This insurаnce case primarily involves the issue of whether the instant insurance policy provides coverage for a slander of title claim. The district court concluded that the policy did not provide such coverage and that the insurer had no duty to defend the insured against any such claim. For the reasons stated herein, we affirm.
I. BACKGROUND FACTS
During the 1980’s, Lake Caroline, Inc. (“LCI”) constructed the Lake Caroline subdivision located in Madison County, Mississippi (the subdivision is hereinafter referred to as “Lake Caroline”). On August 7, 1989, the Madisоn County Board of Supervisors (the “Board”) re-zoned Lake Carolina from “A-l Agricultural” to “P-1 Planned Unit Development.” Accordingly, on December 4, 1989, LCI executed a “Declaration of Covenants, Conditions, and Restrictions for Lake Caroline.” LCI also created the Lake Caroline Planned Unit Development (“LCI PUD”).
A&F Properties, LLC (“AFP”) was interested in constructing and operating a golf course in Lake Caroline. On September 27, 1995, LCI and AFP entered into a “Contract for the Sale and Purchase of Real Propеrly” (the “Contract”) under which LCI agreed to give AFP 154 acres of Lake Caroline (hereinafter referred to as the “Golf Course Lands”) in consideration for AFP building and maintaining a golf course for a period of not less than ten years, i.e., until December 31, 2006. The Contract and warranty deed provided that the Golf Course Lands would be subject to zoning ordinances and other governmental regulations. AFP constructed and began operating the golf course in 1996.
On February 25, 1998, the Board adopted the 1998 Master Plan for the LCI PUD. The 1998 Mаster Plan was, according to LCI, the first plan adopted for the LCI PUD and reflected the then-existing conditions of Lake Caroline, including the existence of the golf course.
In 2003, AFP became disillusioned with running the golf course and instead wanted to residentially develop the Golf Course Lands. AFP twice petitioned the Board— in November 2003 and April 2004 — to rezone the Golf Course Lands to allow for residential development. Both attempts were opposed by LCI, the Lake Caroline Owners’ Association, and hundreds оf individual homeowners. The Board tabled the November 2003 petition as premature because AFP was contractually obligated to operate the golf course until December 31, 2006. The Board’s denial of the April 2004 petition on the same grounds was affirmed on appeal by the Circuit Court of Madison County and then the Mississippi Supreme Court.
See A&F Props., LLC v. Madison County Bd. of Supervisors,
On December 9, 2004, AFP filed suit in state court against LCI alleging breach of *417 contract, breach of warranty deed, and slander of title claims. According to the AFP complaint, the Board had initially approved a master plan for Lake Caroline in 1989. However, the Board lost the only physical copy of the 1989 Master Plan, prompting it to adopt a new master plan in 1998. AFP alleges that it knew nothing of the 1998 Master Plan because LCI withheld the fact that it was presenting a new plan to the Board. AFP further alleges that LCI withheld from the Board that AFP was free to make other use of its property after the Contract term expired. AFP also claims that LCI repeatedly misreprеsented to the Board that LCI was the only developer within the LCI PUD, implying that AFP was not a developer and did not have rights to develop the subject property. AFP characterizes LCI’s conduct as intentional and/or malicious.
LCI owns an insurance policy (the “Policy”) issued by Nationwide Mutual Insurance Company (“Nationwide”). On November 17, 2005, Nationwide filed suit in federal court seeking a declaratory judgment that the allegations in the AFP complaint do not trigger its duty to defend under the Policy. The relevant provisions policy are as follows:
Coverage A governs “property damage” and provides, in pertinent part:
We will pay those sums that the insured becomes legally obligated to pay as damages because of “bodily injury” or “property damage” to which this insurance applies. We will have the right and duty to defend the insured against any “suit” seeking those damages. However, we will have no duty to defend the insured against any “suit” seeking damages for “bodily injury” or “property damage” to which this insurance does not apply. We may, at our discretion, investigate any “occurrence” and settle any claim or “suit” that may result.
“Property damage” is defined to include:
a. Physical injury to tangible property, including all resulting loss of use of that property. All such loss of use shall be deemed to occur at the time of the physical injury that caused it; or
b. Loss of use of tangible property that is not physically injured. All such loss of use shall be deemed to occur at the time of the “occurrence” that caused it.
However, coverage is limited to propеrty damage “caused by an ‘occurrence’ that takes place in the ‘coverage territory.’ ” An “occurrence” is defined in the Policy to mean “an accident, including continuous or repeated exposure to substantially the same general harmful conditions.” Finally, the Policy contains an “expected or intentional conduct” exclusion. Thus, coverage does not apply to property damage that is “expected or intended from the standpoint of the insured.”
Coverage B governs “personal and advertising injury” and provides, in pertinent part:
We will pay those sums that the insured becomes legally obligated to pay as damages because of “personal and advertising injury” to 'which this insurance applies. We will have the right and duty to defend the insured against any “suit” seeking those damages. However, we will have no duty to defend the insured against any “suit” seeking damages for “personal and advertising injury” to which this insurance does not apply. We may, at our discretion, investigate any offense and settle any claim or “suit” that may result.
