F I L E D
United States Court of Appeals
Tenth Circuit
PUBLISH March 27, 2006
Elisabeth A. Shumaker
UNITED STATES COURT OF APPEALS Clerk of Court
TENTH CIRCUIT
PARK UNIVERSITY ENTERPRISES,
INC.,
Plaintiff-Appellee,
v. No. 04-3197
AMERICAN CASUALTY COMPANY OF
READING, PA,
Defendant-Appellant.
Appeal from the United States District Court
for the District of Kansas
(D.C. No. 03-CV-2522-GTV)
Andrew Butz of Bonner Kiernan Trebach & Crociata, Washington, D.C.
(William H. White, Jr. and Jeffrey M. Koonankeil of Bonner Kiernan Trebach &
Crociata, Washington, D.C.; and Barry W. McCormick of McCormick, Adam &
Long, Overland Park, Kansas, with him on the briefs), for Defendant-Appellant.
Thomas M. Van Camp of Van Camp, Meacham & Newman, PLLC, Pinehurst,
North Carolina (Heywood H. Davis of Dicus, Davis, Sands & Collins, PC, Kansas
City, Missouri, with him on the brief), for Plaintiff-Appellee.
Before BRISCOE, SEYMOUR, and ANDERSON, Circuit Judges.
SEYMOUR, Circuit Judge.
Park University Enterprises, Inc. (Park University) was sued in a state court
class action by JC Hauling Company (JC Hauling) for alleged violations of the
Telephone Consumer Protection Act (TCPA), 47 U.S.C. § 227, a federal statute
that bans unsolicited fax advertisements. Park University * s insurer, American
Casualty Company of Reading, Pa. (American), declined to provide any defense
or coverage in the action. Park University filed this action seeking a declaratory
judgment that American has a duty to defend it in the underlying state court suit.
On cross-motions for partial judgment on the pleadings, the district court
concluded that American does owe Park University a defense, Park Univ. Enters.,
Inc. v. Am. Cas. Co. of Reading, Pa., 314 F. Supp. 2d 1094 (D. Kan. 2004), and
certified that decision as final under F ED . R. C IV . P. 54(b). We affirm. 1
I
The TCPA makes it “unlawful for any person . . . to use any telephone
facsimile machine, computer, or other device to send an unsolicited advertisement
1
American has filed a motion asking us to certify a variety of issues to the
Kansas Supreme Court. American did not seek certification in the district court.
“We generally will not certify questions to a state supreme court when the
requesting party seeks certification only after having received an adverse decision
from the district court.” Massengale v. Oklahoma Bd. of Examiners in
Optometry, 30 F.3d 1325, 1331 (10th Cir.1994) (citing Armijo v. Ex Cam, Inc.,
843 F.2d 406, 407 (10th Cir.1988)). Moreover, we are not persuaded the issues
raised in this appeal present sufficiently novel or unsettled questions of Kansas
State law. Accordingly, we deny American’s request for certification.
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to a telephone facsimile machine.” 47 U.S.C. § 227(b)(1)(c). It defines an
“unsolicited advertisement” as “any material advertising the commercial
availability or quality of any property, goods, or services which is transmitted to
any person without that person’s prior express invitation or permission.” Id. §
227(a)(4). The act creates a private right of action that permits recipients of
unwanted faxes to seek injunctions and damages, and allows courts to grant treble
damages if they find a fax sender has acted “willfully or knowingly.” Id. §
227(b)(3).
JC Hauling filed suit in Illinois state court alleging that Park University
violated the TCPA when it sent an advertisement to JC Hauling’s telephone fax
machine in Illinois “without prior express invitation or permission.” Aplt. App.
at 81. It brought the suit as a class action consisting of “all individuals who
received unsolicited advertisements” via fax from or on behalf of Park University.
