Question

Lineberryv.State Farm Fire Cas. Co.

United States District Court, M.D. Tennessee, Nashville DivisionApr 4, 1995

William Edward Farmer, Lebanon, TN, Susan Kerr Lee, John P. Konvalinka, Grant, Konvalinka Grubbs, P.C., Chattanooga, TN, Michael E. Galligan, Galligan Newman, McMinnville, TN, for Dewey Lineberry.

John W. Wagster, Hollins, Wagster Yarbrough, Nashville, TN, for State Farm Fire and Cas. Ins. Co.

ECHOLS, District Judge.

Presently pending before this Court are Plaintiff Lineberry's Motion for Summary Judgment, Plaintiff Robinson's Motion for Summary Judgment, and Defendant State Farm's Motion for Summary Judgment. For the reasons outlined herein, Plaintiff Lineberry's motion is GRANTED, Plaintiff Robinson's motion is GRANTED, and Defendant State Farm's motion is DENIED.

Plaintiffs, Dewey Lineberry and Bill Robinson, seek a declaratory judgment requiring State Farm Fire Casualty Co. ("State Farm") to defend and indemnify them against actions in state court pursuant to personal liability policies of insurance issued by State Farm to Lineberry and Robinson. Lineberry and Robinson originally filed these actions in the Circuit Court of Wilson County, Tennessee, but State Farm subsequently removed them to this Court. Upon their removal, the two cases were consolidated, as the underlying facts and insurance policies are identical.

Plaintiffs are currently defending four separate actions brought in the Circuit Court of Wilson County, Tennessee by four women. The allegations of all four suits are essentially the same. Lineberry apparently had sexual relationships with the four women over the period of time stated in the lawsuits. In the course of building himself a new office building, Lineberry enlisted the help of Robinson to construct a "secret" viewing room adjoining the recreation room and the restroom of Lineberry's personal office. Two-way mirrors were constructed into the walls of the recreation room and restroom so that anyone in the viewing room could look through the mirrors and observe occupants of the recreation room and bathroom without the occupants' knowledge. The occupants of the recreation room and restroom could see only their own reflections in the mirrors. Lineberry and Robinson set up a video camera in the viewing room so that the persons and activities in the recreation room and restroom could secretly be filmed through the two-way mirrors.

On occasions Lineberry brought the unsuspecting females to his office where Robinson, who was hiding in the viewing room, secretly videotaped their sexual activities. Lineberry contends this scheme was approved or suggested by his attorney as a way to preserve proof of his sexual activities in the event one of his unsuspecting female guests falsely accused him of some impropriety. He maintains that this extraordinary precaution was taken only for his own protection, and that he had no intention of disclosing the video tapes of his sexual escapades to any other person. At some later time, Lineberry and his attorney had a dispute. Subsequently, Lineberry's attorney notified the Wilson County District Attorney of Lineberry's clandestine videotaping activities. After a search warrant was obtained, Lineberry's office was searched, and the tapes were seized by local law enforcement officials. The women depicted in the videotapes were then asked to come to the Sheriff's Department, identify themselves on the videotapes, and explain their actions. All four women deny they were aware they had been filmed.

Each of the four women filed a separate lawsuit in the Circuit Court of Wilson County. The suits charge Lineberry and Robinson with outrageous conduct, intentional infliction of emotional distress, fraud or constructive fraud, misrepresentation, appropriation, and invasion of their rights to privacy. Each of the women seek recovery for humiliation, mental distress, and emotional pain  and suffering which resulted from the actions of Lineberry and Robinson.

Both Lineberry and Robinson possess personal liability umbrella insurance policies with State Farm. They contend that pursuant to the provisions of those policies, State Farm must defend and indemnify them against the claims for invasion of privacy in the four lawsuits filed in Wilson County, Tennessee.

It is undisputed that both policies contain the same language relating to a covered "loss." Pursuant to the policies, if the insureds "are legally obligated to pay damages for a loss, [State Farm] will pay [the insured's] net loss minus the retained limit." (Docket Entry No. 44, Exhibit 1 at 3.) It also is undisputed that there is no retained limit in either Lineberry's or Robinson's policy. Therefore, for any losses covered by these policies, State Farm would be liable for the entire loss, up to the policy limit.

"Loss," as defined under the terms of both policies, means "an accident that results in personal injury or property damage during the policy period." (Id. at 1 (emphasis added).) "Personal injury," in turn, is defined as:

a. bodily harm, sickness, disease, shock, mental anguish or mental injury . . .;

b. false arrest, false imprisonment, wrongful eviction, wrongful detention, malicious prosecution or humiliation;

c. libel, slander, defamation of character or invasion of rights of privacy; and

d. assault and battery.

(Id. at 2 (emphasis added).)

The policies also contain a provision which excludes coverage for intentional acts or acts which are expected. Specifically, the policies provide that State Farm:

will not provide insurance . . . for personal injury or property damage:

a. which is either expected or intended by you; or

b. to any person or property which is the result of your willful and malicious act, no matter at whom the act was directed. (Id. at 4.)

Plaintiffs contend that State Farm, having specifically insured them against losses caused by the invasion of the right to privacy, must both defend them against the claims presented in the four lawsuits and indemnify them for any damages awarded to the four women. State Farm contends it is not required to defend or indemnify against these claims because the losses were not the result of an "accident" and the claims fall within the policy's exclusion for intentional or expected acts.

