A federal judge from the Eastern District of Wisconsin has, for the most part, sided with an insurance company, which argued that it had no duty to defend a couple, who were sued by a coach after the couple allegedly physically and verbally attacked him after their son was relegated to the bench for most of a game.
Specifically, the court ruled that the defendants had no coverage under their homeowner policy. However, it held coverage under the umbrella policy may exist for a defamation claim. And if it exists for the defamation claim, the insurance company must defend the entire claim.
Alfonzo and Stephonia Duncan sued Mark and Fredricka Manning over incidents that followed a high-school basketball game and, ultimately Alfonzo Duncan’s termination as basketball coach at St. John’s Northwestern Military Academy (SJNMA). The Mannings’ insurer, American Family Mutual Insurance Company, intervened and moved for a declaration that it owed, pursuant to Fed. R. Civ. P. 57 and 28 U.S.C. § 2201, the Mannings no duty to defend and that no coverage exists under the pertinent policies.
The incident in question occurred in 2012 when the Mannings’ son did not play until the very end of a game. After the contest, the Mannings left their bleacher seats and allegedly confronted Duncan by the locker room in an aggressive manner and “verbally assaulted him.” Further, Duncan claimed that he was backed against a wall, intentionally bumped, and that Manning head butted him.
In addition, the complaint contends that the following morning, Mark Manning sent an email to SJNMA’s Dean of Students, with a copy to SJNMA’s president. Manning demanded that Duncan be terminated from his SJNMA position, based on “intentionally false and malicious statements” that Manning made regarding the incident of the night before, according the court. Duncan was ultimately terminated because of the “false and malicious statements” made by Manning, according to the complaint.
Duncan’s complaint lodged three claims: (1) that “Mark Manning intentionally and maliciously assaulted and battered Alfonzo Duncan by striking him in the head;” (2) that the Mannings “did intentionally and maliciously cause Mr. Duncan to be terminated from SJNMA;” and (3) that the Mannings violated Wis. Stat. § 134.01 “by concerting together for the purpose of willfully and maliciously injuring Alfonzo Duncan’s reputation and profession by making false statements to the Dean of Students and President of SJNMA” The complaint claimed that Duncan suffered loss of his employment earnings and benefits, physical pain, severe emotional distress and dysfunction, as well as medical expenses.
American Family issued a homeowner’s and an umbrella policy to the Mannings, which was central to the legal argument at hand. “At this point the decision is about indemnification, as well as the duty to defend,” the court wrote.
“The court finds that the Mannings have no coverage and American Family has no duty to defend under the Mannings’ homeowner’s policy or their umbrella policy regarding the claims expressly identified in the complaint,” wrote the court. “Those claims fall outside the ‘accidents’ that the policies cover.
“Both policies cover occurrences, and an occurrence is an ‘accident’ that results in bodily injury or property damage.” The court added that an accident is “an unexpected, undesirable event or unforeseen incident characterized by a lack of intention. Estate of Sustache, 2008 WI 87, ¶ 34, 311 Wis. 2d 548, 751 N.W.2d 845 (citing Doyle, 219 Wis. 2d at 289.
“ … (A)ll of the claims expressly alleged in the Complaint require intent on the part of the defendant. … The conduct as alleged in the Complaint was not an accident or accidental.”
As an alternative argument, the Mannings argued that the facts asserted in the complaint include defamation, which is covered by the umbrella policy, even though the Duncans did not expressly plead such a claim.
The court was receptive.
“The Mannings dispute whether their conduct was intentional and malicious,” wrote the court. “If the Duncans pursue a defamation claim and establish a false statement, but the jury fails to find any intent or maliciousness, the claim could arguably be covered. This court cannot say that the facts are undisputed and the intentional-conduct exclusion applies to such a defamation claim. Thus, the potential for coverage under the umbrella policy still exists. And because coverage arguably exists for this one claim, American Family must continue to defend the entire case under the umbrella policy.
“If the Duncans never raise or argue a defamation claim, American Family may in the end need to provide no coverage for any damages the Duncans recover from the Mannings. But the duty to defend is broader than the duty to indemnify, and the possibility of recovery for a defamation claim means that a duty to defend exists under the umbrella policy. Nevertheless, the court concludes that the punitive-damages exclusion bars any coverage under the umbrella policy for punitive damages awarded on a defamation claim.”
Alfonzo C. Duncan, Stephonia Duncan v. Mark Manning, Fredricka Manning; E.D. Wis.;
Case No. 13-C-0437; 2015 U.S. Dist. LEXIS 40529; 3/30/15
Attorneys of Record: (for plaintiffs) Jeanette K Corbett, Lawrence G Albrecht, LEAD ATTORNEYS, Katie S Lonze, Katie S Lonze, First Albrecht & Blondis SC, Milwaukee, WI. (for defendants) Emile H Banks, Jr, LEAD ATTORNEY, Vicki L Arrowood, Emile Banks & Associates LLC, Milwaukee, WI.