Id. JC Hauling sought an injunction and treble damages, contending that Park
University’s actions were “willful and knowing” and that it “knew or should have
known that it did not have the prior express invitation or permission of Plaintiff
and the other members of the Class to send the advertisements and knew or
should have known that its actions constitute a violation of law.” Id. at 82-83. In
response, Park University asserted that any fax advertisements it sent to JC
Hauling were not unsolicited because Park University had an existing business
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relationship with JC Hauling or, in the alternative, it had prior express invitation
or permission from JC Hauling to send the fax adverstisement. Specifically, Park
University contended that any fax it had sent to JC Hauling was addressed to
Patty Evansco, one if its employees, who had registered for one of Park
University’s seminars while acting in the scope of her employment and had
supplied JC Hauling’s fax number to Park University. Consequently, Park
University denied intentionally violating the TCPA.
Park University has a commercial general liability insurance policy with
American and sought a defense and coverage upon JC Hauling’s instigation of the
state class action suit. American declined to provide either, prompting Park
University to bring the instant action. Park University contends the insurance
company owes it a defense under two different provisions of its policy: 1)
“property damage” liability coverage; and 2) “advertising injury” liability
coverage. 2
The property damage provision of the policy states:
A. Bodily Injury and Property Damage Liability
1. Insuring Agreement
a. We will pay those sums that the insured becomes legally obligated to pay
2
Park University also alleged various breach of contract claims and sought a
declaration that American owed a duty to indemnify it in the state case. The
district court held that such a declaration would be premature, Park Univ. Enters.,
Inc. v. Am. Cas. Co. of Reading, Pa., 314 F. Supp. 2d 1094, 1098 (D. Kan. 2004),
and these claims have not been raised on appeal.
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as damages because of “bodily injury” or “property damage” to which this
insurance applies. We will have the right and duty to defend the insured
against any “suit” seeking those damages.
b. This insurance applies to “bodily injury” and “property damage” only if
. . . [t]he “bodily injury” or “property damage” is caused by an
“occurrence” . . . .
Id. at 68 (emphasis added). “Property damage” includes the “[l]oss of use of
tangible property that is not physically injured . . . .” Id. at 79. The policy
defines an “occurrence” as an “accident, including continuous or repeated
exposure to substantially the same general harmful conditions.” Id. at 78. It does
not, however, define the terms “loss of use” or “accident.” Finally, the policy
excludes coverage for “‘property damage’ expected or intended from the
standpoint of the insured.” Id. at 68 (emphasis added).
The advertising injury provision states in relevant part:
B. Personal and Advertising Injury Liability
1. Insuring Agreement
a. We will pay those sums that the insured becomes legally obligated to pay
as damages because of “personal and advertising injury” to which this
insurance applies. We will have the right and duty to defend the insured
against any “suit” seeking those damages.
Id. at 71. The policy defines “advertising injury” as “injury, including
consequential ‘bodily injury’, arising out of . . . [o]ral or written publication of
material that violates a person’s right of privacy.” Id. at 78 (emphasis added).
The terms “oral or written publication” and “right of privacy” are not defined.
The policy characterizes an “advertisement” as “a notice that is broadcast or
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published to the general public or specific market segments about your goods,
products or services for the purpose of attracting customers or supporters.” Id. at
76.
Both parties moved for partial judgments on the pleadings pursuant to F ED .
R. C IV . P. 12(c). The district court concluded that American has a duty to defend
Park University in the state action under the property damage and the advertising
injury provisions of the policy. Park Univ. Enters., 314 F. Supp. at 1111. We
address each issue in turn.
II
We review a district court’s grant of a motion for judgment on the
pleadings de novo, using the same standard that applies to a Rule 12(b)(6) motion.
See Aspenwood Inv. Co. v. Martinez, 355 F.3d 1256, 1259 (10th Cir. 2004). So
doing, we accept all facts pleaded by the non-moving party as true and grant all
reasonable inferences from the pleadings in favor of the same. Judgment on the
pleadings should not be granted “unless the moving party has clearly established
that no material issue of fact remains to be resolved and the party is entitled to
judgment as a matter of law.” United States v. Any & All Radio Station
Transmission Equip., 207 F.3d 458, 462 (8th Cir. 2000). As with our practice for
motions to dismiss under Rule 12(b)(6), documents attached to the pleadings are
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exhibits and are to be considered in our review of the district court’s grant of Park
University’s Rule 12(c) motion. See Hall v. Bellmon, 935 F.2d 1106, 1112 (10th
Cir. 1991); F ED . R. C IV . P. 10(c).
