No Coverage for Cyber Comments Posted Under False Names

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People post comments on the Internet.  Sometimes, people troll, and trolling can turn extreme when people use an Internet persona or a false identity, believing in the Internet’s anonymity.  Sometimes, comments on the Internet create legal liability.

In Sletten & Brettin v. Continental Cas. Co., slip op., No. 13-2918 (8th Cir., Mar. 19, 2015), a dental practice found out the hard way that defamatory comments made on the Internet can be traced, can create legal liability, and can be excluded from insurance.

In that case, St. Croix Valley Dental, PLLC, sued the dental practice Sletten & Brettin (“S&B”) after Brettin posted defamatory comments about St. Croix’s practice while posing as St. Croix patients.  Specifically, the lawsuit alleged that Brettin used (hijacked?) his neighbor’s wireless network to post false, negative reviews about St. Croix.  Three times, Brettin allegedly posed as a patient of St. Croix and criticized one of its dentists:

For example, one review using the screen name “Hockey Mom” claimed that the reviewer’s son required oral surgery after his braces were removed at St. Croix Valley Dental and warned potential patients, “[b]uyer beware.”

Id. at 2.  Ouch.  St. Croix asserted causes of action against S&B for defamation and libel, civil conspiracy, and unfair competition.

S&B tendered a defense to its insurer.  The insurer denied coverage on the ground that S&B was not an insured.  In the ensuing coverage litigation, the trial court granted the insurer’s motion to dismiss, but not on the issue of whether S&B was an insured.  Instead, the trial court determined that that there was no coverage for the lawsuit because the insurance policy excluded coverage for acts done with the intent to injure.  Id. at 3.  S&B appealed and the Eighth Circuit affirmed.

The insurance policy covered “all amounts, up to the limit of liability, which you become legally obligated to pay as a result of injury or damage . . . . The injury or damage must be caused by an occurrence.”  Id. at 5.  The term “injury” was defined to include “oral or written publication of material that . . . slanders or libels an entity or disparages an entity’s goods, products or services.”  Id.

“Occurrence” was defined as “an accident, including continuous or repeated exposure to conditions which: A. results in injury and/or damage; and B. was not expected nor intended by you.”  Id.  “Accident” was not defined.  Id.  The policy also contained an exclusion for “injury or damage you expected or intended, or which a reasonable person could have expected.”  Id. 

On appeal, S&B argued that the policy was ambiguous because it purported to cover several claims based on intentional acts, but then excluded coverage for them by including an intent-to-injure exclusion.  Id.  The Eighth Circuit disagreed, concluding that the policy excluded coverage for acts that were intended to injure, but covered intentional acts where the resultant injury was not intended or expected:

… the policy here grants coverage for accidents through its definition of occurrence.  And the exclusion precludes coverage for intent-to-injure acts. Thus, the two provisions here are opposite sides of the same coin, and we read them together as providing coverage for intentional acts but excluding coverage for acts committed with the intent to injure.  Accordingly, the insurance policy here provides coverage for defamation in general, an intentional act, but excludes coverage for defamation committed with the intent to injure.

Id. at 6.

The Court further noted that its conclusion that an intent-to-injure exclusion was enforceable for defamation coverage was buttressed by a prior Eighth Circuit decision that held a knowledge-of-falsity exclusion excluded coverage for a defamation claim.  Id. at 7-8.

The Court also rejected S&B’s argument that the exclusion for intentional injury rendered the policy’s coverage for intentional acts like defamation illusory.  The Court reasoned that an intent to injure “is not a required element for defamation claims against private individuals under Minnesota law,” and that “defamation is often committed without an intent to injure.”  Id. at 8.

Finally, examining the allegations of the complaint, the Court agreed that there was no duty to defend because the lawsuit alleged that S&B intended to injure the plaintiff:

[T]he St. Croix lawsuit clearly alleges that S&B and Brettin both acted with the intent to injure.  Brettin allegedly used his neighbor’s wireless network to post false and negative reviews of [St. Croix dentist] Wolff and St. Croix Valley Dental.  As to S&B, the complaint specifically alleges that “Brettin was acting on behalf of and with the knowledge and consent of the other Defendants and for their benefit.”  S&B was one of the named “other Defendants” in the complaint.  All three claims, defamation and libel, civil conspiracy, and unfair competition, arose out of the same alleged facts.  And all three claims specifically alleged that the defendants acted with the intent to injure Wolff and St. Croix Valley Dental’s reputation.  [Emphasis added.]

Id. at 10.

What This Case Means:  People can do some dumb things on the Internet because it purports to promise a faceless medium that can preserve anonymity.  Can steps taken by a person to create or preserve anonymity serve as an indication of an intent to injure?  Yes.  Certainly, the Eighth Circuit was swayed by Brettin’s apparent hijacking of his neighbor’s network to post comments under false identities as an indication of an intent to injure St. Croix.  That intent implicated an intentional injury exclusion and excluded coverage his practice later sought.

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