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Broom v. Continental Casualty Co.11/16/2005
Argued: September 29, 2005
The appellants, C. Edward Broom, Thomas P. Broom, Christopher J. Broom and Nicholas Brunet, appeal orders of the Superior Court (McGuire, J.) granting summary judgment to appellee Interstate Fire and Casualty Company (Interstate), and denying their motion for reimbursement of defense costs. The appellants contend that the trial court improperly ruled that Interstate did not have a duty to defend them in an underlying lawsuit. We reverse the order granting summary judgment, vacate the order denying reimbursement of defense costs, and remand.
The underlying litigation involves a host of issues, only one of which we address here. We, therefore, recount only the facts that are relevant to the issue now before us.
The appellants were named in a lawsuit filed on October 9, 2001, in the United States District Court for the District of Oregon (the underlying suit). They were sued in their capacities as principals in Strategic Timbers Trust, Inc. (STT), a Georgia corporation.
The underlying suit arose from a failed business transaction between STT and certain plaintiffs. The plaintiffs alleged, among other things, that once the business venture collapsed, the appellants engaged in a campaign to slander them to lenders and other parties to the transaction. The underlying complaint stated, in support of the slander count:
Once it became apparent that the deal had collapsed, and commencing at a time unknown to plaintiffs, the Broom Defendants . . . and Nicholas Brunet embarked upon a campaign to disparage plaintiffs to lenders and other parties in the transaction who suffered losses as a result of the failed IPO, with the ultimate goal of attempting to place blame for such losses on Plaintiffs, and deflect any such blame away from the Broom Defendants Brunet . . . . As part of the plan to disparage Plaintiffs, Brunet began a campaign of memo writing, which included false statements and representations regarding the Plaintiffs, claiming without any factual basis that Plaintiffs had paid to land consultants . . . a "kickback" of $500,000, when no such event ever occurred. These statements were false and defendants knew they were false when they made them.
An amended complaint filed by the plaintiffs on October 31, 2001, and a demand for arbitration submitted to the American Arbitration Association on July 19, 2002, employed almost identical language. None of these pleadings identified any specific date or time period with regard to the alleged campaign of disparagement.
The allegedly defamatory memoranda were authored during 1998 and 1999. The first dissemination outside of STT was on or about September 28, 1999, when appellant Brunet sent a memorandum to a representative of one of the lender banks. A second distribution of allegedly defamatory material outside of STT occurred on or about April 27, 2000, when Brunet faxed several of the memoranda to another bank representative. On May 4, 2000, a memorandum from June 1999 was hand-delivered to the same recipient.
Strategic Timber Partners, LP (STP), of which STT was a general partner, had purchased business liability insurance coverage from Interstate for the period from April 27, 1998, to April 27, 1999. The policy contained coverage for "those sums that the insured becomes legally obligated to pay as damages because of 'personal injury.'" It further states that Interstate "will have the right and duty to defend the insured against any 'suit' seeking those damages." "Personal injury" was defined in the policy to include injury arising out of " ral or written publication of material that slanders or libels a person or organization or disparages
Page 1 2 3 4 New Hampshire Personal Injury Attorneys
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