Opinion
DOCKET NO. A-2813-09T3
08-01-2011
PENN NATIONAL INSURANCE COMPANY, Plaintiff-Respondent, v. GROUP C COMMUNICATIONS, INC., Defendant-Appellant.
Giordano, Halleran & Ciesla, attorneys for appellant (Michael J. Canning, of counsel and on the briefs; Matthew N. Fiorovanti, on the briefs). Maloof, Lebowitz, Connahan & Oleske, P.A., attorneys for respondent (Robert M. Brigantic, on the brief).
NOT FOR PUBLICATION WITHOUT THE
APPROVAL OF THE APPELLATE DIVISION
Before Judges Graves, Messano, and Waugh.
On appeal from Superior Court of New Jersey, Law Division, Monmouth County, Docket No. L-134-09.
Giordano, Halleran & Ciesla, attorneys for appellant (Michael J. Canning, of counsel and on the briefs; Matthew N. Fiorovanti, on the briefs).
Maloof, Lebowitz, Connahan & Oleske, P.A., attorneys for respondent (Robert M. Brigantic, on the brief). PER CURIAM
Defendant Group C Communications, Inc. (Group C), appeals the judgment of the Law Division declaring that plaintiff Penn National Insurance Company (Penn National) has no duty to defend or indemnify it with respect to claims raised in a class action suit alleging that Group C violated the Telephone Consumer Protection Act (TCPA), 4 7 U.S.C.A. § 22 7, by sending an unsolicited fax to the members of the class. We affirm in part and reverse in part.
I.
We discern the following facts and procedural history from the record.
A.
Group C is "an integrated business to business media company." In a press release that was part of the record on the motion for summary judgment, Group C described its business history up to the time relevant to this action, 2005, as follows:
Group C Media, Inc. was founded in 1968 as American Industrial Properties Report. In 1983 the company changed its name to the Business Facilities Publishing Company and began publishing Business Facilities Magazine. As an offshoot of Business Facilities, Group C founded Today's Facility Manager magazine (originally named Business Interiors) in 1988. As the business began to expand, the company changed the name of the organization to Group C Communications.Business Facilities covers "corporate real estate and relocation," and has a subscriber base of 43,000. Today's Facility Manager covers the "corporate and institutional maintenance and operations of a facility," and has a subscriber base of 50,000.
In 1998, Group C founded The TFM Show, an annual trade show and conference covering all aspects of facility management.
In 2005, Group C launched Business Facilities LiveXchange, a hosted buyer event developed to streamline the site selection process. This invitation-only event is for
corporate decision makers who are looking to fast-track location decisions in a professional environment.
Typical attendees at the TFM show are "government, institutional, corporate facility manager[s] that [have] responsibility for purchasing products and services to maintain and operate their facility." Group C finances the TFM show through the fees received from exhibition booths, sponsorships, and attendee registrations.
Prior to 2005, Group C had generally promoted the TFM show to companies with which it already had a business relationship. To promote its 2005 show in Chicago, Group C rented a list of potential attendees from the Chicago Convention and Tourism Bureau (CCTB). It then hired a company to broadcast a fax advertising the show to entities on the CCTB list, using fax numbers from the list. The fax was sent to over forty recipients on April 14, 2005. One of those recipients was G.M. Sign, Inc., an Illinois company that had never done business with Group C.
B.
At the time the fax was sent to G.M. Sign, Group C was insured by two Penn National policies, the Businessowners Policy (primary policy) and the Commercial Umbrella Policy (umbrella policy). We discuss the coverages and exclusions concerning each policy separately. Because Group C does not claim coverage under the "bodily injury" provisions of either policy, we explore only the property damage, personal injury, and advertising injury coverages.
i.
We start with the primary policy. Section A(1)(a) requires Penn National to "pay those sums that the insured becomes legally obligated to pay as damages because of . . . 'property damage,' 'personal injury' or 'advertising injury' to which this insurance applies."
Section F(15) defines "property damage" as:
a. Physical injury to tangible property, including all resulting loss of use of that property. All such loss of use shall be deemed to occur at the time of the physical injury that caused it; orThere is coverage for "property damage" caused by an "occurrence," which is defined as "an accident, including continuous or repeated exposure to substantially the same general harmful conditions."
b. Loss of use of tangible property that is not physically injured. All such loss of use shall be deemed to occur at the time of the "occurrence" that caused it.