Our primary task is to construe the insurance policy between Park
University and American. Because this case arises under our diversity
jurisdiction, we apply Kansas’ choice-of-law principles. Trierweiler v. Croxton &
Trench Holding Corp., 90 F.3d 1523, 1532 (10th Cir. 1996). “Kansas follows the
general rule that the law of the state where the insurance contract is made
controls.” Safeco Ins. Co. of Am. v. Allen, 941 P.2d 1365, 1372 (Kan. 1997). The
policy in this case was made for Park University in Kansas and was delivered to it
there. As a result, we apply Kansas law. Like any other contract, the language of
an insurance policy is construed to give effect to the intention of the parties.
Catholic Diocese of Dodge City v. Raymer, 840 P.2d 456, 459 (Kan. 1992). If a
policy is unambiguous, the intention of the parties and the meaning of the contract
are determined from the instrument itself. Wolfgang v. Mid-Am. Motorsports,
Inc., 111 F.3d 1515, 1524 (10th Cir. 1997) (applying Kansas law). Under Kansas
law, the test for determining the meaning of an insurance policy’s language is
what a reasonable person in the position of the policyholder would understand the
language to mean. See Farm Bureau Mut. Ins. Co. v. Horinek, 660 P.2d 1374,
1378 (Kan. 1983). Moreover, the duty to defend under an insurance policy is not
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necessarily coextensive with the duty to indemnify. Spivey v. Safeco Ins. Co., 865
P.2d 182, 188 (Kan. 1993). Rather, an insurer’s duty to defend arises “whenever
there is a ‘potential of liability’ under the policy.” Id.; see also State Farm Fire
& Cas. Co. v. Finney, 770 P.2d 460, 466 (Kan. 1989). “The insurer determines if
there is a potential of liability under the policy by examining the allegations in the
complaint or petition and considering any facts brought to its attention or which
it could reasonably discover.” Spivey, 865 P.2d at 188 (emphasis added). With
these principles in mind, we turn to the policy provisions.
A. Property Damage
Under the property damage provision at issue here, a duty to defend arises
if a plaintiff contends that “loss of use of tangible property” was caused by an
“occurrence.” American agrees that sending an unsolicited fax can result in “loss
of use of tangible property.” Here, JC Hauling lost the use of its fax machine,
ink, and paper. See Missouri ex rel. Nixon v. Am. Blast Fax, Inc., 323 F.3d 649,
654-55 (8th Cir. 2003) (discussing TCPA legislative history identifying the range
of harms created by junk faxes). American nevertheless maintains that this loss
of use was not caused by an occurrence because the loss of use damages were
inflicted intentionally by Park University and were therefore not the result of an
accident within the meaning of the policy. It also argues that Kansas public
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policy prohibits its coverage for non-fortuitous loss or damage, so that the loss
would be excluded under the policy’s intentional act exclusion even if it could be
deemed an occurrence. We are not persuaded by these arguments.
In determining for insurance purposes whether the damages resulting from
an insured’s acts were accidental and therefore an occurrence under a policy, the
state of Kansas follows the natural and probable consequences test. Under this
test, an insured’s intent to injure can be inferred if the resulting injury, from the
standpoint of the insured, is the natural and probable consequence of the act
ultimately causing the injury. Harris v. Richards, 867 P.2d 325, 327-28 (Kan.
1994). A finding of specific intent to injure is not necessary. Id. at 328.
Alternatively, even if an act itself is intentional, it may result in an unintended
injury. Spruill Motors, Inc. v. Universal Underwriters Ins. Co., 512 P.2d 403,
408 (Kan. 1973) (duty to defend where intentional wrongful taking of truck
resulted in unintentional injury); see also State Farm Fire & Cas. Co. v. Falley,
926 P.2d 664, 668 (Kan. Ct. App. 1996). Therefore, when determining whether
an insurer is required to defend an insured under a policy barring coverage for
intentional injuries, the courts must examine, from the standpoint of the insured,
whether the injury for which insurance coverage is being sought is the natural and
probable consequence of the insured’s act.
The district court held there was a possible occurrence under the policy
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because the alleged property damage may have been an accident and not the
natural and probable consequence of Park University’s intentional fax
transmission. In arguing to the contrary, American cited case law supporting the
general proposition that intent to injure can be inferred from an intentional act
because the resulting injury was the natural and probable consequence of the act.
