Court Opinion

ID: 9843163
Source: CourtListenerOpinion
Date Created: 2023-09-24 02:29:02.013944+00
Date Added: 2024-06-11T09:14:39.576681
License: Public Domain

NIEMEYER, Circuit Judge,
dissenting:
In determining whether Selective Insurance Company of America is required under its insurance policy to provide a defense to a law suit filed against Richard Fuisz, its insured, we are obliged to read the law suit and determine whether the conduct alleged there is of the kind that Selective Insurance agreed to cover. Under Virginia law, if the complaint alleges “facts and circumstances, some of which would, if proved, fall within the risk covered by the policy,” the insurance company must provide a defense. Parker v. Hartford Fire Ins. Co., 222 Va. 33, 278 S.E.2d 803, 804 (1981) (internal citations omitted). Since I cannot conclude that any of the “facts and circumstances” alleged could give rise to liability that would be covered by Selective Insurance’s policy, I would affirm the district court’s decision reaching the same conclusion.
The insurance policy issued to Fuisz by Selective Insurance excludes coverage for any liability which arises from intentional acts. The policy states that Selective Insurance will “not cover any act committed by ... an insured with intent to cause ... injury” (emphasis added). Thus, irrespective of how the complaint frames its causes of action, coverage is determined by scrutinizing the nature of the conduct alleged, and if the alleged conduct consists solely of acts committed by the insured with the intent to cause injury to another, coverage is not provided. This form of exclusion draws on universal principles of public policy against insuring deliberate conduct which is undertaken with the intent to injure another. See Atlantic Permanent Fed. Sav. & Loan Ass’n v. American Casualty Co. of Reading, Pa., 839 F.2d 212, 217 (4th Cir.1988) (noting that it is against the public policy of Virginia to provide insurance coverage “where the insured acted with the specific intent to cause harm”). Otherwise, insurance could be purchased to cover the adverse effects on the insured of his robbing a bank or pursuing a fraudulent scheme.
In this case, the only possible reading of the underlying complaint against Fuisz is that it alleges deliberate conduct intended to injure Terex Corporation. Specifically, Te-rex Corporation demands that Fuisz answer for conduct deliberately aimed at damaging Terex’s business reputation by accusing it of illegal and unpatriotic connections with Iraq. The action, denominated as a common law claim for libel and slander, summarizes the alleged conduct as “a scheme and plan to injure [Terex] by publicly disseminating false accusations designed to tarnish [its] good name and reputation in the business community” (emphasis added). A “scheme and plan” must, by definition, be intentional.
The historical facts in the complaint describe the development of Fuisz’s “scheme and plan” in detail. First, the complaint relates how Fuisz endeavored, unsuccessfully, to act as Terex’s sales representative in Saudi Arabia. It alleges that Fuisz thereupon “determined to retaliate against [Terex] for the loss of a business opportunity” and engaged in a “vendetta” against Terex. In furtherance of his scheme, Fuisz is alleged to have contacted journalists to spread false information as part of a “smear campaign” against Terex, “falsely linking [Terex] to the sale of military equipment, including scud missile launching equipment, to Iraq,” and implying that Terex aided Saddam Hussein in firing dozens of scud missiles at Israel and Saudi Arabia. The complaint chronicles Fuisz’s initial efforts to contact congressional committees and “responsible and ethical *248members of the media” to spread this false information. When nothing was found to support the charges, the complaint describes how Fuisz then turned to less scrupulous journalists who specialized in “sensationalistic exposes” to spread the information and ultimately get it into the general press. Te-rex demanded that Fuisz retract the false publications but Fuisz refused to do so. Summarizing Fuisz’s deliberate intent to injure Terex, the complaint alleges, “in publishing these false and defamatory statements set forth above, Fuisz was motivated by actual malice and wrongfully and willfully intended to injure plaintiffs.”
The conduct which is described in the complaint can only be characterized as deliberate. There is not a single series of “facts and circumstances” in the complaint which, if true, could have been pursued accidentally or recklessly.
In concluding that the complaint also alleges “reckless” conduct — which Selective Insurance’s policy would not exclude — the majority opinion relies on the single allegation made with respect to each defamatory publication that “Fuisz knew that the statements were false, or published the statements with reckless disregard as to whether they were true or false ” (emphasis added). From this the majority concludes that even if “the evidence at trial fails to establish that Fuisz intentionally harmed Terex, the complaint permits Terex nonetheless to prevail on its claims by proving that Fuisz intended no harm, but acted with reckless disregard for the falsity of his statements.” Op. at 244. But even if Terex could theoretically recover if Fuisz had acted without intent to injure Terex, the complaint never suggests such a possibility. Indeed, if the facts alleged are true, which we must assume in this analysis, it is impossible that Fuisz acted without intent to injure Terex. Moreover, whether Fuisz spread information knowing it to be false or spread it while recklessly indifferent to its truth is irrelevant to the question of whether the injury caused was deliberately inflicted. On that question, the complaint is not ambiguous. Terex alleges that Fuisz purposely spread false information and that Fuisz did so with the single-minded intent of injuring Terex as a “vendetta” for failing to enter into a business relationship with him. The complaint alleges only one type of conduct — a vendetta pursued intentionally to injure — and it never wavers from the accusation that Fuisz’s activities were precalculat-ed, planned, and deliberate, and thus that Fuisz “wrongfully and willfully intended” to injure Terex. If the entire course of conduct imputed to Fuisz was motivated by vendetta and pursued over a long period in conspiracy with others, it cannot follow that the injury Fuisz caused was unintended.
It is just such intentional conduct that is excluded from coverage in Selective Insurance’s policy issued to Fuisz, and must be excluded from any insurance policy in Virginia. Insurance cannot assume responsibility for covering the adverse effects of a person who carries out a vendetta against a company in retaliation for failing to award him a business contract. Because the conduct alleged by Terex in the underlying complaint in this case can only be characterized as acts committed by Fuisz with the intent to cause injury, I would affirm the judgment of the district court. I therefore dissent.