10 19 17aig

Case: 17-1505 Document: 00117212052 Page: 1 Date Filed: 10/17/2017 Entry ID: 6126121
No. 17-1505
UNITED STATES COURT OF APPEALS

FOR THE FIRST CIRCUIT
AIG PROPERTY CASUALTY COMPANY

Plaintiff Appellant
v.
TAMARA GREEN, THERESE SERIGNESE, LINDA TRAITZ, LOUISA
MORITZ, BARBARA BOWMAN, JOAN TARSHIS, ANGELA LESLIE,
KRISTINA RUEHLI, KATHERINE MAE MCKEE and
WILLIAM H. COSBY, JR.,
Defendants Appellees
APPEAL FROM A JUDGMENT OF THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF MASSACHUSETTS
BRIEF OF PLAINTIFF AIG PROPERTY CASUALTY COMPANY
Michael F. Aylward, BBO # 024850 Rebecca R. Weinreich, Esq.

William A. Schneider, BBO # 636421 Steven V. Kovarik, Esq.
Morrison Mahoney LLP Lewis Brisbois Bisgaard Smith LLP
250 Summer Street 633 West 5th Street, Suite 4000
Boston, MA 02110 Los Angeles, CA 90071
(617) 439-7500 (213) 580-7973
Counsel for Plaintiff

October 17, 2017
CORPORATE DISCLOSURE STATEMENT

Pursuant to Fed. R. Civ. P. 26.1 and F.R.A.P. 28(a)(1), Plaintiff-Appellant
AIG Property Casualty Company states that it is an insurance company
domesticated in the State of Pennsylvania with a principal place of business in
New York City. AIG Property Casualty Company is a subsidiary of AIG Property
Casualty U.S., Inc., which is a Delaware corporation headquartered in New York
City. No other corporation owns 10% or more of the stock of AIG Property
Casualty Company.
The names of all law firms that have appeared or are expected to appear on
behalf of AIG Property Casualty Company are Morrison Mahoney LLP and Lewis
Brisbois Bisgaard & Smith LLP.
ii
TABLE OF CONTENTS
CORPORATE DISCLOSURE STATEMENT. ....................................................ii
TABLE OF CONTENTS..................................................................................... iii
TABLE OF AUTHORITIES. ...............................................................................iv
REASONS WHY ORAL ARGUMENT SHOULD BE HEARD.........................1
JURISDICTIONAL STATEMENT. .....................................................................1
STATEMENT OF LEGAL ISSUES. ....................................................................2
STATEMENT OF THE CASE..............................................................................3
STATEMENT OF THE FACTS. ..........................................................................6
SUMMARY OF ARGUMENT. ..........................................................................16
ARGUMENT. ......................................................................................................20
I. Massachusetts Law Controls the Meaning of These Insurance

Policies.......................................................................................................20
II. The Sexual Misconduct Exclusion Applies Because Cosbys

Purported Liability For Defaming These Women Arises Out
Of His Denials Of Their Allegations That He Sexually
Assaulted Them .........................................................................................23
A. Massachusetts Law ...........................................................................25
B. California Law ..................................................................................34
III. Courts in Massachusetts and Throughout the United States

Have Consistently Given Broad Effect to Similar Exclusions
for Sexual Misconduct...............................................................................38
IV. The District Court Erred in Finding Ambiguity Based on

Claims Internal Inconsistencies in the AIG Property Policies ..................42
V. The District Court Did Not Err in Refusing to Estop AIG

Property from Arguing that Massachusetts Law Governs the
Construction of these Insurance Policies...................................................44
iii
CONCLUSION....................................................................................................49
CERTIFICATE OF COMPLIANCE WITH RULE 32(a). .................................50
CERTIFICATE OF SERVICE. ...........................................................................51
iv
TABLE OF AUTHORITIES
Cases Page
Allstate Ins. Co. v. Bates, 185 F.Supp. 2d. 607 (E.D.N.C. 2000) .......................41
American Commerce Ins. Co. v. Porto, 811 A.2d 1185 (R.I. 2002) ...................28
American Home Assur. Co. v. First Specialty Ins. Corp., 73 Mass.

App. Ct. 1 (2008) .......................................................................................26
American States Ins. Co. v. Smith, 133 F.3d 363 (5th Cir. 1998).......................39
Bagley v. Monticello Ins. Co., 430 Mass. 454 (1999).............................25, 26, 27
Brazas Sporting Arms, Inc. v. American Empire Surplus Lines Ins.

Co., 220 F.3d 1 (1st Cir. 2000) ...........................................................25,30
Bushkin Assocs. Inc. v. Raytheon Co., 393 Mass. 622 (1985) ..........................21
Cable Mills, LLC v. Coakley Pierpan Dolan and Collins Ins.

Agency, Inc., 82 Mass. App. Ct. 415 (2012).............................................43
Cincinnati Ins. Co. v. Beazer Homes Invs., LLC, 594 F.3d 441 (6th
Cir. 2010) vacated on other grounds 399 F. Appx 49, 49 (6th
Cir. 2010)...................................................................................................47
Clarendon Nat. Ins. Co. v. Arbella Mut. Ins. Co., 60 Mass. App. Ct.
492 (2004)..................................................................................................21
Commerce Ins. Co. v. Finnell, 41 Mass. App. Ct. 701 (1996) ............................26
Commerce Ins. Co. v. Theodore, 65 Mass. App. Ct. 471 (2006) ........................26
Commerce Ins. Co. v. Ultimate Livery Service, Inc., 452 Mass. 639
(2008).........................................................................................................32
Davler, Inc. v. Arch Ins. Co., 229 Cal. App. 4th 1024 (2d Dist. 2014)...............34
Doe v. Liberty Mut. Ins. Co., 423 Mass. 366 (1996)...........................................37
Dykes v. DePuy, Inc., 140 F.3d 31 (1st Cir. 1998) .............................................20
Emasco Ins. Co. v. Diedrich, 394 F.3d 1091 (8th Cir. 2005) ..............................40
v
Erie R.R. Co. v. Tompkins, 304 U.S. 64 (1938) .....................................................
Evanston Ins. Co. v. Affiliated FM Ins. Co., 556 F. Supp. 135 (D.
Conn. 1983) ...............................................................................................47
Faigin v. Kelly, 184 F.3d 67 (1st Cir. 1999)........................................................48
Farm Family Mut. Ins. Co. v. Samperi, No. 16-157 (D. Conn. Mar.
15, 2017) ....................................................................................................41
Ferguson v. General Star Indem. Co., 582 F. Supp. 2d 91 (D. Mass.

2008) ..........................................................................................................25
Finn v. National Union Fire Ins. Co. of Pittsburgh, Pa., 452 Mass.
690 (2008)..................................................................................................25
Frank and Freedus v. Allstate Ins. Co., 45 Cal. App. 4th 461 (1996) .................34
Frontier Oil Corp. v. RLI Ins. Co., 153 Cal. App. 3d 1436 (2007) .....................44
Fuller v. First Financial Ins. Co., 448 Mass. 1 (2006).........................................26
Hall v. GE Plastic Pacific PTE Ltd., 327 F.3d 391 (5th Cir. 2003) ....................48
Hingham Mut. Fire Ins. Co. v. Smith, 69 Mass. App. Ct. 1 (2007) ..............26, 28
Horace Mann Ins. Co. v. Barbara B., 846 P.2d 792 (Cal. 1993) .........................37
Howard v. Guidant Mut. Ins. Group., 785 A.2d 561 (R.I. 2001) ........................39
HS Services Inc. v. Nationwide Mutual Insurance Company, 109

F.3d 642 (9th Cir. 1997) ............................................................................36
In re Relafen Antitrust Litig., 286 F. Supp. 2d 65 (D. Mass. 2003)....................47
InterGen N.V. v. Grina, 344 F.3d 134 (1st Cir. 2003).........................................45
Klaxon v. Stentor Electric Mfg. Co., 313 U.S. 487 (1941) ................................20
Liberty Mutual Ins. Co. v. Metropolitan Ins. Co., 260 F.3d 54 (1st
Cir. 2001)...................................................................................................27
Liquor Liab. Joint Underwriting Ass'n of Mass. v. Hermitage Ins.

Co., 419 Mass. 316 (1995) ........................................................................26
vi
Loyola Marymount University v. Hartford Accident & Indemnity

Co., 219 Cal. App. 3d 1217 (1990) ...........................................................34
Lydon v. Boston Sand & Gravel Co., 175 F.3d 6 (1st Cir. 1999) .......................48
McCord v. Horace Mann Ins. Co., 390 F.3d 138 (1st Cir. 2004)........................22
Medical Records Associates, Inc. v. American Empire Surplus Lines

Ins. Co., 142 F.3d 512 (1st Cir. 1998) ......................................................27
Merchants Insurance Co. of New Hampshire v. United States

Fidelity & Guaranty Co., 143 F.3d 5 (1st Cir. 1998) ................................27
Metropolitan Property & Cas. Ins. Co. v. Fitchburg Mut. Ins. Co., 58
Mass. App. Ct. 818 (2003) ........................................................................26
New England Mut. Life Ins. Co. v. Liberty Mut. Ins. Co., 40 Mass.
App. Ct. 722 (1999) .......................................................................24, 25, 27
New Hampshire v. Maine, 532 U.S. 742 (2001) ...........................................45, 49
North Am. Specialty Ins. Co. v. Lapalme, 258 F.3d 35 (1st Cir.
2001) .............................................................................................................
Open Software Foundation, Inc. v. USF&G, 307 F.3d 11 (1st Cir.

2002) ..........................................................................................................43
Otis v. Arbella Mut. Ins. Co., 443 Mass. 634 (2005) ..........................................49
Patriot Cinemas, Inc. v. Gen. Cinema Corp., 834 F.2d 208 (1st Cir.
1987) ..........................................................................................................45
Pegram v. Herdrich, 530 U.S. 211 (2000) ...........................................................45
Peterson v. Clark Leasing Corp., 451 F.2d 921 (9th Cir. 1971)..........................46
Philbrick v. Liberty Mutual Fire Ins. Co., 934 A.2d 582 (N.H. 2007)................40
Rischitelli v. Safety Ins. Co., 423 Mass. 703 (1996) .....................................26, 30
Rodgers v. Sargent Controls & Aerospace, 136 Cal.App.4th 82

(2006).........................................................................................................45
vii
Sarah G. v. Maine Bonding and Casualty Co., 866 A.2d 835 (Me.
2005) ..........................................................................................................41
Semtek Intern. Inc. v. Lockheed Martin Corp., 531 U.S. 497 (2002) .................45
Stop & Shop Cos. v. Federal Ins. Co., 946 F.Supp. 99 (D. Mass.
1996), rev'd on other grounds, 136 F.3d 71 (1st Cir. 1998) ......................47
United Nat. Ins. Co. v. Parish, 48 Mass. App. Ct. 67 (1999) ..............................26
United States Golf Assn v. Arroyo Software Corp., 69 Cal. App.

