Full opinion text
OPINION KEETON, District Judge. The decisive issue in this case is whether the defendant, the Hanover Insurance Companies (“Hanover”), insurer under the liability insurance coverages of two policies issued to plaintiff, Harold W. Buirkle, plaintiff (“Buirkle”), had a duty to defend Buirkle in AroChem International, Inc. v. Buirkle, 968 F.2d 266 (2d Cir.1991) (the “Underlying Action”). Hanover declined to defend. Counsel engaged by Buirkle defended to a successful conclusion. After Phase One of a nonjury trial, and subject to reconsideration as provided in the Order attached to this Opinion, I find for the defendant on this issue for the reasons explained in this Opinion. Before stating my findings and conclusions on the merits, I address procedural matters that affected development of this case and illustrate some recurring obstacles to prompt, efficient, and just resolution of disputes on the merits. I. Cross-Motions for Summary Judgment and Alternatives A. Genuinely Disputed and Material Adjudicative Facts Early in the history of this case, the parties filed cross-motions for summary judgment. As a matter of prudential case management, it is my practice to discourage such motions and encourage, in their stead, a trial on stipulated facts of the potentially dispositive issue or issues that are the subject of one or both of the proposed cross-motions. In some circumstances (as this case illustrates), a first-phase trial may be limited to an issue that is dispositive of the entire case under one possible outcome, though leaving other issues to be tried in a later phase or phases under another possible outcome. 1. Historical Facts A dispute of fact exists if, on the evidence before the court, reasonable factfinders could differ about some historical fact (what happened, when, and where). If the fact in dispute is material to some adjudicative issue, the existence of the dispute defeats both cross-motions for summary judgment. The dispute must be resolved by a factfinder (the jury, if one has been demanded, or the judge as factfinder in a nonjury trial). 2. Evaluative Determinations Even if all material historical facts are undisputed, a case cannot be decided on cross-motions for summary judgment if a reasonably disputable evaluative determination is essential to disposition and it is the kind of evaluative determination that, under applicable precedents, is one of “adjudicative fact” and must therefore be made by the factfinder. Cf. Springer v. Seamen, 821 F.2d 871, 876 (1st Cir.1987) (“Not only ordinary fact questions, but also evaluative applications of legal standards (such as the legal concept of ‘foreseeability’) to the facts are properly [questions for the factfinder].”) (citation, internal quotation marks, and footnote omitted) (quoted with approval in Dedham Water v. Cumberland Farms Dairy, 972 F.2d 453, 457 (1st Cir.1992) (causation); and Swift v. United States, 866 F.2d 507, 511 (1st Cir.1989) (causation)). B. Nonadjudicative Factfinding Even if disputable evaluative determinations must be made to decide a case, however, it does not necessarily follow that they cannot be made by a trial court on cross-motions for summary judgment. For example, it may be argued that, in the circumstances of the ease, one or more evaluative determinations must be made by a court in order to decide an issue of law. In such circumstances, these determinations are interwoven with the legal ruling; because the evaluative determinations are essential premises of the legal ruling, it is difficult if not impossible to state the legal ruling precisely without incorporating these evaluative premises into the statement. For that reason, the evaluative premises are subject to nondeferential review on appeal, rather than review under the deferential standard of Federal Rule of Civil Procedure 52(a). Otherwise, different outcomes of like cases in different trial courts, decided by different “factfinders,” would utterly frustrate the aim of the legal system that like cases be decided in the same way, regardless of the identity of the decisionmakers to whom the various cases happen to be assigned. Stated another way, the argument is that evaluative determinations of this kind, to the extent that they are determinations of fact in any sense, are determinations of “premise facts” — that is, nonadjudicative facts that serve as premises of a legal ruling that, unless overturned on appeal, have the force of precedent. See Robert E. Keeton, Legislative Facts and Similar Things: Deciding Disputed Premise Facts, 73 Minn.L.Rev. 1 (1988) (cited hereafter as Premise Facts). In the case now before this court (and in cases of this kind generally) if neither party contends, even in the alternative, that evaluative determinations required to decide the issues raised by the cross-motions for summary judgment should be made by an adjudicative factfinder, the evaluative nature of those determinations is not necessarily an obstacle to final decision of issues of this kind on the pending cross-motions for summary judgment. If either party contends otherwise, however, even in the