See, e.g., Harris, 867 P.2d at 328 (no occurrence under policy where insured fired
shots into vehicle knowing it was occupied and as a result one occupant was
killed and the other severely injured); Spivey, 865 P.2d at 186 (applying Missouri
law similar to that in Kansas and finding no coverage where insured could expect
injury from intentionally threatening co-employee with weapons, firing a gun at
her, and forcing her to perform sexual acts); see also Bell v. Tilton, 674 P.2d 468,
475-77 (Kan. 1983) (no duty to indemnify where one could infer intent to injure
from insured’s intent to hit playmate with pellet from BB gun). The district court
distinguished these cases as inapposite, because their egregious facts clearly
supported an inference under the natural and probable consequences test that by
the insureds’ intentional acts they also intended to cause injury. Park Univ.
Enters., 314 F. Supp. 2d at 1104. The court declined to draw the same inference
from Park University’s intentional fax transmission, reasoning that the recipient
of a fax is not injured by the loss of paper and use of its fax machine if he or she
welcomes or solicits the fax. Thus, because Park University believed it was
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transmitting a fax to a recipient who wished to receive it (whether mistaken or
not), one could not conclude it intended to injure the recipient. Id. at 1105.
Consequently, the alleged injury was potentially an occurrence within the
meaning of the policy, requiring American to defend Park University. Id. Under
this reasoning, the court also rejected American’s arguments that the damages
were non-fortuitous, see Atchison, Topeka & Santa Fe Ry. Co. v. Stonewall Ins.
Co., 71 P.3d 1097, 1134-35 (Kan. 2003) (non-fortuity is a defense to policy
providing coverage for accidents), and that the policy’s exclusion for “expected or
intended injury” should apply. Park Univ. Enters., 314 F. Supp. 2d at 1105-06.
On appeal, Park University does not dispute that it intentionally sent a fax.
Instead, it reasserts its claim that it did not intend to injure the fax recipient
because it believed the fax was solicited, either as part of an existing business
relationship or through prior express invitation or permission. We agree with the
district court that the distinction under Kansas law between intent to act and
intent to injure is dispositive in this case. See Spruill Motors, 512 P.2d at 408.
Significantly, the policy provides the intent to injure must be inferred from the
“standpoint of the insured.” Aplt. App. at 68; see Harris, 867 P.2d at 328-29.
When Park University sent the fax to JC Hauling, it thought it had permission to
do so. Hence, from its standpoint, any resulting use of JC Hauling’s fax machine,
paper, and toner could not have resulted in injury because Park University thought
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the fax was welcome. Unlike intentionally firing a gun into an occupied car as in
Harris or intentionally firing a gun at an employee and forcing her to perform
sexual acts as in Spivey, neither of which is even arguably a welcome act, JC
Hauling’s injury cannot be deemed the natural and probable consequence of Park
University’s act in sending the fax when Park University thought JC Hauling
welcomed the transmission. If Park University intentionally sent a solicited fax,
one cannot infer it intended to injure the recipients anymore than one can infer
from the intentional taking of someone’s truck that the driver’s subsequent
accidental injury of the victim was intentional, as in Spruill Motors.
This case is distinguishable from two other federal circuit court cases
holding that property damage insurance provisions did not require a duty to
defend in TCPA cases. See Resource Bankshares Corp. v. St. Paul Mercury Ins.,
407 F.3d 631 (4th Cir. 2005), cert. denied, 126 S. Ct. 568 (2005); Am. States Ins.
Co. v. Capital Assocs. of Jackson County, Inc., 392 F.3d 939 (7th Cir. 2004).
Contrary to the present case, where the question of Park University’s intent to
cause injury to those it sent faxes lies at the heart of the underlying controversy,
the intentional nature of the alleged injuries in American States appears to have
been wholly undisputed. See 392 F.3d at 943. Moreover, the underlying state
complaint here alleged both intentional and negligent conduct: Park University
“knew or should have known that it did not have the prior express invitation or
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permission of Plaintiff . . . to send the advertisements and knew or should have
known that its actions constitute a violation of law.” Aplt. App. at 82-83
(emphasis added). In American States, the court focused its brief analysis
regarding the property damage insurance clause solely on intentional conduct.