4th 607 (1999)............................................................................................46
United States v. Levasseur, 846 F.2d 786 (1st Cir. 1988) ...................................45
Welch Foods, Inc. v. National Union Fire Ins. Co. of Pittsburgh, PA,
659 F.3d 191 (1st Cir. 2011) .....................................................................43
Worcester Ins. Co. v. Fells Acres Day Sch., Inc., 408 Mass. 393
(1990).........................................................................................................26
Wyner v. North American Specialty Ins. Co., 78 F.3d 752 (1st Cir.
1996) .........................................................................................................43
Statutes
California Civil Code 1646...............................................................................44
G.L. c. 175 113L ...............................................................................................31
Other Authorities
1B MOORE'S FEDERAL PRACTICE 0.443 ..................................................47
Restatement (Second) of Conflict of Laws 6 (1971) ........................................22
Restatement (Second) of Conflict of Laws 188 (1971) ....................................22
Restatement (Second) of Conflict of Laws 193 (1971) ....................................21
viii
REASONS WHY ORAL ARGUMENT SHOULD BE HEARD
Pursuant to Fed. R. App. P. 34(a) and Local Rule 34(a), Plaintiff AIG
Property Casualty Company (AIG Property) requests that the Court schedule this
case for oral argument. In support of this request, Plaintiff states that this case
presents an important legal issue that has consequences for cases pending in this
Commonwealth and around the United States, namely whether and to what extent
tort claimants may plead around broad policy exclusions. Furthermore, it is
Plaintiffs belief that this Court would benefit from the opportunity to ask
questions and that oral argument would substantially aid and enhance the Courts
decisional process.
JURISDICTIONAL STATEMENT
Pursuant to Fed. R. App. P. 28(a), Plaintiff AIG Property states that
jurisdiction in this case is proper pursuant to 28 U.S.C. 1332 in light of the
diverse citizenship of the parties. AIG Property is a Pennsylvania corporation with
its principal place of business in New York City. Defendants Tamara Green and
Louisa Moritz reside in California. Defendants Therese Serignese and Linda
Traitz live in Florida. Defendant Barbara Bowman resides in Arizona. Defendant
Joan Tarshis lives in New York. Defendant Angela Leslie lives in Michigan.
Defendant Kristina Ruehli is a resident of New Hampshire. Defendant Kathrine
McKee is a resident of Nevada. Defendant William H. Cosby, Jr. (Cosby) is a
1
citizen of Massachusetts. The amount in controversy exceeds $100,000, exclusive
of interest and costs.
This Court also has jurisdiction under 28 U.S.C. 1291. Pursuant to F. R.
App. A. 3(a) and 4, Plaintiff is appealing from a final decision of the U.S. District
Court for the District of Massachusetts (Springfield), the Honorable Mark G.
Mastroianni presiding. Plaintiff appeals as of right from the District Courts
Memorandum and Order Regarding Cosbys Motion to Dismiss, dated November
8, 2016, and the District Courts final Order and Judgment, which disposed of all
of the parties claims before the District Court. Plaintiff filed this Notice of Appeal
on May 30, 2017.
STATEMENT OF LEGAL ISSUES
1. Did the District Court err in failing to find that Massachusetts law solely
governs the interpretation of these Massachusetts insurance policies?
2. Did the District Court err in finding that the underlying claims for
defamation do not arise out of excluded sexual misconduct because the
conduct in question was independent of Defendant Cosbys alleged
sexual assaults on the claimants?
3. Did the District Court err in finding ambiguity in the AIG Property
sexual misconduct exclusions on the basis that other provisions in the
2
policy more clearly stated AIG Propertys intent to broadly exclude all
claims involving sexual misconduct?
4. Was the District Court correct in refusing to judicially estop AIG
Property from contending that Massachusetts law solely governs the
interpretation of these policies?
STATEMENT OF THE CASE
During 2014, William H. Cosby, Jr. was an insured under two liability
insurance policies issued by AIG Property: (1) a Massachusetts Homeowners
policy (No. PCG 006004261)1 and (2) and a Personal Excess Liability policy (No.
PCG 006235889). 2 The policies require AIG Property to pay damages [Cosby] is
legally obligated to pay for personal injury or property damage caused by an
occurrence covered by this policy anywhere in the world. The policies definition
of personal injury includes defamation, libel or slander.
The Massachusetts Homeowners Policy contains an exclusion which states
that it does not provide coverage for liability, defense costs or any other cost or
expense for . . . [p]ersonal injury arising out of any actual, alleged, or threatened by
any person: (a) sexual molestation, misconduct or harassment; . . . or (c) sexual,
physical or mental abuse. 3 Similarly, the Excess Policy contains an exclusion stating
1 AIG Record Appendix (hereafter AIG RA) 0174-298

2 AIG RA 0299-0362
3 AIG RA 0195-96
3
it does not provide coverage for liability, defense costs or any other cost or expense. .
. [a]rising out of any actual, alleged or threatened: a. Sexual misconduct, molestation
or harassment . . . or c. Sexual, physical or mental abuse. 4
During 2014 and 2015, several women filed suit against Cosby alleging that he
had sexually assaulted them in the past and that, in subsequently denying these claims,
had defamed their reputations (the Underlying Actions). Cosby tendered the
defense of the Underlying Actions to AIG Property, which agreed to provide a
defense under a full reservation of rights. Owing to AIG Propertys reservation of
rights, this defense has been conducted by counsel of Cosbys own choosing at AIG
Propertys expense.
On June 26, 2015, AIG Property commenced an action for declaratory relief in
the division of the U.S. District of Massachusetts where the Underlying Actions are
venued and where Cosbys residence is located, seeking a declaration that it did not
owe coverage for the Underlying Actions under either policy since the claims arose
out of alleged sexual misconduct and were therefore excluded from coverage. At the
same time, AIG Property also commenced an action for declaratory relief in the U.S.
District Court for the Central District of California seeking a ruling that it did not owe
coverage for a suit brought by Janice Dickinson in that District.
4 AIG RA 0326-27
4
On November 3, 2015, the Central District Court in California granted Cosbys
Motion to Dismiss, declaring that, under California law, the AIG Property Sexual
Misconduct exclusions were susceptible of multiple reasonable meanings and were
therefore ambiguous. Judge O'Connell ruled that whereas some California courts
had given an expansive view of arising out of whereas others interpreted it as
meaning "caused by. [AIG RA 0389]. In light of this disagreement among
courts, the California District Court ruled that these exclusions were ambiguous
since they could be said to apply to claims that merely relate to sexual
misconduct or, as Cosby argued, claimed that are proximately caused by sexual
misconduct. [AIG RA 0390]. Further, the Court pointed to allegations of liability
on the part of Cosby that were purportedly independent of any sexual misconduct,
such as the plaintiffs claim that Cosby had intentionally drugged Dickinson even
though he knew that she had been in a rehab center for addiction [AIG RA 391-92]
This reasoning was largely adopted by the Massachusetts District Court in a
Memorandum and Order granting Cosbys motion to dismiss on November 8, 2016.
[AIG RA 0395-0411] While rejecting Cosbys claim that AIG Property was
judicially estopped to dispute the application of California law to this controversy, the
court declared that whether the law of California or Massachusetts controlled, AIG
Property had a duty to defend because the allegations in the Underlying Actions that
Cosby had defamed them in refuting their claims of past sexual assaults did not
5
unambiguously arise out of excluded Sexual Misconduct. The District Court entered
a final Order and Judgment on April 20, 2017, declaring that Cosby was entitled to a
defense from AIG Property but that the issue of AIG Propertys potential obligation to
pay any resulting judgments could not yet be determined and would, by agreement of
the parties, be dismissed without prejudice to the right to file a new action if warranted
by future developments. AIG Property was also ordered to pay Cosby the sum of Six
Hundred and Seventy-Five Thousand dollars ($675,000) for the cost of litigating this
coverage dispute. [AIG RA 0413-14] This appeal followed.
STATEMENT OF THE FACTS
Cosby is an entertainer who gained widespread popularity between the
1960s and 1980s as a comic and then as the star of his own family-oriented
television show.
I. The Underlying Claims
During the past several years, numerous women have come forward with
allegations that they were drugged and sexually assaulted by Cosby in years past.
Among these women are the claimants named in this case.
In 2014, Tamara Green, Theresa Serignese, Linda Traitz, Louisa Moritz,
Barbara Bowman, Joan Tarshis and Angela Leslie filed suit against Cosby in the
Western Division of the Massachusetts District Court. 5 In their Third Amended
5 AIG RA 0002-0062
6
Complaint filed on November 13, 2015, the claimants allege that they had been
sexually assaulted in the past by Cosby and his denial that these assaults had ever
occurred defamed them:
--Tamara Green [AIG RA 0004-9]
Tamara Green alleges that she first met Cosby in 1969 or 1970 when she
was an aspiring model and singer. She alleges that Cosby invited her to lunch and
during the meal gave her some pills to take that made her weak, dizzy and
woozy. Cosby then allegedly took Green to her apartment where he attempted to
rape her. [AIG RA 0005-6] Green first disclosed this incident publicly in a 2005
newspaper interview.. [AIG RA 0006] Cosby responded through his lawyer that
these accusations were absolutely false and that the incident did not happen in
any way, shape or form and, as Green alleges in her suit, publicly branded her
as a liar [AIG RA 0009-10]
Green repeated these allegations in a 2014 interview with Newsweek
magazine. Cosby again denied that this assault had ever occurred. Ms. Green
alleges that these denials continued [Cosbys] pattern of branding Plaintiff Green
as a liar that he began in 2005. [AIG RA 0007]
--Therese Serignese [AIG RA 0011-14]
Theresa Serignese claims that she met Cosby in 1976 in Las Vegas, where
she was an aspiring model. Cosby invited her to a show and suggested that she take
7
some pills, which put her into an altered state of consciousness. [AIG RA 12].
While in this altered state, Serignese alleges that Cosby raped her. [AIG RA 13]
Serignese reported this incident for the first time on November 4, 2014. Through a
spokesperson, Cosby denied Serigneses claims and implied that she was a liar.
[AIG RA 0014]
--Linda Traitz [AIG RA 0014-16]
Linda Traitz alleges that she met Cosby when she was an 18 year old
waitress. One day, Cosby offered Traitz a ride home, which she accepted. Instead
of going home, however, Cosby allegedly took Traitz to a beach and offered her
some pills. Traitz declined to take the pills, after which Cosby forcibly assaulted
her. [AIG RA 0015] Traitz first disclosed this sexual assault on or about
November 18, 2014, through a post on Facebook. In response, Cosby denied the
sexual assault and implied that she was a liar. [AIG RA 0016]
--Louisa Moritz [AIG RA 0016-28]
In April 1969, Louisa Moritz, then a young actress, was in a room at NBCs
television studios in New York City waiting to make an appearance on The
Tonight Show when Cosby entered the room. Without any invitation or other
expression of consent from Moritz, Cosby allegedly approached, exposed his
penis, put his hands behind Moritzs head, and forced his penis into Moritzs
8
mouth over her resistance. [AIG RA 0017] Moritz disclosed this assault on
November 20, 2014. Cosby denied that her claims were true. [AIG RA 0018]
--Barbara Bowman [AIG RA 0018-23]
Barbara Bowman met Cosby in or about 1985, when she was a 17 year-old
model and an aspiring actress. Upon first meeting at a conference room in the
Turn of the Century Nightclub in Denver, Colorado, Cosby directed Bowman to go
to the bathroom and wet her hair. She complied. Upon her return, Cosby directed
Bowman to sit in a chair, close her eyes, and perform an improvisation exercise
with him by acting intoxicated. As she did, Cosby stood behind Bowman and,
without her consent, stroked her neck and upper chest. [AIG RA 0019]. Bowman
also alleges that she was sexually assaulted by Cosby on several occasions in the
1980s. [AIG RA 0020-21] Bowman publicly disclosed Cosbys sexual assaults in
2006 and again on October 27, 2014 and November 13, 2014. [AIG RA 0022]
Cosby denied Bowmans claims on November 16, 2014 in a manner that allegedly
defamed her. [AIG RA 0022]
--Joan Tarshis [AIG RA 0023-27]
Joan Tarshis first met Cosby through mutual friends in Los Angeles in or
about 1969-70 when she was a young, aspiring comedy writer. While in Los
Angeles, Cosby invited Tarshis to meet him at his bungalow to work on comedy
material. At the bungalow, Cosby prepared a mixed alcoholic drink for Tarshis,
9
which she drank. Tarshis alleges Cosby intentionally drugged her to facilitate his
later sexual assault. Tarshis claims that while in this altered state of consciousness
and on a couch, Cosby grabbed her head and hair such that she could not get away,
and forced her to perform oral sex on him. [AIG RA 0023-24]
Tarshis disclosed Cosbys sexual assaults in an account that was published
on www.hollywood-elsewhere.com, on or about November 16, 2014. On
November 20 and November 21, 2014, Cosby, directly, and vicariously through his
representatives, responded to Tarshiss disclosure by issuing a defamatory
statement denying the alleged sexual assaults. [AIG RA 0026]
--Angela Leslie [AIG RA 0027-29]

