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All Class Constr., LLC v. Mutual Benefit Ins. Co.

United States District Court, D. Maryland

February 26, 2014

ALL CLASS CONSTRUCTION, LLC, et al., Plaintiffs
v.
MUTUAL BENEFIT INS. CO., Defendant

Page 410

For All Class Construction, LLC, William Chaffman, John Cirone, David Dzergoski, Plaintiffs: Steven Lee Tiedemann, LEAD ATTORNEY, Westminster, MD.

For Mutual Benefit Insurance Company, Defendant: Charles B Peoples, LEAD ATTORNEY, Thomas Thomas and Hafer LLP, Baltimore, MD.

OPINION

Page 411

MEMORANDUM

James K. Bredar, United States District Judge.

Pending before the Court is Defendant Mutual Benefit Insurance Company's (" Mutual Benefit" ) motion to dismiss or, in the alternative, motion for summary judgment. (ECF No. 9.) The Court has considered it, the Plaintiffs' opposition (ECF No. 11), and Mutual Benefit's reply (ECF No. 12). No hearing is necessary. Local Rule 105.6 (D. Md. 2011). The motion will be granted.

I. Background

This is an insurance coverage case brought originally in Maryland state court and removed on the basis of diversity to this Court. Plaintiffs are All Class Construction, LLC (" All Class" ), William Chaffman, David Dzergoski, and John Cirone. Plaintiffs allege two causes of action against Mutual Benefit: Count I -- violation of Maryland statutory law for failure to act in good faith in denial of Plaintiffs' claim for coverage, and Count II -- breach of contract or third-party contract. (Compl., ECF No. 2.) Mutual Benefit has supplied to the Court a copy of the insurance policy at issue with its motion (Def.'s Mot. Ex. 1, ECF No. 9-1), and Plaintiffs do not contest its authenticity or that it is integral to their complaint. Accordingly, the Court

Page 412

will rely upon it in considering Defendant's motion. See Am. Chiropractic Ass'n v. Trigon Healthcare, Inc., 367 F.3d 212, 234 (4th Cir. 2004).

A. Insurance Policy

The policy provided, inter alia, commercial property coverage and commercial general liability coverage and was issued on December 6, 2012, to nonparty BOC Masonry, LLC, which was located in Hanover, Pennsylvania, and which had an additional location in Carroll County, Maryland. ( Id. ECF No. 9-1 at 1.) The policy period was January 28, 2013, to January 28, 2014. ( Id. ) On February 19, 2013, the policy was amended to add All Class, also located in Carroll County, Maryland, as an insured, effective retroactively to the policy's inception date of January 28, 2013. ( Id. ECF No. 9-1 at 136.) By its terms, the amended policy included as insureds the members and managers of All Class ( id. ECF No. 9-1 at 31), and it seems to be understood by all parties to the instant suit that Chaffman, Dzergoski, and Cirone fall within that definition.

Relevant to this case, the policy provided coverage for " personal and advertising injury liability," and if the policy applied, the coverage included Mutual Benefit's duty to defend the insureds against any suit seeking those damages. ( Id. ECF No. 9-1 at 28.) " Personal and advertising injury" (hereinafter, " P& A Injury" ) was defined to mean the following:

injury, including consequential " bodily injury", arising out of one or more of the following offenses:
a. False arrest, detention or imprisonment;
b. Malicious prosecution;
c. The wrongful eviction from, wrongful entry into, or invasion of the right of private occupancy of a room, dwelling or premises that a person occupies, committed by or on behalf of its owner, landlord or lessor;
d. Oral or written publication, in any manner, of material that slanders or libels a person or organization or disparages a person's or organization's goods, products or services;
e. Oral or written publication, in any manner, of material that violates a person's right of privacy;
f. The use of another's advertising idea in your " advertisement" ; or
g. Infringing upon another's copyright, trade dress or slogan in your " advertisement" .

(Id. ECF No. 9-1 at 36.)

The policy defined "advertisement" in the following way:

[A] notice that is broadcast or published to the general public or specific market segments about your goods, products or services for the purpose of attracting customers or supporters. For the purposes of this definition:
a. Notices that are published include material placed on the Internet or on similar electronic means of communication; and
b. Regarding web-sites, only that part of a web-site that is about your goods, products or services for the purposes of attracting customers or supporters is considered an advertisement.

(Id. ECF No. 9-1 at 34.)

The policy also included some exclusions to P& A Injury coverage that might be considered relevant to this case:

a. Knowing violation of rights of another

Page 413

b. Material published with knowledge of falsity
c. Material published prior to policy period
. . .
f. Breach of contract
. . .
i. Infringement of copyright, patent, trademark or trade secret
. . .
p. Recording and distribution of material or information in violation of law

(Id. ECF No. 9-1 at 28, 39.)

Finally, the policy addressed limits of insurance and provided the following in pertinent part:

1. The Limits of Insurance shown in the Declarations and the rules below fix the most we will pay ...

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