Parish of Christ v. Church Ins. Co. ( 1999 )

USCA1 Opinion

                  United States Court of Appeals

                      For the First Circuit

                       ____________________





No. 98-1692



                   THE PARISH OF CHRIST CHURCH,



                      Plaintiff, Appellant,



                                v.



                  THE CHURCH INSURANCE COMPANY,



                       Defendant, Appellee.



                       ____________________



           APPEAL FROM THE UNITED STATES DISTRICT COURT



                FOR THE DISTRICT OF MASSACHUSETTS



         [Hon. Reginald C. Lindsay, U.S. District Judge]



                       ____________________



                              Before



                      Selya, Circuit Judge,



John R. Gibson, Senior Circuit Judge,



                    and Lipez, Circuit Judge.



                      _____________________



     Joseph L. Bierwirth, Jr., with whom Susan Hughes Banning  and

Hemenway & Barnes were on brief, for appellant.

     John D. Dwyer, with whom Dwyer & Dwyer was on brief, for

appellee.





                       ____________________



                        February 3,1999

                       ____________________          JOHN R. GIBSON, Senior Circuit Judge.  The Parish of

Christ Church brought this action for a declaration that the

general liability insurance policy issued to it by the Church

Insurance Company provided coverage for an action claiming

defamation, invasion of privacy, and discrimination in employment

brought by a former music director of the Parish.  The Parish

appeals from a summary judgment entered by the district court based

on a policy exclusion of "personal injury sustained by any person

as a result of an offense directly or indirectly related to the

employment of such person by the named insured."  The Parish argues

that the district court erred in its interpretation of the

exclusion in the policy and abused its discretion by denying a

motion to amend, alter, or reconsider the judgment.  We affirm.

          Renea Waligora was the music director at the parish.

After Reverend James A. Diamond, the parish's pastor, dismissed

Waligora from her job, Waligora filed a multi-count lawsuit in

Massachusetts state court, naming the parish, Diamond, and the

Protestant Diocese of Massachusetts as defendants.  Waligora

alleged that Diamond discharged her because she suffered from Post-

Traumatic Stress Disorder and Multiple Personality Disorder.  Among

other things, the complaint contained counts of defamation,

invasion of privacy, and discrimination in employment.  The

relevant allegations of the complaint are as follows:

               8.  Among Waligora's responsibilities as Music

                    Director were . . . to lead the adult and

                    children's vocal and handbell choirs.



                    . . . .



                    13.  On December 26, 1993 . . . . Rev. Diamond

                    . . . fired Waligora from her position as

                    Music Director of the Parish . . . .



                    14.  In a letter dated December 29, 1993, a

                    former parishioner and member of the Parish

                    choir sought the intervention of the then-

                    Bishop of the Diocese . . . [but the Bishop]

                    did nothing to reverse Waligora's termination

                    of employment.



                    15.  [B]eginning in or about November, 1993,

                    and thereafter, Reverend Diamond made the

                    following statements, uttered words to similar

                    effect, and/or published to members of the

                    parish, the following, inter alia, concerning

                    Waligora:



                    (a) That 'Renea is very sick and disturbed and

                    needs to be under intense medical treatment;'



                    (b) That he (Rev. Diamond) had consulted with

                    a psychiatrist whose advice indicated that the

                    children should be protected from Waligora;



                    (c) That after consulting a psychiatrist he

                    (Rev. Diamond) felt he could no longer trust

                    Waligora and was afraid to leave Waligora

                    alone with the children;



                    (d) That if others learned more about Multiple

                    Personality Disorder they would understand why

                    he (Rev. Diamond) had to fire Waligora.



     App. at 15-16.  The parish removed Waligora's suit to federal

court, and after counts based on the Americans with Disabilities

Act were dismissed, the case was remanded to the state court and is

now pending.

          The parish carried a general liability insurance policy

issued by the company providing coverage from April 1, 1993 to

April 1, 1994.  The policy indemnifies the parish for damages

resulting from personal injury, including injury from defamation.