Section A(1)(b)(2)(b) of the primary policy defines "advertising injury" as an injury arising out of "oral or written publication of material that violates a person's right of privacy" which "offense [is] committed in the course of advertising your goods, products or services."
Under Section A(1)(b)(2)(a) of the primary policy, there is coverage for "personal injury" caused by "an offense arising out of your business, excluding advertising, publishing, broadcasting or telecasting done by or for you." Under Section F(13)(e) of the primary policy, "Personal injury" is defined to include injury, other than "bodily injury," arising out of the "[o]ral or written publication of material that violates a person's right of privacy."
In Section B(1)(p)(3) of the primary policy, there is an exclusion for personal injury and advertising injury claims "[a]rising out of the willful violation of a penal statute or ordinance committed by or with the consent of the insured." Section B(1)(q)(4) of the primary policy also excludes coverage for an advertising injury arising out of "[a]n offense committed by an insured whose business is advertising, broadcasting, publishing or telecasting."
ii.
We now turn to the umbrella policy, which provides excess coverage above the one million dollars of coverage provided by the primary policy. Section of the umbrella policy provides that Penn National will "pay on behalf of the insured the 'ultimate net loss' in excess of the 'applicable underlying limit' which the insured becomes legally obligated to pay as damages because of . . . Property Damage Liability . . . and . . . Personal Injury and Advertising Injury Liability."
Under the umbrella policy, "property damage" is defined as: "(a) Physical injury to tangible property, including all resulting loss of use of that property; and (b) Loss of use of tangible property that is not physically injured . . . which occurs during the policy period." Coverage is provided for "property damage" caused by an "occurrence," which is defined as "an accident, including continuous or repeated exposure to substantially the same general harmful conditions."
Section V(1)(b) of the umbrella policy defines "advertising injury" as injury arising out of "oral or written publication of material that violates a person's right of privacy" which offense is "committed during the policy period."
In Section V(9)(e) of the umbrella policy, "personal injury" is defined as injury arising out of "[o]ral or written publication of material that violates a person's right of privacy." Unlike the definition of "personal injury" in the primary policy, the definition in the umbrella policy does not exclude a claim for invasion of privacy resulting from "advertising [or] publishing . . . done by or for you."
Section I(3)(g)(3) of the umbrella policy excludes coverage for personal injury and advertising injury claims "arising out of . . . [t]he willful violation of a penal statute or ordinance committed by or with the consent o[f] the insured." Section I(3)(f)(4) of the umbrella policy excludes coverage for an advertising injury arising out of "an 'offense' committed by an insured whose business is advertising, broadcasting, publishing or telecasting."
The umbrella policy also contains a "Publishers Liability Exclusion" which provides:
This insurance does not apply to "bodily injury," "personal injury," "advertising injury" or "property damage" [resulting from] dissemination of any matter published or printed by the insured or other person for whom the insured is legally responsible including any of the following:However, the umbrella policy further provides that the "exclusion shall not apply to advertising by or on behalf of the insured for the purpose of promoting its own business if such advertising does not involve quoting from the text of any printed or published material."
1. Libel, slander or other acts of defamation;
2. Invasion of privacy;
3. Malicious prosecution or humiliation;
4. Infringement of copyright, title or slogan; or
5. Piracy, plagiarism, unfair competition or misappropriation of ideas.
C.
In July 2008, G.M. Sign filed a class action complaint against Group C in the state courts of Illinois alleging a violation of the TCPA's prohibition of "faxing or having an agent fax advertisements without the recipient's prior express invitation or permission ('junk faxes' or 'unsolicited faxes')." See 4 7 U.S.C.A. § 227(b)(1)(C). According to G.M. Sign, Group C's actions transgressed the "class members' privacy interests in being left alone," causing them to "lose[] the use of [their] fax machine, paper, and ink toner." In addition to the TCPA claim, G.M. Sign asserted claims under the common law of conversion and the Illinois Consumer Fraud and Deceptive Business Practices Act, 815 Ill. Comp. Stat § 505/2 (2002).
