2004-869, C. EDWARD BROOM & a. v. CONTINENTAL CASUALTY CO. & a. C. EDWARD BROOM & a. v. STEADFAST INSURANCE CO.

Court (McGuire, J.) granting summary judgment to appellee Interstate Fire and Christopher J. Broom and Nicholas Brunet, appeal orders of the Superior DALIANIS, J. The appellants, C. Edward Broom, Thomas P. Broom,

on the brief and orally), for appe llee Interstate Fire & Casualty Co. Caron, Constants & Wilson, of Rutherford, New Jersey (Alfred C. Constants, III Devine & Nyquist, P.A. of Manchester (Lee C. Nyquist on the brief), and

and James P. Harris on the brief, and Mr. Harris orally), for the appellants. Sheehan Phinney Bass & Green, P.A. of Manchester (James Q. Shirley

No. 20 04 - 869 Merrimack

page is: http://www.courts.state.nh.us/supreme. a.m. on the morning of their release. The direct address of the court's home reporter@courts.state.nh.us. O pinions are available on the Internet by 9:00 Errors may be reported by E - mail at the following address: errors in order that corrections may be made before the opinion goes to press. Hampshire, One Noble Drive, Concord, New Hampshire 03301, of any editorial Readers are requested to notify the Reporter, Supreme Court of New well as formal revision before publication in the New Hampshire Reports. NOTICE: This opinion is subject to motions for rehearing under Rule p. 2 22 as 2

o f disparagement. identified any specific date or time period with regard to the alleged campaign July 19, p. 2 2002, employed almost identical language. None of these pleadings demand for arbitration submitted to the American Arbitration Association on An amended complaint filed by the plaintiffs on O ctober 31, 2001, and a

made them. false and defendants knew they were false when they no such event ever occurred. These statements were land consultants . . . a “kickback” of $500,000, when without any factu al basis that Plaintiffs had paid to representations regarding the Plaintiffs, claiming writing, which included false statements and disparage Plaintiffs, Brunet began a campaign of memo Defendants [and] Brunet . . . . As part of the plan to and deflect an y such blame away from the Broom attempting to place blame for such losses on Plaintiffs, a result of the failed IPO, with the ultimate goal of other parties in the transaction who suffered losses as upon a campaign to disparage plaintiffs to lenders and Broom Defendants . . . and Nicho las Brunet embarked and commencing at a time unknown to plaintiffs, the Once it became apparent that the deal had collapsed,

complaint stated, in support of the slander count: slander the m to lenders and other parties to the transaction. The underlying the business venture collapsed, the appellants engaged in a campaign to STT and certain plaintiffs. The plaintiffs alleged, among other things, that once The underlying suit arose from a failed business transaction between

(STT), a Geo rgia corporation. They were sued in their capacities as principals in Strategic Timbers Trust, Inc. United States District Court for the District of Oregon (the underlying suit). The appellants were named in a lawsuit filed on October 9, p. 2 2001, in the

issue now bef ore us. address here. We, therefore, recount only the facts that are relevant to the The underlying litigation involves a host of issues, only one of which we

reimbursement of defense costs, and remand. We reverse the order grantin g summary judgment, vacate the order denying that Interstate did not have a duty to defend them in an underlying lawsuit. defense costs. The appellants contend that the trial court improperly ruled Casu alty Company (Interstate), and denying their motion for reimbursement of p. 3 3

determined that the first publication of any defamato ry memorandum occurred summary judgment between Interstate and the appellants. The trial court On June 11, 2004, the trial court ruled on competing motions for

order contained no rulings as to Interstate. motion for summary judgment against Nationwide. Th e December 2, 200 p. 3 3 its policy coverage. Accordingly, the trial court granted the appellants’ cross however, finding that the alleged defamation occurred within the boundaries of judgment. The trial court deni ed Nationwide’s motion for summary judgment, defend or indemnify the appellants and granted their motions for summary appellants. It concluded that Continental and Travelers owed no duty to summary judgment among Continental, Travelers, Nationwide, and the On December 2, 2003, the trial court ruled on competing motions for

outside of STT. 27, 2000, as the dates upon which the memoranda were allegedly distributed for arbitration, and for the first time identified September 28, 1999, and April On December 20, 2002, the underlying plain tiffs amended their demand

indemnity with respect to the underlying lawsuit. Property Casualty Company (Travelers), and Interstate, seeking a defense and (Continental), Nationwide Mutual Insurance Company (Nationwide), Travelers in superior court against insurance carriers Continental Casual ty Company On April 5, 2002, the appellants filed a petition for declaratory judgment

