                                      IN THE DISTRICT COURT OF APPEAL
                                      FIRST DISTRICT, STATE OF FLORIDA

YAZAN KHATIB, VAQAR ALI,              NOT FINAL UNTIL TIME EXPIRES TO
YOUSSEF AL-SAGHIR, and                FILE MOTION FOR REHEARING AND
SUMANT LAMBA,                         DISPOSITION THEREOF IF FILED

      Appellants,                     CASE NO. 1D13-4652

v.

OLD DOMINION INSURANCE
COMPANY and MAJDI
ASHCHI, individually,

      Appellees.

_____________________________/

Opinion filed December 5, 2014.

An appeal from the Circuit Court for Duval County.
Karen K. Cole, Judge.

Charles P. Pillans, III, and Patrick P. Coll of Bedell, Dittmar, DeVault, Pillans &
Coxe, P.A., Jacksonville, for Appellants.

Hinda Klein and Elizabeth A. Izquierdo of Conroy, Simberg, Ganon, Krevans,
Abel, Lurvey, Morrow, & Schefer, P.A., Hollywood, for Appellees.




SHEPHERD, FRANK A., ASSOCIATE JUDGE,

      The issue in this case is whether Old Dominion Insurance Company has a

duty to defend and indemnify four doctors who are defendants in a third-party
defamation claim, appended to a multi-faceted action for fraud, conversion, civil

conspiracy, breach of contract, and other causes of action, being prosecuted by

them against the president and founder of a medical practice they all once enjoyed

together. It is not seriously questioned that the doctors are insureds under the

policy and that the insuring clause of the insurance policy would afford coverage

to the doctors. The dispositive question is whether coverage is precluded by a

policy exclusion. The trial court so found, but we disagree. On de novo review,

we conclude that Old Dominion has an obligation to afford a defense to the third-

party doctor defendants on the defamation claim filed against them, but we demur

on the issue of indemnity.

                                A. BACKGROUND

      This case stems from a dispute between Dr. Majdi Ashchi and the

appellants, Drs. Yazan Khatib, Vaqar Ali, Youssef Al-Saghir, and Sumant Lamba.

Dr. Ashchi was the president and founder of First Coast Cardiovascular Institute

(“FCCI”), a professional service organization that treats heart and cardiovascular

disease. Appellants are FCCI’s other officers and directors. After wresting control

of FCCI from Dr. Ashchi, appellants, acting through FCCI, sued Dr. Ashchi and

others for fraud, negligently supplying false information, breach of contract,

reformation, unjust enrichment, breach of fiduciary duty, and conspiracy. Dr.




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Ashchi denied all allegations and upped the ante by joining his former colleagues

in the action individually, through a third-party defamation complaint.

      The third-party complaint alleges, inter alia, that appellants launched a

systematic plan to take control of FCCI and oust Dr. Ashchi from power. The

complaint further alleges that as part of the plan, Dr. Khatib made baseless

allegations against Dr. Ashchi at an FCCI shareholders meeting and that each of

the appellants published defamatory statements about Dr. Ashchi to third parties.

The complaint also alleges appellants “knew or should have known” that the

defamatory statements they made about Dr. Ashchi were false.

      The insurance policy in this case is a commercial general liability insurance

policy. FCCI is the named insured on the policy. The policy also insures FCCI’s

“‘executive officers’ and directors . . . but only with respect to their duties as

officers and directors.” The third-party doctor defendants are executive officers or

directors of FCCI, and in some cases both. It is alleged that at a shareholders

meeting, Dr. Khatib wrongfully accused Dr. Ashchi of stealing money from FCCI

to pay for improvements to his home, intentionally overcharging FCCI millions of

dollars in rent through his real estate affiliates, and engaging in other acts of

embezzlement. It further is alleged that Dr. Khatib and each of the third-party

defendants published the same or similar statements to FCCI staff members,

referring physicians, and patients.

                                         3
                                    B. ANALYSIS

      We have little difficulty in concluding that at least some of these alleged

wrongs were performed by the third-party defendant doctors “with respect to their

duties as officers and directors.” Some, if not all, of the wrongs alleged occurred

while the third-party doctor defendants were either discharging their obligation at a

shareholders meeting or executing other official duties.