In or about 1990, Angela Leslie was a 28 year-old model and actress. She
sent a letter, resume, headshot, and VHS tape to a casting agency, hoping to obtain
a role in Cosbys upcoming movie, Ghost Dad. In response to Leslies
submission, Cosby personally contacted her and the two maintained a professional
relationship, occasionally contacting one another over the next two years. [AIG
RA 0027] In or about 1992, Leslie accepted Cosbys invitation to meet in Las
Vegas, Nevada, for professional reasons. After Leslie went to Cosbys hotel suite,
he directed her to perform an impromptu audition by acting intoxicated. Cosby
prepared an alcoholic drink, which Leslie only tasted. Cosby then directed Leslie
to go to the bathroom and wet her hair. She complied. When Leslie returned from
the bathroom, Cosby had undressed and gotten into bed. Without Leslies
10
consent, Cosby grabbed Leslies hand, poured lotion into her hand, pulled her
hand under the blankets, held his hand on top of hers, placed her hand on his
penis, and used her hand to masturbate himself. [AIG RA 0028] Leslie publicly
disclosed Cosbys alleged sexual assault against her in a 2014 published interview.
Cosby denied these claims, which Leslie says defamed her. [AIG RA 0028-29]
Defendants Kristina Ruehli and Katherine Mae McKee brought separate
actions seeking damages based on Cosbys denials of their claims of alleged
sexual assault:
--Kristina Ruehli [AIG RA 0156-164].
Kristina Ruehli filed suit against Cosby in the Western Division of the
Massachusetts District Court in November 2015. Ruehli alleges that in December
1965 she was employed as a secretary at a Los Angeles talent agency when Cosby
invited her to a party at his home. Ruehli arrived around 10:00 pm to find the
house nearly empty. Cosby invited her in and brought her to a bedroom, where he
prepared her two drinks. Ruehli accepted and consumed both drinks. After the
second drink, Ruehli alleges that she passed out. Upon regaining consciousness,
she found herself naked and on a bed with Cosby. Cosby allegedly had one hand
on the back of her head with his penis in her face, and was attempting to place his
penis in her mouth to force her to give him oral sex. [AIG RA 0158] Ruehli
alleges that Cosby issued a statement denying her 2014 allegations of sexual
misconduct, thereby defaming her. [AIG RA 0158-159]
--Katherine Mae McKee [AIG RA 0167-175].
11
Katherine McKee filed suit against Cosby in the Western Division of the
Massachusetts District Court in December 2015. McKee alleges that she first met
Cosby in or about 1964, when she was working as an aspiring actress and
showgirl in Las Vegas. In 1974, McKee accepted an invitation from Cosby to
meet while in Detroit, Michigan. [AIG RA 0169]. When McKee arrived at the
hotel room, Cosby invited her in. McKee alleges that as she entered the room,
Cosby physically attacked her. Cosby violently and forcefully grabbed McKee,
spun her such that she was facing away from him, lifted her dress, pulled down
her underwear, and proceeded to forcibly rape her. [AIG RA 0170]
On December 22, 2014, the New York Daily News published an article that
described the 1974 rape. In response to the article, Cosby, by or through his
attorney, Martin Singer wrote a December 22, 2014 letter to the New York Daily
News calling McKee a liar. [AIG RA 0171] In response to the letter, McKee
alleges that the New York Daily News published another article wherein it reported
that Cosby had denied the rape allegation. Cosby asserted that McKee had
[done] a lot of lying and that she defied credibility. [AIG RA 0172]
II. The AIG Property Policies
A. The AIG Property Primary Policy [AIG RA 0175-306]
AIG Property issued Massachusetts Homeowners Policy No. PCG
0006004261, effective for the Policy Period January 1, 2014 to January 1, 2015, to
William H. Cosby, Jr. Under the terms of this policy, AIG Property agreed:
HOMEOWNERS COVERAGE - POLICY PROVISIONS6
6 AIG RA 0186.
12
The insurance company named on your Declarations Page will

provide the insurance described in this policy. You agree to pay
the premium and comply with your responsibilities described in
this policy.
Various provisions in this policy restrict or exclude coverage. Read

the entire policy carefully to determine your rights and duties, and
what is and is not covered. We have no duty to provide coverage
unless there has been full compliance with policy PART IV -
CONDITIONS.
PART I - DEFINITIONS7
Words with special meanings are defined here or in the part of the
policy where they are used. Throughout the policy, defined terms will
be bolded when used.
****
Personal Injury means the following injuries, or resulting death:
****
c. Shock, emotional distress, mental injury;
d. invasion of privacy
e. Defamation, libel or slander;
****
PART III - LIABILITY8
A. Insuring Agreement
We will pay damages an insured person is legally obligated to
pay for personal injury or property damage caused by an
occurrence covered by this policy anywhere in the world,
unless stated otherwise or an exclusion applies.
7 AIG RA 0186-87
8 AIG RA 0194
13
****
C. Defense Coverage and Claim Expense

We will pay the costs to defend an insured person against any
suit seeking covered damages for personal injury or property
damage, even if the suit is false, fraudulent or groundless. You
may choose counsel from a panel of firms selected by us. If a
panel counsel is not established in the jurisdiction where the
suit is brought, we reserve the right to select counsel.
****
E. Exclusions9
This policy does not provide coverage for liability, defense
costs or any other cost or expense for:
****
9. Sexual Molestation or Corporal Punishment10
Personal injury arising out of any actual, alleged or

threatened by any person:
a. Sexual molestation, misconduct or harassment;
****
c. Sexual, physical or mental abuse.
B. The AIG Property Excess Policy [AIG RA 308-340]
AIG Property issued Personal Excess Liability Policy No. PCG
0006235889, effective for the Policy Period January 1, 2014, to January 1, 2015 to
Cosby. The Personal Excess Liability Policy states, in relevant part, as follows:
9 AIG RA 0195
10 AIG RA 0195-96
14
PERSONAL EXCESS LIABILITY COVERAGE - POLICY

PROVISIONS11
****
PART I - DEFINITIONS
Words with special meanings are defined here or in the part of the
policy where they are used. Throughout the policy, defined terms will
be bolded when used.
In this policy, the words you, your and yours mean the person
or persons named on the Declarations Page and his or her spouse who
lives in the same household. The words we, us, our and ours
mean the insurance company named on the Declarations Page. Also,
in this policy, the word(s):
****
Personal means the following injuries, or resulting death;
injury12 c. Shock, emotional distress, mental injury;
d. Invasion of privacy;
e. Defamation, libel or slander;
****
PART II - WHAT IS COVERED13
A. EXCESS LIABILITY
1. Insuring Agreement
We will pay damages an insured person is legally
obligated to pay because of personal injury or property
damage caused by an occurrence, covered by this policy
anywhere in the world:
11 AIG RA 0316.
12 AIG RA 0317
13 AIG RA 0319
15
a. In excess of damages covered by the required

underlying insurance or the Minimum Required
Underlying Limit, whichever is greater
PART V - WHAT IS NOT COVERED - EXCLUSIONS
A. As respects Excess Liability, Limited Employment Practices

Liability and Limited Charitable Board Directors and
Trustees Liability:
This insurance does not provide coverage for liability, defense
costs or any other cost or expense:
B. As respects Excess Liability, the following also applies:

