Write Good, Pay Less
Just as truth is often said to be the first casualty of war, bad grammar is often the first victor in coverage battles. Such has recently been the fate of the quaint but venerable doctrine of the last antecedent, whereby clauses in a contract are interpreted in accordance with the words or phrases that immediately precede them rather than words that are more remote.
Two courts have considered this doctrine in reaching opposite conclusions with respect to whether standard CGL “personal and advertising injury” coverage for “publication of material that invades a person’s right of privacy” extends coverage to junk fax claims. The issue in these cases was whether it is the “publication” that is invasive or the “material.” Junk faxes, while annoying, rarely contain secret or confidential information such that their content could be said to invade a privacy interest. On the other hand, the legislative history of the TCPA suggests that Congress was concerned about protecting the seclusion interest of private citizens in banning such communications.
In State Farm General Ins. Co. v. JT’s Frames, Inc., B215457 (Cal. App. January 27, 2010), the Second District Court of the California Court of Appeal rejected the insured’s argument that the annoying receipt of telefaxed communications constituted a “publication” invading the recipient’s privacy. Rather, the court ruled that the “last antecedent rule,” as well as the context of the coverage itself, made clear that it was the “material” that the insured published that must invade the insured’s privacy rather than the manner of communication.
A contrary view was taken by the Florida Supreme Court in Penzer v. Transportation Ins. Co., No. SC08-20608 (Fla. January 28, 2010). On a certified question from the Eleventh Circuit, the court concluded that sending 24,000 unsolicited blast fax advertisements fell within the common dictionary meaning of “publication” as involving the distribution of material to the public. Further, the court ruled that the faxes themselves were “material,” noting that “material” may mean both solid objects as well as the content of said objects. Finally, the court found that the unhappy recipients of these faxes had suffered an invasion of privacy, rejecting any suggestion that the policy’s reference to “right of privacy” created any material distinction. Accordingly, piecing these conclusions together, the Florida Supreme Court found that the insured’s conduct involved the publication of material that violated a person’s right of privacy.
Transportation argued that the doctrine of the last antecedent required a contrary conclusion. Relying on this doctrine, Transportation had argued that the phrase “that violates a person’s right of privacy” modified the term “material” as opposed to “publication” and thus coverage should only arise when it is the content of the material that violates a person’s right of privacy. The Florida Supreme Court disagreed. First, it ruled that this doctrine was not an absolute rule of contract interpretation and that, in this case, the clause “that violates a person’s right of privacy” is applicable as much to “publication” as to “material.” Furthermore, the court found that even if the phrase only modified the term “material,” the receipt of an unsolicited blast fax could still invade a homeowner’s privacy interest in seclusion without regard to whether the content of the material had also violated the privacy interest in secrecy.
As the Tenth Circuit recently cheerfully observed in Payless Shoesource v. Travelers Co., Inc., 482 F.3d 976 (10th Cir. 2009, “we know that grammatical rules are bent and broken all the time and we will not enforce the more grammatical interpretation of a contract when evident sense and meaning require that a different construction.” In rejecting a Kansas policyholder’s reliance on the last antecedent rule, the Tenth Circuit declared in Payless that “while misplaced modifiers are syntactical sins righteously condemned by English teachers everywhere, our job is not to critique the parties’ grammar, but only, if possible, to adduce and enforce their contract’s meaning. Here, a punctuation peccadillo notwithstanding, the meaning of the parties’ contract is unambiguous.”
