Opinion ID: 751714
Heading Depth: 3
Heading Rank: 3

Heading: Asserted Coverage Under Additional Policy Sections

Text: 50 Having concluded that Massachusetts Bay did not have a duty to defend with respect to the intentional conversion claim, we now turn to consider whether, as Koenig asserts, the Film House complaint alleged facts that could potentially bring the case within the policy's coverage for breach of an insured contract, slander, wrongful entry, invasion of privacy, safekeeping coverage, and/or theft coverage. 8 We find each of Koenig's arguments for these potentially covered causes of action, although creative, to be scant at best. 51 As an initial matter, while we recognize that Tennessee is a notice pleading jurisdiction, see Walden v. Wylie, 645 S.W.2d 247, 250 (Tenn.Ct.App.1982), one wherein Film House was not necessarily required to articulate its theories of recovery by name, see Redfield v. Continental Cas. Corp., 818 F.2d 596, 605 (7th Cir.1987) (distinguishing between fact pleading and notice pleading), it is noteworthy that the Film House complaint explicitly states that [the defendants'] actions amounted to conversion, whereas none of the causes of action which Koenig purports the complaint alleges are expressly identified. Why would Film House have specifically alluded to a claim for conversion and excluded any reference whatsoever to Koenig's breach of an insured contract, slander, wrongful entry, invasion of privacy, safekeeping coverage, and/or theft coverage, unless it chose not to seek relief for them? We need not limit ourselves to speculating on what legal theories Film House intended to allege in its complaint. Once again, it is the facts set forth therein that one must consider in determining whether the disputed insurance policy's coverage is implicated. 52 Our review of the Film House complaint reveals that it alleges facts which solely and entirely relate to a claim for conversion. Koenig's attempt to use single words and phrases contained within the complaint out of context and contrive six additional causes of action is unavailing. The frailty of Koenig's position was evident when, at oral argument, its counsel asserted that Massachusetts Bay had a duty to defend ... because it wasn't clear that there wasn't at least one word in [the Film House] complaint that had the potential for coverage. In our view, this overstates the extent to which we are to review the complaint. See English v. Virginia Surety Co., 196 Tenn. 426, 268 S.W.2d 338, 340 (1954) (emphasis added) (explaining that [a]n insurance policy and its endorsements are to be read as a whole....). It would be inappropriate for us to conduct a word-by-word analysis of the complaint, patching one word from one paragraph to another word from another paragraph, because such a review might very well cause us to find meaning where none otherwise existed. The proper extent of our review simply requires us to focus attention on the facts alleged as they appear in the complaint to determine if they could even potentially be covered by the Massachusetts Bay policy. See Dempster Brothers, Inc., 388 S.W.2d at 156. That said, we turn to discuss Koenig's contention that the Film House complaint sets forth facts which could give rise to a cause of action for: (1) breach of an insured contract; (2) slander; (3) wrongful entry; (4) invasion of privacy; (5) safekeeping coverage; and/or (6) theft coverage. 53
54 Koenig argues that although its policy with Massachusetts Bay expressly excludes coverage for liability assumed under any contract or agreement, the insurer nevertheless had a duty to defend it in the Film House suit because the lease between Koenig and Film House is an insured contract, and its policy makes clear that this exclusion does not apply to liability for damages ... [a]ssumed in a contract or agreement that is an 'insured contract;'.... (R. 1, Ex. A, Garage Coverage Form, at 3). Whether the facts alleged state a claim for breach of an insured contract obviously depends on the policy's definition of that term, which reads, [t]hat part of any contract or agreement entered into, as part of [Koenig's] garage business, by [Koenig] or any of [its] employees pertaining to the rental or lease of any 'auto.'  (Id. at 12.) Koenig contends that the Film House complaint's allegation stating, it [Film House] properly and fully performed its obligations pursuant to a vehicle lease and purchase agreement so as to own said vehicle and its title but defendant Koenig failed and refused to transfer documentary title to the vehicle in question after demand, articulated a claim within the aforementioned definition of an insured contract. We disagree. Reading this sentence in isolation, as Koenig would advise us to do, is deceptive, for the remainder of the paragraph in the complaint from which this sentence is excerpted leaves no doubt that such facts refer solely to a claim for wrongful conversion: 55 This is a case involving the tortious conduct of the defendants in seizing the plaintiff's automobile. [Film House] alleges that it properly and fully performed its obligations pursuant to a vehicle lease and purchase agreement so as to own said vehicle and its title but defendant Koenig failed and refused to transfer documentary title to the vehicle in question after demand. The defendant unconscionably and without cause seized such vehicle in Nashville, Tennessee. These actions amounted to a conversion by the defendants. 56 (R. 1, Ex. B, Film House Complaint, at 1. (emphasis added)). Once again, the omitted text makes clear that the Film House suit was a case involving ... tortious conduct, as opposed to breach of contract, arising out of Koenig's conversion of the BMW automobile. 57 Even if we were to assume, arguendo, that the Film House complaint somehow stated a claim for breach of contract, Massachusetts Bay still would not have had a duty to defend Koenig under the plain language of the parties' agreement. The insured contracts clause covers only liability for damages ... assumed in ... [such] contracts.... Tennessee courts recognize that assumed liability requires an express provision assuming liability; that is, one set forth in and agreed upon as part of a lease agreement. See Coble Systems, Inc. v. Gifford Co., 627 S.W.2d 359, 363 (Tenn.Ct.App.1981) (holding lessee liable for total cost of vehicle where it executed lease agreement which contained an absolute assumption of liability provision). An insurer's exclusion of, or limitation of liability to, an insurer's assumed liabilities is by no means a prohibited practice. In fact, to the extent that only those risks are covered by the policy which were contemplated by the parties when the contract was made, Industrial Sugars, Inc. v. Standard Accident Ins. Co., 338 F.2d 673, 675 (7th Cir.1964), it makes sound business sense. The seven-page lease executed by and between Koenig and Film House in the instant case included no provision under which Koenig even remotely assumed liability for its refusal to transfer documentary title to the BMW automobile. Koenig's insurance policy, therefore, did not cover such liability and, in turn, Massachusetts Bay had no duty to defend against claims therefor. Moreover, as already stated, the policy's exclusion of losses expected or intended from the standpoint of the 'insured'  precludes coverage for Koenig's intentional conduct. 58
59 Koenig further contends that Massachusetts Bay was obligated to defend it against claims for personal injuries, which the parties' Broadened Coverage--Garages endorsement 9 defines as: 60 injury, other than bodily injury, arising out of one or more of the following offenses: 61 a. False arrest, detention or imprisonment; 62 b. Malicious prosecution; 63 c. Wrongful entry into, or eviction of a person from, a room, dwelling or premises that the person occupies; 64 d. Oral or written publication of material that slanders or libels a person or organization or disparages a person's or organization's goods, products or services; or 65 e. Oral or written publication of material that violates a person's right of privacy. 66 (Appellee's Br., Supp.App., Broadened Coverage-Garages, at 16 (emphasis added)). In so doing, it asserts that the Film House complaint alleges facts which could potentially constitute an action for wrongful entry, slander, and/or invasion of privacy, thereby invoking the policy's coverage. We, however, are of the opinion that Koenig is not entitled to a defense under this provision. 1. Slander 67 Under Tennessee law, [t]o establish a claim for [slander] the plaintiff must prove that the defendant communicated a false and defamatory statement to the person of another, and that as a result thereof the plaintiffs suffered actual damages. 