392 F.3d at 943. Because an occurrence could result from negligent conduct on
the part of Park University, any need for analysis of whether intentional conduct
and injury occurred is obviated. See, e.g., Fidelity & Deposit Co. of Md. v.
Hartford Cas. Ins. Co., 189 F. Supp. 2d 1212, 1218 (D. Kan. 2002) (noting that
natural and probable consequences test has not been applied to allegations of
negligent conduct by an insured).
In Resource Bankshares, 407 F.3d at 638, the plaintiff argued that although
it did send a fax, “it only intended to fax ads to recipients who actually wanted
them, and only did otherwise inadvertently.” The plaintiff cited the district
court’s published opinion from the instant case in support of its argument that a
TCPA violation could be accidental. Id. The court pointed out that the TCPA
defines “unsolicited advertisement” as one that “‘is transmitted to any person
without that person’s prior express invitation or permission.’ 47 U.S.C. §
227(a)(4) (2003) (emphasis added).” Id. Because the plaintiff there failed to
present any evidence “that would cause a reasonable person to mistakenly believe
that they had received prior express consent to send their fax ads,” the Resource
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Bankshares court decided against it on summary judgment. Id. at 639. We stand
in a different posture here because we are reviewing the district court’s judgment
on the pleadings. In so doing, we are permitted to treat exhibits attached to a
complaint as part of the pleadings. Indus. Constructors Corp. v. U.S. Bureau of
Reclamation, 15 F.3d 963, 964-65 (10th Cir. 1994) (citation omitted). Park
University’s assertions that its actions were in fact solicited are clearly expressed
in its answer in the state court action, which in turn was attached to the complaint
in this case. Aplt. App. at 159, 160-161, 162, 163. 3 Resources Bankshares is
thus inapposite.
In conclusion, under the minimal potential of liability standard of Kansas
law, see Finney, 770 P.2d at 466, we conclude that an occurrence was possible
under the insurance contract, and that American must provide a defense to Park
University pursuant to the property damage provision. For similar reasons, as
detailed by the district court, see Park Univ. Enters., 314 F. Supp. 2d at 1105-06,
we are not persuaded by American’s related claims of non-fortuity and exclusion
under the policy.
3
As noted above, Park University affirmatively asserted in its response to
the underlying complaint that the fax was addressed to an employee of JC Hauling
who had registered for one of Park University’s seminars while acting in the
scope of her employment, and who had supplied her employer’s fax number.
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B. Advertising Injury
The advertising injury provision of the insurance policy covers injuries
“arising out of . . . [o]ral or written publication of material that violates a
person’s right of privacy.” Aplt. App. at 78. As noted above, the terms “oral or
written publication” and “right of privacy” are not defined. The parties dispute
the meaning of these terms and whether such terms are implicated by a violation
of the TCPA. 4
As we observed above, the Kansas courts have acknowledged that because
standard insurance polic[ies] are predetermined by the insurance
carrier itself and, long in advance of the individual insurance sale . . .
[,] the law, in its concern for even-handed fairness, has attempted to
4
We reject out of hand American’s argument that there can be no coverage
here because the named plaintiff in the underlying suit, JC Hauling, is a
corporation, and corporations cannot claim a right to privacy. See Am. States Ins.
Co. v. Capital Assocs. of Jackson County, Inc., 392 F.3d 939, 942 (7th Cir. 2004).
American conveniently ignores that the offending fax in question was sent to
Patty Evansco, an individual and employee of JC Hauling. Moreover, the
complaint in the underlying class action suit seeks redress for a group of
individuals who have allegedly suffered TCPA violations as a result of Park
University’s faxing activities. Even the court in American States acknowledged
“the class of junk-fax recipients may include real rather than artificial people.”
Id. Likewise, several courts that have addressed TCPA invasion of privacy claims
have implicitly rejected the merits of American’s argument by acknowledging
such actions even where the named plaintiffs were corporate or business entities
rather than natural persons. See e.g., Resource Bankshares Corp. v. St. Paul
Mercury Ins., 407 F.3d 631 (4th Cir. 2005) (complaining plaintiff in underlying
class action was law firm); Universal Underwriters Ins. Co. v. Lou Fusz Auto.
