Primiani

MEMORANDUM *

Appellants Marc Primiani, Jeffrey Coyle, Robert Wagman, Robert Francais, and Kenneth Anderson appeal the district court’s order granting summary judgment for National Union Fire Insurance Company (“National”). Appellants filed claims of breach of contract, breach of the implied covenant of good faith and fair dealing, and declaratory relief against National. Appellants contend that National, which insured Appellants’ former employer myCFO, Inc. (“myCFO”), owed them a duty to defend against a third-party suit by Harris-myCFO, Inc. (“Harris”). 1 The district court ruled that because “there was no potential coverage under [National’s] policy,” Appellants’ claims failed as a matter of law. We have jurisdiction pursuant to 28 U.S.C. § 1291 , and we reverse and remand to the district court.

Appellants claim the district court erred by finding no duty to defend because there had existed a possibility that National would have had to pay on behalf of Appellants damages incurred in the Harris suit. We agree.

Pension Trust Fund for Operating Eng’rs v. Fed. Ins. Co., 307 F.3d 944, 949 (9th Cir.2002) (internal citation and quotation marks omitted) (third alteration' in…

I respectfully dissent. In my view, the allegations of the Third Amended Complaint (Complaint) were stretched almost beyond recognition by the majority to preserve the semblance of a covered claim.

I agree, with the majority that the Complaint is the appropriate starting point for determining an insurer’s duty to defend. See Pension Trust Fund v. Fed. Ins. Co., 307 F.3d 944, 949 (9th Cir.2002). However, I disagree that the allegations of the Complaint in this case trigger that duty.

The Plaintiffs in this case seek insurance coverage for the tort of disparagement. The pivotal inquiry in resolving the coverage issue is whether the Plaintiffs were acting within the scope of their duties as employees of myCFO when the disparaging statements were made. I part company with the majority because I do not read the Complaint as supporting the conclusion that the Plaintiffs were acting within the scope of their duties as employees of myCFO. Rather, I read the allegations of the Complaint as asserting loudly and clearly that Plaintiffs were in no wise acting for the benefit of myCFO when they uttered the disparaging remarks.

In a nineteen-page Complaint, the majority relies on a mere…