Finding the exclusion relied upon by the insurer was ambiguous, the Fourth Circuit affirmed the district court's ruling that a duty to defend was owed. Mariam, Inc. v. Universal Underwriters Ins. Co., 2020 U.S. App. LEXIS 15658 (4th Cir. May 15, 2020)
Tamara Darvish Fallahi sued her father, his company, and her two half-brothers (Appellees) in a dispute over a family-owned business. The allegations included claims of tortious interference with economic relationships and tortious interference with contract. To prevail on her underlying tort claims, Fallahi had to show intentional, malicious acts that were calculated to cause harm.
Appellees tendered to Universal Underwriters, who's policy provided coverage for allegations of wrongful employment practices. Universal denied the claim, citing an exclusion for coverage of actions taken with the intent to cause harm. The exclusion did not apply, however, if the injury arose solely from the intentional use of reasonable force for the purpose of protecting persons. The district court granted summary judgment to Appellees on their duty to defend claim.
On appeal, Universal argued that "harm" meant any harm whatsoever, while Appellees maintained that, reading context, "harm" could refer only to physical harm. The Fourth Circuit agreed with Appellees. The exclusion was ambiguous because it could suggest more than one meaning to a reasonably prudent layperson. "Harm" could reasonably be interpretedas referring only to harms of a physical nature. In light of the ambiguity, the exclusion was construed against Universal as the drafter of the policy. The district court's judgment was affirmed.
