Duty to Defend under CGL Form does not Apply to Claim for Injunctive Relief

The insured sought a determination from the court that the insurer owed a duty to defend the insured under the terms of the general liability policy. This is a United States District Court case decided under Florida law. The case is MJCM, Inc. v. Hartford Casualty Insurance Company, 2010 WL 1949585 (M.D.Fla.).

The insured operates a kennel and grooming salon. Neighbors to the salon filed a complaint against the insured seeking injunctive relief, costs of the action, and other relief as the court deems appropriate. The neighbors allege that the operation of the kennel constitutes a private nuisance and that it interferes with the neighbors' quiet enjoyment of their own property because of the continuous and distracting barking of the dogs. The insured notified the insurer of the lawsuit and requested defense. The insurer declined, saying that the claims against the insured did not qualify as bodily injury, property damage, or personal and advertising injury as defined in the policy. This lawsuit followed.

The insurer argued that injunctive relief does not constitute damages under the liability policy, and so, the insurer owes neither a duty to defend nor a duty to indemnify. The insured argued that the underlying complaint, when fairly read, alleges facts that do or potentially can bring the lawsuit within the policy coverage. The insured said that property damage occurs when quiet enjoyment of property is interfered with as claimed by the neighbors, in that this is loss of use of tangible property that is not physically injured.

The district court noted that the construction and effect of a written contract of insurance is a matter of law and that the court is required to interpret the policy in a way that will effectuate the intentions of the parties at the time they entered into the contract. Moreover, the terms of an insurance policy should be given their ordinary meaning unless there is some indication that the parties intended a special or technical meaning. In the underlying complaint, the court said, the neighbors seek relief which by definition does not include a monetary award; in other words, the neighbors do not seek the award of damages to compensate for the alleged invasion of the right to quiet enjoyment of their property. The underlying complaint does not claim bodily injury, property damage, or personal and advertising injury as defined in the policy. And, the neighbors seek only injunctive relief and this does not meet the definition of “suit” in the policy. Therefore, the motion by the insurer to dismiss is granted; the insurer did not owe a duty to defend or a duty to indemnify.

Editor's Note: The point made by the court in this case is that, based on the information provided in the underlying complaint against the insured, the damages sought do not encompass bodily injury, property damage, or personal and advertising injury as defined in the policy for which the insured would be legally obligated to pay. The claim was for injunctive relief, and this is not within the scope of a general liability policy that applies to claims for damages based on tort negligence caused by an occurrence.