This insurance does not provide coverage for liability, defense
costs or any other cost or expense:
3. Sexual Misconduct14
Arising out of any actual, alleged or threatened:
a. Sexual misconduct, molestation or harassment;
****
c. Sexual, physical or mental abuse.
SUMMARY OF ARGUMENT
The District Courts finding that the Sexual Misconduct exclusions were
ambiguous and that AIG Property therefore had a duty to defend the Underlying
Actions rests on three erroneous legal premises, namely (1) that California law was
relevant to the interpretation of these Massachusetts contracts; (2) that the
defamation allegations were independent of Cosbys claimed sexual misconduct
14 AIG RA 0326-27
16
and did not arise out of it; and (3) that these exclusions were ambiguous because,
however plain their language was, they could have been written more explicitly.
A. It Was Error To Apply California Law to this Massachusetts Policy
Massachusetts choice of law rules, which the District Court was bound to
apply, clearly require that Massachusetts law controls the interpretation of a
homeowners insurance and excess liability policy that were issued to a
Massachusetts homeowner. Although the District Court sought to avoid making an
explicit choice of law ruling in light of its finding that the law of California and
Massachusetts were in accord on the meaning of arising out of, there is, in fact, a
clear conflict that required such a ruling. (Page 20) In the view of the judge in the
California insurance coverage litigation, arising out of is synonymous with
proximate cause, whereas this Court and the Supreme Judicial Court have declared
that arising out of should be given a much more expansive meaning than
proximate cause that extends to events that are connected to or related to
excluded causes and would not have occurred but for those causes. It was
therefore error not to make a choice of law ruling and to consider California law in
interpreting these policies. (Pages 21-22).
B. It Was Error to Find that The Underlying Defamation Claims did

not Arise Out Of Excluded Allegations of Sexual Misconduct
It was also error to give such a constricted meaning to arising out of or to
find that the womens allegations that Cosby had defamed them by disputing their
17
allegations that he had sexually assaulted them did not arise out of allegations of
sexual misconduct. In so finding, the District Court seemingly focused on the
alleged assaults, which are claimed to have occurred decades ago. In this case,
however, the clear and direct cause of the womens claims that they were defamed
are Cosbys denial of their allegations in 2014 and 2015 that he had sexually
assaulted them. Cosbys statements denying the womens claims of sexual assault
and calling them liars are inextricably intertwined with and prompted by the
womens allegations that he was a rapist and therefore clearly fall within the
policies exclusions for clearly fell within the policies exclusions for liability
arising out of any actual [or] alleged . . . sexual molestation, misconduct or
harassment. (Brief, pp. 20-34).
In adopting the California view of arising out of that the District Court
judge in the California insurance coverage litigation had adopted the year before,
the Massachusetts District Court also ignored California precedents that, like
Massachusetts law, requires an expansive reading of arising out of (Brief, pp. 34-
38) as well as cases throughout the United States that have given a broad reading to
similar exclusions for sexual misconduct. (Brief, pp. 38-43).
C. It Was Error to Find Ambiguity In These Exclusions

Finally, it was error to find a duty to defend based on a claimed ambiguity in
the wording of the AIG Property policies exclusion for sexual misconduct.
18
Contrary to established principles of Massachusetts law, no alternative
interpretation supported by Massachusetts case law on arising out of was
presented to contradict or confound the reasonable meaning proposed by AIG
Property. Nor could ambiguity be manufactured by contrasting the plain meaning
of these exclusions with an entirely separate provision contained elsewhere in the
policy that had slightly different policy language. (Brief, pp. 43-44).
D. The Court Did Not Err In Refusing To Estop AIG Property From
Contesting The Application of California Law In this Case
It was not, however, error for the court below to reject Cosbys argument
that AIG Property should be judicially estopped from disputing the application of
California law in this case. There is no evidence that AIG Property has played
fast and loose with these cases. As detailed below, AIG Property argued in the
California insurance coverage litigation that California case law on arising out of
required an expansive interpretation similar to that given by Massachusetts law and
was relevant by reason of California Insurance Code Section 1646 (which is
irrelevant to this Massachusetts proceeding). In any event, this doctrine requires
that the partys contention have been adopted, whereas AIG Property did not
prevail in the California case and its positions were rejected. (Brief, pp. 44-50).
19
ARGUMENT
I. MASSACHUSETTS LAW CONTROLS THE MEANING OF

THESE INSURANCE POLICIES
In this case, the District Court elected not to make a formal choice of law
determination as it was his view that California and Massachusetts law were
aligned on the issues presented. In fact, it was error to consider California law as
Massachusetts law solely applies to the interpretation of these policies.
AIG Property argued in the California coverage litigation that both
California and Massachusetts courts have adopted an expansive interpretation of
arising out of that would defeat coverage for these claims. The California
District Court rejected that argument, however, based upon a narrow view of
arising out of that makes it synonymous with caused by. As that view is
diametrically opposed to the teachings of this Court and the Supreme Judicial
Court, an actual conflict exists between California and Massachusetts on the key
legal issue in this case that should have necessitated a choice of law determination
in this case by the Massachusetts District Court.
A federal court must apply the forum states rules for resolving conflicts of
law. Klaxon v. Stentor Electric Mfg. Co., 313 U.S. 487, 496 (1941); Dykes v.
DePuy, Inc., 140 F.3d 31, 39 (1st Cir. 1998). In contract cases such as this,
Massachusetts utilizes a functional choice-of-law approach that responds to the
interests of the parties, the States involved, and the interstate system as a whole.
20
Bushkin Assocs. Inc. v. Raytheon Co., 393 Mass. 622, 631 (1985). Therefore, in
the absence of a choice of law by the parties, contract rights are determined by the
local law of the state which, with respect to that issue, has the most significant
relationship with the transaction [. . .]. Id. at 631-32.
In insurance cases, Massachusetts courts look to the Restatement (Second),
Conflict of Laws to resolve choice-of-law questions. See Clarendon Nat. Ins. Co.
v. Arbella Mut. Ins. Co., 60 Mass. App. Ct. 492, 495 (2004). Section 193 of the
Restatement provides that the rights created by a contract of casualty insurance are
to be determined by the local law of the state that the parties to the insurance
contract understood would be the principal location of the insured risk during the
term of the policy unless some other state has a more significant relationship under
the principles of Section 6. Restatement (Second) of Conflict of Laws 193 (1971).
The principal location of the insured risk is emphasized because location often has
an intimate bearing on the nature of the risk, and may determine the terms and
conditions of the contract. Clarendon Nat. Ins. Co., 60 Mass. App. Ct. at 49 (citing
193, comment c). Therefore, courts give more weight to the location of the
insured risk, provided that the risk can be located principally in one state. Id.
Here, Section 193 considerations point to Massachusetts as the principal
location of the insured risk. AIG Property issued a Massachusetts Homeowners
Policy insuring Cosbys primary residence in Massachusetts. (emphasis supplied).
21
Similarly, the policies are replete with endorsements and forms required by
Massachusetts insurance regulators, including:
Homeowners Amendatory EndorsementMassachusetts (AIG RA 280, 344)
Increased Fungi or Bacterial CoverageMassachusetts (AIG RA 283, 347)
Massachusetts Liquid Fuel Endorsement (AIG RA 290, 354)
Tenants Relocation Expense EndorsementMassachusetts (AIG RA 291, 355)
There is not a single comparable endorsement conforming these policies to
the requirements of California law.
As these insurance policies were issued in Massachusetts in conformity with
Massachusetts regulatory requirements and Massachusetts law and as the risk
insured by these policies is principally located in Massachusetts, Massachusetts
law should govern the construction of these policies. McCord v. Horace Mann Ins.
Co., 390 F.3d 138 (1st Cir. 2004) (Massachusetts has a strong interest in
regulating insurance policies covering homes in Massachusetts).
The same result obtains under Section 188, which provides that the rights
and duties of the parties with respect to a contract issue are determined by the local
law of the state which, as to that issue, has the most significant relationship to the
transaction and to the parties under the principles of Section 6.15 Again,
15 The Section 6 factors are: (a) the needs of the interstate and international
systems; (b) the relevant policies of the forum; (c) the relevant policies of other
interested states and the relative interests of those states in the determination of the
22
Massachusetts law should govern because it has the most significant relationship to
the transaction and to the parties. AIG Property is providing Cosby, a
Massachusetts resident, with a defense under the Massachusetts Homeowners
Policy for claims pending in federal court in Massachusetts. No state other than
Massachusetts has any relationship, let alone a significant one, to the coverage
issues raised in this case. Accordingly, Massachusetts law controls.
II. THE SEXUAL MISCONDUCT EXCLUSION APPLIES

