TRAVELERS PROPERTY CASUALTY COMPANY OF AMERICA v. MERICLE
TRAVELERS PROPERTY CASUALTY COMPANY OF AMERICA, f/k/a The Travelers Indemnity Company of Illinois,
ROBERT K. MERICLE; MERICLE CONSTRUCTION, INC., Appellants.
United States Court of Appeals, Third Circuit.
Argued January 10, 2012.
Filed: June 20, 2012.
R. TED CRUZ, ESQUIRE (ARGUED), Morgan, Lewis & Bockius, 1000 Louisiana Street, Suite 4000, Houston, Texas 77002.
SAMUEL J. ARENA, JR., ESQUIRE (ARGUED), KARL S. MYERS, ESQUIRE, Stradley, Ronon, Stevens & Young, 2600 One Commerce Square, 2005 Market Street, Philadelphia, Pennsylvania 19103, Attorneys for Appellee.
Before: SCIRICA, RENDELL and SMITH, Circuit Judges.
NOT PRECEDENTIALOPINION OF THE COURT
SCIRICA, Circuit Judge.
Travelers Property Casualty Company sought a declaratory judgment that a commercial general liability insurance policy issued to Robert Mericle and Mericle Construction did not oblige it to defend or indemnify Mericle in a lawsuit brought by the victims of a corrupt kickback scheme. The District Court found Travelers had no duty to defend or indemnify Mericle and entered judgment in favor of Travelers. For the following reasons, we will affirm.I
The underlying complaint stems from a tragic judicial kickback scheme. Mark Ciavarella and Michael Conahan, two judges of the Luzerne County Court of Common Pleas, engaged in a scheme exploiting and debasing their position as judges in adjudicating juvenile cases. Each accepted money from Robert Mericle, the owner of Mericle Construction and builder of two private juvenile facilities, and others1 in exchange for facilitating the construction of private juvenile detention facilities and then imposing harsh sentences on juveniles in order to ensure the facilities would be used. As a result of Mericle's role in the illegal scheme, several civil suits, consolidated in the Master Individual Complaint ("MIC") and the Master Class Action Complaint ("MCAC"), were filed by the aggrieved juveniles against Mericle.2
The case before us is a dispute about insurance coverage. Robert Mericle and Mericle Construction (collectively "Mericle") had an insurance policy with Travelers Property Casualty Company of America ("Travelers"). Under the General Liability section of the policy, coverage is provided for claimed damages of "Bodily Injury and Property Damage" (Coverage A) or "Personal and Advertising Injury" (Coverage B). The policy only applies to "Bodily Injury and Property Damage" caused by an "occurrence" taking place during the policy period. The policy defines an "occurrence" as "an accident, including continuous or repeated exposure to substantially the same general harmful conditions." Moreover, the policy excludes coverage for "bodily injury" "expected or intended from the standpoint of the insured" under the exclusions articulated in the policy. The policy also provides coverage for claimed damages of "Personal and Advertising Injury," which the policy defines as "injury, other than `bodily injury', arising out of one or more of the following offenses: (a) False arrest, detention, or imprisonment ... ." Coverage is excluded for "personal injury" that "aris[es] out of the willful violation of a penal statute or ordinance committed by or with the consent of the insured."