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Columbia Cas. Co. v. Hiar Holding, L.L.C.

Columbia Cas. Co. v. Hiar Holding, L.L.C.

Supreme Court of Missouri

August 13, 2013, Opinion Issued

SC93026

Opinion

en banc

 [*261]  An insurer that refused to defend its insured challenges its liability for damages that were agreed to in a settlement between the insured and a class of plaintiffs that brought suit alleging that the insured violated the Telephone Consumer Protection Act (TCPA), 47 U.S.C. section 227 et seq. After the class and the insured reached a settlement, the class filed a garnishment action against the insurer. The insurer sought a declaratory judgment that its policy with the insured did not provide coverage, and its arguments included that there was no coverage for damages awarded related to the TCPA. The trial court ultimately entered judgments in favor of the class, holding that the insurer wrongly had refused to defend the insured and was liable to indemnify the insured by paying the settlement amount plus interest. The insurer appeals, and this Court affirms.1

I. Background

] The  [**2] TCPA, 47 U.S.C. section 227 et seq., is intended "to protect the privacy interests of residential telephone subscribers by placing restrictions on unsolicited, automated telephone calls to the home and to facilitate interstate commerce by restricting certain uses of facsimile ([f]ax) machines and automatic dialers." Sen. Rep. No. 102-178, at 1 (1991). The act allows a private right of action for recipients of unsolicited communications that violate the act. 47 U.S.C. section 227(b)(3). The recipients can bring "an action to recover for actual monetary loss from such a violation, or to receive $500 in damages for each such violation, whichever is greater." 47 U.S.C. section 227(b)(3)(B). Further, the act provides for treble damages if, in the trial court's discretion, it is shown that the defendant "willfully or knowingly" violated the act. 47 U.S.C. section 227(b)(3).2 Violations of the TCPA underlie this appeal.

Hotel proprietor HIAR Holdings LLC used a marketing services company to  [*262]  send approximately 12,500 unsolicited advertising facsimiles—"junk faxes"—to recipients in the 314 and 636 area codes in October 2001.3 About 10,000 of the junk faxes were received. Karen S. Little LLC4 brought a class action suit under the TCPA, seeking injunctive relief and statutory damages of $500 per occurrence (per fax sent).

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411 S.W.3d 258 *; 2013 Mo. LEXIS 49 **; 2013 WL 4080770

COLUMBIA CASUALTY COMPANY, Appellant, v. HIAR HOLDING, L.L.C., and HMA RIVERPORT, L.L.C., and KAREN S. LITTLE, L.L.C., Individually and on Behalf of the Other Members of the Certified Class, as Assignees, Respondents.

Prior History:  [**1] APPEAL FROM THE CIRCUIT COURT OF ST. LOUIS COUNTY. The Honorable Mark D. Seigel, Judge.

Columbia Cas. Co. v. Hiar Holdings, L.L.C., 2012 Mo. App. LEXIS 1334 (Mo. Ct. App., Oct. 23, 2012)

CORE TERMS

insurer, coverage, settlement, damages, trial court, faxes, advertising injury, refuse to defend, argues, violations, assertions, property damage, indemnify, notice, statutory damages, invoked, wrongly, summary judgment, recipients, provide coverage, duty to defend, cooperation, privacy, amended petition, settlement amount, excess insurer, contends, insurance policy, right to privacy, extra-contractual

Business & Corporate Compliance, Communications Law, Federal Acts, Telephone Consumer Protection Act, Civil Procedure, Appeals, Record on Appeal, Summary Judgment, Appellate Review, Standards of Review, Judgments, Evidentiary Considerations, Defenses, Demurrers & Objections, Affirmative Defenses, General Overview, Entitlement as Matter of Law, Standards of Review, Abuse of Discretion, Pleadings, Amendment of Pleadings, Leave of Court, Parties, Joinder of Parties, Insurance Law, Business Insurance, Commercial General Liability Insurance, Duty to Defend, Enforcement & Execution, Garnishment, Remedies, Declaratory Judgments, Obligations of Parties, Settlements, Insurers, Allegations in Complaints, Indemnification, Claim, Contract & Practice Issues, Policy Interpretation, Ordinary & Usual Meanings, Ambiguous Terms, Coverage Favored, Exclusions, Intentional Acts, Construction Against Insurers, Policyholders, Duty to Cooperate, Notice of Claims