“Personal and advertising injury” is defined in the Policy to include “[o]ral or written publication, in any manner, of material that slanders or libels a person or organization or disparages a person’s or *418 organization’s goods, products or services.” However, the Policy also contains a “knowledge of falsity” exclusion. Thus, coverage does not apply to any “ ‘[personal and advertising injury’ arising out of oral or written publication of material, if done by or at the direction of the insured with knowledge of its falsity.”
On September 28, 2006, the district court entered judgment in favor of Nationwide on the ground that the AFP complaint alleges only intentional conduct thereby triggering the “expected or intentional conduct” exclusion under Coverage A and the “knowledge of falsity” exclusion under Coverage B. Thus, according to the district court, Nationwide has no duty to defend LCI against the AFP complaint because the allegations in that complaint do not arguably fall within the scope of coverage. LCI filed this timely notice of appeal.
II. STANDARD OF REVIEW
We review a district court’s summary judgment ruling
de novo,
applying the same standard as the district court.
Wyatt v. Hunt Plywood Co., Inc.,
Because this is a diversity case, this court applies the substantive law of Mississippi.
Mulberry Square Prods. v. State Farm Fire & Cas. Co.,
III. ANALYSIS
“Under Mississippi law, an insurer’s duty to defend an action against its insured is measured, in the first instance, by the allegations in the plaintiffs pleadings, and only if the pleadings state facts which bring the injury within the coverage of the policy is the insured required to defend.”
Mulberry,
First, where an insurance policy is plain and unambiguous, a court must construe that instrument, like other contracts, exactly as written. Second, it reads the policy as a whole, thereby giving effect to all provisions. Third, it must read an insurance policy more strongly against the party drafting the policy and most favorably to the policy holder. Fourth, where it deems the terms of an insurance policy ambiguous or doubtful, it must interpret them most favorably to the insured and against the insurer. Fifth, when an insurance policy is subject to two equally reasonable interpretations, a court must adopt the one giving the greater indemnity to the insured. Sixth, where it discerns no practical difficulty in making the language of an insurance policy free from doubt, it must read any doubtful provision against the insurer. Seventh, it must interpret terms of insurance policies, particularly exclusion clauses, favorably to the insured wherever reasonably possible. Finally, although ambiguities of an insurance policy are construed against the insurer, a court must refrain from altering or changing a policy where terms arе unambiguous, despite resulting hardship on the insured.
Centennial Ins. Co. v. Ryder Truck Rental, Inc.,
A. Personal and Advertising Injury — Coverage B
The parties agree that the only possibility for coverage under Coverage B arises out of subsection d of the definition “personal and advertising injury,” which includes coverage for injuries arising out of “[o]ral or written publication, in any manner, of material that slanders or libels a person or organization or disparages a person’s or organization’s goods, products or services.” Coverage is excluded, however, if the publication was “done by or at the direction of the insured with knowledge of its falsity.”
The district court held that because the AFP complaint allegеs that LCI’s conduct was intentional, the “knowledge of falsity” exclusion applies to preclude coverage. In doing so, the district court erred. The AFP complaint alleges that LCI’s conduct was intentional and/or malicious. “Malice” in this context does not require knowledge of falsity. Instead, a party can be deemed to have acted with malice under Mississippi law upon a showing of a reckless disregard for the truth.
See Eckman v. Cooper Tire & Rubber Co.,
This court has held under Mississippi law that “knowledge of falsity” exclusions do not apply to conduct constituting a “gross and reckless disregard of the truth.”
EEOC v. South. Publ’g Co., Inc.,
However, we affirm the judgment of the district court on other grounds.
See Holtzclaw v. DSC Commc’ns Corp.,
“Slander of title” is a phrase commonly employed to describe words or conduct which bring or tend to bring in question the right or title of another to particular property, as distinguished from the disparagement of the property itself. The slander may consist of a statement in writing, printing, or by word of mouth, and may relate to personal as well as real property .... [T]he general rule of liability for slander of title is stated as follows: “One who falsely and maliciously publishes matter which brings in question or disparages the title to property, thereby causing special damage to the owner, may be held liable in a civil action for damages.”
Words spoken of property are not in themselves actionable. But the publication of false and malicious statements, disparaging of plaintiffs property or the title thereto, when followed, as a natural, reasonable and proximate result, by special damage to the owner, are actionable. The false statement may consist of an assertion that plaintiff has no title to the property of which he is the ostensible owner, or that his title is defective, or that defendant has an interest in or lien upon the property. Whatever be the statement, however, in order for it to form the basis of a right of action it must have been made, not only falsely, but maliciously.
Walley v. Hunt,
None of the cases cited by LCI compels a different result. Indeed, the polices at issue in each of those cases provided coverage for slander
generally
and did not limit coverage to the slander of a person or organization or disparagement of a good, product, or service.
See, e.g., Valley Improvement Ass’n v. USF&G,
Although we conclude that the policy at issue does not cover slander of title claims, LCI is correct that this court’s review is not limited to the particular legal theories alleged in the AFP complаint.