Network, Inc., 401 F.3d 876 (8th Cir. 2005) (plaintiff was computer business); W.
Rim Inv. Advisors, Inc. v. Gulf Ins. Co., 269 F. Supp. 2d 836 (N.D. Texas 2003)
(plaintiff was group of businesses), aff’d, 96 Fed. Appx. 960 (5th Cir. 2004).
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minimize the imbalance between insurer and insured, so far as that is
possible, by means of a rule that in the event of ambiguity or conflict
in the policy provisions a policy of insurance is to be construed
strictly against the insurer and in favor of the insured.
Gowing v. Great Plains Mut. Ins. Co., 483 P.2d 1072, 1074-75 (Kan. 1971).
Where an ambiguity arises, the test for determining the meaning of an insurance
policy’s language focuses not on what “the insurer intend[ed] the [policy] to
mean, but what a reasonable person in the position of the insured would have
understood [it] to mean.” Casey v. Aetna Cas. & Sur. Co., 470 P.2d 821, 826
(Kan. 1970); see also Farm Bureau Mut. Ins. Co., 660 P.2d at 1378; Gowing, 483
P.2d at 1075.
Courts have noted the term “privacy” can be interpreted in multiple ways
and be used to mean either secrecy or seclusion. See Resource Bankshares Corp.,
407 F.3d at 639-40 & n.9; Am. States Ins. Co., 392 F.3d at 941.
“Privacy” is a word with many connotations. The two principal
meanings are secrecy and seclusion, each of which has multiple
shadings. See Restatement (Second) of Torts § 652 (1977); Richard
S. Murphy, Property Rights as Personal Information, 84 Geo. L.J.
2381 (1996). A person who wants to conceal a criminal conviction,
bankruptcy, or love affair from friends or business relations asserts a
claim to privacy in the sense of secrecy. A person who wants to stop
solicitors from ringing his doorbell and peddling vacuum cleaners at
9 p.m. asserts a claim to privacy in the sense of seclusion.
Id. American argues that at most the TCPA allows recovery for injuries arising
from an invasion of privacy in the form of seclusion, whereas the policy at issue
here only provides coverage for an invasion of privacy in the form of secrecy.
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American’s basic thesis is that the policy, by virtue of its language detailing that a
personal privacy violation might occur when material is published, implicitly
defines the violation as the disclosure of secrets rather than the invasion of one’s
seclusion. Despite the lack of any specific definitions in the policy supporting
this position, American reasons the term “publish” requires that material or
information be disseminated to a third party. From this, it contends the term
“privacy” must relate to secrets rather than seclusion, because dissemination of
information to a third party that violates a person’s right to privacy mirrors the
tort of defamation and the invasion of secrecy interests. American further argues
that the receipt of an unsolicited fax cannot violate a secrecy interest because no
offensive material is being transmitted to a third party. According to American,
therefore, even if this case presents a violation of privacy in the sense of
seclusion, the policy it issued to Park University only provides coverage for
secrecy violations.
American’s argument is not entirely unreasonable and at least two circuit
courts have ruled accordingly in similar situations. See Resource Bankshares
Corp., 407 F.3d at 641-42; Am. States Ins. Co., 392 F.3d at 943. 5 We are
5
The court in Resource Bankshares examined a policy with language
distinct from the policy language at issue here. Resource Bankshares Corp., 407
F.3d at 634 (policy provided coverage for damages arising from “[m]aking known
to any person or organization written or spoken material that violates a person’s
(continued...)
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convinced by countervailing case law in three other circuits, however, that the
policy American issued to Park University, defined by a reasonable person in the
position of the insured, provides coverage for TCPA violations. See Universal
Underwriters Ins. Co. v. Lou Fusz Auto. Network, Inc., 401 F.3d 876 (8th Cir.
2005); Hooters of Augusta, Inc. v. Am. Global Ins. Co., No. 04-11077, 2005 WL
3292089 (11th Cir. Dec. 6, 2005) (unpub.), aff’g Hooters of Augusta, Inc. v. Am.
