Documente Academic
Documente Profesional
Documente Cultură
No. 13-2451
Appeal from the United States District Court for the District of
South Carolina, at Spartanburg.
Timothy M. Cain, District
Judge. (7:12-cv-02824-TMC)
Argued:
Decided:
ARGUED: Laura Anne Foggan, WILEY REIN LLP, Washington, D.C., for
Appellant.
George Antonios Tsougarakis, HUGHES, HUBBARD & REED
LLP, New York, New York, for Appellees.
ON BRIEF: Vollie
Cleveland Bailey, IV, Robert Mason Barrett, Perry D. Boulier,
HOLCOMBE BOMAR, PA, Spartanburg, South Carolina; Amera Z.
Chowhan, Taylor K. Herman, HUGHES, HUBBARD & REED LLP, New York,
New York, for Appellees.
PER CURIAM:
Liberty Mutual appeals a district court ruling that it had
a duty to defend its insured, the J M Smith Corporation, in a
lawsuit
brought
by
claims
alleged
in
the
state
the
of
West
West
Virginia.
Virginia
Because
complaint
the
create
that
Liberty
Mutual
has
duty
to
defend
in
the
West
has
corporation,
been
insured
under
annual
by
Liberty
commercial
Mutual,
general
Wisconsin
liability
(CGL)
as
an
accident,
including
continuous
or
repeated
--
physicians,
pharmacists,
and
distributors
of
as
responsible
for
increased
abuses.
The
complaint
also
defendants
Uniform
from
Controlled
willfully
Substances
and
repeatedly
Act
by
violating
failing,
among
the
other
to
monitor
and
to
disclose
suspicious
orders
of
facts
of
the
drug
abuse
epidemic
by
negligently
controlled
substance
permit,
maintain
effective
patterns
Complaint).
in
size
West
or
frequency.
Virginia
alleged
J.A.
that
150-151
these
(W.
Va.
violations
IV
alleged
recklessly,
and/or
that
the
defendants
intentionally
had
negligently,
distributed
controlled
152
(W.
indifference
epidemic,
Va.
to
the
Complaint).
the
state
By
facts
of
charged
the
doing
the
so
with
prescription
defendants
with
blind
drug
abuse
creating
public nuisance.
The
fifth
count
alleged
that
the
defendants
had
been
distribution
of
controlled
5
substances,
as
well
as
watchfulness,
and
vigilance
commensurate
to
the
posed
defendants
distinctive
failed
to
and
acquire
significant
special
dangers
knowledge
that
and
the
special
complaint
incorporated
earlier
allegations
to
demonstrate
conduct that breached proper care. J.A. 155 (W. Va. Complaint).
Count VII requested a fund for medical monitoring to treat
patients who had become prescription drug abusers as a result of
the defendants negligent and unlawful conduct. *
Finally, the eighth count alleged the defendants violated
antitrust laws by conspiring with pill mill physicians and
pharmacies to engage in unfair and deceptive business practices
to obtain [a] dominant market share in West Virginia. J.A. 158159. It alleged that by prescribing, filling and distributing
controlled
substances
for
illegitimate,
non-medical
uses,
the
drug
distributors
that
complied
with
regulations
and
Carolina
district
court
seeking
declaratory
judgment
its
opinion,
the
district
court
found
that
the
West
resulted
in
violations
of
West
Virginia
law,
the
violations that resulted from those actions were not natural and
probable consequences that would be reasonably anticipated. From
this ruling Liberty Mutual now appeals.
7
II.
