Owners Insurance Company v. European Auto Works, Inc.
695 F.3d 814
8th Cir.2012Background
- Owners and Auto-Owners insured Autopia; Percic sued Autopia in Minnesota state court for TCPA violations and conversion from unsolicited faxes.
- Autopia allegedly faxed 5,851 advertisements in 2005, with 3,903 received by recipients; Autopia claims it relied on its fax vendor’s representations.
- Percic alleged the faxes violated the TCPA and invaded privacy by intrusion and interruption of seclusion.
- Insurers defended Autopia under their commercial general liability and umbrella policies, which cover “advertising injury” and “property damage”; settlement in state court allocated $1,951,500 to TCPA violations and bound insurers if coverage existed in the federal action.
- Settlement stated it was enforceable against insurers only if federal coverage existed; the district court granted summary judgment for Autopia and Percic, finding TCPA claims covered as advertising injury; insurers appeal on coverage and ambiguity grounds.
- Minnesota law governs interpretation of the policies, with unambiguous terms given plain meaning and ambiguities interpreted in insureds’ favor.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Does advertising injury cover TCPA violations via unsolicited faxes? | Percic contends TCPA violations are privacy invasions covered by advertising injury. | Owners/Auto-Owners argue the provision covers secrecy-based privacy violations only. | Yes; TCPA claims fall within advertising injury under Minnesota contract interpretation. |
| Is the term 'publication' broad enough to include disseminating faxes? | Percic argues publication includes dissemination of fax ads. | Insurers contend publication targets content/publication of material, not dissemination. | Yes; 'publication' encompasses dissemination of fax advertisements. |
| Does the last antecedent rule require a narrow reading excluding TCPA violations? | Minnesota law requires ambiguity be resolved in insureds' favor when reasonably subject to interpretation. | The phrase should modify only 'material' under the last antecedent rule. | No; last antecedent reading does not compel exclusion; ambiguity resolved in favor of coverage. |
| Do the other advertising injuries imply exclusion of TCPA coverage or is coverage preserved? | Coverage extends to broad advertising injuries; TCPA fits within general scope. | Content-based limitations suggest TCPA should be excluded. | Coverage is afforded under advertising injury; property damage issue not reached. |
| Is TCPA coverage also possibly available under property damage? | Not contested here. | Not necessary to decide. | Not reached; primary holding resolves advertising injury coverage. |
Key Cases Cited
- Park Univ. Enters., Inc. v. Am. Cas. Co. of Reading, Pa., 442 F.3d 1239 (10th Cir. 2006) (TCPA coverage under privacy/adverting injury provisions)
- Hooters of Augusta, Inc. v. Am. Global Ins. Co., 157 Fed.Appx. 201 (11th Cir. 2005) (TCPA coverage under advertising injury provision)
- Valley Forge Ins. Co. v. Swiderski Elecs., Inc., 860 N.E.2d 307 (Ill. 2006) ( Illinois Supreme Court on TCPA coverage under privacy provision)
- Universal Underwriters Ins. Co. v. Lou Fusz Auto. Network, Inc., 401 F.3d 876 (8th Cir. 2005) (TCPA as invasion of privacy under ordinary meaning)
- Auto-Owners Ins. Co. v. Websolv Computing, Inc., 580 F.3d 543 (7th Cir. 2009) (contextual reading of advertising injury provisions)
- Minn. Mining & Mfg. Co. v. Travelers Indem. Co., 457 N.W.2d 175 (Minn. 1990) (ambiguous policy provisions construed in insured’s favor)
- Gen. Cas. Co. of Wis. v. Wozniak Travel, Inc., 762 N.W.2d 572 (Minn. 2009) (plain meaning of terms; ambiguous terms construed favorably to insured)