alternative, proceeding with cross-motions for summary judgment runs a high risk of a substantial waste of private and public resources. See, e.g., Continental Grain v. Puerto Rico Maritime Shipping, 972 F.2d 426, 429 n. 7 (1st Cir.1992) (citing Boston Five Cents Sav. Bank v. Secretary of the Dep’t of Housing and Urban Dev., 768 F.2d 5, 11-12 (1st Cir.1985)). C. The Stipulation in This Case The parties to this case responded positively to the court’s encouraging them to agree to a Phase One Trial of duty-to-defend issues on stipulated facts. The stipulated facts are as follows: 1. Buirkle was a named insured under a Homeowners Policy issued by Hanover, a true and accurate copy of which is attached hereto as Exhibit “A.” 2. Buirkle was also a named insured under a Personal Catastrophe Liability Policy issued by Hanover, a true and accurate copy of which is attached hereto as Exhibit “B.” 3. On or about May 3, 1990, an action was brought in New York state court against Buirkle (the “Underlying Action”). The Underlying Action was removed to the United States District Court for the Southern District of New York on or about June 5, 1990. A true and accurate copy of the complaint against Buirkle in the Underlying Action is attached hereto as Exhibit “C.” 4. Buirkle gave Hanover written notice of the Underlying Action on or about June 1, 1990. A true and accurate copy of the notice is attached hereto as Exhibit “D.” 5. On or about June 26, 1990, Hanover gave Buirkle written notice that it would not provide him with a defense in the Underlying Action. A true and accurate copy of the notice is attached hereto as Exhibit “E.” 6. . Buirkle again requested that Hanover provide him with coverage and a defense by letter dated September 4, 1990, a true and accurate copy of which is attached hereto as Exhibit “F.” 7. Buirkle again requested that Hanover participate in resolving the matter of his coverage and defense by letter dated January 4, 1991, a true and accurate copy of which is attached hereto as Exhibit “G.” 8. Hanover would not defend Buirkle in the Underlying Action. 9. As a result, Buirkle retained his own counsel to defend his interests in the Underlying Action. 10. The Underlying Action was tried before a jury from June 3 through 6, 1991. On June 6, 1991, after the plaintiffs in the Underlying Action presented their case, the court granted a directed verdict in Buirkle’s favor, and later issued a judgment in accordance with the verdict. The plaintiffs appealed from the judgment to the Court of Appeals for the Second Circuit. The Second Circuit affirmed the district court’s decision. 11. Buirkle has incurred costs in defending himself in the Underlying Action. (Docket No. 31, filed in open court October 1, 1992, entered in Docket December 4, 1992). D. Post-Stipulation Proceedings in This Case On November 17, 1992, this case was called for nonjury trial on Phase One, limited to the issue of duty to defend. The parties offered in evidence their Stipulation of Facts, quoted above. Neither party offered any additional evidence. After hearing oral argument on the day of trial, I set a conference for December 11, 1992 to schedule proceedings for determination of damages should plaintiff prevail on liability, and took Phase One of the ease under advisement. At the conference of December 11, 1992, I advised the parties of my concern about lack of evidence on some potentially significant liability issues and suggested the possibility of reopening the evidence in Phase One. I allowed the parties time to submit a further stipulation or further proffers before I determined whether to reopen the evidence. At further proceedings in the Phase One trial on February 10,1993,1 overruled plaintiffs objections to reopening the evidence and received additional evidence by affidavit, though sustaining objections to some parts of affidavits received. I took under advisement issues with respect to whether some parts of the affidavits would be received for consideration by the court only as to “premise” facts and not as to “adjudicative” facts. I also set a schedule for submission of additional memoranda by the parties. After full consideration of all matters taken under advisement, I now conclude that there are indeed some “premise” fact issues that must be determined in this case, and some genuinely disputed and material adjudicative fact issues as well. As to the reopening of evidence bearing upon adjudicative fact questions, I now conclude that I should, and I do, sustain plaintiffs objection, which is grounded in part on the following stipulation of the parties: The parties also stipulate and agree that the Court will find facts based solely on the stipulated-to facts contained herein, and that the Court may draw inferences of fact from the stipulated-to facts. The parties further stipulate and agree that they will submit no further evidence — either through live testimony or documentary evidence — to the Court at trial on the issue of Hanover’s duty to defend. Docket No. 31 at 1-2. I conclude that, in view of this stipulation, it would be unfair to the plaintiff to reopen the evidence bearing