January 4, 2002. by letter dated December 6, 2001, and that Interstate denied coverage on services.” The appellants allege that they requested a defense from Interstate organization or disparages a person’s or organization’s goods, products or “[o]ral or written publication of material that slanders or libels a person or “Personal injury” was defined in the policy to include injury arising out of right and duty to defend the insured against any ‘suit’ seeking those damages.” because of ‘personal injury.’” It further states that Interstate “will have the for “those su ms that the insured becomes legally obligated to pay as damages period from April 27, 1998, to April 27, 1999. The policy contained coverage had purchased business liability insurance coverage from Interstate for the Strategic Timber Partners, LP (STP), of which STT was a general partner,

memorandum from June 1999 was hand - delivered to the s ame recipient. of the memoranda to another bank representative. On May p. 4 4, 2000, a outside of STT occurred on or about April 27, 2000, when Brunet faxed several the lender banks. A second distribution of allegedly defamatory material 1999, when appellant Brunet sent a memorandum to a representative of one of 1999. The first dissemination outside of STT was on or about September 28, The allegedly defamatory memoranda were authored during 1998 and 4

See Ma rikar, 151 N.H. at 397. The interpretation of insurance policy language Our analysis must begin with an examination of the policy language.

Inc., 123 N.H. 1 p. 4 48, 152 (1983). rights under the policy. U.S. Fidelity & Guaranty Co., Inc. v. Johnson Shoes, the pleading s, we consider the reasonable expectations of the insured as to its In determining whether a duty to defend exists based upon the sufficiency of terms of the policy. Martin v. Me. Mut. Fire Ins. Co., 145 N.H. 498, 500 (2000). insured alleges sufficient facts in the pleadings to bring it within the express defend its insured is determined by whether the cause of action against t he It is well - settled law in New Hampshire that an insurer’s obligation to

the facts de novo. Id. Marikar, 151 N.H. at 397. We review the trial court’s application of the law to judgment as a matter of law, the grant of summary judgment is prope r. there is no genuine issue of material fact, and if the moving party is entitled to (citing Peerless Ins. v. Vermont Mutual Ins. Co., 151 N.H. 71, 72 (200 p. 4 4)). If moving party. Marikar v. Peerless Insurance Co., 151 N.H. 395, 397 (2004) inferences properly drawn from them, in the light most favorable to the non summary judgment, we consider the affidavits and other evidence, and all exercise of discretion s tandard). In reviewing the trial court’s initial grant of id.; cf. State v. Lambert, 147 N.H. 295, 296 (2001) (explaining unsustainable motion for reconsideration absent an unsustainable exercise of discretion. See Candia, 146 N.H. 430, 444 (2001). We will uphold a trial court’s decision on a fact that a court has overlooked or misapprehended. Webster v. Town of A motion for reconsideration allows a party to present points of law or

agree. “potentially covered claim” triggering Interstate’s duty to defend them. We court did not resolve the issue of coverage until June 1 1, 200 p. 4 4, they had a identify dates of external distribution until December 20, 2002, and the trial The appellants take the position that, because the underlying pleadings did not determined that Interstate had no duty to defend them in the underlying suit. On appeal, the appellants assert that the trial court improperly

for reimbursement of defense costs. court denied the appellants’ motions for reconsideration and clarification and publication did not fall within the coverage peri od of Interstate’s policy, the trial from Interstate. The trial court denied the motions. Because the first date of June 11, 200 p. 4 4 order, as well as a motion for reimbursement of defense costs The appellants filed a mo tion for reconsideration and clarification of the

granted Interstate’s motion for summary judgment. policy period. Ruling that Interstate owed no coverage to the appellants, it on or about September 28, 1999, and, therefore, fell outside of the Interstate p. 5 5

foreclosed the possibility that the dissemination of allegedly defamatory identified. Moreover, it was not until June 11, 2004, that the trial court coverage period. Prior to that date, however, the publication dates were not 2002 amended demand for arbitration fell outside of Interstate’s policy T he publication dates identified by the plaintiffs in their December 20,

from Interstate. December 20, 2002, more than a year after the appellants requested a defense identify any such dates until they amended their demand for arbitration on unknown” to the plaintiffs in the underlying action. The plaintiffs did not campaign of disparagement, stating only that it “commenc[ed] at a time asserted no specific dates of publication in connection with the claimed false statements and representations regarding the Plaintiffs.” The complaint the alleged plan Brunet “began a c ampaign of memo writing, which included “embarked upon a campaign to disparage [the] plaintiffs” and that as part of 9, 2001, alleged that “commencing at a time unknown,” the appellants the ex press terms of the policy. The initial underlying complaint, filed October against the appellants alleged sufficient facts in the pleadings to bring it within in the underlying litigation, we must determine whether the cause of action Turning to whether Interstate had an obligation to defend the appellants

