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Insurance – Ambiguous Terms – Denial of Coverage

By: Derek Hawkins//October 5, 2015//

Insurance – Ambiguous Terms – Denial of Coverage

By: Derek Hawkins//October 5, 2015//

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Civil

7th Circuit Court of Appeals

Officials: KANNE, WILLIAMS, and HAMILTON, Circuit Judges.

Insurance – Ambiguous Terms – Denial of Coverage

No. 14-1805 Defender Security Company v. First Mercury Insurance Company

The term “publication” not ambiguous as utilized in insurance policy

“Under Indiana law, a “failure to define terms in an insurance policy does not necessarily make it ambiguous.” Am. Family Life Assurance Co. v. Russell, 700 N.E.2d 1174, 1177 (Ind. Ct. App. 1998) (citation omitted). And “[a]n ambiguity does not exist simply because a controversy exists between the parties, each favoring an interpretation contrary to the other.” Newnam Mfg., Inc. v. Transcon. Ins. Co., 871 N.E.2d 396, 401 (Ind. Ct. App. 2007) (citations omitted). Rather, “an ambiguity exists where the provision is susceptible to more than one reasonable interpretation.” Russell, 700 N.E.2d at 1177. Where there is ambiguity, “insurance policies are to be construed strictly against the insurer.” Newnam, 871 N.E.2d at 401 (citation omitted) Here, the parties each favor a specific interpretation of the term “publication.” Defender argues that the term publication is susceptible to its definition, and it points to a decision of the United States District Court of the Southern District of Ohio as supporting its view. In that case, under similar facts, the district court concluded that publication occurred at the moment that the conversation was disseminated to the recording device. See Encore Receivable Mgmt., Inc. v. Ace Prop. and Cas. Ins. Co., No. 1:12-cv-297, 2013 WL 3354571, at *9 (S.D. Oh. Jul. 3, 2013), vacated on May 19, 2014. But, as noted, Encore was vacated while on appeal. Id. Defender cites to no other cases that establish its view of publication. For the reasons we described above, including Indiana’s definition of publication in the defamation context, we conclude that the term publication was not susceptible to Defender’s interpretation. It was not ambiguous as used in the Policy”

Affirmed

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Attorney Derek A. Hawkins is the managing partner at Hawkins Law Offices LLC, where he heads up the firm’s startup law practice. He specializes in business formation, corporate governance, intellectual property protection, private equity and venture capital funding and mergers & acquisitions. Check out the website at www.hawkins-lawoffices.com or contact them at 262-737-8825.

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