Court Opinion

ID: 6983162
Source: CourtListenerOpinion
Date Created: 2022-07-24 02:39:14.494908+00
Date Added: 2024-06-11T16:09:18.585939
License: Public Domain

ILANA DIAMOND ROVNER, J„
dissenting.
The majority rejects the possibility of coverage in this case by focusing solely on the allegations of the complaint that address the misappropriation of the customer lists. Although those allegations comprise the core of the complaint in this case, they are not exhaustive of the allegations in this complaint. We have previously recognized that an insurer cannot avoid its duties of defense and indemnification by reference to the core or dominant character of the plaintiffs allegations. Curtis-Universal, Inc. v. Sheboygan Emergency Medical Services, Inc., 43 F.3d 1119, 1122 (7th Cir.1994). Instead, an insurer must defend if any conduct alleged in the complaint falls within the insurance policy, even if those allegations constitute only a “subordinate aspect” of the complaint; Id. Because other allegations in the complaint arguably involve conduct within the policy provisions, I am unwilling to join my brothers.
As the majority recognizes and all parties concede, this is a case involving the duty to defend, not the duty to indemnify. The duty to defend is broader than the duty to indemnify, and is triggered by arguable, not actual, coverage. Bruner v. Heritage Companies, 593 N.W.2d 814, 817 (Wis.App.Ct.1999). Thus, “[i]n determining an insurer’s duty to defend, we apply the factual allegations present in the complaint to the terms of the disputed insurance policy.... We liberally construe those allegations and assume all reasonable inferences.” Doyle v. Engelke, 219 Wis.2d 277, 580 N.W.2d 245, 248 (1998). Moreover, all doubt as to the existence of the duty to defend must be resolved in favor of the insured. Wausau Tile, Inc. v. County Concrete Corp., 226 Wis.2d 235, 593 N.W.2d 445, 459 (1999).
Our starting point, therefore, is the complaint itself. The complaint alleges that: Wisconsin Tire- made contact with numerous MITA customers via telephone, at personal meetings, and through print advertising, and was in direct competition with MITA; Wisconsin Tire, for the purpose of wilfully and maliciously injuring MITA in its reputation, trade, and business, conspired to engage in unfair competition and to injure MITA in its reputation, trade and business; and through those acts of personal contact and print advertising, MITA suffered severe damage to its reputation. Those allegations, along with all reasonable inferences, at least arguably fall within the “personal injury” provision of the United Security’s garage policy, and the “advertising injury” provision of Western States’ umbrella policy.
*704Personal injury under the garage policy includes “injury ... arising out of ... oral or written publication of material that slanders or libels ... [an] organization or disparages ... [an] organization’s goods, products or services.” The allegations above at least arguably involve personal injury under that definition, and that is all that is required. The complaint alleges that Wisconsin Tire acted through telephone contact, personal meetings and print advertising, which are sufficient to fall under the oral or written publication requirement of the definition. Moreover, the complaint alleges that Wisconsin Tire conspired to injure MITA in its reputation, and did in fact cause severe damage to MITA’s reputation through, among other acts, the acts involving print advertising and personal contact. One can certainly infer from those allegations that Wisconsin Tire disparaged MITA’s goods, products or services; in fact, that is the most obvious way that the contact would result in severe damage to its reputation. Unlike the majority, I cannot assume that the reputational injury was caused by MITA’s “customers’ conclusion that it [MITA] couldn’t keep a secret.” Maj. Op. at 701. That is pure speculation, and we are simply not at liberty to make such leaps of conjecture in this context. In fact, we are required to construe the complaint liberally in favor of the insured, but the majority appears to do just the opposite with that conclusion. Because the allegations of the complaint, taken with all reasonable inferences, arguably fall within the policy language, United Security had a duty to defend.
For similar reasons, Wisconsin Tire has succeeded in demonstrating potential coverage under the “advertising injury” provision of Western States’ umbrella policy. The majority rejects this claim, holding that the complaint fails to allege any advertising, and that Wisconsin Tire wants us to treat advertising as including any calls by salesmen. The complaint, however, explicitly states that Wisconsin Tire engaged in “print advertising,” and that those actions as well as others resulted in severe damage to MITA’s reputation. Those allegations are sufficient to raise an inference of an injury caused by advertising, even under a restrictive definition of that term.
This interpretation is more consistent with the broad interpretation given to complaints in other cases. For instance, in Doyle, the Wisconsin Supreme Court construed a clause in the policy that protected against bodily injury. 580 N.W.2d at 249-250. The policy defined bodily injury as “any physical harm, including sickness or disease.... ” The complaint in that case alleged that Doyle suffered “emotional distress” that was “disabling.” The court held that those allegations were sufficient to fall within the policy, construing them liberally and interpreting the policy as including emotional and psychological harm.
Similarly, the Wisconsin Court of Appeals made clear the broad interpretation that is required in a duty to defend case in Production Stamping Corporation v. Maryland Casualty Co., 199 Wis.2d 322, 544 N.W.2d 584 (1996). The issue in Production Stamping was whether a contamination of adjacent land occurred prior to 1986. The relevant facts alleged .in the complaint were as follows: the corporation owned the property since 1960; the contamination was discovered in October 1990; the contamination occurred during the corporation’s ownership; and the contamination existed for “a long time.” Id. at 327-28, 544 N.W.2d 584. The court held that “giving Production Stamping the benefit of the doubt, as we must, these allegations are sufficient to allege that Production Stamping’s discharge of the chemicals contaminated the adjoining landowner’s property prior to January 1, 1986.” Id. at 328, 544 N.W.2d 584. That case illustrates that even vague allegations can trigger the duty to defend if they allow for a reasonable inference of policy coverage. See also Roman Catholic Diocese of Springfield v. Maryland Casualty Co., 139 *705F.3d 561 (7th Cir.1998). By contrast, the allegations in the present case are far more cleai’ly within the policy provisions, because the allegations contain language directly implicating the policy provisions. When we consider reasonable inferences in addition to that language, we must conclude that the complaint at least triggered the duty to defend. Therefore, I respectfully dissent.