defined above. defend against a lawsuit seeking damages resulting from a “personal injury” as the position of the insured would understand the policy to obligate Interstate to in the context of the policy as a whole, we conclude that a reasonable person in which [the policy] applies are alleged.” Construing these terms obj ectively, and “civil proceeding in which damages because of . . . ‘personal injury’ . . . to organization’s goods, products or services.” “Suit” is defined in the policy as a slanders or libels a person or organization or disparages a person’s or include injury arising out of “[o]ral or written publication of material that that result from “personal injury.” “Personal injury” is defined in the policy to right and duty to defend the i nsured against any ‘suit’ seeking those damages” period April 27, 1998, to April 27, 1999, states that Interstate “will have the The Interstate policy in question, purchased by STP for the coverage

7 p. 6 63 (2003); see also Progressive N. Ins. Co., 1 p. 5 51 N.H. at 654. the policy as a whole. Preferred Nat’l Ins. Co. v. Docusearch, 14 9 N.H. 759, person in the position of the insured based upon more than a casual reading of 151 N.H. at 397. We construe the terms of the policy as would a reasonable to the plain and ordinary meaning of the po licy’s words in context. Marikar, issue of law for the court to decide.”). In interpreting policy language, we look whether the underlying litigation falls outside the bounds of coverage is an Lawyers Title Ins. Corp., 147 N.H. 610, 614 (2002) (“[T]he determination of Concord Gen. Mut. Ins. Co., 151 N.H. 649, 653 (2005); see also Panciocco v. is ultimately an issue of law for this court to decide. Progressive N. Ins. Co. v. 6

owes no duty to the appellants because they are not insureds under the policy At oral argum ent, Interstate introduced the alternative theory that it

costs and remand for further proceedings. court’s order denying the appellants’ motion for reimbursement of defense for this court to decide in the first instance. Accordingly, we vacate the trial appellants. The issue of reimbursement of defense costs, if any, is not a matter Continental had already expended approximately $495,000 in defending the by the carriers. By the time of the trial court’s December 2, 2003 order, they hired their own private attorney instead of relying upon counsel retained Nationwide, and another carrier, Steadfast Insurance Company, and because appellants received, in whole or in part, a defense from Continental, owes the appellants no reimbursement for defense costs because the American Mut. Ins. Co., 139 N.H. 745, 751 (1995). Interstate asserts that it Joint Underwriting Assoc., 142 N.H. 59, p. 6 61 (1997); see also A.B.C. Builders v. incurred in defending the claim. Concord Hosp. v. N.H. Medical Malpractice insurer breaches its du ty to defend, it must reimburse the insured for the costs As to the appellants’ motion for reimbursement of defense costs, when an

of discretion. appellants’ motion for reconsideration amounted to an unsustainable exercise also h old that the trial court’s order of August 23, 2004, denying the judgment to Interstate in its June 11, 2004 order was in error. We, therefore, In light of our conclusion, we hold that the trial court’s grant of summary

breached that duty by denying coverage on January 4, 2002. Interstate owed the appellants a defense a t the time it was requested, and potentially within the scope of Interstate’s policy coverage, we conclude that Because a reasonable intendment of the initial complaint alleged injuries insurer under the poli cy, the doubt must be resolved in the insured’s favor. Id. doubt as to whether the complaint against the insured alleges a liability of the Co. v. Foreman, 138 N.H. 440, 443 (1994) (quotation omitted). In a case of can j ustify escape of the insurer from its obligation to defend.” Green Mt. Ins. ambiguity [nor] inconsistency . . . in the underlying plaintiff’s complaint . . . intendment of the pleadings liability of the insured can be inferred, and neither cases of perfect declarations, but also in cases where by any reasonable We have said that “[an] insurer’s obligation is not merely to defend in

within the policy’s coverage. Interstate, there existed a reasonable possibility that the underlying claim fell the appellants made their December p. 6 6, 2001 request for a defense from “publication” for the purposes of the declaratory judgment action. Thus, when memoranda within STT during the policy coverage period could be considered p. 7 7

concurred. BRODERICK, C.J., and NADEAU, DUGGAN and GALWAY, JJ.,

we need not address it. See Marik ar, 151 N.H. at 39 p. 7 7. in question. Because Interstate failed to raise this issue before the trial court,