Wrongful Termination Covered, Defamation Excluded

General Liability	Negligent Acts
Employee Benefit Liability	Duty to Defend

Altivia Corporation, a trucking business (Altivia), was sued by a former employee, Hidrogo (we do not know Hidrogo’s first name). He charged that Altivia was guilty of wrongful termination as revenge for filing a workers compensation claim. Hidrogo also claimed that Altivia workers defamed his reputation with prospective employers. Altivia's was covered by a CGL policy that included an Employee Benefit Liability (EBL) endorsement. The policy was written by Greenwich Insurance Company (Greenwich). Greenwich requested a summary judgment because it believed it had no obligation to respond to either of Hidrogo's allegations. The trial court awarded a summary judgment in favor of Greenwich on both issues, and Altivia appealed.

Altivia appealed on the grounds that Greenwich had a duty to defend under the CGL policy and the EBL endorsement. Altivia argued that Greenwich's duty to defend against Hidrogo's claim was not, as Greenwich successfully asserted, limited to negligent acts. The truck firm stated that the EBL language obligated it to pay damages related to administering Altivia's employee benefit program. The appellate court agreed with Altivia. Greenwich's only basis for asserting that the EBL did not provide a duty to defend against the wrongful termination claim was the distinction made about negligent acts, and the appellate court held otherwise.

On the defamation issue, the Hidrogo petition did not provide enough information. It did not explain the context within which any, allegedly, defamatory statements were made. However, Hidrogo did claim that the statements were made by a person who knew them to be false and malicious. Since the CGL policy excluded losses involving personal injury caused by false information, the higher court deemed that the incident was outside the scope of coverage. The judgment of the trial court was reversed and remanded concerning the wrongful termination issue and affirmed as to the defamation issue.

Altivia Corporation, Appellant, V. Greenwich Insurance Company, Appellee. Texas Court of Appeals, Fourteenth District. No. 14-03-00740-CV. August 26, 2004. affirmed in part, reversed and remanded in part. 2004 CCH Personal and Commercial Liability Cases. Paragraph 8057.