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Peerless Indem. Ins. Co. v. Moshe & Stimson LLP

Court of Appeals of Indiana

December 30, 2014

PEERLESS INDEMNITY INSURANCE CO., Appellant-Plaintiff,
v.
MOSHE & STIMSON LLP, SARAH MOSHE, and JUSTIN STIMSON, Appellees-Defendants

APPEAL FROM THE MARION SUPERIOR COURT. The Honorable Cynthia J. Ayers, Judge. Cause No. 49D04-1203-PL-010282.

ATTORNEY FOR APPELLANT: RICK D. MEILS, WILLIAM M. BERISH, JOHN W. MERVILDE, Meils Thompson Dietz & Berish, Indianapolis, Indiana.

ATTORNEY FOR APPELLEES: JUSTIN STIMSON, Bloomington, Indiana.

VAIDIK, Chief Judge. FRIEDLANDER, J., and MAY, J., concur.

OPINION

Page 883

VAIDIK, Chief Judge

Case Summary

Sarah Moshe, Justin Stimson's sister and former law partner, sued her brother in Marion Superior Court alleging, among other things, defamation. Justin made a claim under Moshe & Stimson LLP's insurance policy for defense and indemnification. Peerless Indemnity Insurance Company, the firm's insurer, filed a summary-judgment motion arguing that it had no duty to defend and indemnify Justin due to a clause in the policy that excluded coverage for certain employment-related practices, including defamation. The trial court initially ruled in Peerless's favor, but it later reversed course and ordered Peerless to defend and indemnify Justin.

On appeal, Peerless argues that the employment-related exclusionary clause is unambiguous and bars coverage. We agree. Because Justin's alleged actions toward his sister were employment-related, the exclusionary clause applies. We reverse the trial court and remand with instructions to enter summary judgment in Peerless's favor on the issue of coverage.

Facts and Procedural History

Sarah and Justin are siblings and former law partners in the law firm Moshe & Stimson LLP. In December 2011, after Sarah told Justin that she intended to leave the firm, the siblings' working relationship deteriorated: Justin allegedly refused to dissolve the partnership, seized control of the firm's assets and refused to pay Sarah her regular income, refused to turn over client files and certain personal property belonging to Sarah, and began making " accusations about [Sarah's] personal integrity and her professional competence." Appellant's App. p. 168. One month later, Sarah filed suit against Justin in Marion Superior Court alleging defamation and seeking a formal dissolution of the partnership, an accounting, an injunction, and damages. Id. at 167-69.

Peerless insured Moshe & Stimson LLP. After Sarah filed suit, Justin made a claim under the firm's policy for defense and indemnification. Peerless denied the claim and sought a declaratory judgment that it had no responsibility to defend or indemnify Justin. Id. at 15. In its motion, Peerless argued that " the allegations in [Sarah's] complaint constitute " employment-related practices, which are excluded from coverage by the [policy's] terms, conditions and exclusions . . . ." [1] Id. at 20. Peerless relied on the following exclusionary clause:

This insurance does not apply to:

1. " Bodily injury" or " personal and advertising injury" to

a. A person arising out of any:
(1) Refusal to employ that person;

Page 884

(2) Termination of that person's ...

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