Global Ins. Co., 272 F. Supp. 2d 1365 (S.D. Ga. 2003); W. Rim Inv. Advisors, Inc.
v. Gulf Ins. Co., No. 03-10707, 2004 WL 1160165 (5th Cir. May 19, 2004)
(unpub.), aff’g W. Rim Inv. Advisors Inc. v. Gulf Ins. Co., 269 F. Supp. 2d 836,
847 (N.D. Tex. 2003). 6
Courts have consistently held the TCPA protects a species of privacy
interest in the sense of seclusion. “Looking at how Congress described
unsolicited fax advertisements, it is clear that Congress viewed violations of the
5
(...continued)
right of privacy.” (emphasis added)). Hence, the court’s determination that this
language did not provide coverage for an invasion of seclusion claim under the
TCPA is not determinative of the issue here.
6
The Eleventh Circuit affirmed the district court in Hooters v. Augusta, Inc.
v. Am. Global Ins. Co., No. 04-11077, 2005 WL 3292089 (11th Cir. Dec. 6,
2005), in a lengthy unpublished opinion which we find persuasive and helpful to
our analysis. See T ENTH C IR . R. 36.3(B). The Fifth Circuit affirmed in W. Rim
Inv. Advisors, Inc. v. Gulf Ins. Co., No. 03-10707, 2004 WL 1160165 (5th Cir.
May 19, 2004), stating only that “the court finds no reversible error of fact or law
and affirms for essentially the reasons stated by the district court.” Id. at **1.
We therefore look to the district court opinion in Western Rim as descriptive of
the Fifth Circuit’s determination.
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Act as ‘private nuisances’ and ‘invasions of privacy’ under ordinary, lay meanings
of these phrases.” Universal Underwriters Ins., 401 F.3d at 881; see also
Resource Bankshares Corp., 407 F.3d at 639 (“the harm occasioned by unsolicited
faxes involves protection of some sort of ‘privacy’” and class action seeking
redress of TCPA harms addresses “seclusion privacy”); Am. States Ins. Co., 392
F.3d at 942 (TCPA promotes “interest in seclusion”); Hooters, 272 F. Supp. 2d at
1373 (“the TCPA provides that no one is to be harassed with advertisement faxes
unless he specifically solicits them”); W. Rim Inv. Advisors Inc., 269 F. Supp. 2d
at 847 (purpose of TCPA “is to protect the privacy of individuals from receiving
unsolicited faxed advertisements); Prime TV, LLC v. Travelers Ins. Co., 223 F.
Supp. 2d 744, 752-53 (M.D. N.C. 2002) (“TCPA was enacted to protect the
privacy interests of residential telephone subscribers by placing restrictions on
unsolicited, automated telephone calls to the home . . .” (quotations and citations
omitted)).
The district court in the instant case ruled accordingly. Park Univ. Enters.,
314 F. Supp. 2d at 1109 (“Congress . . . sought to address the right of facsimile
recipients to be left alone”). Applying Kansas law requiring it to interpret the
policy as viewed by a reasonable person in the position of the insured, the district
court also was of the view that the policy term “privacy” could be understood to
include the right to seclusion. “The plain and ordinary meaning of privacy
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includes the right to be left alone, unburdened by unsolicited facsimiles.” Id. at
1109-10 (following Universal Underwriters Ins. Co. v. Lou Fusz Auto. Network,
Inc., 300 F. Supp. 2d 888, 895 (D. Mo. 2004); Hooters of Augusta, Inc., 272 F.
Supp. 2d at 1372). Contrary to American’s arguments otherwise, the court further
concluded the term “publication” could be read by a reasonable person in the
position of insured, in the absence of any definition to the contrary in the
insurance contract, to mean either the transmittal of material to a third party or
the simple transmittal of material to a recipient. Viewing the term “publication”
as ambiguous, the court construed the policy against American pursuant to Kansas
law, and held that the policy protects seclusion interests.
