James Freedman leased property to Encarnacion and her husband. Encarnacion used the property for an auto body shop. When she fell behind on her rent Freedman made threatening and harassing phone calls to Encarnacion, including "threatening to have his wife come to the premises and beat her up." He also harassed and threatened her on the premises.
Encarnacion feared for her safety and began to suffer from anxiety attacks for which she received medical treatment.
Encarnacion filed suit against Freedman, seeking a restraining order and alleging negligent and intentional infliction of emotional distress and interference with business relations.
Freedman sought coverage from his commercial liability insurer, USL, asserting that the claim came within the policy's coverage for personal and advertising injury because it alleged invasion of the right of private occupancy of the premises. USL denied coverage.
In Freedman v. U.S. Liab. Ins. Co., 82 Mass App. Ct. 331 (2012), the court noted that in the underlying complaint Encarnacion did not complain of Freedman's appearance on her premises as landlord, or deny his right to be there. Therefore, the complaint was not for an invasion of the right of private occupancy.
Rather, the complaint was based on Freedman's harassing and threatening behavior while on the premises. Without going into details, the court held that the complaint came within the exclusion for actions made by or at the direction of the insured "with the knowledge that the act would violate the rights of another and would inflict 'personal and advertising injury.'"