47 U.S.C.A. § 227(b)(3) provides a private right of action for violations of subsection (b). There is no criminal penalty, as there is in 47 U.S.C.A. § 227(e)(5)(B) for violations of the subsection prohibiting the provision of inaccurate caller identification information. Consequently, the exclusion in the policy provisions for injury "arising out of . . . [t]he willful violation o[f] a penal statute or ordinance by or with the consent of the insured" is not applicable in this case.
Group C notified Penn National of the class action complaint and sought a defense and indemnification pursuant to the polices. Penn National responded that there were "coverage issues" under the terms of the policies. It outlined some of the coverage and exclusion provisions of both policies. Penn National undertook to "review the matter further and advise [Group C] of [Penn National's] final coverage position in the near future." Penn National offered to defend the underlying action subject to a reservation of rights.
In December 2008, Penn National sent Group C a letter denying coverage. The letter advised Group C that it intended to pursue a declaratory judgment action to determine the coverage issue. Penn National nevertheless continued its offer to provide a defense, subject to a reservation of rights, pending disposition of the contemplated declaratory judgment action. Group C accepted that offer.
D.
In January 2009, Penn National filed the complaint in this matter in the Law Division. Penn National sought a declaratory judgment that it had no obligation to defend or indemnify Group C in the class action under either of the policies. Group C filed a counterclaim, alleging that Penn National had a duty to defend the underlying complaint under both insurance policies and that Penn National had "breached [its] duty of good faith and fair dealing . . . in wrongfully denying [Group C's] claim for coverage." Group C also sought counsel fees and costs pursuant to Rule 4:42-9(a)(6).
Following discovery, Penn National and Group C filed cross-motions for summary judgment. The motion judge heard oral argument on January 8, 2010. The judge then delivered a brief oral decision granting Penn National's motion for summary judgment and denying Group C's cross-motion. He also entered an order implementing his decision.
This appeal followed.
II.
On appeal, Group C argues the motion judge erred in determining that the Penn National policies provided no coverage with respect to the underlying class action suit. Penn National urges us to affirm the judge's decision. Before addressing the specific issues raised on appeal, we outline the general principles of law that govern our decision.
A.
It is well-established that our review of a trial judge's conclusions of law is de novo. Manalapan Realty, L.P. v. Twp. Comm. of Manalapan, 140 N.J. 366, 378 (1995) ("A trial court's interpretation of the law and the legal consequences that flow from established facts are not entitled to any special deference."). Consequently, we review a grant of summary judgment de novo, applying the same standard governing the trial court under Rule 4:46-2(c). Brill v. Guardian Life Ins. Co. of Am. , 142 N.J. 520, 539-40 (1995); Chance v. McCann, 405 N.J. Super. 547, 563 (App. Div. 2009) (citing Liberty Surplus Ins. Corp. v. Nowell Amoroso, P.A., 189 N.J. 436, 445-46 (2007)).
In addressing a motion for summary judgment, a court must "consider whether the competent evidential materials presented, when viewed in the light most favorable to the non-moving party, are sufficient to permit a rational factfinder to resolve the alleged disputed issue in favor of the non-moving party." Brill, supra, 142 N.J. at 540; see also R. 4:46-2(c). Because the trial court granted summary judgment to Penn National, we must construe the facts in the light most favorable to Group C. Liberty Surplus, supra, 189 N.J. at 445.
The interpretation of an insurance contract typically raises questions of law. Consequently, it is generally appropriate to resolve such questions on summary judgment. Adron, Inc. v. Home Ins. Co., 292 N.J. Super. 463, 473 (App. Div. 1996) (citing Weedo v. Stone-E-Brick, Inc., 155 N.J. Super. 474, 479 (App. Div. 1977), rev'd on other grounds, 81 N.J. 233 (1979)).
When reviewing an insurance policy, a court "should give the policy's words 'their plain, ordinary meaning.'" President v. Jenkins, 180 N.J. 550, 562 (2004) (quoting Zacarias v. Allstate Ins. Co., 168 N.J. 590, 595 (2001)). If the terms of the insurance policy are clear and unambiguous, the court "should interpret the policy as written and avoid writing a better insurance policy than the one purchased." Ibid. (citing Gibson v. Callaghan, 158 N.J. 662, 670 (1999)). If the insurance contract is ambiguous, the policy should be construed in favor of providing coverage for the insured. Id. at 5 63 (citing Doto v. Russo, 140 N.J. 544, 556 (1995)).
