United States District Court, E.D. Virginia
LIBERTY MUTUAL FIRE INSURANCE COMPANY, Plaintiff/Counterclaim Defendant,
GENERAL INFORMATION SERVICES, INC. et al., Defendants/Counterclaim Plaintiffs
For Liberty Mutual Fire Insurance Company, Plaintiff: Gary Robert Reinhardt, LEAD ATTORNEY, Kalbaugh Pfund & Messersmith PC, Richmond, VA; John Nathaniel Love, PRO HAC VICE, Robins Kaplan Miller & Ciresi, Washington, DC.
For General Information Services, Inc., E-Backgroundchecks.com, Inc., Defendants: Curtis Gilbert Manchester, LEAD ATTORNEY, Alexandria Elizabeth Cuff, Reed Smith LLP, Richmond, VA; Anthony Bernard Crawford, Timothy Patrick Law, PRO HAC VICE, Reed Smith LLP, Philadelphia, PA.
For E-Backgroundchecks.com, Inc., General Information Services, Inc., Counter Claimants: Curtis Gilbert Manchester, LEAD ATTORNEY, Alexandria Elizabeth Cuff, Reed Smith LLP, Richmond, VA; Anthony Bernard Crawford, Timothy Patrick Law, Reed Smith LLP, Philadelphia, PA.
For Liberty Mutual Fire Insurance Company, Counter Defendant: Gary Robert Reinhardt, LEAD ATTORNEY, Kalbaugh Pfund & Messersmith PC, Richmond, VA; John Nathaniel Love, Robins Kaplan Miller & Ciresi, Washington, DC.
Robert E. Payne, Senior United States District Judge.
This matter is before the Court following a bench trial. For the reasons set
forth below, judgment will be entered in favor of Liberty Mutual Insurance Company (" Liberty Mutual" ) declaring that it has no insurance obligations.
Liberty Mutual filed this diversity action seeking declaratory relief against General Information Services, Inc. (" GIS" ) and E-Backgroundchecks.com, Inc. (" BGC" ) (collectively " BGC" ). BGC is a subsidiary of GIS, and both are insured under the Liberty Mutual policies here at issue. BGC  also is the named defendant in Henderson v. Backgroundchecks.com,
Civil Action No. 3:13cv29, an action brought under the Fair Credit Reporting Act, 15 U.S.C. § 1681 et seq. (the " Henderson Suit" ).
In its First Amended Complaint (" FAC" ), Liberty Mutual requests a declaration " that Liberty Mutual has no duty to defend Defendants under the Policies for the Henderson Suit, or in the alternative, that any duty to defend by Liberty Mutual is limited by the terms, conditions, exclusions, and limitations of the Policies" that are identified in the FAC and will be addressed subsequently. (FAC, Docket No. 31, at 21.) BGC filed a counterclaim that is essentially the mirror image of Liberty Mutual's FAC. There, BGC alleges that Liberty Mutual breached " its duty to defend BGC with respect to the Henderson Suit," and seeks specific performance, damages, and other relief. BGC also seeks a declaration " that Liberty Mutual is legally obligated under the terms and provisions of the Liberty Mutual Policies to defend Defendants' interests in connection with the Henderson Suit." (Second Amended Counterclaims of General Information Services, Inc. and E-Backgroundchecks.com, Inc., Docket No. 42, at 17-18.)
The action was tried by the Court sitting without a jury. The parties filed an Omnibus Set of Stipulations (Docket No. 60), and agreed on fourteen exhibits. At the bench trial, the parties presented no additional evidence, but argued their respective legal positions based on their briefs and the Omnibus Set of Stipulations (" Stip." ), together with fourteen exhibits (Exhibits 1-16, with Exhibits 3 and 4 withdrawn). The Omnibus Stipulations and the Exhibits constitute the record.
This action implicates two general commercial liability (GCL) policies: one for the period 2007-2008 (Ex. 1) and one for 2008-2009 (Ex. 2). For the purposes of today's case, the policies are the same. Thus, the parties have stipulated that:
For the purpose of determining whether Liberty Mutual has a duty to defend Defendants against the Henderson Suit, it is sufficient to determine whether, upon consideration of the allegations of the [Henderson ...