BECAUSE COSBYS PURPORTED LIABILITY FOR
DEFAMING THESE WOMEN ARISES OUT OF HIS
DENIALS OF THEIR ALLEGATIONS THAT HE SEXUALLY
ASSAULTED THEM
It is undisputed that the genesis of these defamation claims are the
underlying claimants allegations that they were branded as liars when Cosby
issued statements in 2014 and 2015 denying their claims that he had sexually
assaulted them in the past. It is also undisputed that, whether for reasons of shame
or fear of publicity or invasions of privacy, the passage of time prevents these
women from suing Cosby directly for these assaults. Accordingly, their sole
recourse at law are the present claims that, in refusing to admit to his past actions,
Cosby has defamed them by calling into question the truth of their recent
accusations of rape and sexual assault. In light of this clear connection between
particular issue; (d) the protection of justified expectation; (e) the basic policies
underlying the particular field of law; (f) certainty, predictability and uniformity of
result, and (g) ease in the determination and application of the law to be applied.
23
the womens claim that they were sexually assaulted by Cosby, Cosbys denials of
those assaults, and the present law suits, the defamation claims clearly arise out of
these allegations of sexual assault and are therefore excluded from coverage.
In this case, the underlying claimants seek damages from Cosby for
defamation, false light, and the intentional infliction of emotional distress after
Cosby and or his representatives publically denied their respective allegations of
sexual misconduct. Although these suits allege diverse theories of liability, what
matters is the substance of the claim not the legal label attached to it. New
England Mut. Life Ins. Co. v. Liberty Mut. Ins. Co., 40 Mass. App. Ct. 722, 727
(1999) ([i]t is the source from which the plaintiffs personal injury originates rather
than the specific theories of liability alleged in the complaint which determines the
insurers duty to defend).
The lower courts finding that AIG Propertys sexual misconduct exclusions
do not apply because the original assaults were remote in time from the present
defamation claims misses the point. Whether or not Cosby actually sexually
assaulted these women is irrelevant to whether coverage exists under the Policies.
Rather, coverage is barred because the defamation claims against Cosby all arise
out of allegations made by the underlying claimants in 2014-2015 that they were
sexually assaulted by Cosby.
24
Although Cosby asserts that these sexual misconduct exclusions do not
apply because any potential liability for defamation does not arise from his
statements denying these claims, those denials standing alone would not have
injured the claimants or resulted in liability for Cosby. Rather, liability arose
because these women first accused Cosby of sexual assault, which he then denied. .
Simply put, but for the allegations of sexual assault, there could be no denial of
said allegations or defamatory claim that these women are lying. The sexual
misconduct exclusion bars coverage because, each claimants alleged injuries
arise out of her claim of alleged . . . [s]exual molestation, misconduct or
harassment. Based on the plain terms of the exclusions, these allegations of sexual
assault are barred from coverage under the Policies.
A. Massachusetts Law
Under Massachusetts law, arising out of has been held to mean
originating from, growing out of, flowing from, incident to, or having
connection with. Brazas Sporting Arms, Inc. v. American Empire Surplus Lines
Ins. Co., 220 F.3d 1, 7 (1st Cir. 2000) and New England Mutual Life Ins. Co. v.
Liberty Mutual Ins. Co., 40 Mass. App. Ct. 722 (1996). The case law construing
the phrase is legion.16
16 See, e.g., Ferguson v. General Star Indem. Co., 582 F. Supp. 2d 91, 99 (D.
Mass. 2008); Finn v. National Union Fire Ins. Co. of Pittsburgh, Pa., 452 Mass.
690, 696-98 (2008); Bagley v. Monticello Ins. Co., 430 Mass. 454, 456-57 (1999);
25
Massachusetts law instructs courts to interpret the term arising out of
expansively regardless of whether it appears in an exclusion or a coverage grant;
it has a broader meaning than proximate cause, and is more analogous to but for
causation. See Bagley v. Monticello Ins. Co., 430 Mass. 454, 457 (1999), When
interpreting the phrase arising out of, the court examining the exclusion must
inquire whether there would have been personal injuries, and a basis for the
plaintiffs suit, in the absence of the objectionable underlying conduct. Id., citing
United Nat. Ins. Co. v. Parish, 48 Mass. App. Ct. 67, 70-71 (1999). 17
Liquor Liab. Joint Underwriting Ass'n of Mass. v. Hermitage Ins. Co., 419 Mass.
316, 317-22 (1995); Rischitelli v. Safety Ins. Co., 423 Mass. 703, 704 (1996);
Worcester Ins. Co. v. Fells Acres Day Sch., Inc., 408 Mass. 393, 412 (1990); Fuller
v. First Financial Ins. Co., 448 Mass. 1, 5-7 (2006); American Home Assur. Co. v.
First Specialty Ins. Corp., 73 Mass. App. Ct. 1, 6 (2008); Hingham Mut. Fire Ins.
Co. v. Smith, 69 Mass. App. Ct. 1, 4-5 (2007); Commerce Ins. Co. v. Theodore, 65
Mass. App. Ct. 471, 474 (2006); Metropolitan Property & Cas. Ins. Co. v.
Fitchburg Mut. Ins. Co., 58 Mass. App. Ct. 818, 821 (2003); Commerce Ins. Co. v.
Finnell, 41 Mass. App. Ct. 701, 702703 (1996); United Nat. Ins. Co. v. Parish,
48 Mass. App. Ct. 67, 68-71 (1999).
17 As with these state decisions, this court has consistently ruled that arising out
of merely requires that a claim be connected to an excluded event. See Liberty
Mutual Ins. Co. v. Metropolitan Ins. Co., 260 F.3d 54 (1st Cir. 2001), Medical
Records Associates, Inc. v. American Empire Surplus Lines Ins. Co., 142 F.3d 512,
516 (1st Cir. 1998) and Merchants Insurance Co. of New Hampshire v. United
States Fidelity & Guaranty Co., 143 F.3d 5, 9 (1st Cir. 1998)("under
Massachusetts law the phrase 'arising out of' denotes a level of causation that lies
between proximate and actual causation").
26
In New England Mutual Life, 40 Mass. App. Ct. 722, the Appeals Court
ruled that claims of misrepresentation, negligence, and loss of consortium against
the insured arose out ofdiscrimination which is unlawful or which is committed
by or at the direction of the insured because there would have been no basis for
suit but for the discrimination:
Without the underlying discriminatory acts against

Henderson, there would have been no personal injuries
and, therefore, no basis for a suit against the insureds for
misrepresentation, negligence, and loss of consortium.
Because all of these claims for personal injuries are
derived from the alleged discriminatory treatment of
Henderson by the insureds, we fail to see how they
survive the exclusionary clause. It is the source from
which the plaintiffs personal injury originates rather than
the specific theories of liability alleged in the complaint
which determines the insurer's duty to defend
Id. at 726.
Similarly, in Bagley, the Supreme Judicial Court declared that claims against
a motel for failure to provide reasonable security against assault and negligent
service of liquor had their genesis in the underlying act of rape, and were not
covered in light of language in the policy stating:
All coverage is excluded hereunder for any claim which

arises wholly or in part out of allegations of violation of
any federal, state, or local statute, ordinance, or law. This
exclusion shall specifically include but not be limited to
any sexual misconduct committed or alleged to have
been committed by any Insured or Additional Named
Insured.
27
430 Mass. at 456.
As in New England Mutual Life, the Supreme Judicial Court declared that
[it] is the source from which the plaintiff's personal injury originates rather than
the specific theories of liability alleged in the complaint which determines the
insurer's duty to defend. Id. at 458 (emphasis in original). As all of the claims
against the insured had their genesis in the rape of the claimant, the Bagley court
ruled that the insurer had no duty to defend as the diverse different claims against it
insured all arose out of an illegal act (ie. rape). Id. at 460. See also Hingham
Mutual Fire Ins. Co. v. Smith, 69 Mass. App. Ct. 1 (2007) (allegations that
homeowners were negligent in the supervision of their teenage son who sexually
molested a neighbors children clearly arose out of the sons misconduct and
were therefore subject to a sexual molestation exclusion in the policy). In ruling
that the negligent supervision claims did not trigger the insurers duty to defend,
the Appeals Court ruled in Smith that:
while the alleged cause of the injuries is different, the

bodily injuries allegedly suffered by the Smith children
are the same. See American Commerce Ins. Co. v. Porto,
811 A.2d at 1199. Thus, the policy's exclusion for bodily
injury "aris[ing] out of . . . sexual molestation" precludes
coverage.
Id. at 6.
The Porto case cited by the Appeals Court is instructive. In American
Commerce Ins. Co. v. Porto, 811 A.2d 1185 (R.I. 2002), the court held that
28
allegations that a local chapter of the Boy Scouts of America had been negligent in
its training or supervision of a troop leader who showed pornography to a scout
and molested him arose out of excluded sexual molestation. The court refused to
find that physical contact was necessary to constitute sexual molestation.
Further, the court rejected the insureds argument that independent allegations of
negligence were sufficient to trigger this coverage or that arising out of requires
a causal connection. The court ruled that, It is not the proximate cause of the
injury suffered that determines the insureds right to coverage under the policy
rather, it is the nature of the bodily injury suffered by the plaintiff and how the
alleged tortfeasor(s) supposedly inflicted these injuries. If the type of injuries
suffered are excluded from coverage under the language of the policy, no right to
coverage or duty to defend the insured existseven if, as here, the insureds
conduct is an alleged proximate cause of the injuries in question. Id. at 1196. The
court also ruled that the meaning of proximate cause in tort cases differs from
insurance contract cases. Whereas proximate cause in tort law refers to legal
culpability for an accident, as where the defendants conduct in causes or
contributes to the plaintiffs injuries (a but for test), in insurance coverage cases,
proximate cause is concerned not so much with culpability (why the injury
occurred) as the nature of the injury and how it physically happened. As a result,
while agreeing that the separate theories of negligence against Porto might give
29
rise to independent findings of liability, the court declared that it was the type of
injuries alleged by the plaintiff that determines the availability of coverage and
therefore ruled that all such claims arose out of the molestation of the plaintiff so
as to be excluded from coverage. Id.
A similarly expansive interpretation of arising out of was adopted by this
Court in Brazas Sporting Goods, 220 F.3d 1. In Brazas, a firearms distributor was
sued by the City of New York, the NAACP and other municipalities for marketing
practices that had allegedly contributed to a flood of cheap guns in Americas
cities. Brazas sought a defense to these suits under a Commercial General
Liability policy, notwithstanding an exclusion for losses arising out of the
insureds product. The insureds argument that this exclusion was only intended to
apply to defects in its products, whereas the New York civil actions were
addressed to the company's business management and strategy. However, this
Court ruled that firearms were the immediate source of the plaintiffs' injuries, and
the fact that the plaintiffs, to reach the deep pockets of the firearms industry,
contrived a theory of liability that targeted Brazas for its alleged participation in
flooding the firearms market cannot affect the application of the exclusion
provision. Id. at 7.
Despite these precedents, the District Court in this case ruled that the
defamation claims against Cosby were sufficiently independent of the sexual
30
misconduct such that the exclusions do not apply. (Order, p. 14). In so finding,
the court largely relied on the Supreme Judicial Courts opinion in Rischitelli v.
Safety Ins. Co., 423 Mass. 703 (1996). That reliance was misplaced.
In Rischitelli, a motorist sought uninsured motorist benefits for injuries that
he suffered after a motorist that he had collided with, exited his vehicle and
physically assaulted him. The issue before the court was whether the insureds
injuries arose out of the ownership, maintenance or use of the insured vehicle.
Id. at 704. In concluding that coverage did not apply, the court found that the
violence was an independent intervening act which broke the chain of causation
between the operation of the vehicles and the injuries or that the violence was
merely incidental to the use of the vehicles. Id. at 705. The court also took note
of the statutory framework for uninsured motorists coverage, observing that the
focus of G.L. c. 175 113L was damage from hit and run motor vehicles, not the
driver of those vehicles. Id.
In light of Rischitelli, the District Court ruled in this case that Cosbys
alleged sexual misconduct preceded, and set the context for, the defamation, but
nonetheless the two remain separate and discrete events. (Order p. 15). As this
Court ruled in Brazas, Rischitelli does not apply where the allegedly covered and
non-covered sources of injury are interdependent. 220 F.3d at 7. In contrast to
Rischitelli, the chain of causation between the womens allegations of rape and
31
sexual assault and Cosbys allegedly defamatory assertion that they are liars is
uninterrupted and direct. Far from being separate and independent acts as the
District Court concluded, the claimants allegations of rape and sexual assault by
Cosby are inseparably linked to the victims claims of defamation. The allegations
of sexual assault did not merely precede the defamatory denials; they created them.
The denials do not have meaning in and of themselves. They are only potentially
defamatory because they assert that these womenin claiming that Cosby raped
and sexually assaulted themwere publicly branded as liars.
This is consistent with the Supreme Judicial Courts most recent and
expansive analysis of arising out of. In Commerce Ins. Co. v. Ultimate Livery
Service, Inc., 452 Mass. 639 (2008), the court ruled that a drunk driving accident
arose out of of the insureds transportation of the driver from a club where he
had been drinking, even though the insured had not itself served alcohol to the
motorist and even though its vehicle was not involved in the accident.
Commerce argues that the plaintiffs' injuries did not arise