Ambiguity only occurs "where the phrasing of the policy is so confusing that the average policyholder cannot make out the boundaries of coverage." Weedo, supra, 81 N.J. at 247; see also Powell v. Alemaz, Inc., 335 N.J. Super. 33, 44 (App. Div. 2000) ("An insurance policy is not ambiguous merely because two conflicting interpretations of it are suggested by the litigants."). A court should not strain the language of the insurance policy to create ambiguity. Stiefel v. Bayly, Martin & Fay of Conn., Inc., 242 N.J. Super. 643, 651 (App. Div. 1990).
"'[T]he duty to defend [an insured] comes into being when the complaint states a claim constituting a risk insured against.'" Voorhees v. Preferred Mut. Ins. Co., 128 N.J. 165, 173 (1992) (first alteration in original) (quoting Danek v. Hommer, 28 N.J. Super. 68, 77 (App. Div. 1953), aff'd o.b., 15 N.J. 573 (1954)). "Whether an insurer has a duty to defend is determined by comparing the allegations in the complaint with the language of the policy." Id. at 173. "The duty to defend arises when the comparison reveals that if the allegations of the complaint are sustained, the insurer will be required to pay any resulting judgment. Any doubts are resolved in favor of the insured." Sears Roebuck & Co. v. Nat'l Union Fire Ins. Co., 340 N.J. Super. 223, 241 (App. Div.) (citing Voorhees, supra, 128 N.J. at 173), certif. denied, 169 N.J. 608 (2001).
"In general, insurance policy exclusions must be narrowly construed; the burden is on the insurer to bring the case within the exclusion." Princeton Ins. Co. v. Chunmuang, 151 N.J. 80, 95 (1997) (citing Burd v. Sussex Mut. Ins. Co., 56 N.J. 383, 399 (1970)). Once an insurer meets the exclusion's threshold, the exclusion is given effect if it is "specific, plain, clear, prominent, and not contrary to public policy." Doto, supra, 140 N.J. at 559 (citing Catton v. N.J. Full Ins. Underwriting Ass'n, 242 N.J. Super. 5, 10-11 (App. Div. 1990)).
B.
We turn first to the question of whether there was coverage under the advertising injury provisions of the Penn National policies. Inasmuch as the fax that formed the basis for the underlying class action was an instance of advertising by Group C, the advertising injury provisions would appear to be the most logical sources of any coverage.
Section (A)(1)(b)(2)(b) of the primary policy provides coverage for injuries "caused by an offense committed in the course of advertising your goods, products or services." With respect to the umbrella policy, "Coverage B" of Section I provides coverage for excess damages because of an "Advertising Injury Liability."
The motion judge determined that any coverage suggested by those policy provisions was not available to Group C because they were specifically excluded by the exemptions contained in each policy. The applicable language in the primary policy, Section (B)(1)(q)(4), excludes an "advertising injury" arising out of "[a]n offense committed by an insured whose business is advertising, broadcasting, publishing or telecasting." An identical exclusion is contained in Section I(3)(f)(4) of the umbrella policy.
Group C asserts that the advertising injury exclusions for offenses "committed by an insured whose business is advertising, broadcasting, publishing or telecasting" are inapplicable because it is a diverse, "multi-faceted" company that cannot be shoehorned into that exclusionary category. It contends that the motion judge erred in granting summary judgment because there existed a genuine issue of material fact precluding summary judgment on the applicability of the exclusion. Group C argues in the alternative that the exclusion is sufficiently ambiguous that it should be interpreted in favor of coverage.
Language similar to that contained in both policies has been interpreted by other courts as being unambiguous, but also as requiring that the insured's "principal or primary" business must fall within the specifically excluded business. State Auto Prop. & Cas. Ins. Co. v. Travelers Indem. Co., 343 F.3d 249, 261 (4th Cir. 2003) ("The Business of Advertising Exclusion applies to those insureds, and only to those insureds, whose principal or primary business is advertising."); Am. Employers' Ins. Co. v. DeLorme Publ'g Co., 39 F. Supp. 2d 64, 81 (D. Me. 1999).
