Emmis Communications Corporati v. Illinois National Insurance Co

In the
United States Court of Appeals
For the Seventh Circuit
____________________
No. 18‐3392
EMMIS COMMUNICATIONS CORPORATION,
Plaintiff‐Appellee,
v.
ILLINOIS NATIONAL INSURANCE COMPANY,
Defendant‐Appellant.
____________________
Appeal from the United States District Court for the
Southern District of Indiana, Indianapolis Division.
No. 1:16‐cv‐89 — William T. Lawrence, Judge.
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ARGUED MAY 30, 2019 — DECIDED JULY 2, 2019
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Before FLAUM, MANION, and BARRETT, Circuit Judges.
BARRETT, Circuit Judge. Emmis Communications Corpora‐
tion bought two insurance policies, each from a different pro‐
vider. From Chubb Insurance Company, it purchased a direc‐
tors‐and‐officers liability policy for the period of October 1,
2009, to October 1, 2010. Emmis later bought a second insur‐
ance policy, this time from Illinois National Insurance Com‐
pany. This policy covered liability from October 1, 2011, to
2 No. 18‐3392
October 1, 2012. It had an exclusion for any losses in connec‐
tion with “Event(s),” which included “[a]ll notices of claim of
circumstances as reported under policy 8181‐0068 issued to
Emmis Corporation by Chubb Insurance Companies.”
In 2012, Emmis tried to gain control of enough of its shares
to go private. Three shareholders filed an action to stop Em‐
mis’s effort. Emmis, through its broker, reported this suit to
Chubb. It also sought coverage under the Illinois National
policy. Illinois National refused coverage, so Emmis sued,
seeking damages for breach of contract and breach of the duty
of good faith and fair dealing.
Both parties sought summary judgment—Emmis arguing
that coverage was appropriate, and Illinois National arguing
that the policy’s complex exclusion provisions prevented cov‐
erage. Among the disputes was the meaning of “as reported.”
Illinois National argued that this provision excluded all no‐
tices that were reported to Chubb at any time—which of
course would include the notice in dispute. Emmis, on the
other hand, claimed that it excluded only those notices that
had been reported at the time that the policy went into effect—
two years before this notice was reported.
The district court entered summary judgment for Emmis
on its claim for breach of contract. It rejected each of Illinois
National’s theories under the language of the exclusion, in‐
cluding its interpretation of the “as reported” language. It
concluded that, while both interpretations were reasonable,
Emmis’s was better. The court thought that the past tense of
“as reported” must “refer[] to events that had already oc‐
curred at the time of drafting.” It bolstered its holding by in‐
voking the rule favoring coverage when multiple reasonable
No. 18‐3392 3
readings of an insurance policy might apply. See Bradshaw v.
Chandler, 916 N.E.2d 163, 166 (Ind. 2009).
On appeal, the parties briefed many legal issues arising
from the Byzantine exclusion language. But we can resolve
this case on a single issue: the meaning of “as reported.” We
disagree with the district court’s opinion; Illinois National’s
proposed interpretation is correct. The phrase has no discern‐
able temporal limitations. Once Emmis or one of its agents re‐
ports a claim to Chubb, at any time, then that claim is “re‐
ported”—and so is excluded. The timing of the report is irrel‐
evant. Emmis acknowledged in its brief that it did in fact re‐
port its claim to Chubb. That resolves our inquiry.
The exclusion applies, so summary judgment should have
been entered in favor of Illinois National. The judgment of the
district court is REVERSED and REMANDED for proceed‐
ings consistent with this opinion.