441_C010
BUSINESS_RELATED
SLANDER NOT COVERED
|
Personal Umbrella |
slander |
|
Business pursuits |
|
An insured under a personal
umbrella liability policy forwarded a summons and complaint to the insurer,
with a request that it represent and defend him in a lawsuit brought by general
partners in a real estate syndicate in which he was a limited partner.
The insurer disclaimed
coverage citing the policy excluded coverage for "personal injury…arising
out of…any business pursuits." The insured filed suit against the insurer.
He appealed a trial court judgment to the effect that the insurer's denial of
liability was proper.
According to the terms of
the partnership agreement, limited partners had no control over the conduct of
the business and no authority to act for or bind the partnership. The general
partners were the active partners and commenced the slander action after the
insured disagreed with their proposals to sell property owned by the business
and then to dissolve it. The defendant communicated with other limited partners
with regard to opposing the plans. The general partners sought damages in the
amount of $500,000, alleging that the insured had accused them, in oral
communications with other limited partners, of "phonying
and doctoring" the books and of "getting away with murder" in
their conduct of the business.
The appeal court took note
of the fact that the insured was president of a plumbing supply firm, to which
he devoted most of his working time. It also found that the term "business
pursuits" was not defined in the personal umbrella liability policy under
which claim was made. The court said [the defendant’s]: “primary means of
livelihood consisted of activities other than his investment in this real
estate syndicate. However, for purposes of the ‘business pursuits’ exclusion,
the ‘business' engaged in by him need not necessarily be limited to his sole
occupation or employment."
The court affirmed the trial
court judgment in favor of the insurance company, with costs. In holding that
the "business pursuits" exclusion applied, it declared that the
policy did not entitle the insured to coverage or defense by the insurer in the
slander action.
Shapiro, Appellant v. Glens
Falls Insurance Company, Respondent.