10 Shipley v. Tennessee Farmers Mut. Ins. Co., 1991 WL 77540, at  5 (Tenn.Ct.App.1991) (citing Emerson v. Garner, 732 S.W.2d 613, 617 (Tenn.Ct.App.1987)). Koenig urges that Film House potentially pleaded these three requisite elements by alleging that Koenig: (1) falsely claimed Film House owed $6,000 on the BMW; (2) communicated false statements that it was going to take the car one way or another ... in the parking lot of insurer's office; and (3) caused significant damage as a result thereof. We find Koenig's argument to be unpersuasive. Giving Koenig the benefit of the doubt and assuming the fact that Film House owed $6,000 on the leased vehicle was false, Koenig nevertheless does not suggest that this particular statement was communicated to other individuals. Rather, it tells us that another declaration--[we are] going to take the car one way or another--was made in the parking lot of insurer's office, and no falsity inheres this statement. Moreover, Koenig relies on statements excerpted from a document entitled, Memorandum of Law and Facts on Behalf of Plaintiff Film House, which explains that Film House should receive compensatory damage because of the humiliation it suffered during and following the repossession, to demonstrate that Film House suffered damages as a result of Koenig's purported slanderous conduct. This proposition is thus extracted not from the complaint, but from an extrinsic document beyond the scope of our inquiry. See Drexel Chemical Co., 933 S.W.2d at 480 (explaining that the obligation of a liability insurance company to defend an action brought against the insured by a third party is determined solely by the allegations contained in the complaint in that action). For these reasons, Koenig's claim that Film House's complaint made out a cause of action for slander is without merit. 2. Invasion of Privacy 68 Koenig's assertion that the facts in the complaint potentially alleged an invasion of privacy is likewise unpersuasive. While there exists more than one branch of liability under the invasion of privacy cause of action, see Stein v. Davidson Hotel Company, 1996 WL 230196, at  7 (Tenn.Ct.App.1996), Koenig fails to identify the specific theory pursuant to which relief was allegedly sought in Film House's complaint (i.e., intrusion into seclusion, disclosing private information, etc.). 11 More significant, however, is the fact that Koenig once again mistakenly references documents other than the Film House complaint in its attempt to craft a claim which would otherwise fall under the Massachusetts Bay insurance policy's coverage. We hasten to point out that this information is not within the purview of our inquiry. See Drexel Chemical Co., 933 S.W.2d at 480 (the duty to defend is determined solely by the factual allegations of the complaint in relation to the language of the insurance policy). Hence, we need not waste valuable judicial resources and devote effort to addressing the substantive merits of its invasion of privacy argument. 3. Wrongful Entry 69 Koenig also claims that the Film House complaint's allegation which reads, [the] conversion was committed through a breach of the peace whereby defendants entered onto plaintiff's property, evidences a wrongful entry, a cause of action for which the Broadened Coverage--Garages endorsement provides coverage. Towards this end, Koenig cites McCall v. Owens, 820 S.W.2d 748, 752 (Tenn.Ct.App.1991), for the proposition that when a repossession breaches the peace as Film House alleged in its complaint, the repossessor may be liable for trespass. (Appellant's Br. at 10 (emphasis added)). We believe that this argument effectively extends us an invitation to create Tennessee law, a course of action that we are in no position to follow. That is, as Koenig points out, McCall explicitly addressed the tort of trespass in a vehicle repossession context, whereas the Massachusetts Bay policy insures against Koenig's wrongful entry into the premises of another. Koenig does not refer us to a single Tennessee case that sets forth the elements of a wrongful entry action, and for good reason, as none exist to our knowledge. We could, of course, equate wrongful entry with trespass, and proceed to consider Koenig's argument vis-a-vis Tennessee trespass principles. Such an analysis certainly would not prove novel to this Court, for we have previously drawn upon Missouri's and Illinois' trespass laws to interpret an insurance policy's definition of wrongful entry. See Pipefitters Welfare Educ. Fund v. Westchester Fire, 976 F.2d 1037 (7th Cir.1992). But the predominant reason for having done so-because Missouri and Illinois courts recognize that wrongful entry is substantially similar to trespass, id. at 1041, is inapplicable to the case at bar. Tennessee courts simply have not been called upon to compare and contrast the two causes of action, and it would be imprudent for us to do so in their stead. It is not our province as a reviewing federal appellate body to make federal law, much less state law.