The policy further obligates the company to defend the parish in

any suit seeking damages covered by the policy.  However, the

policy excludes from coverage "personal injury sustained by any

person as a result of an offense directly or indirectly related to

the employment of such person by the Named Insured."  Based on the

policy exclusion, the company denied any duty to defend the suit or

indemnify the parish for the costs of defending the suit.  The

parish filed this action seeking a declaration of its rights under

the policy.  The parties filed cross-motions for summary judgment.

Both parties stipulated that on the motions for summary judgment

the district court need only look to the policy and Waligora's

complaint to decide whether the exclusion applied.  The district

court granted summary judgment in favor of the company, holding

that the exclusion applied, and we affirm.

          The key issue before us is whether the district court

erred in holding that the exclusion applied.  We review this

conclusion of law de novo.  See Mt. Airy Ins. Co. v. Greenbaum, 127

F.3d 15, 19 (1st Cir. 1997).  The question is whether Waligora's

suit was for personal injury sustained "as a result of an offense

directly or indirectly related to her employment" by the parish.

If it is, then the policy exclusion applies, and the company has no

duty to defend the parish against Waligora's suit.  Looking only to

Waligora's complaint and the relevant language of the policy, as

the parties so agreed, we conclude the exclusion applies.

          This case is similar to three others cited by the

company.  See Interco Inc. v. Mission Ins. Co., 808 F.2d 682 (8th

Cir. 1987);  Frank and Freedus v. Allstate Ins. Co., 45 Cal. App.

4th 461, 52 Cal.Rptr. 2d 678 (1996); Loyola Marymount Univ. v. Hartford Accident & Indemn. Co., 219 Cal. App. 3d 1217, 271 Cal.

Rptr. 528 (1990).  In each of these cases, discharged employees

brought similar claims against their employer, insured by policies

with  similar exclusions.  See Interco, 808 F.2d at 683-84; Frank

and Freedus, 45 Cal. App. 4th at 464, 470, 52 Cal. Rptr. 2d at 680,

683; Loyola Marymount, 219 Cal. App. 3d at 1220-22, 271 Cal. Rptr.

at 529-30.  Each court held that the offenses alleged in the

complaint were "related to" employment.  See Interco, 808 F.2d at

685; Frank and Freedus, 45 Cal. App. 4th at 471-72, 52 Cal. Rptr.

2d at 684; Loyola Marymount, 219 Cal. App. 3d at 1223,  271 Cal.

Rptr. at 531.

          As those courts observed, defamatory statements providing

an explanation for termination or directed to performance are

"related to" employment.  See Frank and Freedus, 45 Cal. App. 4th

at 471-72, 52 Cal. Rptr. 2d at 684.  Alleged offenses occurring as

"part and parcel" of an allegedly wrongful termination are "plainly

related" to employment.  Loyola Marymount, 219 Cal. App. 3d at

1223, 271 Cal. Rptr. at 531.  Post-employment defamations can be

directly or indirectly related to employment, and thus can fall

within an exclusion of the sort at issue here.  See id.

          The statements to which Waligora's complaint refers are

comments as to Waligora's abilities and job performance.  They are

explanations as to why Diamond terminated Waligora's employment.

The complaint alleges that Waligora's duties included leading the

children's choir.  Allegations 15(b) and 15(c) specifically

indicate that it was not safe for Waligora to be around the

children.  Allegation 15(d) explicitly mentions that Diamond was

explaining his basis for firing Waligora.  Allegation 15(a) does

not explicitly mention the children or the firing of Waligora, but

placing it in context with the other provisions in the complaint

cited above, it too relates to Waligora's ability to perform her

job and provides an explanation for the termination of her

employment.  Because the allegations in the complaint contain

statements directed to Waligora's abilities and job performance and

are explanations as to why her employment was terminated, we

conclude the offenses are, at the least, indirectly related to

Waligora's employment, if not directly related.  In either case,

the exclusion applies, and the company has no duty to defend.

          The parish next contends that the district court abused

its discretion by denying its motion to alter, amend, or reconsider

the judgment.  This contention is wholly without merit.  First, the

motion asks the court to consider documents other than those agreed

to by the parties in their stipulation.  Moreover, the motion

refers to only one statement of a truly different substantive

nature, which Diamond allegedly made after the policy had expired.

Thus, the statement is immaterial to this litigation.

          Affirmed.