and Practice § 4492 (Berdal ed.1979)). We have already held that the allegations in the AFP complaint state only a slander of title claim. Under Mississippi law, such claims require a showing of malice. Walley, 54 So.2d at 396. A party can be deemed to have acted with malice under Mississippi law upon a showing of a reckless disregard for the truth, which requires sufficient evidence to establish that the defendant in fact entertained serious doubts as to the truth of his publication. McCullough, 743 So.2d at 361 (quoting Harte-Hanks Commc'ns, 491 U.S. at 688, 109 S.Ct. 2678). Such conduct hardly constitutes an undersigned, sudden, and unexpected event. Third, LCI concedes that the subject property was not physically injured. The only other property damage that is covered under the Policy is the [floss of use of tangible property. However, under Mississippi law, injurious falsehood claimssuch as slander of titlemust include a showing of economic or pecuniary damages. See Smith v. Magnolia Lady, Inc., 925 So.2d 898, 906 (Miss.Ct.App. 2006). This court has recognized the abundance of case law holding that purely economic losses . . . do not constitute the loss of use of tangible property.' Snug Harbor, Ltd. v. Zurich Ins., 968 F.2d 538, 542 & n. 13 (5th Cir.1992); see also Shelter Mut. Ins. Co. v. Brown, 345. F.Supp.2d 645, 649 (S.D.Miss.2004) (holding that damages arising out of negligent misrepresentation not property damages); Audubon Ins. Co. v. Stefancik, 98 F.Supp.2d 751, 756 (S.D.Miss.1999) (holding that damages arising out of defamation not property damages); State Farm Fire & Cas. Co. v. Brewer, 914 F.Supp. 140, 142 (S.D.Miss.1996) (The[ ] cases are virtually unanimous in their holdings that damages flowing from misrepresentation and/or fraud have no basis in property damage; rather, the only cognizable damages from such torts are economic and contractual in nature and as such do not fall within the scope of coverage afforded by policies like that of the [Defendant]); Giddings v. Indus. Indem., 112 Cal.App.3d 213, 169 Cal. Rptr. 278, 281 (1980) (To construe, the explicit words `tangible property' to include intangible economic interests and property rights requires a strained and farfetched interpretation, doing violence to the plain language of the policies.). In short, the subject property itself was not damaged; if anything, the reputation of AFP's title to the subject property was damaged and the resulting injury was purely economic. The distinction is subtle but important and does not serve to trigger the duty to defend under the Policy. Even if this court goes beyond the allegations in the AFP complaint, LCI does not isolate any additional facts that would trigger coverage or in any way alter our conclusion that AFP is simply alleging a slander of title claim, which did not occur in Lake Caroline, does not meet the definition of an occurrence in the Policy, and does not involve damage that would constitute the loss of use of tangible property as required under the Policy. Accordingly, we conclude that LCI has not established that the AFP complaint itselfor any additional factstrigger the duty to defend under Coverage A of the Policy.