out of the use of Ultimate's van because no alcohol was
supplied by Ultimate, or Broderick, in the van and
because Ultimate's van was not involved in the collision.
We reject these arguments. Commerce's contentions
ignore the broad construction we have given to the phrase
"arising out of." See Ruggerio Ambulance Serv., Inc. v.
National Grange Mut. Ins. Co., supra at 797-798. The
argument also overlooks the consideration that no
requirement exists that the insured vehicle itself produce
the injury. See, e.g., Roe v. Lawn, supra at 69 (bus
driver's sexual assault on passenger in school bus arose
32
out of use of bus for transportation for victim between

home and school); LaPointe v. Shelby Mut. Ins. Co., 361
Mass. 558, 563-564 (1972) (explosion caused by
negligently installed propane gas tank was sufficiently
connected to motor vehicle used to deliver tank to be
deemed to have arisen out of vehicle's use); Assetta v.
Safety Ins. Co., 43 Mass. App. Ct. 317, 319 (1997)
(injury to plaintiff, struck by bottle thrown from moving
automobile, arose from use of vehicle). See also 8A G.
Couch, Insurance, supra at 119:31 ("coverage of a
policy for liability and damages 'arising out of the use of'
a vehicle is effective although there is no actual physical
contact of the vehicle with the persons or property
harmed").
Id. at 654.
As in Ultimate Livery, there is a clear and ineluctable nexus between the
womens claims in 2014 and 2015 that they had been sexually assaulted by Cosby
and his subsequent efforts to evade responsibility by challenging the veracity and
character of his accusers. The fact that many years have elapsed since the original
events may be the basis for these women not be able to sue for sexual assault or
from seeking criminal prosecutions; it does not cut the cord between their
subsequent recounting of these assaults and Cosbys efforts to defame them in
response.
That each of the plaintiffs claims against Cosby arise out of excluded
alleged sexual misconduct is reinforced by the counterclaims Cosby has filed in the
Green action. [AIG RA 66-154] In those counterclaims, Cosby alleges, inter alia, a
claim of defamation per se founded upon allegations that each plaintiff published
33
false and defamatory statements concerning the alleged sexual assaults:
Counterclaim Defendants have engaged in a campaign to assassinate Cosbys
reputation and character by willfully, maliciously, and falsely accusing Cosby of
multi-decade-old purported sexual misconduct. [AIG RA 0142] As a result, the
only liability issue that is necessary to resolve the parties competing defamation
claims is whether Cosby in fact raped or sexually assaulted each of the Green
plaintiffs. This underscores that all of these claims originate from, grow out of,
flow from, are incident to, or have connection with, the alleged sexual misconduct.
Stated differently, but for the alleged sexual misconduct, the defamation, false
light, and emotional distress claims would not exist. Accordingly, the claims
asserted against. Cosby all arise out of excluded alleged sexual misconduct.
B. California Law
Notwithstanding Judge OConnells ruling granting Cosbys motion to
dismiss in the California coverage litigation, California law is, in fact, largely
consistent with the Massachusetts jurisprudence on arising out of.
In Frank and Freedus v. Allstate Insurance Company, 45 Cal. App. 4th 461,
52 Cal. Rptr. 2d 678 (1996), a law firm discharged an employee who was believed
to be gay and then issued a notice to members of the firm stating that he had been
let go owing to his failure to perform and develop as an associate." The associate
sued for wrongful termination and defamation. The law firm sought a defense
34
from its liability insurer, which raised as a defense to coverage an exclusion in the
policy for claims arising out of termination of employment and other
employment-related practices. In sustaining this position, the California Court of
Appeal rejected the insureds argument that the defamatory statement was not
employment-related because it was issued after the associate had ceased to be an
employee. Accord Loyola Marymount University v. Hartford Accident &
Indemnity Co., 219 Cal. App. 3d 1217, 271 Cal. Rptr. 528 (1990)(post-
employment defamation held excluded as arising out of employment relationship).
More recently, the California Court of Appeal ruled in Davler, Inc. v. Arch
Ins. Co., 229 Cal. App. 4th 1024 (2014) that a trial court did not err in refusing to
find coverage for an ex-employees claims of sexual harassment, invasion of
privacy and false imprisonment. Despite the fact that the policy included coverage
for false imprisonment, the Court of Appeal agreed that these claims were
subject to an employment practices exclusion, as the allegation of false
imprisonment and detention occurred in an employment scenario and was for
employment purposes. The court declined to find ambiguity in the exclusion based
upon its use of phrases like such as and arising out of, nor did ambiguity arise
from the fact that the exclusion conflicted with the policys coverage for false
imprisonment. The fact that false imprisonment was not included among the
offenses enumerated in the exclusion was not, in the courts opinion, determinative
35
in view of the fact that the list was not described as being exclusive and merely set
forth examples of employment-related practices that were not covered.
In HS Services Inc. v. Nationwide Mutual Insurance Company, 109 F.3d 642
(9th Cir. 1997), the Ninth Circuit distinguished Frank and Freedus on the grounds
that the allegedly defamatory statement was made 3 months after the plaintiff was
fired. In contrast to Frank and Freedus, the Ninth Circuit also found that the
defamatory statements were not clearly employment related or made in the context
of the plaintiff's employment or directed to the plaintiff's performance during the
time of his employment. Rather, the remarks in question related to a competition
between two businesses in the marketplace. Thus, the court ruled that their relation
was too indirect and attenuated to qualify under the exclusion.
We hold that to "arise out of" a termination of

employment, the defamatory or market issue must have
been part of or directly and proximately resulted from the
termination. Here, the defamatory remarks were not a
part of Cade's termination, and their proximate cause as
Cade's own remark in the marketplace, made as a
competitor, concerning Cade-Grayson's financial
condition. Thus, the train of causation between the
termination and the remarks was broken.
Id. at 647.
As these cases make clear, there is no hard and fast rule in California
concerning arising out of any more than exists in Massachusetts. Contrary to
the District Courts rulings in Cosbys cases, California does not require that a loss
36
be caused by an event in order to arise from it. There must, however, be some
type of causal relationship linking the circumstances together in order for one to
arise out of the other. AIG Property submits that the facts in this case more
closely mirror Frank and Freedus and the cases following it than HS. The
allegedly defamatory statements by Cosby were specifically prompted by
allegations that he engaged in excluded conduct and do not concern collateral
matters unrelated to sexual assault. Furthermore, unlike these cases, defamation
was the sole legal remedy available to these women as the statute of limitations for
battery or sexual assault had long since expired.
California law does differ from the law of Massachusetts as regards its
recognition of so-called para-sexual behavior, such as hugging and holding
hands, which, while not itself inherently injurious, is part of a pattern of conduct
that ultimately leads to the plaintiff's alleged injuries. Under California law,
certain para-sexual conduct was held to give rise to a duty to defend in Horace
Mann Ins. Co. v. Barbara B., 846 P.2d 792 (Cal. 1993). The California District
Court relied on Barbara B.in finding a duty to defend based on allegations that
Cosby had drugged Dickinson despite knowing that she had a history of drug
problems. [AIG RA 0392]
In contrast to Horace Mann, the Supreme Judicial Court of Massachusetts
ruled in Doe v. Liberty Mut. Ins. Co., 423 Mass. 366 (1996), that stray allegations
37
of para-sexual conduct will not trigger an insurers duty to defend. 423 Mass. at
370. In Doe, a school principal was sued by a teenage girl with whom he had
conducted a consensual sexual liaison. Id. at 367. Even though the complaint
contained allegations of relatively benign conduct, such as holding hands, the court
ruled that such allegations had to be considered in the broader context of an on-
going sexual relationship over a period of months. Id. at 370-71.
Here, the only fair reading of the underlying claims is that Cosby allegedly
gave or attempted to give each drugs for the purpose of committing a sexual
assault. The plaintiffs claims are based on the torts of defamation, false light, and
emotional distress did not arise independently of the uncovered sexual misconduct.
It is all connected and originates from the excluded acts of sexual harassment and
misconduct. Since the potentially covered acts are inextricably intertwined with
and dependent on the commission of uncovered acts, coverage does not apply.
III. COURTS IN MASSACHUSETTS AND THROUGHOUT THE

UNITED STATES HAVE CONSISTENTLY GIVEN BROAD
EFFECT TO SIMILAR EXCLUSIONS FOR SEXUAL
MISCONDUCT
In the wake of widespread litigation arising out of claimed sexual assaults in
day care centers and other custodial institutions, insurers have adopted sexual
misconduct exclusions to eliminate any obligation to provide coverage that might
otherwise apply to such acts. With rare exception, these exclusions have been
given broad effect.
38
In Howard v. Guidant Mut. Ins. Group., 785 A.2d 561 (R.I. 2001), the
Rhode Island Supreme Court construed a policy exclusion for injury arising out of
any act of sexual misconduct to bar coverage for a defamation claim brought
against a priest who blamed a parishioner for a sexual affair. The court reasoned
as follows:
Despite an exclusion in the commercial general liability policy