In DeLorme, the court analyzed the issue as follows:
The Court rejects DeLorme's attempt to convince the Court that the language of the
exclusion is ambiguous and should, as the canons of insurance contract interpretation provide, be interpreted in favor of coverage. DeLorme contends that it is unclear from a plain reading of the exclusion whether it applies to businesses whose sole business is one of the four areas or whether the exclusion encompasses insureds whose business, only in part, is one of the four areas. Clearly, the exclusion does not apply to insureds whose sole business is one of the four areas. This flies in the face of common sense. Most, if not all, businesses are engaged in multiple areas of business even if they primarily practice in one area. For instance, a company that primarily manufactures goods likely advertises those goods and perhaps even publishes a catalog featuring those goods. A person of ordinary intelligence would still accurately describe this company as a company that is in the business of manufacturing. It would belie logic to interpret the exclusion in a manner that rendered it wholly inapplicable because no insureds would qualify.
Additionally, the language of the exclusion makes it clear that it does not apply to insureds who are "in the business of . . . publishing" only in part. The phrasing "insureds whose business is . . ." clearly contemplates that the insured is more than just, in part, engaged in one of the four listed activities. An ordinary person would not reasonably conclude that the exclusion applies if one of a company's ancillary activities is in one of the four listed areas. For example, the fictitious manufacturing company described above would not be excluded from coverage for suits arising from "advertising injuries" simply because, in addition to chiefly manufacturing goods, it advertises its goods and publishes a catalog. By not qualifying the phrase "in the business" to include
even "in the business in part," the parties did not broaden the reach of the exclusion to include insureds whose ancillary activities include one of the four listed areas. Hence, in this context, to be "in the business" of one of the four listed areas plainly means to be more than merely engaged in part and clearly means to be at least primarily engaged in that activity. Furthermore, as required under Maine law, this interpretation is more in favor of the existence of coverage and, thus, liberally construed in favor of insureds.
A policy is ambiguous only if it is susceptible to alternative meanings by an ordinary person. "This is not to say, however, that every time an insurer and an insured disagree on the meaning of the contract, the insured's interpretation must prevail. Mere hope of coverage by the insured, or inability of the insured to understand the policy, does not render the contract ambiguous." Colford v. Chubb Life Insur. Co. of Am., 687 A.2d 609, 614 (Me. 1996). Here, the language of the exclusion is reasonably and fairly susceptible to only one meaning. An ordinary person would reasonably understand that the exclusion applies to insureds who are primarily, rather than solely or only partially, engaged in one of the four listed areas of business and thereby excluded from the CGL policy's coverage for suits arising from "advertising injuries." It is possible that a question of fact may arise under this provision as to whether the insured is, in fact, primarily in the business of one of the four listed areas rather than involved merely in an ancillary manner. This, however, does not render the language obscure and the factual basis for the application of the plain meaning of the language can be determined from the evidence by the fact finder.
[DeLorme, supra, 39 F . Supp . 2d at 81-82.]
That reasoning was adopted by the Fourth Circuit in State Auto, supra, 343 F.3d at 261:
The "phrasing 'insureds whose business is . . .' clearly contemplates that the insured is more than just, in part, engaged in" advertising. DeLorme, 39 F. Supp. 2d at 81 (interpreting, under Maine law, similar insurance policy provision). By the same token, however, we do not view the Business of Advertising Exclusion as limited to those insureds whose sole business is advertising. As the DeLorme court recognized, "most, if not all, businesses are engaged in multiple areas of business even if they primarily practice in one area." Id . Instead, the logical interpretation is that the Business of Advertising exclusion "applies to insureds whose primary, essential, chief or principal business" is advertising. Id .
We agree with DeLorme that the policy language is not ambiguous. We also agree that it must be interpreted to mean that, for the exclusion to apply, the insured's primary business must fall within one of the excluded business types.
In arguing that the exclusion is applicable, Penn National relies on the October 23, 1991 application for the primary policy, in which Group C categorized its business as "Offices — Advertising." That classification, which was used by Penn National to issue Group C its first policy, also appeared on the declaration page for the 2004-2005 primary policy, which is the one at issue here. Group C nevertheless asserts that it "inaccurately described the nature of Group C's business."
