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Encore Receivable Management, Inc. v. Ace Property and Casualty Insurance Co.

United States District Court, Sixth Circuit

July 3, 2013

ENCORE RECEIVABLE MANAGEMENT, INC., et al., Plaintiffs,
v.
ACE PROPERTY AND CASUALTY INSURANCE COMPANY, et al., Defendants.

ORDER GRANTING IN PART AND DENYING IN PART DEFENDANTS DISCOVER PROPERTY AND CASUALTY INSURANCE COMPANY AND ST. PAUL FIRE'S JOINT MOTION FOR SUMMARY JUDGMENT (Doc. 113)

TIMOTHY S. BLACK, District Judge.

This civil action is before the Court on Defendants'[1] joint motion for summary judgment (Doc. 113) and the parties' responsive memoranda (Docs. 131, 132, 140).

I. BACKGROUND FACTS AND PROCEDURAL POSTURE[2]

Defendants submit this motion in response to Plaintiffs' motion for partial summary judgment (Doc. 66) and in support of their summary judgment motion seeking a declaration that neither owes any obligation to Plaintiffs in connection with the underlying matters, including any of the alternative declaratory relief sought by Plaintiffs.

Plaintiffs bring the instant claims under general liability policies issued by Discover to Plaintiffs' parent Convergys for annual periods from October 1, 2005 to October 1, 2011 and excess liability policies issued by St. Paul to CMG for annual periods from October 1, 2005 through October 1, 2010. (Doc. 1 at ¶¶ 63, 68, 75, 82).[3]

Despite Plaintiffs' argument to the contrary, the Court's prior ruling on Defendants' Rule 12(c) motion does not per se resolve the pending motions in Defendants' favor. All that is required to avoid dismissal through a motion for judgment on the pleadings is that a complaint "contain direct or inferential allegations respecting all the material elements under some viable legal theory." Commercial Money Ctr., Inc. v. llinois Union Ins. Co., 508 F.3d 327, 336 (6th Cir. 2007). The Court's prior ruling found only that the "complaint meets the minimal pleading requirements necessary to sate plausible claims' for which relief may be granted." (Doc. 98 at 1825). The ruling does not contain any analysis of whether the underlying allegations fall within the Policies' insuring agreements or potential application of the various exclusionary defenses.

II. UNDISPUTED FACTS[4]

I. The Policies
A. Primary Policies
1. Discover issued six Commercial Insurance Policies to Convergys Corporation ("Convergys") and its subsidiaries covering the period from October 1, 2005 to October 1, 2011 (the "Discover Policies"). (Doc. 80-4 at 38; Doc. 72-1 at 28; Doc. 72-2 at 27).
2. Old Republic Insurance Company ("Old Republic") issued a Commercial Insurance Policy to Convergys and its subsidiaries for policy year October 1, 2011 to October 1, 2012 (the "Old Republic Policy"). (Doc. 69-1).
B. Umbrella Policies
3. Defendant American Home Assurance Company ("American Home") issued three Commercial Umbrella Liability Policies to Convergys and its subsidiaries covering the period from October 1, 2005 to October 1, 2008 (the "American Home Policies"). (Doc. 1 at ¶ 23).
4. Defendant ACE Property and Casualty Insurance Company ("ACE") issued four Commercial Umbrella Liability Policies to Convergys and its subsidiaries covering the period from October 1, 2008 to October 1, 2012 (the "ACE Policies"). (Docs. 46-1 and 46-2).
5. The ACE Policies provide coverage for "sums in excess of the retained limit' that the insured' becomes legally obligated to pay as damages because of... personal and advertising injury' to which this insurance applies." (Doc. 46-1 at 10, 58; Doc. 46-2 at 1, 58).
6. "Personal and advertising injury" is defined in the ACE Policies to mean: "Injury, including consequential bodily injury', arising out of one or more of the following offenses:... [o]ral or written publication, in any manner, of material that violates a person's right of privacy...." (Doc. 46-1 at 26, 74; Doc. 46-2 at 17, 74).
7. The ACE Policies provide that ACE has "the right and duty to defend the insured' against any suit' seeking damages for... personal and advertising injury'... [w]hen damages sought for... personal and advertising injury' are not covered by underlying insurance' or any other insurance', or any applicable self-insured retention has been exhausted by the payment of loss' covered by this policy." (Doc. 46-1 at 12, 60; Doc. 46-2 at 3, 60).
8. "Loss" is defined in the ACE Policies to mean "those sums paid in the settlement of a claim or suit' or satisfaction of a judgment which the insured' is legally liable to pay as damages because of... personal and advertising injury', after making proper deductions for all recoveries and salvages." (Doc. 46-1 at 25, 73; Doc. 46-2 at 16, 73).
10. The ACE Policies apply to "personal and advertising injuries" "only if the offense causing the personal and advertising injury' takes place in the coverage territory' and during the policy period.'" (Doc. 46-1 at 10, 58; Doc. 46-2 at 1, 58).
11. With respect to "personal and advertising injury, " the word "Occurrence" as defined in the ACE Policies means: "[A] covered offense. All damages that arise from the same act, publication or general conditions are considered to arise out of the same occurrence', regardless of the frequency or repetition thereof, the number or kind of media used or the number of claimants." (Doc. 46-1 at 26, 74; Doc. 46-2 at 17, 74).
12. The ACE Policies state that "this insurance does not apply to... "[p]ersonal and advertising injury' arising out of oral or written publication of material whose first publication took place before the beginning of the policy period'" (the "First Publication Exclusion"). (Doc. 46-1 at 18, 66; Doc. 46-2 at 9, 66).
13. The ACE Policies state that "this insurance does not apply to... [p]ersonal and advertising injury' arising out of a criminal act committed by or at the direction of the insured'" (the "Criminal Acts Exclusion"). (Doc. 46-1 at 18, 66; Doc. 46-2 at 9, 66).
14. The ACE Policies state that "this insurance does not apply to... [p]ersonal and advertising injury' for which the insured' has assumed liability in a contract or agreement" (the "Contractual Liability Exclusion"). (Doc. No. 46-1 at 18, 66; Doc. No. 46-2 at 9, 66). The ...

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