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M A I 3 E
STATE OF h4AINE
;
..- sk SUPERIOR COURT
"'!."RF";LANiJ,
Y O + IQLI I
SS
CUMBERLAND, ss. C ~ E R K ' S ~ J F F I C E CIVILACTION
Docket No. C d V 3 7 8
;ov-,7
IN1 FEB - 8 A 1:5b T@ - L'J'
MIDDLESEX MUTUAL ASSURANCE
COMPANY,

Plaintiff,

v. DECISION AND JUDGMENT

ELEANOR B. HANDLER M.D. and DONALD L. GARBRECHT

ELEANOR B. HANDLER M.D. P.A., LAW LlPRARv

Defendants. MAY 1 6 2007

Middlesex Mutual Assurance Company (Middlesex) insured the defendants

.. . coverage for "oral or written

under a Businessowners Liability Policy which provides

publication of material that slanders or libels a person . . . ,"but excludes coverage for

injury "arising out of oral or written publication of material if done by or at the

direction of the insured with knowledge of its falsity."

When the defendants' business relationship to share space, services and

personnel with August C. Schwenk W1.D. deteriorated and dissolved, Dr. Handler sent

several letters to doctors and hospital authorities in the Belfast area. In the letters she

variously described Dr. Schwenk's conduct as egregious, unprofessional, unethical,

actionable and illegal.

In a response to a lawsuit by Dr. Handler lawsuit, based on the dissolution of

their business relationship, Dr. Schwenk asserted a counterclaim for defamation.

Middlesex appeared and defended Handler on the counterclaim.

By agreement, the parties took their case to arbitration where the arbitrator

found for Dr. Schwenk and awarded h m $30,000 on the counterclaim. The issue here is

the extent of indemnification by Middlesex.

 In his modified award, the arbitrator found that Dr. Handler's statements were

"defamation per se." In the original findings of fact and conclusions, the arbitrator

found Handler's letters in question to be "clearly defamatory in nature." 9 37. He

further found that Dr. Handler admitted "all of the statements and that they "were

made with the intent to harm defendant's good name and reputation . . . they were
more than statements of mere opinion." 37(4). The arbitrator also found that Dr.

Schwenk was unable to quantify his loss of income from the per se defamatory

published letters and noted that he was not required to do so. Citing, Farrell v. Kramer,

193 A.2d 561 (Me. 1963) and Xippert v. Bemis, 672 A.2d 82 (Me. 1986). He awarded

$30,000 for damages "as a result of the defamatory statements." Subsequent to the

filing of the decision, Middlesex paid $15,000 of the award. Middlesex asserts that

although Dr. Schwenk was damaged by Handler's statements, Dr. Handler is not

protected for calling Schwenk's actions "illegal" because at her deposition she agreed

they were not illegal and coverage is not available for a statement made "with

knowledge of its falsity."

Both parties have filed motions for summary judgment.

Notwithstanding Handler's statement of illegality as defamatory, the arbitrator

did not specify that any part of the award was or was not based on particular

statements. mddlesex's unilateral decision to apportion the award is without basis in

law or fact.

The court finds, based on undisputed facts that Middlesex has not demonstrated

any basis to support a division of the award as they have done. The burden of proving

allocation of damages between covered and non-covered claims is on the insurer.

Liberty Mut. Ins. Co. v. Metropolitan Life Ins. Co., 260 F.3d 54 (1" Cir. 2001). The insurer

may not meet this burden by engaging in speculation as to what the fact finder was
thinking when he returned a general verdict. Lavender v. Grange Mut. Cas. Co., 1979

Ohio App. LEXIS 10921.

In Maine the Law Court has also decided that the burden to apportion or allocate

damages rests on the defendant, or it this case upon Middlesex, as the party asserting

that it is responsible for only a portion of the award. See, Lovely v. Allstate insurance Co.,

658 A.2d 1091 (Me. 1995). Since Middlesex has not met its burden of proving allocation

of damages, summary judgment is appropriate declaring that Middlesex must

indemnify Dr. Handler for the full amount of the award.