upon adjudicative facts. It does not follow, however, that the court should not have “reopened the evidence” bearing on premise facts. Indeed, for reasons explained in Premise Facts, 73 Minn. L.Rev. at 29-32, and for the reasons (as they bear particularly on this case) stated more fully in Parts VI-VIII, infra, I conclude that it was appropriate to receive additional evidence in relation to premise fact issues in this case. Indeed, as stated in the Order following this Opinion, I will, even now, allow the parties a further opportunity to file submissions in response to my provisional determination of premise facts in this Opinion. II. The Insurance Policies and Questions They Present A. The Terms and Structure of the Insurance Policies 1. The Promise of “Plain English” Each of the two policies, issued by Hanover to Buirkle in 1989, is written in “plain English.” The “INTRODUCTION” to the Personal Catastrophe Liability Policy explains: This is your new Personal Catastrophe Liability Policy. We have written it in plain English so you can understand just what coverage it offers. Please read it. If you have any questions, call or write your agent or us right away. Exhibit B, page 1. 2. Length, Complexity, and Style Three characteristics of the Homeowners Policy undercut the laudable “plain English” objective. First, the policy is long. Second, and of more significant bearing in this ease, the package is complex. Third, the drafters of the policy generously used variations on a grant-withdraw-restore (or “grant, exclude, carve-out from the exclusion”) drafting technique. One of the variations on this three-step technique was to insert a fourth step between the first and second, producing a grant-add-withdraw-restore technique. An illustration of one possible reading of the Homeowners Policy and the New Jersey endorsement will help to explain the style, (i) Grant. The basic grant of liability insurance coverage is stated at the beginning of “Section II-Liability Coverages.” This section begins with “Coverage E-Personal Liability,” which grants liability insurance coverage for a claim made or a suit brought “against an insured for damages because of bodily injury or property damage caused by an oecurrence to which this coverage applies, ____” (Emphasis added). (ii) Add. A New Jersey form of endorsement to the Homeowners policy adds to the grant by noting: For an additional premium under Coverage E-Personal Liability, the definition of bodily injury is amended to include personal injury. [Emphasis added.] (iii) Withdraw (or “Exclude”). “This coverage does not apply to injury arising out of the business pursuits of an insured.” (iv) Restore. But this exclusion “does not apply to ... activities which are usual to non-business pursuits.... ” Moreover, adding to the complexity produced by the four-step drafting technique is the embellishment that both a withdrawal and a restoration may be total or partial and may be conditional or unconditional. Even as to the provisions that are clearest in content, a reader cannot be certain of manifested meaning without examining the entire package to identify all relevant grants, additions, withdrawals, and restorations. The reader may then need to study again the selected provisions to determine just what parts of the relevant grants and additions to coverage remain after withdrawals and restorations are fully considered. Plain English! Do structure, style, and readability count at all in drafting a policy “in plain English”? 3. Generalizations About Style and Drafting Technique Drafting in a style that does not evidence the work of an accomplished stylist may nevertheless be stylish. In this instance, it is. The grant-withdraw-restore technique is not distinctive to insurance policy forms. It and closely analogous techniques (e.g., “prohibit, withdraw part of the prohibition, restore part of the withdrawal”; “require, withdraw part of the requirement, restore part of the withdrawal”) appear often in legal writing. Also, quite commonly (as in the insertion of the “add” step by appending the New Jersey endorsement to the Homeowners Policy and by making withdrawals and restorations partial or conditional), a drafter may insert more steps somewhere before, among, or after the basic three (grant-withdraw-restore) and may add bells and whistles as well. See, e.g., I.R.C. § 74 (granting an exception to the definition of “gross income” in subdivision (b), adding another exception in subdivision (c), in each subdivision arguably withdrawing to some extent and restoring to some extent through intricacies that include “if’ and “but not” clauses); Fed.R.Civ.P. 12 (requiring in 12(b) that “[ejvery defense” be asserted in the responsive pleading, “if one is required,” except that certain defenses “may at the option of the pleader be made by motion,” but such a motion “shall be made before pleading if a further pleading is permitted”). These illustrative “exception,” “if,” and “but not” clauses from a statute and a rule of procedure make the point that the insurance policy provisions that must be interpreted in this case are by no means at the extremes