Plaintiffs counter Defendant's arguments by pointing to the language in the policy which defines "personal injury" by specifically listing a number of intentional torts, including invasion of the right of privacy. In other words, the losses insured against are those resulting in personal injury, which under the policy's definition includes certain types of intentional torts. An intentional tort is a civil wrong or injury which occurs as a result of the intentional act of another person. For example, one cannot commit an act of assault and battery accidentally. Likewise, one cannot be liable for malicious prosecution without intending to prosecute the victim. Plaintiffs further contend that one cannot invade a person's privacy by accident, because invasion of the right of privacy is inherently an intentional tort. Therefore, Plaintiffs allege that State Farm insured them against damages resulting from certain specific intentional torts, namely, invasion of right of privacy. However, in a separate section of the State Farm policy, under "Exclusions," the policy excludes coverage for injuries which were "intended or expected." Plaintiffs contend these provisions result in contradictory coverage or coverage which is ambiguous or merely illusory. Plaintiffs, therefore, maintain that the policy's ambiguity should be construed against the drafter, State Farm, and in Plaintiffs' favor.

Defendant alleges that the insurance policy provisions are not contradictory and the coverage is not illusory, because an invasion of the right to privacy is not necessarily an intentional tort. If that were correct, the policy would not necessarily be ambiguous, as the policy would cover injuries resulting from unintentional invasions of the right of  privacy and would exclude those which are intentional.

Because there are no genuine disputes of material fact and the crux of the dispute is the legal interpretation of the insurance policies, the parties have agreed to have the case resolved by means of cross-motions for summary judgment. In ruling on a motion for summary judgment, this Court must construe the evidence produced in the light most favorable to the non-moving party, drawing all justifiable inferences in his or her favor. See Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 255, 106 S.Ct. 2505, 2513-14, 91 L.Ed.2d 202 (1986). A party may obtain summary judgment if the evidentiary material on file shows "that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." Fed.R.Civ.P. 56(c).

It is well-established that an insurance policy, which is nothing more than a contract between the insurance company and the insured, should be given its plain meaning. State Farm Mutual Auto. Ins. Co. v. Oliver, 406 F.2d 409, 410 (6th Cir. 1969); Purdy v. Tenn. Farmers Mut. Ins. Co., 586 S.W.2d 128, 130 (Tenn.Ct.App. 1979). However, where policy language is ambiguous, "the policy must be construed in favor of the insured and against the insurer." Purdy, 586 S.W.2d at 130; Oliver, 406 F.2d at 410; Allstate Ins. Co. v. Watts, 811 S.W.2d 883, 885 (Tenn. 1991). Exclusionary clauses are to be strictly construed against the insurer. Phillips v. Gov't Employees Ins. Co., 395 F.2d 166, 167 (6th Cir. 1968); Travelers Ins. Co. v. Aetna Casualty Sur. Co., 491 S.W.2d 363, 367 (Tenn. 1973).

There are four kinds of invasion of rights to privacy: (1) appropriation; (2) unreasonable intrusion; (3) public disclosure of private facts; and (4) false light publicity. Restatement (Second) of Torts § 652A (1977). Therefore, the inquiry regarding the necessary intent for invasion of the right to privacy requires that this Court examine all four forms of that tort. (Please look the comment section for the rest of the case)

questions

#1. The procedural history of the case/litigation (i.e. what happened since the filling of the petition/complaint within the court system including important motions and court rulings?)

#2. What is the court's decision?

Answer 1

Answer 1:

Procedural History: This case was filed before the Echols, District Judge of United States District Court, M.D. Tennessee filed by the plaintiff Linerberry Motion for Summary Judgment.

Citation: Lineberry V. State Farm Fire & Casualty Co.

           

Court: United States District Court.

Facts of the case:

· The plaintiffs, Mr. Dewey Lineberry and Mr. Bill Robinson filed a motion for Summary Judgment in the United States District Court stating that State Farm Fire & Casualty Co. should indemnify both the plaintiffs from cases filed in the state court under personal liability policy of insurance.

· Both the plaintiffs are defending four actions brought against them in the Circuit Court of Wilson County, Tennessee by four women separately. According to these cases, Mr. Lineberry had sexual relationships with these four women and had a hidden camera in his office which captured all their sexual activities. Later, a complaint was filed against Mr. Lineberry by his attorney regarding the hidden camera to the Wilson Country District Attorney. His office was searched and the tapes were seized by local law enforcement officials. After making inquiries from those four women it was found that no one was knowing about this hidden camera in his office. Finally, all the four women filed separate lawsuits against Mr. Lineberry charging him along with Mr. Robinson his colleague, for outrageous conduct, fraud, misrepresentation, etc.

· Both the plaintiff had personal liability umbrella insurance policies with State Farm. The plaintiffs wanted the State Farm to provide them indemnification from these four cases. However, State Farm contends that it will not indemnify the plaintiffs because the losses that happened to them are not a result of an ‘accident’ and their claim falls under the ambit of exclusions of the policy for intentional or expected acts. The plaintiffs contested their arguments.

Issues of the case:

a. Are plaintiffs eligible for indemnification under the insurance policies?

b. Does State Farm has a duty to defend the plaintiffs?

Answer 2:

The court’s decision:

Based on the facts and findings of the case, the Court decided in favor of the Plaintiffs and granted the Motion for Summary Judgment. According to the court findings, this case falls within the umbrella policy and should be covered under it. The wording of the policy was found illusionary and ambiguous and must be interpreted in favor of the insured in case of ambiguity.

The court found that the State Farm has to defend both the plaintiffs because the claims for damages resulting from the invasion of the right to privacy falls within the coverage of the policy provided by the State Farm to the plaintiffs.

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