      We also find on de novo review that “Coverage B” of the policy insuring

agreement affords the third-party defendant doctors coverage in this case, subject,

of course, to the workings of any policy exclusion. This insuring clause provides:

      COVERAGE B. PERSONAL                   AND      ADVERTISING
      INJURY LIABILITY

      1.     Insuring Agreement
             a. We will pay those sums that the insured becomes
                legally obligated to pay as damages because of
                “personal injury” or “advertising injury” to which this
                insurance applies. We will have the right and duty to
                defend any “suit” seeking those damages. However,
                we will have no duty to defend the insured against any
                “suit” seeking damages for “personal injury” or
                “advertising injury” to which this insurance does not
                apply. We may, at our discretion investigate any
                “occurrence” or offense and settle any claim or “suit”
                that may result . . . .

             b. This insurance applies to:

                     (1) “Personal injury” caused by an offense arising
                         out of your business . . . .


                                         4
       “Personal injury” is defined in the policy to include “injury, other than

‘bodily injury,’ arising out of one or more of the following offenses: . . . (d) Oral or

written publication of material that slanders or libels a person or organization or

disparages a person’s or organization’s goods, products or services.” It matters not

under the policy that the alleged defamation is uttered against another insured or

occurs during the course of a family feud. Old Dominion easily could have

excepted coverage for defamation among insureds if it so desired. It also is

incontestable that the allegations of the third-party complaint—in fact of the entire

lawsuit—“arise[] out of [the] business” conducted by the parties. We therefore

turn to the exclusions from coverage.

      Old Dominion argues that the employment-related practices exclusion found

in one of the endorsements to the insurance policy excuses it from any coverage

obligation in this case. This exclusion reads in pertinent part:

             This insurance does not apply to:

             “Personal injury” to:

             (1)    A person arising out of any

             (a)    Refusal to employ that person;

             (b)    Termination of that person’s employment; or

             (c) Employment-related practices, policies, acts or
             omissions, such as coercion, demotion, evaluation,
             reassignment, discipline, defamation, harassment,
             humiliation or discrimination directed at that person . . . .
                                           5
(emphasis added).

The exclusion goes on to specify that it applies:

             (1) Whether the insured may be liable as an employer
             or in any other capacity . . . .

      This exclusion, by its terms, excludes from coverage any claim for damages

for “‘[p]ersonal injury’ caused by an offense arising out of [an insured’s] business”

where the “personal injury” also “aris[es] out of any . . . (c) [e]mployment-

related practices . . . such as . . . defamation.” (emphasis added). The third-

party defendant doctors argue that the emphasized language found in subsection

(1)(c) of the employment-related practices exclusion is ambiguous as a matter of

law because it negates the coverage afforded under Coverage B, subsection 1.b,

which affords coverage for “‘personal injury’ caused by an offense “arising out of

[the insured’s] business.” The third-party defendant doctors are correct on the law

but wrong on the interpretive facts.

      It is true that an insurance policy cannot, with impunity, grant a right in one

paragraph, then retract the very same right in an exclusion. See Tire Kingdom,

Inc. v. First S. Ins. Co., 573 So. 2d 885, 887 (Fla. 3d DCA 1990) (concluding that

conflicting provisions create an ambiguity concerning the question of coverage). It

also is true that ambiguities thus created are “construed against the insurer and in

favor of coverage.” See Acosta, Inc. v. Nat’l Union Fire Ins. Co., 39 So. 3d 565,

573 (Fla. 1st DCA 2010) (quoting Taurus Holdings, Inc. v. U.S. Fid. & Guar. Co.,
                                          6
913 So. 2d 528, 532 (Fla. 2005)).         Unfortunately for the third-party doctor

defendants, however, a cursory consideration of the two clauses on which they

place their reliance for this argument reveals the provisions do not conflict.

      Contrary to the argument of the third-party doctor defendants, a defamatory

utterance might easily “arise out of [a company’s] business” while being not at all

“employment related.”       Case law from around the country supports this

conclusion. See HS Servs., Inc, v, Nationwide Mut. Ins. Co., 109 F.3d 642, 646-

47 (9th Cir. 1997) (holding that for an act or omission to be “employment related,”

the relationship to employment must be direct and proximate); Golden Eagle Ins.