Group C's effort to downplay the importance of the declarations page is not persuasive. New Jersey courts "have previously recognized the important role that declaration sheets play in informing an insured about the parameters of insurance coverage. . . . '[T]he one page most likely to be read and understood by the insured is the declarations sheet.'" Pizzullo v. N.J. Mfrs. Ins. Co., 196 N.J. 251, 272 (2008) (quoting Zacarias, supra, 168 N.J. at 603 (internal citation omitted)). The duty to review the declaration page rests on the insured, not the insurer. Id. at 273. Group C never notified Penn National that there was an error with respect to its business designation on the declaration page. In addition, Group C has a substantial publishing business. Business Facilities was founded in 1983 and has a subscriber base of 43,000, while Today's Facility Manager was founded in 19 88 and has a subscriber base of 50,000.
The record indicates that Group C had other business ventures in 2005. Although Penn National has a strong argument in its favor, we believe that the determination as to whether Group C's "primary, essential, chief or principal" business was "advertising, broadcasting, publishing or telecasting" in 2005 should be made by the finder of fact, rather than in the context of a motion for summary judgment. Our reading of the motion judge's brief opinion suggests that he did not utilize the DeLorme standard in reaching his determination.
Consequently, we reverse the grant of summary judgment on the issue of "advertising injury" coverage and remand for further proceedings consistent with this opinion.
C.
Group C also argues that there is personal injury coverage under the umbrella policy. It relies on a plain language comparison between the two policies. The primary policy explicitly excludes offenses arising from advertising or publishing, while the umbrella policy contains no parallel language. Group C further contends that the publisher's liability exclusion does not preclude coverage because the facsimile only promoted its own business, not that of a third-party.
Group C ignores the umbrella policy's definition of "personal injury." It defines "personal injury" as:
[I]njury, other than "bodily injury," arising out of one or more of the following offenses committed during the policy period:As a result, coverage for "personal injury" arising out of "advertising . . . done by or for [Group C]" is not covered under the personal injury provision of the policy by virtue of the definition of "personal injury." Because there is no coverage, we need not reach the publisher's liability exclusion.
. . . .
e. Oral or written publication of material that violates a person's right of privacy;
. . . .
Such "offenses" must arise out of the conduct of your business, excluding advertising, publishing, broadcasting or telecasting done by or for you.
[(Emphasis added).]
Consequently, the motion judge correctly determined that there is no personal injury coverage under the umbrella policy. We affirm that aspect of his decision.
D.
Finally, Group C claims that there was property damage coverage under both policies. The underlying complaint alleged that "[r]eceiving [d]efendant's junk faxes caused the recipients to lose paper and toner consumed in the printing of [d]efendant's faxes." Group C argues that those allegations fall within the property damage definition of both polices: "[l]oss of use of tangible property that is not physically injured." Group C further asserts that any such damage resulted from "an occurrence" within the meaning of both policies and was not "expected or intended" from its standpoint, so that Exclusion B(1)(a) of the primary policy does not apply.
The prevalent rule in New Jersey is that "the accidental nature of an occurrence is determined by analyzing whether the alleged wrongdoer intended or expected to cause an injury. If not, then the resulting injury is 'accidental,' even if the act that caused the injury was intentional." Voorhees, supra, 128 N.J, at 183 (emphasis added). Additionally, "[t]he general trend appears to require an inquiry into the actor's subjective intent to cause injury." Id. at 184 (emphasis added).
Here, Ted Coene, Group C's co-president, certified that:
When I acquired the list from the CCTB, I advised that Group C would probably use the list for the dissemination of facsimiles. The CCTB never recommended that I obtain permission from each addressee before doing so and never said I was not allowed to send faxes promoting the TFM Show to the names on the list. This supported my belief that I had permission to fax the document to each company listed by the CCTB, since I reasonably concluded that a governmental entity could not sell a list of facsimile numbers without first receiving permission from those companies.His deposition testimony supported the same position:
[QUESTION]: All right. When the [CCTB] rented Group C the list, were there any documents stating that [Group C] couldn't use the list to send advertisements by fax?These statements, when viewed in the light of Voorhees, supra, 128 N.J, at 183-84, suggest that G.M. Sign's receipt of the fax may have been an "occurrence" rather than an intentional wrong. If Group C had a good faith belief that the fax was not unwelcome, then the exclusion would not be applicable. Terra Nova Ins. Co. v. Fray-Witzer, 869 N.E.2d 565, 571 (Mass. 2007) ("Any sender of a facsimile advertisement knows that his recipient will be forced to consume paper and toner, and will lose temporarily the use of the facsimile transmission line.").
