MAINE SUPREME JUDICIAL COURT                                       Reporter of Decisions
Decision: 2013 ME 68
Docket:   Cum-12-387
Argued:   April 11, 2013
Decided:  July 16, 2013

Panel:       SAUFLEY, C.J., and ALEXANDER, LEVY, SILVER, MEAD, GORMAN, and JABAR,
             JJ.



                          CHALMERS HARDENBERGH

                                         v.

                  PATRONS OXFORD INSURANCE COMPANY


LEVY, J.

         [¶1] Patrons Oxford Insurance Company appeals from a summary judgment

of the Superior Court (Cumberland County, Wheeler, J.) declaring that Patrons

Oxford has a duty to defend Chalmers Hardenbergh, pursuant to his homeowners

insurance policy, against a third-party suit. Patrons Oxford contends that it has no

duty to defend Hardenbergh because the third-party suit is based entirely on

activity falling within the policy’s exclusion for the insured’s “business pursuits.”

We agree, vacate the judgment, and remand the case to the Superior Court for

entry of a summary judgment in favor of Patrons Oxford.

                                I. BACKGROUND

         [¶2] The following undisputed facts appear in the summary judgment record

unless otherwise indicated.     At all times relevant to this suit, Hardenbergh
2

maintained a homeowners insurance policy with Patrons Oxford.1 Pursuant to an

endorsement to that policy, Patrons Oxford has a duty to defend Hardenbergh from

claims for “personal injury,” including from claims for “injury arising out of . . .

libel, slander or defamation of character.” Explicitly excluded from this coverage

are claims for “injury arising out of the business pursuits of any insured.”

        [¶3]    In September 2011, Pan Am Systems, Inc. and two other named

plaintiffs (collectively, Pan Am) filed a complaint in the United States District

Court against Hardenbergh; C.M. Hardenbergh, P.A., a Maine corporation; and

Atlantic Northeast Rails & Ports, a publication owned by the corporation.

Paragraph 12 of the Pan Am complaint alleges that Hardenbergh and/or the other

defendants “published, without privilege, as fact untrue information regarding

[Pan Am] in Atlantic Northeast Rails & Ports Newsletters and E-Bulletins, as well

as on the Atlantic Northeast Rails & Ports website; such publications contained

false and defamatory statements . . . including, but not limited to,” certain

specifically identified statements made in those publications.

        [¶4] Paragraph 14 alleges that Hardenbergh and/or the other defendants

“published false and defamatory statements about [Pan Am] including, but not

limited to, those described in paragraph 12.” Paragraph 15 states, “[t]he false and
    1
      Patrons Oxford issued a one-year homeowners insurance policy to Hardenbergh in November 2006.
Although only the 2006 policy appears in the summary judgment record, the parties do not dispute that
the operative language of the 2006 policy is identical to the operative language of the policy in effect at
the times relevant to this case.
                                                                                  3

defamatory statements were published without privilege by Defendants to viewers

of the Atlantic Northeast Rails & Ports’ Newsletters, E-Bulletins and website.”

      [¶5] The Pan Am complaint also alleges that “Atlantic Northeast Rails

& Ports is a widely read weekly trade newsletter and e-bulletin covering the

Northeastern United States, Eastern Quebec and the Canadian Maritimes regions,

with a place of business in Yarmouth, Maine.” Further, “Atlantic Northeast Rails

& Ports maintains a website that contains back issues of its newsletters, maps and a

database about shippers, ports, railroads and intermodal facilities.” Paragraph 7

alleges, “Hardenbergh is the editor, publisher, owner and principal of Atlantic

Northeast Rails & Ports.”

      [¶6] In response to the Pan Am complaint, Hardenbergh tendered defense of

the suit to Patrons Oxford. Patrons Oxford declined to defend Hardenbergh.

      [¶7] In January 2012, Hardenbergh filed in the Superior Court a complaint

seeking a declaratory judgment that Patrons Oxford has a duty to defend him in the

pending action by Pan Am. Hardenbergh also sought to recover money damages

for costs he had incurred to defend himself in that action. Patrons Oxford moved

to dismiss Hardenbergh’s complaint pursuant to M.R. Civ. P. 12(b)(6).

Hardenbergh opposed that motion and moved for summary judgment. Patrons

Oxford filed a cross-motion for summary judgment.
4

      [¶8] In May, while this matter was pending in the Superior Court, the

United States District Court dismissed, with leave to amend, the Pan Am complaint

against Hardenbergh. In June, Pan Am filed an amended complaint, which also

names Hardenbergh as a defendant.