for [a]ny personal injury, bodily injury and mental or
emotional pain or anguish, sustained by any person arising out
of or resulting from any actual or alleged act of sexual
misconduct of any kind, plaintiff argued that Martins claims
of defamation, false light and invasion of privacy were not
excluded under the terms of the policy. He asked us to read the
exclusion narrowly, and claimed that the letter, written five
months after the termination of his relationship with Martin, did
not arise out of or result from the alleged sexual
misconduct. It is our opinion, however, that the language of the
insurance policy clearly and unambiguously supports the
contrary conclusion. The letter that plaintiff read to the
congregation would never have been written had the sexual
misconduct never occurred, and the statements in the letter from
which Martins claims derived were intrinsically connected to
the sexual misconduct. Therefore, we must conclude that the
defamation, invasion of privacy, and false light claims arose
out of and resulted from the underlying sexual misconduct
and thus were excluded from coverage.
785 A.2d at 562-63.
The Howard court found persuasive the decision of the United States Court
of Appeals for the Fifth Circuit in American States Ins. Co. v. Smith, 133 F.3d 363
(5th Cir. 1998). In Smith, several liability insurers brought a declaratory judgment
action to determine if they had duty to defend or indemnify the insured the church
39
and four of its associate ministers on claims arising from alleged sexual
misconduct of churchs pastor-in-charge. Id. at 366. The policies provided that no
coverage exists for claims or suits brought against any insured for damages arising
from sexual action. Id. at 367. Construing the terms arising from broadly, the
court held that the insurers had no duty to defend or indemnify church and
ministers on claims of defamation, invasion of privacy, breach of fiduciary duty,
battery, and other claims originating from pastors sexual misconduct, as the
claims fell within a sexual action exclusion. Id. at 369-73.
In Philbrick v. Liberty Mutual Fire Ins. Co., 934 A.2d 582 (N.H. 2007), the
New Hampshire Supreme Court declared that negligent entrustment claims against
a homeowner for failing to prevent the sexual molestation of the plaintiff's children
by their son "arose out of" sexual molestation so as to be excluded. The court
concluded that there would be no injuries and, therefore, no damages under the
negligence claims absent the sexual molestation. Thus, the alleged bodily injuries
did "arise out of" the excluded act of sexual molestation and, therefore, the
exclusion applies to preclude coverage. Id. at 586. See also Allstate Ins. Co. v.
Bates, 185 F.Supp. 2d. 607, 613 (E.D.N.C. 2000) ([w]ithout the molestation there
would be no injury and thus, no basis for the negligence claim").
The U.S. Court of Appeals for the Eighth Circuit ruled in Emasco Ins. Co. v.
Diedrich, 394 F.3d 1091 (8th Cir. 2005) that a federal district court in South Dakota
40
did not err in holding that allegations that the insureds teenage son sexually
molested a minor who was being cared for at the insureds home daycare center
were subject to an exclusion in the homeowners policy for injuries that arose out
of sexual molestation, corporal punishment, or physical or mental abuse.
Notwithstanding the insureds contention that the claim was for negligent
supervision not the intentional acts of the insureds son, the court ruled that the
intentional acts exclusion was not restricted to acts committed by the insured and
therefore defeated coverage here.
The Maine Supreme Judicial Court ruled in Sarah G. v. Maine Bonding and
Casualty Co., 866 A.2d 835 (Me. 2005) that an exclusion for injuries arising out of
the actual or threatened abuse or molestation by anyone of any person while in the
care, custody or control of any insured precluded coverage for a reach and apply
action brought by the families of several young girls who were paid to pose nude
by a motel operator. The court rejected the plaintiffs contention that abuse was
overbroad or ambiguous and declared that it should apply here where the claims
arose out of the insureds sexual exploitation of minor children.
In Farm Family Mut. Ins. Co. v. Samperi, No. 16-157 (D. Conn. Mar. 15,
2017), a Connecticut District Court ruled that any personal injury coverage was
defeated by a policy exclusion for claims arising out of sexual abuse and
molestation. The District Court rejected the insureds argument that the plaintiffs
41
false imprisonment claim was independent of this exclusion, declaring that its
factual allegations were inextricably intertwined with the allegations of abuse and
molestation. The court found that the false imprisonment claim would not have
existed but for the sexual abuse and was thus excluded.
IV. THE DISTRICT COURT ERRED IN FINDING AMBIGUITY

BASED ON CLAIMED INTERNAL INCONSISTENCIES IN
THE AIG PROPERTY POLICIES
The District Court further found ambiguity in these sexual misconduct
exclusions by contrasting them with a separate exclusion in the Excess Policy
applicable to Limited Charitable Board Directors and Trustees Liability that
barred coverage for damage arising out of, or in any way involving, directly or
indirectly, any alleged sexual misconduct. The District Court declared that if
AIG wanted to exclude from coverage all expenses merely involving or
indirectly arising out of sexual misconduct, it could have used that language in
the sexual misconduct exclusions at issue. (Order, p. 15).
The Limited Charitable Board Directors and Trustees Liability exclusion
precluding coverage for liability arising out of, or in any way involving, directly
or indirectly, any alleged sexual misconduct, child abuse or neglect, including but
not limited to employment, supervision, reporting to the proper authority, failure to
so report a retention of any person merely addresses the specific types of
secondary liability which a director or trustee of a qualifying organization may
42
face, and reflects an intent to preclude coverage for such liability. Again, the
addition of similar wording adds nothing to the meaning of the exclusions at issue.
The doctrine of noscitur a sociis may be relied on to elucidate the meaning
of a word by the words immediately surrounding it. See Open Software
Foundation, Inc. v. USF&G, 307 F.3d 11 (1st Cir. 2002). However, as this court
recognized in Welch Foods, Inc. v. National Union Fire Ins. Co. of Pittsburgh, PA,
659 F.3d 191 (1st Cir. 2011) there are limits to this doctrine and it may not be
relied on to create ambiguity in otherwise plain meaning.
In the final analysis, speculation that a provision could have written the
exclusion differently does not render its otherwise clear terms ambiguous. See
Wyner v. North American Specialty Ins. Co., 78 F.3d 752, 759 (1st Cir. 1996)
(declining to find ambiguity based on different use of capitalizations and wording
in liability policy: in the absence of directly conflicting word
meaningsMassachusetts courts appear to find ambiguity in insurance contracts
somewhat sparingly); Cable Mills, LLC v. Coakley Pierpan Dolan and Collins
Ins. Agency, Inc., 82 Mass. App. Ct. 415, 423-25 n. 13 (2012) (rejecting contention
that insurers failure to use phrase arising out of in lieu of the phrase for in an
exclusion rendered it unclear or ambiguous). Consequently, the wording of other
policy exclusions does not change or alter the meaning of the sexual misconduct
exclusions at issue which apply on their face.
43
V. THE DISTRICT COURT DID NOT ERR IN REFUSING TO

ESTOP AIG PROPERTY FROM ARGUING THAT
MASSACHUSETTS LAW GOVERNS THE CONSTRUCTION
OF THESE INSURANCE POLICIES
The District Court did not err in refusing to find that AIG Property was
judicially estopped to argue for Massachusetts law in light of statements made in
the California coverage litigation. Not only did AIG Property not prevail in those
proceedings but, as may be seen, it did not take a choice of law position in that
case that is inconsistent with what it advocates here.
In the California coverage litigation, AIG Property argued, based upon
California Civil Code 1646, that California law should control the interpretation
of the California policies, Massachusetts law should be applied to the
Massachusetts policies, and based upon Frontier Oil Corp. v. RLI Ins. Co., 153
Cal. App. 3d 1436, 1461 (2007), California duty to defend principles apply
because the case is pending in that jurisdiction. [AIG RA 419-20] Its brief
identified the similarities between Massachusetts and California law regarding the
general rules of policy construction (i.e., carriers have the right to limit coverage;
exclusions must be conspicuous, plain and clear; words must be given their fair
and reasonable meaning; the exclusions apply as written). [AIG RA 420-24]
The brief also discussed the ordinary and popular meaning of the word alleged
[AIG RA 423-25] and the respective states broad construction of the phrase
arising out of. [AIG RA 424-26] Judge OConnell therefore noted in her
44
decision: Plaintiff asserts that Massachusetts and California law ought to govern
this case, but represents that the law of those states do not conflict. Therefore, the
Court will apply California law, the law of the forum state. (AIG RA 0385) The
court went on to disagree with AIG Propertys interpretation of the phrase arising
out of under California law finding it ambiguous under California law. It never so
much as considered if Massachusetts law would yield the same result.
The doctrine of judicial estoppel prevents a litigant from pressing a claim
that is inconsistent with a position taken by that litigant either in a prior legal
proceeding or in an earlier phase of the same legal proceeding. InterGen N.V. v.
Grina, 344 F.3d 134, 144 (1st Cir. 2003); accord Pegram v. Herdrich, 530 U.S.
211, 227 n. 8 (2000). The doctrine's primary utility is to safeguard the integrity of
the courts by preventing parties from improperly manipulating the machinery of
the judicial system. See New Hampshire v. Maine, 532 U.S. 742, 750 (2001);
United States v. Levasseur, 846 F.2d 786, 792 (1st Cir. 1988). Courts typically
invoke judicial estoppel when a litigant is playing fast and loose with the courts.
Patriot Cinemas, Inc. v. Gen. Cinema Corp., 834 F.2d 208, 212 (1st Cir. 1987).
Federal common law governs the claim-preclusive effect of a dismissal by a
federal court sitting in diversity. Semtek Intern. Inc. v. Lockheed Martin Corp.,
531 U.S. 497, 508 (2002). Thus, when a federal court sitting in diversity issues a
decision on state law grounds, other federal courts apply the law that would be
45
applied by state courts in which the first federal court sits as to the preclusive
effect of that decision. Id. On this basis, any adverse rulings of a federal court
based on a states laws are governed by that states collateral estoppel principles in
other federal jurisdictions. Therefore, California collateral estoppel standards will
apply in the Massachusetts declaratory relief action.
California law applies the doctrine of collateral estoppel where three (3)
factors are present: (1) the issue necessarily decided at the previous proceeding is
identical to the one which is sought to be relitigated; (2) the previous proceeding
resulted in a final judgment on the merits; and (3) the party against whom
collateral estoppel is asserted was a party, or in privity with a party, at the prior
proceeding. See Rodgers v. Sargent Controls & Aerospace, 136 Cal.App.4th 82,
90 (2006). Under California law, however, when the proceeding in which issue
preclusion is currently sought involves different substantive law than the previous
proceeding, collateral estoppel does not apply. United States Golf Assn v. Arroyo
Software Corp., 69 Cal. App. 4th 607, 617-18 (1999). In Peterson v. Clark Leasing
Corp., 451 F.2d 921 (9th Cir. 1971), the court observed that [t]he doctrine of
collateral . . . applies only to issues that are identical in both actions. Issues are not
identical if the second action involves application of a different legal standard,
even though the factual setting of both suits be the same. Id. at 1292, citing 1B
46
MOORE'S FEDERAL PRACTICE 0.443[1]-[2]; see also In re Relafen Antitrust
Litig., 286 F. Supp. 2d 56, 65 (D. Mass. 2003), citing same.
The same rule applies in insurance cases. See, e.g., Stop & Shop Cos. v.
Federal Ins. Co., 946 F.Supp. 99 (D. Mass. 1996), rev'd on other grounds, 136
F.3d 71 (1st Cir. 1998) (judicial declaration of coverage did not have preclusive
effect in subsequent suit where Massachusetts law governed); Evanston Ins. Co. v.
Affiliated FM Ins. Co., 556 F. Supp. 135 (D. Conn. 1983) (priority of coverage
issue decided under Pennsylvania law did not have collateral estoppel effect in
case where Connecticut law would apply to same issue); Cincinnati Ins. Co. v.
Beazer Homes Invs., LLC, 594 F.3d 441, 445 (6th Cir. 2010), vacated on other
grounds 399 F. Appx 49, 49 (6th Cir. 2010) (recognizing choice-of-law
distinctions to not bar litigation of same issue under different states law).
Cosby moved to dismiss Counts I and III of the California action pursuant to
California law. The federal court in California decided, pursuant to California
choice-of-law principles, to apply California law. It declared AIG Property owed
a duty to defend Cosby against the lawsuit brought against him by Janice
Dickinson in California, based exclusively on California law and the specific facts
of that case.18 Here, AIG Property asks this court to declare that, under
18 In California, where the court is presented with an issue regarding the