[ANSWER]: No.
[QUESTION]: Okay. So, there was no mention at all; is that correct?
[ANSWER]: No, there was no mention. As a matter of fact, it was known that we wanted to use the list for fax. That's why fax numbers were on it.
In Terra Nova, the insured knew that it did not have permission to broadcast the fax. The insured "knew that it had purchased the contact information . . . without any information as to whether these people had given consent to be contacted." Ibid. The Supreme Judicial Court of Massachusetts concluded "[i]n light of these facts, it cannot be said that the transmission of unsolicited facsimile advertisements was accidental in nature." Ibid. When an insured knows that it does not have permission to send a broadcast facsimile, then it logically follows that an injury was intended.
We hold that a good faith belief that the businesses contained on the CCTB list obtained by Group C were willing to receive faxes from other business entities would preclude application of the intentional conduct exclusion. The facts alleged by Group C, as set forth in Coene's certification and deposition testimony, when viewed in the light most favorable to Group C, Nowell Amoroso, P.A., supra, 189 N.J. at 445-46, raise a genuine issue of material fact as to whether the property damage alleged in the underlying complaint was "expected or intended" under the policies.
Section B(1)(j)(1) of the primary policy contains an exclusion for injuries "due to rendering or failure to render any professional service" including "[l]egal, accounting or advertising services." That exclusion is not applicable because Group C was advertising its own business and was not engaged in rendering advertising services for others.
Because there appears to be at least the possibility of coverage for property damage, we must consider the publisher's liability exclusion contained in the umbrella policy. The exclusion bars coverage for "invasion of privacy" resulting from "dissemination of any matter published or printed by the insured or other person for whom the insured is legally responsible." However, there is an exception to the exclusion: "[t]his exclusion shall not apply to advertising by or on behalf of the insured for the purpose of promoting its own business." It is undisputed that the broadcast facsimile promoted Group C's own business. As a result, property damage coverage under the umbrella policy is not excluded by the publisher's liability exclusion.
The policies do not define "invasion of privacy." Consequently, we construe them to include both "rights involving secrecy interests and rights involving seclusion interests." Auto-Owners Ins. Co. v. Websolv Computing, Inc., 580 F.3d 543, 549 (7th Cir. 2009) (stating that the four definitions of invasion of privacy under the Restatement (Second) of Torts § 652(A)(2) can be organized into two broad categories: "rights involving secrecy interests and rights involving seclusion interests"). In Terra Nova, supra, 869 N.E.2d at 572-74, the Supreme Judicial Court of Massachusetts, applying New Jersey law concerning the construction of insurance policies, concluded that the "invasion of privacy" provision was ambiguous and interpreted it broadly.
Consequently, we also reverse the dismissal of Group C's claim for property damage coverage, and remand for further proceedings consistent with this opinion.
E.
Finally, Group C argues that its efforts to "compel[] Penn National to honor its duty to defend and indemnify [Group C] in accordance with the terms of the policies" warrants an award of counsel fees and costs.
Rule 4:42-9(a)(6) states that "[i]n an action upon liability or indemnity policy of insurance," counsel fees and costs may be awarded "in favor of a successful claimant." We have held that "even if an insurer files a declaratory judgment action in good faith to contest its obligation to cover a claim, it must pay the insured's legal fees if it loses." Myron Corp. v. Atl. Mut. Ins. Corp., 407 N.J. Super. 302, 310 (App. Div. 2009), aff'd, 203 N.J. 537 (2010).
Whether Group C is entitled to seek counsel fees under Rule 4:42-9(a)(6) must await determination of whether it is entitled to coverage. That determination can only be made on remand, after the factual issues we have articulated have been decided.
F.
In summary, we reverse the order granting summary judgment on the issues of coverage under the advertising injury and property damage provisions of both policies, but affirm as to the personal injury provision of the umbrella policy. We remand to the trial court for further proceedings consistent with this opinion.
Affirmed in part, reversed in part.