FROM THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF
MASSACHUSETTS [Hon. Mark G. Mastroianni, U.S. District Judge]
Michael F. Aylward, with whom William A. Schneider, Morrison
Mahoney LLP, Rebecca R. Weinreich, Steven V. Kovarik, and
Lewis Brisbois Bisgaard Smith LLP were on brief, for
A. Pasich, with whom Pamela M. Woods, Mikaela
Gallagher-Whitman, Pasich LLP, Francis D. Dibble, Jr., John
M. Greaney, Elizabeth S. Zuckerman and Bulkley, Richardson
& Gelinas, LLP were on brief, for appellee.
Lynch, Circuit Judge, Souter, [*] Associate Justice, and Stahl,
SOUTER, Associate Justice.
declaratory judgment action, plaintiff AIG Property Casualty
Company appeals from a judgment that it has a duty to defend
the policyholder, defendant William H. Cosby, Jr. We affirm.
the past decade, a number of women have accused Cosby of
sexual assault. In 2014 and 2015, nine of them, also
defendants here, filed three separate actions claiming that
Cosby had defamed them by publicly denying their accusations.
At relevant times, Cosby held two insurance policies issued
by AIG: a homeowners policy and a personal excess liability
policy (the "umbrella policy"). Under each, AIG has
a duty to "pay damages [Cosby] is legally obligated to
pay [due to] personal injury or property damage caused by an
occurrence covered by this policy anywhere in the world . .
. ." Both policies define "personal injury" to
include "[d]efamation, " and oblige AIG to pay the
cost of defending against suits seeking covered damages.
Cosby notified AIG of the underlying defamation suits, AIG
initially agreed to defend him, subject to a reservation of
rights that permitted the company to bring this action,
seeking a declaration that the policies' "sexual
misconduct" exclusions barred coverage. The cited
exclusion in the homeowners policy bars coverage for
liability or defense costs "arising out of any actual,
alleged[, ] or threatened . . . [s]exual molestation,
misconduct or harassment[, ] . . . or . . . [s]exual,
physical or mental abuse." And the umbrella policy
similarly excludes coverage for liability or defense costs
"[a]rising out of any actual, alleged[, ] or threatened
. . . [s]exual misconduct, molestation or harassment[, ] . .
. or . . . [s]exual, physical or mental abuse."
Contending that the underlying defamation claims arose out of
Cosby's alleged sexual assaults, AIG moved for summary
judgment on its declaratory judgment claim. Cosby, for his
part, moved to dismiss or, in the alternative, for judgment
on the pleadings. The district court treated his motion as
one for judgment on the pleadings under Federal Rule of Civil
Procedure 12(c) and held that the sexual-misconduct
exclusions were at least ambiguous and consequently granted
Cosby's motion insofar as it sought a judgment that AIG
had a duty to defend.
a dismissal under Rule 12(b)(6), we review a judgment on the
pleadings de novo, "tak[ing] all well-pleaded
facts in the light most favorable to the non-moving party and
draw[ing] all reasonable inferences in that party's
favor." Najas Realty, LLC v. Seekonk Water
Dist., 821 F.3d 134, 140 (1st Cir. 2016).
parties debate whether Massachusetts or California law
governs the interpretation of the relevant insurance
policies, with AIG arguing for Massachusetts on its
understanding that its law requires a finding of no coverage.
But we have no need to resolve that dispute because, simply
by applying the law of Massachusetts as AIG asks, we conclude
that AIG has a duty to defend Cosby. For the same reason, it is
unnecessary to address Cosby's arguments that AIG should
be judicially estopped even from arguing that Massachusetts
Massachusetts law, we construe an insurance policy under the
general rules of contract interpretation[, ] . . .
begin[ning] with the actual language of the policies, given
its plain and ordinary meaning." Brazas Sporting
Arms, Inc. v. Am. Empire Surplus Lines Ins. Co., 220
F.3d 1, 4 (1st Cir. 2000). "The insurer bears the burden
of demonstrating that an exclusion exists that precludes
coverage, " however, "and any ambiguities in the
exclusion provision are strictly construed against the
insurer." Valley Forge Ins. Co. v. Field, 670
F.3d 93, 97 (1st Cir. 2012) (internal quotation marks
omitted). Indeed, the general interpretive rule that
"[a]mbiguous policy terms are construed in favor of the
insured, " Scottsdale Ins. Co. v. Torres, 561
F.3d 74, 77 (1st Cir. 2009), "applies with particular
force to exclusionary provisions, " U.S. Liab. Ins.
Co. v. Benchmark Const. Servs., Inc., 797 F.3d 116, 120
(1st Cir. 2015) (internal quotation marks omitted).
"Ambiguity exists when the policy language is
susceptible to more than one meaning."
Scottsdale, 561 F.3d at 77.
is no single definition of "arising out of" under
Massachusetts law. The Massachusetts Supreme Judicial Court
has said that the term "indicates a wider range of
causation than the concept of proximate causation in tort
law, " Commerce Ins. Co. v. Ultimate Livery Serv.,
Inc., 897 N.E.2d 50, 62 (Mass. 2008) (internal quotation
marks omitted), and that it "suggest[s] a causation more
analogous to 'but for' causation, " Fuller
v. First Fin. Ins. Co., 858 N.E.2d 288, 292 (Mass. 2006)
(internal quotation marks omitted). In a slightly earlier
decision, however, the same court has taken care to note that
"the expression does not refer to all circumstances in
which the injury would not have occurred 'but
for'" the excluded activity. Rischitelli v.
Safety Ins. Co., 671 N.E.2d 1243, 1245 (Mass. 1996)
(injuries resulting from fisticuffs that broke out after
vehicle collision did not "aris[e] out of the ownership,
maintenance or use of an auto"). Rather, "there
must be a sufficiently close relationship" or a
"reasonably apparent" causal connection between the
injury and relevant event. Commerce Ins. Co., 897
N.E.2d at 62 (internal quotation marks omitted). Ultimately,
"[a] judgment call . . . must be made as to where the
facts of the case fall along a continuum of causation."
Am. Home Assur. Co. v. First Specialty Ins. Corp.,
894 N.E.2d 1167, 1170 (Mass. App. Ct. 2008).
AIG says that because Cosby's allegedly defamatory
denials were prompted by the women's sexual-assault
allegations, the defamation injury and the excluded conduct
are so "inextricably intertwined" as to trigger the
sexual-misconduct exclusions. Cosby counters that the source
of the women's claimed injuries is not any alleged sexual
misconduct, but rather the allegedly defamatory statements.
Cf. Bagley v. Monticello Ins. Co., 720 N.E.2d 813,
817 (Mass. 1999) ("It is the source from which
the plaintiff's personal injury originates rather than
the specific theories of liability alleged in the
complaint which determines the insurer's duty to
defend." (emphasis in original; internal quotation marks