of embellishment one can find in the techniques that, historically, writers have used in drafting statutes, rules and regulations of courts and agencies, and contracts in general as well as insurance policies in particular. The fact that this style appears in many different forms of legal writing diminishes the force of two arguments that Buirkle repeatedly emphasizes in this case — his arguments for resolving alleged ambiguities in his favor and for honoring his allegedly reasonable expectations. It is true that the two policies on which Buirkle bases his claims against Hanover are structurally complex. See footnote 2, swpra. It is also true that the Homeowners Policy is especially hard to read, even after one has narrowed the study to the policy provisions that are potentially relevant to the matter in dispute. It is also true, however, that part of the seeming complexity may turn out to be irrelevant in a particular case. That is, some segments of the policy that appear on first screening to be potentially relevant may be discarded on closer examination. In making a closer examination of particular policy provisions invoked in arguments made by the parties in this case, one should be constantly alert to contrasts in meaning of the phrases “property damage,” “bodily injury,” “personal injury,” “Liability Coverages,” “Coverage E-Personal Liability [coverage],” “bodily injury liability coverage,” “Personal Injury [liability] Coverage,” and “Property Damage [liability coverage].” “Personal liability coverage” has a broad meaning. “Bodily injury liability coverage,” “personal injury liability coverage,” and “property damage liability coverage” are three different types of “personal liability coverage.” Also, close reading discloses that relevant enlargements of “Section II-Liability Coverages” appear in the New Jersey Optional Endorsements, under the caption, “HO 82 (Optional) Personal Injury.” Here we learn that “Section II Exclusions do not apply to personal injury.” I conclude that, after screening for relevance to this case, the content of the policy provisions can be summarized in the following way, certain critical passages being quoted and highlighted for emphasis. If a ... suit is brought against an insured for damages because of “personal injury ” caused by an occurrence to which this coverage applies, we [the company] will provide a defense at our expense by counsel of our choice, even if the suit is groundless, false, or fraudulent. “Personal injury ” means injury arising out of one or more of the following offenses: . malicious prosecution . libel, slander or defamation of character, or . invasion of privacy. Personal injury insurance does not apply to: . “injury arising out of the business pursuits of an insured.” Up to this point, the summarized policy provisions have carried us through the grant-add-withdraw steps of the drafting style. Does the policy language also proceed through a fourth step, in which something withdrawn by the exclusion of “injury arising out of the business pursuits of an insured” is restored? Here we encounter a debatable question. Definitely there is a clause in “Section II-Exclusions” of the basic policy telling us that “Coverage E-Personal Liability” does “not apply to bodily injury ... arising out of business pursuits of an insured____” And, definitely, that provision is followed immediately by one that partly restores: “This ex-elusion does not apply to ... activities which are usual to non-business pursuits____” One may argue, however, that these provisions of the basic policy are irrelevant in this case because they concern “bodily injury” and not “personal injury.” With respect to “personal injury insurance” there is no grant anywhere in the basic policy. Instead, “personal injury insurance” is added in the New Jersey endorsement, and that endorsement declares that “[pjersonal injury insurance does not apply to ... injury arising out of the business pursuits of an insured.” This “does not apply” clause excludes (or withdraws, or takes away) part of the coverage added (in step two) — the “personal injury insurance.” The New Jersey endorsement does not contain a fourth-step provision purporting to restore something otherwise taken away by the “business pursuits” clause. Should we disregard the fourth-step provision of the basic policy form and, finding no fourth-step provision in the New Jersey endorsement, conclude that no fourth-step restoration applies to “personal injury insurance” coverage? Because of this debatable question about whether the text of the policy (that is, the basic policy and the New Jersey endorsement, taken together) contains a relevant fourth step, it is at least plausible to argue that the complex structure and drafting style make the combined Homeowners Policy and New Jersey endorsement ambiguous to the objectively reasonable reader and that Buirkle should have coverage under the Homeowners Policy because either (i) the ambiguity should be resolved against the insurer, or (ii) it was objectively reasonable for Buirkle to believe he had coverage for defense against the New York law suit against