The clerk will make the following entry as the Order and Judgment of the court:

A. Plaintiff Middlesex Mutual Assurance Company's Motion for

Summary Judgment is denied.

B. Defendants/Counterclaim-PlaintiffsEleanor B. Handler M.D. and

Eleanor B. Handler M.D. P.A. Motion for Summary Judgment is granted.

C. The clerk will enter judgment for defendants/counterclaim plaintiffs in

the amount of $15,000 as the balance to be paid on the arbitration award,
plus interest and costs as allowed by statute and rule.

D. No attorneys' fees are awarded.

SO ORDERED.

DATED: February 7,2007

Justice, Superior ~o;rt

M I D D L E S E X MUTUAL ASSUKANCE COMI'ANY PI,AI N'I' I Is'F SUPPlR LOII COURT
CIJMHEIILAND , ss .
A t t o r n e y f o r : MIDDI,I.:SEX MIJ'I'IJAL A S S I J l A N C E (:OMIIANY Docket. No PORSC-CV-2005- 0 0 3 5 8
J O H N WHI'I'MAN - RETAINEII 0 6 / 1 4 / 2 0 0 5
R I C H A R D S O N WHITMAN LARGE & BAI)(;NR
4 5 5 CONGRESS S T , SUTTE 9 0 0 DOCKET RECORD
P O BOX 9 5 4 5
PORTLAND ME 0 4 1 1 2 - 9 5 4 5

VS
ELEANOR I! HANDLER MD - I)EFKNI)ANr1'

Attorney tor: ELEANOII H IIANI)I,T I< MI)

CHARLES G I L B E R T I11 - W L 1 ' t I I ) I ~ W N 0 4 / 1 9 / 2 0 0 6
GILBERT & GREIF
8 2 COLUMl3IA S T
P O BOX 2 3 3 9
BANGOR MN 0 4 4 0 2 2 3 3 9

Attorney Eor: EL1:ANOR B IIANI)IJI~:II MI)

J U L I E FARR - RE'I'AINED 0 1 / 1 7 / 2 0 0 6
GILBERT & C K E I F
8 2 COLUMHlA S T
P O BOX 2.339
BANGOR ME 0 4 4 0 2 - 2 3 3 9

ELEANOR I? HANDLER MU P A I)b~171~NI~~I'

Attorney f o r . ELEANOR B HANDIJER MD P A

CHARLES (;I LBER'1' I LT W I'I'II1)IIAWN 04/1 9 / 2 0 0 6
GILBER'I' & GREIF
8 2 COLUMnTA Srl'
PO BOX 2 3 3 9
BANGOR MI< 0 4 4 0 % 7 3 3 9

Attorney for: ELEANOR B IIANI)LEI< MI) L'A

J U L I E FAI<R - RE'I'AlNED 0 1 / 1 1/ 7 3 0 6
G I L B E R T & GIIETF
8 2 COLUMBIA S T

F i l i n g D o c u m e n t : COMPLATN'I' M i r l o r C a s e T y p e : UECLAlln'l'ORY JUDGMENT

F i l i n g Date: 0 6 / 1 4 / 2 0 0 5

Docket Events:
06/14/2005 F T I j I N G I)OCUMb>NrI' COMI'LAl.NrT F I L I 3 I ) ON 0 6 / 1 4 / 2 0 0 5
1)ECLAIIATORY JIJ1)C;MISN'I' W r'rI~I KrTA(:FIk:I) KXHI B I T ' S A - F (JW)

0 6 / 1 4/ 2 0 0 5 P a r t y (S ) : MIUULISSI<X MIJ'I'IJAL, ASSIJIIANCE COMPANY

ATTORNI.:Y - RI<'17AI~NIII) 1~:N'I'I~:REI)ON 0 6 / 1 1/ 3.0 0 5
P l a i n t i f f ' s At.c.ornc!y: .JOHN WH1:rMAN

Printed on: 02/12/200'?