interpretation of a contract, Cal. Civ. Code 1646 governs the choice of law
determination. See Frontier Oil Co. v. RLI Ins. Co., 153 Cal. App. 4th 1436, 1443
47
Massachusetts law, the terms of coverage under a Massachusetts Homeowners
Policy, issued to a Massachusetts resident, applies to the claims pending in
Massachusetts. To the extent the California Court interpreted arising out of
narrowly, it did so in conflict with Massachusetts law. Therefore, collateral
estoppel does not apply to prevent the Court from adjudicating the coverage issue
raised in this case.
Two conditions must be satisfied before judicial estoppel can attach. Hall v.
GE Plastic Pacific PTE Ltd., 327 F.3d 391, 396 (5th Cir. 2003). First, the
estopping position and the estopped position must be directly inconsistent, that is,
mutually exclusive. See Faigin v. Kelly, 184 F.3d 67, 82 (1st Cir. 1999). Second,
the responsible party must have succeeded in persuading a court to accept its prior
position. See Lydon v. Boston Sand & Gravel Co., 175 F.3d 6, 13 (1st Cir. 1999).
The presence of these elements creates the appearance that either the first court has
been misled or the second court will be misled, thus raising the specter of
inconsistent determinations and endangering the integrity of the judicial process.
See New Hampshire v. Maine, 532 U.S. 742, 75051 (2001).
AIG Property has not played fast and loose with the courts or tried to
mislead anyone. It has maintained a consistent position throughout - the phrase
(2007). Under Civil Code 1646, a contract is to be interpreted according to the

law and usage of the place it is to be performed if the contract indicate[s] a place
of performance and according to the law and usage of the place it was made if the
contract does not indicate a place of performance.
48
arising out of as it appears in the subject exclusions is unambiguous and
construed broadly, whether by the courts of California or Massachsuetts. That
AIG Property stated in California there is no conflict between Massachusetts law
and California law does not judicially estop it from arguing that Massachusetts law
controls here. Moreover, the California court disagreed with AIG Propertys
interpretation of California law. AIG Property therefore did not prevail on that
argument and has not used the judicial process in an inconsistent manner. See Otis
v. Arbella Mut. Ins. Co., 443 Mass. 634, 639-41 (2005) (discussing elements and
application of judicial estoppel in insurance coverage dispute).
CONCLUSION
The District Courts ruling that the AIG Property Sexual Misconduct
exclusions are ambiguous and that Plaintiff therefore has a duty to defend the
Underlying Actions ignore well-established principles of Massachusetts governing
the meaning of arising out of and should therefore be reversed. AIG Property
therefore respectfully requests that this case be remanded to the District Court with
a direction that a declaration enter in AIG Propertys favor and for such other and
further relief as this Honorable Court may directed.
49
Respectfully submitted
Dated: October 17, 2017
Michael F. Aylward, BBO # 024850 Rebecca R. Weinreich, Esq.

William A. Schneider, BBO # 636421 Stephen V. Kovarik, Esq.
Morrison Mahoney LLP Lewis Brisbois Bisgaard Smith LLP
250 Summer Street 633 West 5th Street, Suite 4000
Boston, MA 02110 Los Angeles, CA 90071
(617) 439-7500 (213) 250-1800
Counsel for Plaintiff,
CERTIFICATE OF COMPLIANCE WITH RULE 32(a)

1. This brief complies with the type-volume limitation of Fed. R. App. P.
32(a)(7)(b) because it contains a total of 12,101 words, excluding the
parts of the brief exempted by Fed. R. App. P. 32(a)(7)(B)(iii).
2. This brief complies with the typeface requires of Fed. R. App. P. 32(a)(5)
and the typestyle requirements of Fed. R. App. P. 32(a)(6) because it has
been prepared in a proportionally spaced typeface using Word 2013 in
Times New Roman, proportional 14 point types, which includes serifs.
Dated: October 17, 2017 s/ Michael F. Aylward
50
CERTIFICATE OF SERVICE
I hereby certify that on October 17, 2017, I electronically filed the foregoing
document with the United States Court of Appeals for the First Circuit by using the
CM/ECF system. I certify that the following parties or their counsel of record are
registered as ECF filers and that they will be served by the CM/ECF system.
Francis D. Dibble, Jr., Esq. Attorneys for Defendant-Appellee,

Bulkley Richardson & Gelinas William H. Cosby, Jr.
1500 Main Street, Suite 2700
P.O. Box 15507
Springfield, MA 01115-5507
Pamela M. Woods, Esq. Attorneys for Defendant-Appellee,

Law Office of David Gauntlett William H. Cosby, Jr.
18400 Von Karman, Suite 300
Irvine, CA 92612
Frederick William Salo, Esq. Attorney for Defendant-Appellee

501 E. 87th Street, No. 11-F Kathrine Mae McKee
New York, NY 10128
Carole Christine Cooke, Esq. Attorneys for Defendant-Appellee
Megan C. Deluhery, Esq. Kristina Ruehli
Todd & Weld, LLP
One Federal Street
Boston, MA 02110
s/ Michael F. Aylward
51

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Case: 17-1505 Document: 00117212052 Page: 1 Date Filed: 10/17/2017 Entry ID: 6126121

UNITED STATES COURT OF APPEALS

AIG PROPERTY CASUALTY COMPANY

APPEAL FROM A JUDGMENT OF THE UNITED STATES DISTRICT COURT

BRIEF OF PLAINTIFF AIG PROPERTY CASUALTY COMPANY

Michael F. Aylward, BBO # 024850 Rebecca R. Weinreich, Esq.

Counsel for Plaintiff

CORPORATE DISCLOSURE STATEMENT

AIG Property Casualty Company states that it is an insurance company

domesticated in the State of Pennsylvania with a principal place of business in

Casualty U.S., Inc., which is a Delaware corporation headquartered in New York

Brisbois Bisgaard & Smith LLP.

CORPORATE DISCLOSURE STATEMENT. ....................................................ii

TABLE OF CONTENTS..................................................................................... iii

TABLE OF AUTHORITIES. ...............................................................................iv

REASONS WHY ORAL ARGUMENT SHOULD BE HEARD.........................1

JURISDICTIONAL STATEMENT. .....................................................................1

STATEMENT OF LEGAL ISSUES. ....................................................................2

STATEMENT OF THE CASE..............................................................................3

STATEMENT OF THE FACTS. ..........................................................................6

SUMMARY OF ARGUMENT. ..........................................................................16

I. Massachusetts Law Controls the Meaning of These Insurance

II. The Sexual Misconduct Exclusion Applies Because Cosbys

A. Massachusetts Law ...........................................................................25

B. California Law ..................................................................................34

III. Courts in Massachusetts and Throughout the United States

IV. The District Court Erred in Finding Ambiguity Based on

V. The District Court Did Not Err in Refusing to Estop AIG

CERTIFICATE OF COMPLIANCE WITH RULE 32(a). .................................50

CERTIFICATE OF SERVICE. ...........................................................................51

American Home Assur. Co. v. First Specialty Ins. Corp., 73 Mass.

Bagley v. Monticello Ins. Co., 430 Mass. 454 (1999).............................25, 26, 27

Brazas Sporting Arms, Inc. v. American Empire Surplus Lines Ins.

Cable Mills, LLC v. Coakley Pierpan Dolan and Collins Ins.

Doe v. Liberty Mut. Ins. Co., 423 Mass. 366 (1996)...........................................37

Dykes v. DePuy, Inc., 140 F.3d 31 (1st Cir. 1998) .............................................20

Erie R.R. Co. v. Tompkins, 304 U.S. 64 (1938) .....................................................

Faigin v. Kelly, 184 F.3d 67 (1st Cir. 1999)........................................................48

Ferguson v. General Star Indem. Co., 582 F. Supp. 2d 91 (D. Mass.

Fuller v. First Financial Ins. Co., 448 Mass. 1 (2006).........................................26

HS Services Inc. v. Nationwide Mutual Insurance Company, 109

In re Relafen Antitrust Litig., 286 F. Supp. 2d 65 (D. Mass. 2003)....................47

InterGen N.V. v. Grina, 344 F.3d 134 (1st Cir. 2003).........................................45

Liquor Liab. Joint Underwriting Ass'n of Mass. v. Hermitage Ins.

Loyola Marymount University v. Hartford Accident & Indemnity

Medical Records Associates, Inc. v. American Empire Surplus Lines

Merchants Insurance Co. of New Hampshire v. United States

New Hampshire v. Maine, 532 U.S. 742 (2001) ...........................................45, 49

Open Software Foundation, Inc. v. USF&G, 307 F.3d 11 (1st Cir.

Pegram v. Herdrich, 530 U.S. 211 (2000) ...........................................................45

Rischitelli v. Safety Ins. Co., 423 Mass. 703 (1996) .....................................26, 30

Rodgers v. Sargent Controls & Aerospace, 136 Cal.App.4th 82

United States Golf Assn v. Arroyo Software Corp., 69 Cal. App.

California Civil Code 1646...............................................................................44

G.L. c. 175 113L ...............................................................................................31

1B MOORE'S FEDERAL PRACTICE 0.443 ..................................................47

Restatement (Second) of Conflict of Laws 6 (1971) ........................................22

Restatement (Second) of Conflict of Laws 188 (1971) ....................................22

Restatement (Second) of Conflict of Laws 193 (1971) ....................................21

REASONS WHY ORAL ARGUMENT SHOULD BE HEARD

tort claimants may plead around broad policy exclusions. Furthermore, it is

Pursuant to Fed. R. App. P. 28(a), Plaintiff AIG Property states that

jurisdiction in this case is proper pursuant to 28 U.S.C. 1332 in light of the