him and that his reasonable expectation should be honored? I return to this question and its subparts in Parts VI-VIII of this Opinion. Before proceeding to other matters, I call attention to one more characteristic of the Homeowners Policy that bears upon questions to be resolved in this case. It has a “Definitions” section, but no definition of “business pursuits.” The basic policy does say, however, under the caption, “DEFINITIONS”: 2. “business” includes trade, profession or occupation. The Personal Catastrophe Liability Policy (Exhibit B to the Stipulation) is mercifully less complex. In one respect, however, the stipulated facts in this case presented a more puzzling question. What premium was paid for this policy? The premium is not stated in Exhibit B. The court explicitly called attention to this gap in the evidence when suggesting in the December conference that the evidence might be reopened. A later proffer contained evidence that the total premium for Buirkle’s homeowners policy was $846.00. (Eska Aff. ¶ 5, Docket No. 43, exh. B.) I have concluded, however, that I should sustain defendant’s objection to the reopening of evidence bearing upon adjudicative facts. Part I.D, swpra. Therefore I must and do disregard this evidence when finding adjudicative facts in this case. Potentially relevant provisions of the Personal Catastrophe Liability Policy are set forth in the margin. A close reading narrows the provisions that are most significant in this case to the following (stated here in abbreviated paraphrase except as to the critical passages, which are identified by emphasis and quotation marks): This policy gives two types of extra protection to you beyond that of your other policies. First, it adds to the liability limits. Second, there are liabilities your other policies do not cover. This policy is designed to protect you against some unusual claims that are not covered by your standard policies. This policy covers losses from personal injury suits. “Personal injury” includes “injuries to a person’s feelings or reputation.” “This includes mental injury, mental anguish, shock, libel, slander, defamation of character, invasion of privacy or false arrest, so long as these injuries are not intended by you." “This policy does not cover the following types of claims: ” “1. We will not cover liability connected with business, profession or occupation of anyone insured, such as malpractice claims against a doctor.” ... “6. We will not cover any liability caused by acts committed by you or at your di- rection which were intended to hurt people or damage property.” Part VIII, below, examines more closely the interpretation of the emphasized passages of the Personal Catastrophe Liability Policy. III. Choice of Law During early proceedings in this case the parties called attention to a potential issue of choice among New Jersey, Massachusetts, and New York law. At trial, however, the parties stipulated that New Jersey law is to be applied. I accept this stipulation. See, e.g., Borden v. Paul Revere Life Ins. Co., 935 F.2d 370, 375 (1st Cir.1991) (“[wjhere ... the parties have agreed about what law governs, a federal court sitting in diversity is free, if it chooses, to forego independent analysis and accept the parties’ agreement”) (citations omitted). IV. The Law on Duty to Defend A. The Basic Rule in New Jersey Under New Jersey law, “the duty to defend is generally determined by comparing the allegations in the complaint with the language of the policy.” SL Industries, Inc. v. American Motorists Insurance Company, 128 N.J. 188, 197, 607 A.2d 1266, 1271 (1992). “When the two correspond, the insurer must defend the suit.” Id. When no duty arises on this basis, “facts outside the complaint may trigger the duty to defend,” id. at 198, 607 A.2d at 1272, but only if those facts are “known to the insurer,” id. at 199, 607 A.2d at 1272 (emphasis in original). Another issue of potential relevance concerns allocation of defense costs among claims where the duty to defend applies to one or more claims asserted in the tort complaint and not to one or more others. The Supreme Court of New Jersey has recently clarified its position on this issue: Although we adopt the general rule favored by most jurisdictions, we note that our interpretation differs from that of a number of the courts that have applied it. Those courts presume that apportioning costs will be very difficult, and that the exception, requiring insurers to pay all of the defense costs if they are not capable of apportionment, thus applies more often than the rule requiring apportionment. See, e.g., Crist, ... 