      [¶9] In July, after a hearing on the parties’ motions, the Superior Court

granted Hardenbergh’s motion for summary judgment, and denied Patrons

Oxford’s motions to dismiss and for summary judgment. The court concluded that

Patrons Oxford had a duty to defend Hardenbergh against the original Pan Am

complaint based on the complaint’s “including, but not limited to” language, which

the court determined could include statements Hardenbergh made in his individual

capacity and outside of the policy’s “business pursuits” exclusion. The court did

not address whether Patrons Oxford has a duty to defend against the amended Pan

Am complaint.

                                II. DISCUSSION

      [¶10] Patrons Oxford appeals, contending that the trial court should have

granted summary judgment in its favor because it has no duty to defend

Hardenbergh against the Pan Am lawsuit. Before addressing Patrons Oxford’s

arguments, we consider, sua sponte, whether the United States District Court’s

dismissal of the Pan Am complaint, and Pan Am’s filing of an amended complaint,

renders this appeal moot.
                                                                                   5

A.    Mootness

      [¶11] An appeal is moot “when there is no real and substantial controversy,

admitting of specific relief through a judgment of conclusive character.” Doe I v.

Williams, 2013 ME 24, ¶ 14, 61 A.3d 718 (quotation marks omitted). Here, the

duty to defend against the original Pan Am complaint arose, if at all, upon its

filing. See Horace Mann Ins. Co. v. Me. Teachers Ass’n, 449 A.2d 358, 360

(Me. 1982). Regardless of whether Patrons Oxford has a duty to defend against

the amended complaint, an issue that the trial court did not address and thus is not

properly before us, Hardenbergh alleges in this action that he has incurred costs in

defending against the original complaint, and he seeks damages. Thus, Patrons

Oxford’s appeal retains its “controversial vitality,” and is therefore not moot.

See Doe I, 2013 ME 24, ¶¶ 14, 18, 61 A.3d 718; see also Smith & Nephew Inc. v.

Fed. Ins. Co., 113 F. App’x 99, 102, 105 (6th Cir. 2004) (applying Tennessee law

and federal procedural rules to hold that the filing of an amended complaint does

not render moot the issue of whether a duty existed to defend against the original

complaint).

B.    Duty to Defend

      [¶12] Patrons Oxford argues that the trial court should have concluded that

Patrons Oxford has no duty to defend against the original Pan Am complaint

because the allegations of the complaint fall within the policy’s “business pursuits”
6

exclusion.      Our review of whether the trial court erred in granting summary

judgment in favor of Hardenbergh is de novo.2 See Mitchell v. Allstate Ins. Co.,

2011 ME 133, ¶ 8, 36 A.3d 876.

        [¶13] Whether Patrons Oxford has a duty to defend depends on whether the

complaint “contains any allegations that, if proved, could fall within the coverage

afforded by the policy.” Cox v. Commonwealth Land Title Ins. Co., 2013 ME 8,

¶ 9, 59 A.3d 1280.           An insurer’s duty to defend arises exclusively from the

allegations in the complaint and the language of the policy. See id. Thus, “[a]n

insurer may properly refuse to defend a policyholder if the allegations of the

complaint fall entirely within a policy exclusion.” Mitchell, 2011 ME 133, ¶ 13,

36 A.3d 876.

        [¶14] We begin by examining the language of the policy to determine the

scope of coverage, and then turn to the language of the original Pan Am complaint

to determine whether it falls within the scope of the policy’s coverage.                              In

construing the language of an insurance policy, we interpret unambiguous

language in accordance with its plain meaning. See Cox, 2013 ME 8, ¶ 8, 59 A.3d


    2
     The trial court considered the parties’ competing motions for summary judgment, as well as Patrons
Oxford’s motion to dismiss the complaint pursuant to M.R. Civ. P. 12(b)(6). We review the court’s grant
of Hardenbergh’s motion for summary judgment, and its denial of Patrons Oxford’s cross-motion for
summary judgment, and do not directly review the court’s denial of Patrons Oxford’s motion to dismiss
the complaint. See M.R. Civ. P. 12(b) (providing that “[i]f, on a [Rule 12(b)(6) motion], matters outside
the pleading are presented to and not excluded by the court, the motion shall be treated as one for
summary judgment and disposed of as provided in Rule 56”).
                                                                                   7

1280. We strictly construe policy exclusions in favor of coverage. See Mitchell,

2011 ME 133, ¶ 11, 36 A.3d 876.

      [¶15] Pursuant to the endorsement to the policy, Patrons Oxford has a duty

to defend Hardenbergh against claims for damages for “injury arising out of . . .

libel, slander or defamation of character.” The endorsement, however, explicitly

excludes from coverage “injury arising out of the business pursuits of any insured.”

