A federal court in Mississippi held that a suit alleging tortious interference with business relations falls outside coverage on the face of the complaint and that the “extrinsic facts” exception to the “four corners” rule (which would have allowed for consideration of facts outside the allegations of the complaint in consideration of the duty to defend) did not apply.Nationwide Ins. Co. v. Lexington Relocation Services, LLC, 2014 WL 1213805 (N.D. Miss. Mar. 24, 2014). 

Several insureds who were sued sought coverage and defense from their insurer. The suit alleged that the insureds had hired a former employee of the underlying plaintiff in violation of her non-compete agreement and gained trade secrets and other knowledge used to then obtain part of their client base. The insurer filed a declaratory judgment action, alleging that no duty to defend existed because the complaint’s allegations of tortious interference with contractual relations and prospective business advantages are not covered under the policy or are otherwise subject to policy exclusions. The insureds argued that the court should consider extrinsic evidence. The court first determined that the insureds did not allege “true facts,” or facts which are indicated in the record or through investigation which support coverage, in order to meet the “extrinsic facts” exception. The court found that the insured offered only general assertions and legal positions and not “competent summary judgment evidence.” 

The court then found no coverage under the policy terms. It found no “occurrence” as defined took place because no accident or continued exposure was alleged. It found also no “personal injury” as defined took place because there was no allegation of disparagement and there was no “advertising injury,” concluding that Mississippi law requires a causal connection between the advertising and the alleged “advertising injury” offense such that coverage would be expected and finding that no such connection existed. The court granted the insurer’s summary judgment in the declaratory judgment action.