2. Reasonable expectations of the insured.
In considering the coverage afforded by a policy, "'the court may not look to the words of the policy alone, but must also consider the reasonable expectations of the public and the insured as to the type of service which the insurance entity holds itself out as ready to offer.'" White v. Western Title Ins. Co., 40 Cal. 3d 870, 881 , 221 Cal. Rptr. 509 , 710 P.2d 309 (1985) (emphasis added) (quoting Jarchow v. Transamerica Title Ins. Co., 48 Cal. App. 3d 917, 941 , 122 Cal. Rptr. 470 (1975)). In other words, the policy "must be construed so as to give the insured the protection which he reasonably had a right to expect." Gray v. Zurich Ins. Co., 65 Cal. 2d 263, 270 n. 7 , 54 Cal. Rptr. 104 , 419 P.2d 168 (1966) (original emphasis deleted). Therefore, "if coverage may be reasonably expected but is not to be provided, notice of noncoverage must be conspicuous, plain, and clear." McLaughlin v. Connecticut General Life Ins. Co., 565 F. Supp. 434, 441 (N.D. Cal. 1983). However, while "doubts, uncertainties and ambiguities" in the contract language should ordinarily be resolved in favor of the insured to effect his reasonable expectations of coverage, "this rule of construction is applicable only when the policy language itself is found to be unclear." Producers Dairy Delivery Co. v. Sentry Ins. Co., 41 Cal. 3d 903, 912 , 226 Cal. Rptr. 558 , 718 P.2d 920 (1986) (citations omitted).
Plaintiffs argue that the plain meaning of the term "malicious prosecution" to the average layman would encompass the legalistic definition of both the torts of malicious prosecution and abuse of process: a legal proceeding undertaken for an improper purpose. Therefore they contend that they have a reasonable expectation of coverage under the Policy in light of Maryland Hotel's allegations that Bay Vista's original Complaint was filed "for an improper purpose, namely, to intimidate" the Hotel "in not pursuing any action," "to exact concessions," "to gain an additional advantage" over the Hotel, and "to disrupt the business enterprise" of the Hotel. Counterclaim paras. 69-70, 76 & 81.
The Policy, however, clearly states that it covers claims for "malicious prosecution" only, and not abuse of process. Therefore there is no apparent ambiguity under the terms of the contract. Moreover, the Policy specifically states that "no other obligation or liability to pay sums or perform acts or services is covered unless explicitly provided for under SUPPLEMENTARY PAYMENTS -- COVERAGES A AND B." Policy § I.B.1.a (emphasis added). Therefore, in light of the itemization of some five different specific areas constituting "personal injury," see id. § V.10, clearly the parties could have readily added a provision for the "family" of malicious prosecution torts rather than the specific claim of malicious prosecution, but they did not do so.
See San Filippo v. U.S. Trust Co., 1987 U.S. Dist. LEXIS 3960 (S.D.N.Y. May 15, 1987) ("This Court finds nothing ambiguous about the phrase 'malicious prosecution.' That phrase clearly refers to the traditional action at common law. If the parties intended in some way to broaden this common sense interpretation of this common law phrase, they clearly could have so provided." (emphasis added)).
Moreover, as noted above, several courts from other jurisdictions enforce the language of the contracts in this area, holding that the language is not ambiguous, and that claims for malicious prosecution are covered, but not those for abuse of process. See, e.g., Parker Supply Co. v. Travelers Indemnity Co., 588 F.2d 180, 182-83 (5th Cir. 1979); R.A. Hanson Co. v. Aetna Ins. Co., 26 Wash. App. 290, 612 P.2d 456, 459 (1980). These conclusions are persuasive in light of the presumption that the parties, including the insurer, should be entitled to enforce the language of the policy for which they bargained.
In conclusion, the Court finds that the language of the Policy is clear, and that only claims for malicious prosecution were intended to be covered, rather than claims for abuse of process as well. Therefore, as a matter of law, the Court holds that no duty to defend under the American insurance contract with Bay Vista arose in relation to the Counterclaims for abuse of process. Thus American is entitled to summary judgment on plaintiffs' second and third causes of action.
B. Breach of the covenant of good faith and fair dealing.
"The term 'bad faith' does not connote 'positive misconduct of a malicious or immoral nature' (factors more properly considered in connection with punitive damages). It simply means the insurance company acted tortiously." Kornblum, Kaufman & Levine, California Practice Guide: Bad Faith para. 3:7, at 3-3 (1990) (citing Neal v. Farmers Ins. Exch., 21 Cal. 3d 910, 921 n. 5 , 148 Cal. Rptr. 389 , 582 P.2d 980 (1978)). Moreover, "where there is no duty to defend, there can be no bad faith refusal defend." State Farm Fire & Cas. Co. v. Geary, 699 F. Supp. 756, 760 (N.D. Cal. 1987). In light of the foregoing conclusion that American was not under an obligation to defend, the Court finds that defendant is entitled to summary judgment on plaintiffs' claim of breach of the covenant of good faith and fair dealing, including the prayer for punitive damages.
C. Breach of fiduciary duty against an insurer.
American seeks dismissal of the fourth cause of action for breach of fiduciary duty. Defendant correctly notes that California does not recognize a private cause of action against an insurer for breach of fiduciary duty. Love v. Fire Ins. Exch., 221 Cal. App. 3d 1136, 1147-50 , 270 Cal. Rptr. 246 (1990); Henry v. Associated Indem. Corp., 217 Cal. App. 3d 1405, 1418-19 , 266 Cal. Rptr. 578 (1990).
Plaintiffs do not address this argument, much less oppose it. Therefore the Court finds that defendant is entitled to summary judgment on the fourth cause of action for breach of fiduciary duty, as well as the accompanying claim for punitive damages.
For the foregoing reasons, the Court ORDERS as follows:
1. Defendant American's motion for summary judgment is GRANTED.
2. Plaintiffs' motion for partial summary judgment is DENIED.
IT IS SO ORDERED.