Liberty Mutual contends on appeal that the West Virginia
Complaint does not charge an occurrence within the meaning of
J M Smiths CGL policy because the complaint alleges willful and
intentional misconduct on the part of the insured that does not
constitute an accident. This seems to us to mischaracterize
the complaint. One count (VI) sounds wholly in negligence, and
the
others
generally
describe
mix
of
negligence
and
actual
defendants
liability,
initial
the
duty
potential
to
defend
liability
arises
under
the
from
claims
the
as
alleged by the plaintiff. USAA Prop. & Cas. Ins. Co. v. Clegg,
661 S.E.2d 791, 796-97 (S.C. 2008). An insurer must defend its
insured
if
there
is
possibility
of
coverage
under
the
policy, City of Hartsville v. S.C. Mun. Ins. & Risk Fin. Fund,
677 S.E.2d 574, 578 (S.C. 2009), for even just one claim in the
complaint. See Town of Duncan v. State Budget & Control Bd.,
Div. of Ins. Servs., 482 S.E.2d 768, 773-74 (S.C. 1997); Isle of
Palms Pest Control Co. v. Monticello Ins. Co., 459 S.E.2d 318,
319
(S.C.
coverage
Ct.
by
App.
1994).
We
the
policy
comparing
determine
the
provisions
likelihood
with
the
of
facts
insurer,
City
of
Hartsville,
677
S.E.2d
at
578.
Any
the
labels
affixed
to
the
causes
of
action.
See
City
of
Hartsville, 677 S.E.2d at 578-79; State Farm Fire & Cas. Co. v.
Barrett, 530 S.E.2d 132, 137 (S.C. Ct. App. 2000).
The instant policy, like many CGL policies, covers property
damage or bodily injury caused by an occurrence, defined as
an
accident,
including
continuous
or
repeated
exposure
to
to
the
counts
alleged
in
the
West
Virginia
of
West
Virginia
is
the
drug
distributors
failure
to
Count
VI
for
negligence,
the
state
alleges
that
these
contains
no
demonstration
of
any
intent
to
harm
Act
that
have
attended
and
promoted
the
defendants.
Rather,
it
effectively
claims
that
such
in
those
such
as
counts
Count
that
I
do
for
not
explicitly
injunctive
allege
relief,
the
guard
against
theft
and
diversion
and
to
disclose
[]
to
nuisance
take
claim
reasonable
effectively
care
to
prevent
alleges
that
the
harm.
The
public
defendants
knew
certain drugs were ones that were abused, and then continued to
distribute
them
without
effective
controls
--
once
again,
cases
this
pointed
line.
The
to
by
Liberty
defendants
Mutual
in
C.Y.
are
helpful
Thomason
Co.
in
v.
731
(4th
Cir.
1950).
Over
the
next
year,
however,
the
from
its
persistent[]
and
continuous[]
actions
and
from
the
normal
consequences
of
the
acts.
C.Y.
presses
allegations
against
thirteen
different
defendants who may have been causing harm, but the chain of
12
hands.
C.Y.
Thomason
Co.
and
this
case
aptly
simple
fact
that
the
alleged
injurious
action
was
repeated cannot on its own render the harm outside the policys
coverage. If that were the case, the CGL policy provision that
allows an accident to include continuous or repeated exposure
to substantially the same general harmful conditions would be
meaningless.
The
possibility
must
be
there,
then,
that
an
that
results
in
harm
unbeknownst
13
to
it.
Though
the
knowledge
distributor
done
with
of
such
that
intent
to
harm
directly
further
harm.
attributable
violations
Surely
must
the
to
any
necessarily
attenuated
chain
one
be
of
were
enacted
to
prevent
addiction,
in
this
case
to
alleged
maximum
payout
gamblers
through
that
the
permitted
defendant
by
advertising
law
had
and
schemes.
been
exceeding
fraudulently
Collins,
666
the
inducing
S.E.2d
at
899. The whole complaint charged the defendant with the purpose
and intent to get gamblers hooked and, as a result, harmed.
14
reached,
accidental
injury.
but
We
that
does
cannot
not
forecast
preclude
how
the
finding
case
will
we
drug
hold
abusers
that
and
there
the
is
at
state
least
of
a
West
Virginia.
possibility
of
coverage under the Liberty Mutual CGL policy, and Liberty Mutual
thus has a duty to defend J M Smith in the underlying action.
AFFIRMED
15