United States District Court, E.D. Pennsylvania
Henry S. Perkin, M.J.
Before the Court are the Motion for Summary Judgment (Dkt. No. 43) filed on July 15, 2014 by Plaintiff, Auto-Owners Insurance Company (“Plaintiff” or “Auto-Owners”)), the Cross-Motion for Summary Judgment of Defendant, The Hymed Group Corporation (“Defendant” or “Hymed”) (Dkt. No. 47) filed on September 30, 2014, Auto-Owners’ Memorandum of Law in Support of Opposition of the Motion for Summary Judgment (Dkt. No. 52) filed on October 30, 2014, and Hymed’s Reply to the Response to the Cross-Motion for Summary Judgment (Dkt. No. 53) filed on November 14, 2014. Following oral argument on the Cross-Motions for Summary Judgment held on December 4, 2014, and for the reasons set forth in this Memorandum, we will grant Auto-Owners’ Motion for Summary Judgment and deny Hymed’s Cross-Motion for Summary Judgment.
In this insurance coverage dispute, Auto-Owners seeks a declaratory judgment pursuant to 28 U.S.C. § 2201 (2006) that it has no obligation to defend or indemnify Stevens & Ricci in connection with the underlying class action litigation. Hymed has counter-claimed for a declaratory judgment that Auto-Owners is so obligated.
A. Stevens & Ricci’s Fax Advertising Program.
Defendant Stevens & Ricci was solicited by a fax broadcaster which represented that its fax advertising program complied with the Telephone Consumer Protection Act, 47 U.S.C. § 227 (“TCPA”). Stevens & Ricci then caused 18, 879 unsolicited advertisements to be faxed by the fax broadcaster on its behalf, to 9, 728 fax machines, including Hymed’s, on or about February 8, 2006, and February 27, 2006. In doing so, Stevens & Ricci did not willfully or knowingly violate the TCPA.
B. Underlying Litigation.
Hymed commenced litigation against Stevens & Ricci in this Court, Civil Action No. 12-CV-3093, entitled Hymed Group Corporation, a Pennsylvania corporation, individually and as the representative of a class of similarly-situated persons, Plaintiff v. Stevens & Ricci, Inc., Defendant (the “Underlying Litigation”). In the Underlying Litigation, Hymed alleges that, on or about February 8 and February 27, 2006, it received a fax advertisement from Stevens & Ricci. Hymed alleges that the transmission of that fax violates 47 U.S.C. § 227, the Telephone Consumer Protection Act (“TCPA”) which, according to its Complaint, prohibits the “use of any telephone facsimile machine, computer or other device to send an unsolicited advertisement to a telephone facsimile machine.” Hymed alleges that it did not invite or give permission to Stevens & Ricci to send the fax or faxes and that, upon information and belief, Stevens & Ricci faxed the same and/or similar advertisements to Hymed and “more than 39 other recipients.” Hymed further alleges that the so-called “'junk faxes” “interrupt the recipient’s privacy”; that they cause the recipient to lose “the use of its fax machine, paper, and ink toner”; that they “waste” the recipient’s “valuable time that would have been spent on something else”; and that they prevent the recipient’s fax machine “from receiving authorized faxes, prevent their use for authorized outgoing faxes, cause undue wear and tear on the recipient’s fax machines, and require additional labor to attempt to discern the source and purpose of the unsolicited message.” Hymed further alleges that the “junk faxes” “unlawfully interrupted” its “privacy interests in being left alone.” The Complaint in the Underlying Action further alleged that the TCPA is a strict liability statute, so that Stevens & Ricci would be liable even if its actions were only negligent.
Based upon these factual allegations, Hymed asked the Court to certify the matter as a class action, and the class was certified. Hymed also seeks actual or statutory damages, whichever is greater, an injunction against future violations costs, and “such further relief as the Court may deem just and proper.”
C. The Auto-Owners Policy
Auto-Owners issued a “Businessowners Policy” to Stevens & Ricci that includes a “Businessowners Liability Coverage Form, ” policy number 44-838-627-00 (the “Auto-Owners Policy”). The Auto-Owners Policy was in force and effect from December 5, 2005 through December 5, 2006, at the time Stevens & Ricci allegedly sent unsolicited faxes to Hymed and the other class members. The Auto-Owners Policy obligates Auto-Owners to “pay those sums that the insured becomes legally obligated to pay as damages because of ‘bodily injury, ’ ‘property damage, ’ ‘personal injury’ or ‘advertising injury’ to which this insurance applies.” For “bodily injury” or “property damage” coverage to apply under the Auto-Owners Policy, the “bodily injury” or “property damage” must be caused by an “occurrence” and must “occur during the policy period.”
The Auto-Owners Policy defines “bodily injury” to mean “bodily injury, sickness or disease sustained by a person, including death resulting from any of these at any time.” The term “property damage” is defined in the Auto-Owners Policy to mean “physical injury to tangible property, including all resulting loss of use of that property” together with the “loss of use of tangible property that is not physically injured.” The term “occurrence” is defined in the Auto-Owners Policy to mean “an accident, including continuous or repeated exposure to substantially the same general harmful conditions.” The Policy does not define “accident.” The term “personal injury” is defined in the Auto-Owners Policy to mean injury “other than ‘bodily injury’” arising out of one or more of the following offenses:
a. False arrest, detention or imprisonment;
b. Malicious prosecution;
c. Wrongful entry into, or eviction of a person from, a room, dwelling or premise that the person occupies;
d. Oral or written publication of material that slanders or libels a person or organization or disparages a person's or ...