We find no fault with the district court’s ruling. As noted above, the court
correctly determined that in layman’s terms, “[t]he plain and ordinary meaning of
privacy includes the right to be left alone.” Id. at 1110. Certainly, the insurer
could impose a more restrictive, technical and legal definition to the term
“privacy” following that of the classic tort of invasion of secrecy interests or
defamation. See, e.g., Resource Bankshares, 407 F.3d at 641; Am. States Ins. Co.,
392 F.3d at 941-42. Such an approach, however, would construe the language of
the contract from the vantage of an insurer or an attorney, rather than the insured.
American failed to provide specific terms in the policy to narrow the scope of
privacy interest violations for which it intended to provide coverage, and we
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decline to permit it to do so now. Accord Universal Underwriters Ins. Co., 401
F.3d at 882; Hooters of Augusta, Inc., 2005 WL 3292089 at *3; W. Rim Inv.
Advisors, 269 F. Supp. 2d at 847; Prime TV, LLC, 223 F. Supp. 2d at 752-53 &
n.5.
We likewise agree with the district court’s broad construction of the term
“publication” in favor of Park University. Random House defines publication, in
part, as “the act of bringing before the public; announcement.” R ANDOM H OUSE
U NABRIDGED D ICTIONARY 1563 (2d ed. 1987). Similarly, the Oxford English
Dictionary defines the term as “the action of making something generally known;
public declaration or announcement.” N EW S HORTER O XFORD E NGLISH
D ICTIONARY 2405 (1993). Reading the terms in the policy from the vantage point
of the insured, rather than an insurer or lawyer, Gowing, 483 P.2d at 1074-75;
Casey, 470 P.2d at 826, it is entirely reasonable to define publication as making
something generally known. By faxing advertisements to the class of plaintiffs as
alleged in the underlying state court complaint, Park University effectively
published material in this broader sense, i.e., communicated information
generally, which undermined the recipients’ rights to be left alone. Accord
Hooters of Augusta, Inc., 2005 WL 3292089 at *5; W. Rim Inv. Advisors, Inc.,
269 F. Supp. 2d at 846-47; Prime TV, LLC, 223 F. Supp. 2d at 752-53.
Of course, as with the term “privacy,” the word publication can be defined
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in the limited manner advocated by American. Thus, Random House states the
legal definition for the term “publish” means “to communicate (in a defamatory
statement) to some person or persons other than the person defamed.” R ANDOM
H OUSE U NABRIDGED D ICTIONARY 1563. The Oxford English Dictionary’s legal
definition for publication reads: “Notification of communication to a third party
or to a limited number of people regarded as representing the public.” N EW
S HORTER O XFORD E NGLISH D ICTIONARY 2405. To give the term this narrow,
technical reading would depart from the definition a reasonable person in the
position of an insured might give the word. As noted above, we are precluded by
Kansas law from construing the term “publication” so narrowly in this insurance
policy when a reasonable person could view the term more broadly. 7
In conclusion, we agree with the district court that when the policy is
strictly construed against American and in favor of Park University, a TCPA
invasion of seclusion claim might be covered by the policy’s advertising injury
7
In this regard, we find American’s reliance on MGM, Inc. v. Liberty
Mutual Ins. Co., 855 P.2d 77 (Kan. 1993), as support for its definition of
publication, to be largely inapposite. First, MGM, Inc. did not address any form
of advertising injury or coverage for the same. Second, the injury at issue in
MGM, Inc., is more focused on a violation of secrecy, rather than a violation of
seclusion. Id. at 78 (employer secretly taped employees’ private conversations).
Finally, the court’s conclusion that there was no privacy violation because the
employer in MGM, Inc. did not disseminate to anyone the private information he
had secretly obtained from his employees, id. at 79, does not aid in fleshing out
the proper definition for the term “publish,” and how that term is used in a
seclusion setting.
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provisions. The transmission of an allegedly unsolicited fax can constitute a
publishing act, while receiving the same can result in an invasion of privacy. An
asserted TCPA violation easily dovetails, therefore, with the language in the
insurance policy. Similarly, in agreement with the district court’s reasoning, see
Park Univ. Enters., 314 F. Supp. 2d at 1110, and relying on our earlier analysis as
to whether there was an occurrence under the policy, we reject American’s allied
argument regarding non-fortuitous advertising injuries. Consequently, the district
court correctly determined that American has a duty to defend Park University in
the underlying TCPA action.
We AFFIRM.
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