529 F.Supp. at 605 (“Typically,____ an apportionment of expenses ... is nearly impossible.”). Those courts implicitly require a greater degree of certainty in determining the alloeability of costs than is either necessary or fair. We recognize that insurers, insureds, and courts will rarely be able to determine the allocation of defense costs with scientific certainty. However, the lack of scientific certainty does not justify imposing all of the costs on the insurer by default. The legal system frequently resolves issues involving considerable uncertainty. We presume that the insurer and insured can negotiate a satisfactory settlement that fairly apportions the defense costs. When they are unable to agree, we likewise presume that our courts will be able to analyze the allegations in the complaint in light of the coverage of the policy to arrive at a fair division of costs. Id. at 215-16, 607 A.2d at 1280 (footnote omitted). B. Controlling Effect in This Case of the Complaint in the Underlying Action In New Jersey, as noted above, facts outside the complaint may trigger a duty to defend only if those facts are “known to the insurer.” SL Industries, 128 N.J. at 198-99, 607 A.2d at 1272 (emphasis in original). There is no evidence in the record before me that Buirkle gave notice to Hanover, before or at the time of demanding that Hanover defend, of any facts outside the complaint as a basis for his claiming that Hanover had a duty to defend. Nor is there is any evidence to support a finding that Hanover learned any facts outside the allegations of the complaint in the Underlying Action that would support a duty to defend. Also, Buirkle, even when invited by the court to proffer evidence beyond the stipulation filed by the parties, did not proffer evidence to support a finding that Hanover knew facts beyond the claims in the Underlying Action that would support a duty to defend. Thus, whether I address the matter on the stipulation only or instead on the stipulation plus the proffered evidence (despite my determination in Part I.D above that I should not receive evidence beyond the stipulation for the purpose of making findings on adjudicative facts), I find that there is no evidence before me of facts outside the allegations of the Underlying Action that bear upon the duty to defend. I turn, then, to the allegations of the complaint in the Underlying Action as the basis upon which I must determine the duty to defend in this case. V. The Suit The “suit” as to which Buirkle asserts that Hanover had a duty to defend Buirkle was brought in the Supreme Court of the State of New York by AroChem Corporation and William R. Harris against Harold W. Buirkle. The complaint (Exhibit C to the Stipulation), after describing the Parties (paras. 1-3), alleges Jurisdiction and Venue (paras. 4, 5), and alleges “Relevant Facts” in three categories — Background (paras. 6-9), The Facts Pertinent to this Action (paras. 10-13), and Defamatory Statements to the Victory Companies and Malicious Interference with Contracts and Relationships Between the Victory Companies and AroChem and Harris (paras. 14-20). The complaint then alleges four causes of action: First Cause of Action (Libel, Slander and Defamation with Actual Malice) (paras. 21-25) Second Cause of Action (Libel, Slander and Defamation Absent Actual Malice) (paras. 26-30) Third Cause of Action (Tortious Interference with Contract) (paras. 31-34) Fourth Cause of Action (Tortious Interference with Business Relationships and Prospective Business Opportunities) (paras. 35-38) By letter of June 1, 1990, addressed to Hanover, counsel for Buirkle referred to Buirkle’s two policies with Hanover (Exhibits A and B to the Stipulation in this case) and stated: Please be advised that this office represents your insured Harold Buirkle. Recently, a complaint was served upon Mr. Buirkle, a copy of which is enclosed, which alleges that he defamed and maliciously interfered with the business relationships of the plaintiffs. Based on the policy provisions, Hanover Insurance Co. is obligated to provide a defense and coverage to Mr. Buirkle against these allegations. We believe that it is in the best interests of Mr. Buirkle and Hanover that this action be removed from the New York Supreme Court to the United States District Court of New York. Accordingly, we propose to file a petition for removal. This petition must be filed within thirty days of the service of the complaint upon Mr. Buirkle. Since the complaint was served on May 7, we are required to file this petition no later than June 7, 1990. Unless we receive instructions from you to the contrary by Wednesday, June 5, 1990, it is our intention to proceed with the removal. We have also sought an extension of time in which to file and prepare an answer to the complaint____ Mr. Buirkle has also requested that Hanover permit this firm to continue as counsel on his behalf in this matter. Please advise if there is any further information which is required in order to process this matter. Docket No. 34, exh. D (emphasis added). This demand letter asserted coverage only as to allegations that Buirkle “defamed and maliciously interfered with the business relationships of the plaintiffs.” It offered no explanation of what specific provisions of the policy Buirkle relied upon to support his contention that Hanover had a duty to defend against these claims of defamation and malicious interference. Nor did this letter call attention to any specific paragraphs or allegations of the complaint in the Underlying Action that Buirkle relied upon. I do not decide the duty-to-defend issue on the basis of the