Corp. v. Rocky Cola Cafe, Inc., 114 Cal. Rptr. 2d 16 (Ct. App. 2001) (adopting the

narrow interpretation of “employment related” by Ninth Circuit in HS Servs.);

Waffle House, Inc. v. Nationwide Mut. Ins. Co., 114 S.W. 3d 601, 610 (Tex. Ct.

App. 2003) (finding that the context of defamatory statements was not clearly

employment related where the statements arose out of a company’s attempt to

prevent employees from leaving and not out of a former employee’s termination).

This interpretation also is consistent with our canon of construction providing that

when a drafter uses two different phrases in the same context when he might have

used one, it is presumed the drafter meant two different things. See Universal

Prop. & Cas. Ins. Co. v. Johnson, 114 So. 3d 1031, 1036 (Fla. 1st DCA 2013) (“A

contract is not to be read so as to make one section superfluous, and so ‘[a]ll the

                                          7
various provisions of a contract must be so construed . . . as to give effect to

each.’” (quoting Univ. of Miami v. Frank, 920 So. 2d 81, 87 (Fla. 3d DCA 2009))).

      However, our task is not yet at an end. It is further axiomatic in the law of

insurance coverage in Florida that if a complaint alleges some facts within and

some facts outside of coverage under an insurance policy, the insurer must

nevertheless defend the entire suit. Grissom v. Commercial Union Ins. Co., 610

So. 2d 1299, 1307 (Fla. 1st DCA 1992) (citations omitted). In this regard, the

third-party complaint contains the following “examples” of defamatory statements

allegedly made about Dr. Ashchi by the third-party doctor defendants to their staff

members, referring physicians, and patients:

      a.    Dr. Khatib told Dr. Imran Sheikh that Dr. Ashchi had embezzled from
            FCCI;

      b.    Dr. Khatib told Dr. Jessica Barbare that Dr. Ashchi was guilty of
            financial improprieties;

      c.    Dr. Khatib told Victoria Kozel that Dr. Ashchi was due to be
            prosecuted for his conduct at FCCI;

      d.    Dr. Khatib told Dr. Juzar Lokhandwala that Dr. Ashchi orders
            unnecessary procedures; and

      e.    Dr. Al-Saghir told Dr. David Grech that Dr. Ashchi was a thief.

      There is no indication in the third-party complaint that these allegedly

defamatory statements were “employment related” at all. It is quite possible, for

example, that these utterances were made at a business-related conference or

                                        8
business-related social event, therefore “arising out of [the insureds’] business” for

insuring agreement purposes, while at the same time not being “employment

related” in any of the narrow senses discussed above.           Moreover, “[i]f the

allegations of the complaint leave any doubt regarding the duty to defend, the

question must be resolved in favor of the insured requiring the insurer to defend.”

Baron Oil Co. v. Nationwide Mut. Fire Ins. Co., 470 So. 2d 810, 814 (Fla. 1st

DCA 1985) (citing New Amsterdam Cas. Co. v. Knowles, 95 So. 2d 413 (Fla.

1957); 7C Appleman, Ins. Law & Practice, § 4683, p. 58 (Berdal Ed. 1979)). Our

study of the third-party complaint in this case leaves us with sufficient doubt.

                                C. CONCLUSION

      For the reasons stated, we find that Old Dominion Insurance Company owes

the third-party defendant doctors a duty of defense on the allegations of the third-

party complaint. At the same time, we hold that the decision of the trial court

exonerating Old Dominion Insurance Company from a duty to indemnify the third-

party defendant doctors is premature. A liability insurer’s duty to indemnify is

narrower than the duty to defend. E.g., U.S. Fire Ins. Co. v. Hayden Bonded

Storage Co., 930 So. 2d 686, 691 (Fla. 4th DCA 2006) (citation omitted). The

duty to indemnify is thus often dependent upon further factual development

through discovery or at trial. Id. We find that to be so in this case. Accordingly,




                                          9
we reverse and remand for further proceedings on Dr. Ashchi’s claim for

indemnity.

     Reversed and remanded with directions.

MAKAR and OSTERHAUS, JJ., CONCUR.




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