The policy does not define the term “business pursuits,” but defines “business” to

“include[] trade, profession or occupation.” Because the term “business pursuits”

pertains to an exclusion from coverage, we strictly construe that term against

Patrons Oxford, interpreting it to mean pursuit of one’s “trade, profession or

occupation.”    See id.   Thus, the policy requires Patrons Oxford to defend

Hardenbergh against claims of injury arising out of “libel, slander or defamation of

character,” unless the injury arose out of Hardenbergh’s pursuit of his “trade,

profession or occupation.”

      [¶16] We now turn to the original Pan Am complaint to determine whether

it “contains any allegations that, if proved, could fall within the coverage afforded

by the policy.” See Cox, 2013 ME 8, ¶ 9, 59 A.3d 1280. Because the complaint

includes claims for defamation, Patrons Oxford properly concedes that it has a duty

to defend Hardenbergh unless the allegations of the complaint fall entirely within

the “business pursuits” exclusion. To make this determination, we consider the
8

allegations in the complaint regarding the publications in which the alleged

defamatory statements appeared, and Hardenbergh’s relationship to those

publications.

      [¶17] According to the complaint, all of the alleged false or defamatory

statements appeared in Atlantic Northeast Rails & Ports publications. Although

paragraph 12 of the complaint alleges defamation arising from statements

“including, but not limited to,” statements specifically described in the complaint,

it also unequivocally alleges that all of the actionable statements appeared in

Atlantic Northeast Rails & Ports publications. Similarly, although paragraph 14

alleges that Hardenbergh and/or other defendants “published false and defamatory

statements about [Pan Am] including, but not limited to, those described in

paragraph 12,” paragraph 15 alleges that “[t]he false and defamatory statements

were published without privilege by Defendants to viewers of the Atlantic

Northeast Rails & Ports’ Newsletters, E-Bulletins and website.”        Read in its

entirety, the complaint alleges defamation arising only out of statements appearing

in Atlantic Northeast Rails & Ports publications.

      [¶18] We therefore turn to the question of whether Hardenbergh’s activity

with regard to Atlantic Northeast Rails & Ports falls within the definition of a

“business pursuit.” The complaint describes Hardenbergh as the “editor, publisher,

owner and principal of Atlantic Northeast Rails & Ports,” which is “a widely read
                                                                                   9

weekly trade newsletter and e-bulletin” that has “a place of business in Yarmouth,

Maine.” As the policy states, “‘[b]usiness’ includes trade.” In short, all of the

alleged defamatory statements appeared in a trade publication, which has a place of

business and for which Hardenbergh is the “editor, publisher, owner and

principal.”

      [¶19] The “including, but not limited to” language of paragraphs 12 and 14

of the complaint does not support the opposite conclusion. Although that language

is indefinite as to the specific statements supporting the defamation claim, the

complaint is definite that the statements Hardenbergh allegedly made all appeared

in pursuit of a trade—the publishing of an electronic and print trade publication for

which he serves as the “editor, publisher, owner and principal.”         Statements

published in a trade publication by that publication’s “editor, publisher, owner and

principle” arise out of that person’s “business pursuits.”

      [¶20] Because the allegations in the original Pan Am complaint fall entirely

within the “business pursuits” exclusion of the policy, Patrons Oxford has no duty

to defend Hardenbergh against that complaint. See id. Accordingly, the trial court

erred in granting summary judgment for Hardenbergh, and should have granted
10

Patrons Oxford’s motion for summary judgment.3 See Mitchell, 2011 ME 133, ¶ 8,

36 A.3d 876.

         The entry is:

                           Judgment vacated. Remanded for entry of a
                           summary judgment in favor of Patrons Oxford
                           declaring that Patrons Oxford had no duty to
                           defend Hardenbergh against the original Pan Am
                           complaint.



On the briefs:

         James M. Bowie, Esq., and Hillary J. Bouchard, Esq., Thompson & Bowie,
         LLP, Portland, for appellant Patrons Oxford Insurance Company

         Jeffrey T. Edwards, Esq., and Jonathan G. Mermin, Esq., Preti Flaherty
         Beliveau & Pachios, LLP, Portland, for appellee Chalmers Hardenbergh


At oral argument:

         James M. Bowie, Esq., for appellant Patrons Oxford Insurance Company

         Jeffrey T. Edwards, Esq., for appellee Chalmers Hardenbergh



Cumberland County Superior Court docket number CV-2012-00034
FOR CLERK REFERENCE ONLY



     3
     The parties do not contest the Superior Court’s conclusion that, insofar as Hardenbergh’s complaint
for declaratory relief and the parties’ motions for summary judgment requested a determination of
whether Patrons Oxford has a duty to indemnify Hardenbergh in the underlying action, such a claim is
premature. Accordingly, we do not address this issue. Further, we do not consider and express no
opinion regarding Patrons Oxford’s duty, if any, to defend against the amended Pan Am complaint, a
question not addressed by the Superior Court and therefore not properly before us.
