MCI v. Society Insurance – Insurance Policies Defamation Rider Doesn’t Provide Coverage — Chicago’s Best Defamation Libel and Slander Attorneys Near Oak Brook and Naperville

When a restaurant owner was sued for broadcasting DirecTV and paying only residential subscription rates instead of higher commercial subscription rates, the owner could not seek coverage under the insurance policy. The policy protected against suits for libel, slander, or defamation, and even though DirecTV had alleged that the owner had damaged its reputation, the owner was not alleged to have made any statement, and therefore the facts did not indicate any act of libel, slander, or defamation entitling the owner to a defense of the suit.

Martinsville Corral, Inc. owns two Texas Corral restaurants in Indiana. In December 2013, Society issued an insurance policy to MCI that provided general business liability coverage. MCI also purchased additional coverage under an “Employment-Related Practices Liability Endorsement.” The Endorsement requires Society to cover MCI for “damages resulting from a ‘wrongful act’ to which the policy applies.”

In January 2015, DirecTV, LLC filed two lawsuits against MCI pursuant to the Cable Communications Policy Act of 1984. The complaints alleged that MCI displayed DirecTV’s satellite television programming in its restaurants, but paid only for a residential subscription and not the higher commercial subscription rate. One of the allegations DirecTV made was that MCI had damaged DirecTV’s goodwill and reputation as a result of MCI’s violations of the CCPA. Based on this allegation, MCI requested Society to defend the suit, arguing that DirecTV’s allegation constituted the “wrongful acts” of libel, slander, or defamation that were covered under the policy. Society denied coverage and refused to indemnify MCI. DirecTV ultimately dismissed its suit, after MCI had incurred over $75,000 in expenses defending against it.

MCI then filed a complaint against Society for breach of contract. Society counter-claimed, seeking a declaratory judgment that there was no coverage. MCI and Society filed cross-motions for summary judgment, and the district court granted summary judgment to Society. MCI then appealed.

The appellate panel began by noting that insurance policies were interpreted under the same rules as other types of contracts. The panel stated that an insurer was required to defend a claim against an insured if the alleged facts of the claim arguably fell within the described offenses covered under the policy. The panel analogized the instant case to the case of Ind. Ins. Co. v. N. Vermillion Cmty. Sch. Corp., stating that in Vermillion, the plaintiff, a school, was entitled to defense by its insurer of a suit by a fired school employee that alleged that the school had terminated the employee in violation of his constitutional rights. The panel noted that, in that case, the school employee had not specifically used the words libel, slander, or defamation in his complaint, but the facts of the case clearly alleged such claims, and therefore were covered under the school’s insurance policy.

By contrast, the panel found that in the instant case, the facts of MCI’s dispute with DirecTV did not clearly allege that MCI had committed libel, slander, or defamation. The panel noted that even though DirecTV had included a claim for damage to its reputation, MCI was not alleged to have made any statement at all, and therefore could not be said to have committed libel, slander, or defamation. Therefore, the panel concluded, MCI was not entitled to a defense under its insurance policy.

Our Schaumburg, IL libel and slander lawyers concentrate in this area of the law. We have defended or prosecuted a number of defamation and libel cases, including cases representing a consumer sued by a large luxury used car dealer in federal court for hundreds of negative internet reviews and videos which resulted in substantial media coverage of the suit; one of Loyola University’s largest contributors when the head basketball coach sued him for libel after he was fired; and a lawyer who was falsely accused of committing fraud with the false allegation published to the Dean of the University of Illinois School of Law, where the lawyer attended law school and the President of the University of Illinois. One of our partners also participated in representing a high profile athlete against a well-known radio shock jock.

Our Chicago defamation attorneys defend individuals’ First Amendment and free speech rights to post on Facebook, Yelp and other websites information that criticizes businesses and addresses matters of public concern. Our Chicago Cybersquatting attorneys also represent and prosecute claims on behalf of businesses throughout the Chicago area including in Lincolnwood and Skokie who have been unfairly and falsely criticized by consumers and competitors in defamatory publications in the online and offline media. We have successfully represented businesses who have been the victim of competitors setting up false rating sites and pretend consumer rating sites that are simply forums to falsely bash or business clients. We have also represented and defended consumers First Amendment and free speech rights to criticize businesses who are guilty of consumer fraud and false advertising.

Super Lawyers named Chicago and Oak Brook business trial attorney Peter Lubin a Super Lawyer in the;e Categories of Class Action, Business Litigation, and Consumer Rights Litigation and Chicago slander attorney Patrick Austermuehle a Rising Star. Lubin Austermuehle’s Oak Brook and Chicago business trial lawyers have over thirty years of experience in litigating complex class action, consumer rights, and business and commercial litigation disputes. We handle emergency business lawsuits involving injunctions, and TROS, defamation, libel, and covenant not to compete, franchise, distributor and dealer wrongful termination and trade secret lawsuits and many different kinds of business disputes involving shareholders, partnerships, closely held businesses and employee breaches of fiduciary duty. We also assist businesses and business owners who are victims of fraud or defamatory attacks on their business and reputations.

Lubin Austermuehle’s Cook County defamation and slander lawyers near Glenview and Northbrook have more than three decades of experience helping business clients unravel the complexities of Illinois and out-of-state business laws. Our Chicago business, commercial, class-action, and consumer litigation lawyers represent individuals, family businesses and enterprises of all sizes in a variety of legal disputes, including disputes among partners and shareholders as well as lawsuits between businesses and consumer rights, auto fraud, and wage claim individual and class action cases. In every case, our goal is to resolve disputes as quickly and successfully as possible, helping business clients protect their investments and get back to business as usual. From offices in Elmhurst, near Wheaton and Elgin, we serve clients throughout Illinois and the Midwest.

You can call us locally at 630-333-0333. You can also contact us online.

Contact Information