Billings v. COMMERCE INSURANCE COMPANY, 458 Mass. 194

Billings was insured by Commerce under a personal umbrella policy from March 15, 2000, to March 15, 2001, covering personal injury including malicious prosecution.
The 1998 action against the Petersons regarding zoning/building permits was dismissed April 7, 2000 after settlement; the underlying dispute predated Commerce’s coverage period.
In December 2000, Scott M. Peterson and Eric M. Peterson, as trustees, filed the 2000 action alleging malicious prosecution and intentional infliction of emotional distress arising from the 1998 action and rumors.
Billings sought a defense from Commerce in the 2000 action; Commerce refused, asserting no defense duty since the alleged offense occurred outside the coverage period.
A jury later ruled in favor of Billings in 2005, and Billings then filed this declaratory judgment action on January 26, 2006 seeking a defense from Commerce and damages under Chapter 93A and Chapter 176D.
The Superior Court granted Commerce’s summary judgment, and the Massachusetts Supreme Judicial Court held that Commerce had no duty to defend the 2000 action based on the timing of the alleged occurrences and the scope of the rumors allegation

Issue	Plaintiff's Argument	Defendant's Argument	Held
When does the malicious prosecution occurrence occur for insurance purposes?	Billings asserts occurrence is the filing date of the malicious action.	Commerce argues occurrence occurs at the time of the alleged offense within the policy period.	Occurrence is the filing date; not the termination date, and here the filing occurred before coverage began.
Does the ‘spreading rumors’ claim reasonably sketch a defamation claim within the policy period?	The complaint plausibly sketches libel/slander/defamation arising from rumors.	The rumors were not shown to have occurred during the policy period based on the complaint and timing.	The rumor allegation is reasonably susceptible of a defamation claim but not shown to have occurred during the policy period.

Chervin v. Travelers Ins. Co., 448 Mass. 95 (2006) (recitation of malicious prosecution elements and accrual)
Hubbard v. Beatty & Hyde, Inc., 343 Mass. 258 (1961) (general malicious prosecution framework)
Ruggerio Ambulance Serv., Inc. v. National Grange Mut. Ins. Co., 430 Mass. 794 (2000) (duty to defend based on reasonably susceptible allegations)
Boston Symphony Orchestra, Inc. v. Commercial Union Ins. Co., 406 Mass. 7 (1989) (duty to defend based on coverage scope and allegations)
Desrosiers v. Royal Ins. Co., 393 Mass. 37 (1984) (consideration of insurer’s knowledge in duty to defend)
Terrio v. McDonough, 16 Mass. App. Ct. 163 (1983) (readily knowable information can affect defense duty)
Farm Family Mut. Ins. Co. v. Whelpley, 54 Mass. App. Ct. 743 (2002) (rare exception to standard duty-to-defend rule)
Erie v. Guaranty Nat'l Ins. Co., 109 F.3d 156 (3d Cir. 1997) (occurrence timing vs. limitations period considerations)
Continental Cas. Co. v. Gilbane Bldg. Co., 391 Mass. 143 (1984) (injury timing triggers insurance coverage)
Bartholomew v. Insurance Co. of N. Am., 502 F. Supp. 246 (D.R.I. 1980) (precedent on damage timing under insurance)