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Ruksznis v. Argonaut Ins. Co.

United States Court of Appeals, First Circuit

December 18, 2014

FRANK RUKSZNIS, Plaintiff, Appellant,
v.
ARGONAUT INSURANCE COMPANY, Defendant, Appellee

APPEAL FROM THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF MAINE. Hon. D. Brock Hornby, U.S. District Judge.

Arthur J. Grief, with whom Julie D. Farr and Gilbert & Grief, P.A. were on brief, for appellant.

Richard R. Eurich, with whom Michael H. Hayden and Morrison Mahoney LLP were on brief, for appellee.

Before Lynch, Chief Judge, Lipez, Circuit Judge, and Lisi,[*] District Judge.

OPINION

Page 785

LIPEZ, Circuit Judge.

Appellant Frank Ruksznis, former plumbing inspector for the Town of Sangerville (" the Town" ), obtained a judgment against Lance Burgess, a Town Selectman, for slander. Ruksznis sought to collect the judgment through this reach and apply action against the Town's insurer, Argonaut Insurance Company (" Argonaut" ). The district court granted summary judgment for Argonaut, finding that the exclusions in the insurance contract for " employment-related" practices barred Ruksznis's recovery. Because we agree that the term " employment" unambiguously covers Ruksznis's relationship with the Town, and the policy therefore excludes coverage, we affirm.

I.

We draw the facts from the complaint in the underlying slander and civil rights action, as well as from the summary judgment record in the case before us.

Ruksznis served as the appointed[1] plumbing inspector for the Town from approximately 1993 until 2010. Each year from 1993 until 2010, he was reappointed for an additional one-year post. As plumbing inspector, Ruksznis set his own hours, provided his own tools, paid for all of his own expenses, and paid for any schooling to update his license.[2] Ruksznis describes himself as an independent contractor. Although Argonaut describes Ruksznis as an employee, they argue that

Page 786

even if he were an independent contractor, he was nonetheless in an employment relationship with the Town within the meaning of the insurance policies.

The Town held two insurance policies from Argonaut relevant to this case: a Commercial General Liability (" CGL" ) policy and a Public Officials Liability (" POL" ) policy. Each policy covered personal injury claims generally, but each also contained an exclusion for " employment-related" activity. The CGL policy's " employment-related practices exclusion" states that insurance for personal and advertising injury does not apply to claims " arising out of any . . . Employment-related practices, policies, acts or omissions, such as coercion, demotion, evaluation, reassignment, discipline, defamation, harassment, humiliation, discrimination or malicious prosecution directed at that person." The POL policy's exclusion precludes coverage for " [a]ny claim arising out of employment or application for employment with any insured, or any other employment related policies or practices." The policies do not define either " employment" or " employment-related."

At a public meeting of the Sangerville Board of Selectmen on April 13, 2010, Selectman Burgess stated that Ruksznis had made " less than quality decisions" while serving as plumbing inspector, and that " there has [sic] been a couple of issues concerning both his job performance and actions outside of work. I can't comment on what happened last year because I wasn't on the Board and I believe the Selectmen discussed it in the executive session."

At the next Selectmen's meeting on April 22, Burgess took unspecified actions that caused Ruksznis to be removed from his position as plumbing inspector. Although informed by the Maine Municipal Association that Ruksznis's removal had not complied with ...


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