Opinion ID: 2650308
Heading Depth: 2
Heading Rank: 1

Heading: ANPAC’s Duty to Defend

Text: The duty of an insurer to defend its insured under Oklahoma law “is separate from, and broader than, the duty to indemnify . . . .” First Bank of Turley v. Fid. & Deposit Ins. Co. of Md., 928 P.2d 298, 303 (Okla. 1996). “An insurer has a duty to defend an insured whenever it ascertains the presence of facts that give rise to the potential of liability under the policy.” Id. (emphasis in original). Thus, in order to determine whether ANPAC had a duty to defend Dr. Cohlmia, we must ascertain whether the conduct alleged in the underlying suit gave rise to the potential of liability under ANPAC’s policies covering Dr. Cohlmia. The Oklahoma Supreme Court has held that “the duty of an excess insurer to participate in the insured’s defense is triggered only by exhaustion of the primary policy.” U.S. Fid. & Guar. Co. v. Federated Rural Elec. Ins. Corp., 37 P.3d 828, 832-33 (Okla. 2001). ANPAC’s policies covering Dr. Cohlmia provide: “If there is other insurance covering the same loss or damage, we will pay only -9- for the amount of covered loss or damage in excess of the amount due from that other insurance, whether you can collect on it or not.” Aplt. App., vol. II at 429. PLICO’s policy, on the other hand, contains a “pro rata” clause regarding other insurance coverage. Id. at 331. We therefore agree with the district court that “ANPAC is an excess insurer with regard to [Dr. Yousuf’s] claim for negligence,” and that ANPAC’s duty to defend based on the negligence claim was not triggered because PLICO did not exhaust its policy limits. Yousuf, 718 F. Supp. 2d at 1297-98. But PLICO contends the claim for intentional interference with business relations is another matter. It is undisputed that PLICO’s policy does not cover any intentional conduct, including knowingly engaging in intentional interference with business relations. Therefore, if ANPAC’s policy does cover the intentional misconduct alleged by Dr. Yousuf, ANPAC would become the primary insurer with respect to that claim and would have had an equal duty to defend Dr. Cohlmia in the state court action. Under Oklahoma law, the interpretation of insurance contracts is “a matter of law for the Court to determine . . . .” Dodson v. St. Paul Ins. Co., 812 P.2d 372, 376 (Okla. 1991). Terms in the policy that are “unambiguous, clear, and consistent, are accepted in their plain and ordinary sense, and the contract will be enforced to carry out the intention of the parties as it existed at the time the contract was negotiated.” Id. On the other hand, if the meaning of a term is -10- ambiguous or in conflict with other provisions, the policy will be interpreted “most favorably to the insured and against the insurance carrier.” Id. at 377; see also Spears v. Shelter Mut. Ins. Co., 73 P.3d 865, 868 (Okla. 2003) (“[I]nsurance contracts are contracts of adhesion because of the uneven bargaining position of the parties. Consequently, in the event of ambiguity or conflict in the policy provisions, a policy of insurance is to be construed strictly against the insurer and in favor of the insured.” (internal citations, quotations, and alterations omitted)). ANPAC’s two identical policies covering Dr. Cohlmia state that ANPAC “will pay on behalf of the insured all sums which the insured shall become legally obligated to pay as damages because of bodily injury, property damage, or personal injury caused by an occurrence to which this insurance applies.” Aplt. App., vol. II at 418 (emphasis omitted). The term “occurrence” is defined in the policies as “an accident, including continuous or repeated exposure to conditions which results in bodily injury or property damage neither expected nor intended from the standpoint of the insured and with respect to personal injury, the commission of an offense, or a series of similar or related offenses.” Id. at 426 (emphasis omitted). “Personal injury” is defined to mean: injury which arises out of one or more of the following offenses committed in the conduct of the named insured’s business: a. false arrest, detention or imprisonment, or malicious prosecution; b. the publication or utterance of a libel or slander or of other defamatory or disparaging material, or a publication or utterance in violation of an individual’s right of privacy . . . . -11- Id. at 426-27 (emphasis added). In the underlying suit, the damages that Dr. Yousuf alleged he suffered fall into this definition of “personal injury” because they arose from the publication or utterance of disparaging material. As the district court noted, the tort of interference with business relations is also sometimes called disparagement. Yousuf, 718 F. Supp. 2d at 1286. We held in Bankwest v. Fidelity & Deposit Co. of Maryland, 63 F.3d 974 (10th Cir. 1995), under Kansas law, that policy language virtually identical to the provision at issue here provided coverage for the tort of interference with business relations. Id. (“[W]e conclude that [the policy term covering ‘the offense’ of] ‘the publication of . . . other defamatory or disparaging material’ is susceptible of a construction supporting coverage of the [Plaintiff’s] claim that [Defendant] interfered with their contractual and business relations . . . .”); see also McCormack Baron Mgmt. Servs., Inc. v. Am. Guar. & Liab. Ins. Co., 989 S.W.2d 168, 171 (Mo. 1999) (holding that commercial general liability policy providing coverage for “personal injury” stemming from “disparagement” includes claim for tortious interference with contractual relationships); Forbes Inc. v. Granada Biosciences, Inc., 124 S.W.3d 167, 170 (Tex. 2003) (“A business disparagement claim is similar in many respects to a defamation action. The two torts differ in that defamation actions chiefly serve to protect the personal reputation of the injured party, while -12- a business disparagement claim protects economic interests.” 2 (internal citation omitted)). We similarly conclude that the provision in ANPAC’s policy providing coverage for “personal injury” resulting from “the publication or utterances of a libel or slander or of other defamatory or disparaging material” is broad enough to encompass the tort of intentional interference with business relations. ANPAC has provided no authority to convince us that Oklahoma courts would hold otherwise.