absence of specificity of the demand letter, however. Hanover had easy access to the complaint to obtain whatever information the complaint provided about the nature of the claims in the Underlying Action. The complaint gave notice in the captions for the First and Second Causes of Action, quoted above, that those causes of action were for “Libel, Slander and Defamation.” The captions of the Third and Fourth Causes of Action gave notice that they were for “Tortious Interference with Contract” and “Tortious Interference with Business Relationships and Prospective Business Opportunities.” I assume in Buirkle’s favor that these captions in the complaint were sufficient to notify Hanover that tort claims were alleged against Buirkle for “personal injury” as that term is used in both the Homeowners Policy and the Personal Catastrophe Liability Policy. Throughout this litigation, Buirkle’s principal claim has been under the “personal injury” liability coverage. Recently filed submissions have added a contention of coverage under “property damage” liability coverage. That contention may be quickly dismissed, however. The policy definitions of property damage liability coverage are as follows: “property damage” means physical injury to, destruction of, or loss of use of tangible property. Homeowners Policy (Docket No. 34, exh. 1-A). Property damage: Any damage to tangible property or its loss or destruction. Also the loss of its use. But only if the damage, loss or destruction or loss of use is not intended by you. Personal Catastrophe Liability Policy (Docket No. 34, exh. 1-B). No claim was made against Buirkle in the Underlying Action for damage to tangible property or for loss of use of tangible property. That is enough to end the matter. Cf Voorhees v. Preferred Mut. Ins. Co., 128 N.J. 165, 607 A.2d 1255, 1259 (1992) (noting that “[wjhether an insurer has a duty to defend is determined by comparing the allegations in the complaint with the language of the policy,” and observing, furthermore, that “[t]he duty to defend, ..., is determined by whether a covered claim is made, not by how well it is made”) (emphasis in original). In the alternative, however, even if I assume also in Buirkle’s favor a more dubious proposition that one or more of the Causes of Action was for “property damage,” Buirkle’s assertion that Hanover had a duty to defend faces another hurdle, which applies also to Buirkle’s assertion of “personal injury” liability coverage. Buirkle loses in this case if the “Causes of Action” alleged in the complaint disclose on the face of the complaint no basis for an objectively reasonable contention by Buirkle that one or more of the claims was outside the meaning of the following provisions: (i) in the Homeowners Policy, the provision declaring that “[pjersonal injury insurance does not apply to ... injury arising out of the business pursuits of an insured,” and (ii) in the Personal Catastrophe Liability Policy, the provision declaring that “[w]e will not cover liability connected with business, profession or occupation of anyone insured, such as malpractice claims against a doctor----” I now summarize additional details of the complaint in the Underlying Action that might arguably bear upon whether the complaint states a claim not within the scope of these exclusions. The complaint in the Underlying Action describes Buirkle as a person who at all relevant times lived in New Jersey; worked in New York, doing business in New York as managing director of Henley; and, in addition, “transacted business in New York relating to matters involving AroChem and Harris.” Underlying Action, Complaint ¶ 3. According to the factual allegations of the complaint, Buirkle had a close business relationship with a third person, Wells, who had an ownership interest in AroChem. Beginning in February 1988 and extending into 1989, Wells became increasingly interested in expanding his ownership interest in AroChem and came increasingly into conflict with Harris, who also had an ownership interest in AroChem. Wells developed a malicious scheme to defame Harris and interfere with Harris’ relationship with AroChem. Wells enlisted Buirkle to join in the scheme. Buirkle, in view of his business connections with Henley, had the ability to assist Wells with financing. By no later than October 1989 Buirkle agreed personally to assist Wells with financing in exchange for Buirkle’s personal participation in the ownership of AroChem if Wells succeeded in the scheme. Buirkle also provided business advice to Wells and assisted Wells in defaming Harris and interfering with Harris’ relationship with AroChem and with Harris’ and AroChems’ relationship with the Victory Companies. See Docket No. 34, exh. C, pp. 1-10, 13-14. The complaint cannot reasonably be interpreted as asserting, even in the alternative, a claim against Buirkle for any tort not connected with Buirkle’s activities associated with aiding Wells in efforts to obtain a larger share of ownership in Aroehem through activities extending over a period of months at the least. Because of the conclusion reached in Parts VI-VIII below, I need not