Court Opinion

ID: 9490126
Source: CourtListenerOpinion
Date Created: 2023-08-05 13:33:42.705039+00
Date Added: 2024-06-11T17:53:54.883845
License: Public Domain

BEEZER, Circuit Judge,
dissenting:
The opinion of the court holds that the defamation at issue is not “clearly employment-related.” I dissent.
The first principle of contract interpretation is to ascertain the plain meaning of the language. “If the contractual language is clear and explicit, it governs.” Frank and Freedus v. Allstate Ins. Co., 45 Cal.App.4th 461, 52 Cal.Rptr.2d 678, 684 (1996). The “Employment-Related Practices Exclusion” in Allstate’s policy provides that coverage does not apply to “personal injury” arising out of “defamation ... or other employment-related practices, policies, acts or omissions.” Consistent with the California Court of Appeals’ holding in Frank and Freedus, I would hold that this language is clear and unambiguous. Id. 52 Cal.Rptr.2d at 684.
Also consistent with Frank and Freedus, I would hold that the defamation at issue here “arose out of’ an employment-related act. The defamation occurred approximately three months after Cade’s termination as president of Cade-Grayson. A Cade-Grayson manager circulated a memo to all of the sales representatives recommending responses to questions regarding “Cade-Grayson and Steve Cade’s status.” The memo went on to say that Cade was terminated for acts involving dishonesty.
But for Cade’s employment with Cade-Grayson, the defamation would not have occurred. This renders the defamation “employment-related” and that is all that is required by the contract in order for the exclusion to apply. It is not necessary that the defamation be “clearly employment-related.” Nor is it necessary that the defamation was “a part of or directly and proximately resulted from the termination.”
*648According to Frank and Freedus, a defamatory statement is employment-related if it is made in the context of employment and if its content is directed to performance during employment. 52 Cal.Rptr.2d at 684. The opinion of the court distinguishes Frank and Freedus on the grounds that the statements at issue here were not made in the context of Cade’s employment. While the statements were directed at the marketplace, they also were directed at the current employees of Cade-Grayson. In Frank and Freedus the court concluded that statements directed at employees were made in the context of employment. Id. 52 Cal.Rptr.2d at 685.
The facts of this case are materially indistinguishable from those of Frank and Freedus. I would hold that the defamation here arose out of an employment-related act, and affirm the district court.