FROM THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF
MAINE [Hon. Nancy Torresen, Chief U.S. District Judge]
S. Whitman, Esq., with whom Richardson, Whitman, Large, &
Badger were on brief for appellant.
Timothy E. Steigelman, with whom Melissa A. Hewey, and
Drummond Woodsum were on brief for appellees.
Howard, Chief Judge, Boudin and Barron, Circuit Judges.
BARRON, CIRCUIT JUDGE.
Maine LLC is a private energy company that serves customers
in Maine. It held a D&O insurance policy (the
"Policy") with Zurich American Insurance Co.
("Zurich") when, in November of 2015, a class
action was brought against it, Spark Holco LLC, Emile Clavet,
and Kevin Dean (together "Electricity Maine"). The
named plaintiffs were two of Electricity Maine's
customers, Jennifer Chon and Katherine Veilleux. They sought
to represent a class of nearly 200, 000 of the company's
customers. The complaint alleged that Electricity Maine had
engaged in misconduct that resulted in customers receiving
higher bills than Electricity Maine had represented that they
would be. The complaint sought class-wide damages totaling
approximately $35 million for a variety of Maine state common
law claims, as well as for claims under the federal Racketeer
Influenced and Corrupt Organizations Act ("RICO"),
18 U.S.C. §§ 1962, 1964; and the Maine Unfair Trade
Practices Act, Me. Rev. Stat. Ann. tit. 5 § 207.
Maine tendered notice of the suit to Zurich. Zurich then
initiated the present action against Electricity Maine in the
United States District Court for the District of Maine on May
3, 2017, based on diversity jurisdiction. 28 U.S.C. §
1332. Zurich seeks a declaratory judgment that it has no duty
to defend Electricity Maine against the underlying action.
Zurich contends that Electricity Maine's
policy with Zurich provides, in relevant part,
that Zurich has a duty to defend Electricity Maine against
any lawsuit that seeks damages for "bodily injury"
caused by an "occurrence" and that the complaint in
the underlying action fails to allege that Electricity Maine
engaged in conduct that qualifies as an
"occurrence" or that caused any "bodily
and Electricity Maine cross-moved for summary judgment on a
stipulated record. The District Court ruled for Electricity
Maine. Zurich Am. Ins. Co. v. Electricity Maine LLC,
325 F.Supp.3d 198, 202-03 (D. Me. 2018). This appeal
followed. We affirm.
review the District Court's decisions on the parties'
motions for summary judgment de novo. See Utica Mut. Ins.
Co. v. Herbert H. Landy Ins. Agency, Inc., 820 F.3d 36,
41 (1st Cir. 2016). We must affirm the judgments below if
there is no genuine issue of material fact in dispute and the
District Court's conclusions are correct as a matter of
law. See id.
parties agree that the only issues presented on appeal
concern the District Court's interpretation of the
relevant provisions of the Policy. Those issues present
matters of law, which we review de novo. Massamont Ins.
Agency, Inc. v. Utica Mut. Ins. Co., 489 F.3d 71, 72
(1st Cir. 2007).
parties agree that Maine law controls the interpretive
questions at issue on appeal. Under Maine law, "[i]f the
allegations in the underlying . . . action are within the
risk insured against and there is any potential basis for
recovery, the insurer must defend the insured regardless of
the actual facts on which the insured's ultimate
liability may be based." Elliott v. Hanover Ins.
Co., 711 A.2d 1310, 1312 (Me. 1998).
determine if the allegations in the underlying action are
within the risk insured, we must "compar[e] the
complaint with the terms of the insurance contract."
Id. The key terms in the Policy that define the
"risk insured" are ...