Opinion ID: 203784
Heading Depth: 2
Heading Rank: 4

Heading: Effect of Policy Exclusions

Text: 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, -15- 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 -16- 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 -17- 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.