See Ingalls,
Defamation and disparagement are explicitly covered by the bаsic policy, and defamation by the umbrella policy. But neither tort is named in the counterclaim. No matter. Coverage does not depend on the characterization of the wrong by the plaintiff .... Modern pleading requires the pleading only of a claim, not of a legal theory; and so if a *422 specific tort or other legal wrong named in the insurance policy had to be named in the suit for liability coverage to exist, insurance protection could be lost as the result of a totally inconsequential omission by the drafter of the complaint. Such a rule would also be an invitation to strategic pleading.
Cincinnati Ins. Co. v. E. Atl. Ins. Co.,
LCI cites the following allegations that, according to it, serve to trigger Nationwide’s duty to defend:
[T]he MCBS, at the request of LCI, approved another Master Plan for the PUD dated February 19,1998.
When LCI presented the 1998 Master Plan to the MCBS and requested that it be approved, LCI withheld from the MCBS the details of the Contract and Warranty Deed.
LCI withheld from [AFP] the fact that it was presenting to the MCBS, and requesting approval of, the 1998 Master Plan.
As a result of the actions of LCI, the 1998 Master Plan was approved by the MCBS without [AFP] being given an opportunity to advise the MCBS of its contract and deed rights.
LCI opposed [AFP]’s request, using as a basis for its opposition, the 1998 Master Plan which LCI had approved by withholding information from the MCBS and [AFP],
LCI made representations to the MCBS and to the public that it was the only developer of the PUD indicating that [AFP] was not a developer and did not have rights to develop the subject property in аccordance with applicable zoning ordinances.
LCI made representations to the MCBS and to the public that [AFP] was prohibited by the Declaration of Covenants, Conditions and Restrictions for Lake Caroline from developing the subject property.
LCI has continued to do all it can to prevent [AFP] from exercising its right to develop the subject property and change its use after December 31, 2006 as contemplated by the Contract and Warranty Deed.
According to LCI, these allegations make out a claim for slander of person or organization or disparagement of goods, products, or services. We disagree. According to the AFP complaint, LCI stated that “[AFP] did not have rights to develop the subject property” and that “[AFP] was prohibited by the Declaration of Covenants ... from developing the subject property.” Moreover, according to the AFP complaint, “LCI has continued to do all it can to prevent [AFP] from exercising its right to develop the subject property and change its use.” Assuming that these statements are slanderous or disparaging, they do not slander a person or organization or disparage a good, product, or service. At best, these alleged statements do nothing more than slander AFP’s title to the subject property and the Policy does not cover such claims.
Because the allegations in the complaint do not trigger the duty to defend, this court must next address whether Nationwide knew of facts or could have reasonably ascertained facts that would have triggered coverage under the Policy.
See Mulberry,
B. Property Damage — Coverage A
LCI also argues that there is a possibility of coverage under Coverage A of the Policy, which covers “property damage” caused by an “occurrence.” We reject this argument for thrеe independent reasons. First, the Policy only covers property damage “caused by an ‘occurrence’ that takes place in the ‘coverage territory.’” Here, there is no suggestion that the alleged slanderous statements took place in Lake Caroline.
Second, it is doubtful that the allegations in the AFP complaint satisfy the Policy’s definition of “occurrence,” which limits coverage to property damage resulting from “an accident.” The Mississippi Supreme Court has cited with favor the following definition of “accident” for insurance coverage purposes:
An accident is anything that happens or is the result of that which is unanticipated and takes place without the insured’s foresight or anticipation .... As used in insurance policies it is simply an undersigned, sudden, and unexpected event, usually of an afflictive or unfortunate character, and often accompanied by a manifestation of force, but it does not mean the natural and ordinary consequenсes of a negligent act.
Allstate Ins. Co. v. Moulton,
Third, LCI concedes that the subject property was not physically injured. The only other property damage that is covered under the Policy is the “[l]oss of use of tangible property.” However, under Mississippi law, injurious falsehood claims — such as slander of title — must include a showing of economic or pecuniary damages.
See Smith v. Magnolia Lady, Inc.,
Even if this court goes beyond the allegations in the AFP complaint, LCI does not isolate any additional facts that would trigger coverage or in any way alter our conclusion that AFP is simply alleging a slander of title claim, which did not occur in Lake Caroline, does not meet the definition of an “occurrence” in the Policy, and does not involve damage that would constitute the loss of use of tangible property as required under the Policy. Accordingly, we conclude that LCI has not established that the AFP complaint itself — or any additional facts — trigger the duty to defend under Coverage A of the Policy.
IV. CONCLUSION
For the foregoing reasons, we affirm the judgment of the district court.
AFFIRMED.
Notes
. We recognize that this statement of Mississippi law is incorrect to the extent that it implies that an insurer has an absolute duty to conduct a reasonable investigation to determine the true facts before declining to defend or extend coveragе. The Mississippi Court of Appeals has since clarified that no such duty exists under Mississippi law and that federal courts interpreting otherwise are wrong.
See Terracina Motor Co. v. Universal Underwriters Ins. Co.,
Case No. 97-CA-00052,