The opinion of the court was delivered by: SWEET
This is an action for a declaratory judgment and damages brought by plaintiff Joe McGinniss ("McGinniss"). McGinniss seeks a declaration that defendant Employers Reinsurance Corporation ("Employers") is obligated by a contract of insurance entered into by McGinniss' publisher, G. P. Putnam's Sons ("Putnam's"), and Employers, which specifically covers authors such as McGinniss, to indemnify him for all legal fees and costs incurred in defense of an action brought against McGinniss by Jeffrey MacDonald ("MacDonald") in the United States District Court for the Central District of California,
as well as for any final judgment rendered against McGinniss in that action. McGinniss and Employers have made cross-motions for summary judgment pursuant to Fed.R.Civ.P. 56. For the reasons given below, McGinniss' motion is granted in part and denied in part and Employers' motion to deny coverage under the insurance policy is denied.
McGinnis, a Massachusetts resident, is the author of "Fatal Vision," which relates the story of the murder of MacDonald's family on February 16, 1970 and his subsequent conviction for the crimes. The book covers many aspects of the story including MacDonald's version of the events in question, others' versions, the physical evidence found at the crime scene, the Army and Justice Department investigations, and the trial.
On August 3, 1979, a time during which McGinniss was researching the book, MacDonald wrote a letter to McGinniss promising, among other things, to "release, discharge and acquit" him from any cause of action whether for libel, violation of right of privacy, or anything else by reason of anything contained in the book." (Plaintiff's Exhibit B to Notice of Cross-Motion). The letter recited that the rights granted therein were in return for consideration and the letter was witnessed. (Id.) On December 17, 1981, McGinniss and MacDonald signed an agreement entitled "Consent and Release," which granted McGinniss broad rights to use MacDonald's story or afictionalized version thereof in film or on television. (Id.) This agreement also stated that the rights granted were without claims . . . or causes of action, whether for libel, defamation, violation of right of privacy. . . ." (Id.)
The book was published in 1983. In August of 1984, MacDonald filed suit in the United States District Court for the Central District of California claiming damages of fifteen million dollars for fraud, breach of contract, breach of the covenant of good faith and fair dealing, and intentional infliction of emotional distress, and requesting an accounting. In September, 1984, MacDonald filed a complaint in the Los Angeles Superior Court against McGinniss and Putnam's claiming that Fatal Vision was a libelous publication and seeking ten million dollars in damages. The complaint in the state action, however, was never served and the action never commenced.
McGinniss notified Employers, a Missouri corporation, of the federal action and requested indemnification for defending the action and for any final judgment pursuant to Employers Policy numbered L-5841 issued to Putnam's and entitled "Publishers' Libel and Allied Torts Policy." (the "Policy"). (Exhibit E to Employers' motion for summary judgment). The portions of the Policy relevant to this action are as follows:
COVERAGE. [Employers] will pay on behalf of the Insured such loss . . . as the Insured sustains by reason of liability imposed by law or assumed under contract for damages because of injury sustained by any person or organization arising out of:
(a) libel or slander or other defamatory or disparaging material;
(b) invasion or infringement of the right of privacy, including unwarranted or wrongful publicity or the unlawful use of name or likeness for profit;
(c) plagiarism, piracy or misappropriation of information or ideas;
committed or alleged to have been committed in the acquisition, utterance or dissemination of matter (including but not limited to, books . . .) first published . . . during the policy period. . . .
DEFINITIONS. When used in this policy (including endorsements forming a part hereof):
(b) "Loss" means such amounts which the Insured becomes legally obligated to pay in settlement of claims or in satisfaction of judgments . . . and including court costs . . . ...