and do not consider whether the complaint may reasonably be interpreted as alleging in the alternative a claim outside the scope of policy exclusions for intended injuries. VI. “Business Pursuits,” “Connected With Business, ” and “Activities Usual to Non-Business Pursuits” For the reasons explained in Parts IV and V, I conclude that, to determine whether Hanover had a duty to defend Buirkle in the Underlying Action in this case, I must compare each of the claims alleged in the Underlying Action with the coverage provisions of the two policies. More precisely, in the particular circumstances of this case, as explained in Parts IV and V, the purpose of the comparison is to determine whether in the Underlying Action some claim is alleged against Buirkle that is not taken out of the scope of coverage (i) of the Homeowners Policy, by the provisions declaring that “[pjersonal injury insurance does not apply to ... injury arising out of the business pursuits of an insured,” and (ii) of the Personal Catastrophe Liability Policy, by the provision declaring that “[w]e will not cover liability connected with business, profession, or occupation of anyone insured, such as malpractice claims against a doctor____” A. Differing Policy Provisions and Conflicting Precedents 1. Impediments to Determining the Weight of Precedent For four interconnected reasons, it is difficult, if not impossible, to determine the weight of precedents, both in New Jersey and elsewhere, as they might be applied to the issues in this ease. The four reasons are: First, policy clauses using the phrase “business pursuits” have varied widely in their text and in their literal contexts (that is, in the organization, structure, and text of associated clauses of each policy). Second, the factual circumstances of the cases before the courts have varied widely. Third, few of the opinions disclose explicitly the full text and literal context of the “business pursuits” clause or the “connected with business, profession or occupation” clause before the court. Fourth, even fewer opinions draw comparisons or contrasts between the clauses before them and the clauses before other courts in other cases. See, e.g., Job A. Sandoval, Annotation, Construction and Application of “Business Pursuits” Exclusion Provision in General Liability Policy, 48 A.L.R.3d 1096 (1973 & Supp. 1992) (collecting cases). In general, one strong tendency of the decisions is to find ambiguity and resolve it against the insurer — that is, resolve it in favor of coverage, regardless of whether the text at issue was part of a grant of coverage, an exclusion from coverage, or a carve-out from an exclusion. 7C John A. Appleman, Insurance Law and Practice § 4684.01 (Walter F. Berdal ed., 1979). Of course, this tendency is not necessarily unprincipled. The organizing principle may be that a genuine and material ambiguity is resolved against the insurance company, regardless of the type of clause in which it appears. The applicability of this principle depends entirely, however, on the existence of a genuine and material ambiguity. 2. Zones of Clarity and Uncertainty About What Activities are “Business Pursuits” Before crediting a legal argument based on alleged ambiguity of an insurance policy provision, or one based on an alleged expectation about the scope of the insurance coverage it provides, a court must screen for relevance. That is, an alleged ambiguity or expectation is of no consequence unless it concerns an issue relevant to disposition of the case before the court. For example, an identified ambiguity about the meaning of “business pursuits” helps the claimant (Buirkle, in this instance) only if the circumstances of the claim present a dispute within the zone of that identified ambiguity. Even though no bright line exists to separate activities we describe as “business pursuits” from those we describe as “not business pursuits” (or “non-business pursuits,” a phrase that does not necessarily mean the same thing as “not business pursuits”), some activities plainly are business pursuits and others plainly are not. A perceptive observer sees a material difference between the light of day and the dark of night, and knows that difference to be a reality even though the two are separated not by a bright line but by a zone of twilight. So, too, zones of clarity exist, at each end of the spectrum, about whether human experiences are or are not business pursuits. Ambiguity within the zone of twilight in between, and ambiguity at the edges of the twilight zone, about the meaning of the phrases “business pursuits” and “not business pursuits” (or “non-business pursuits”) help Buirkle’s claim only if the activities described in his claim fall within the zone of ambiguity. (This is true whether we define the policyholder’s activities by the allegations of the tort claim against him, as I have concluded we must do in this case, or instead by the evidence he proffers as to what his activities actually were.) If, instead, Buirkle’s activities fall within the zone of clarity that supports his claims, he wins without relying on ambiguity. If, on the other hand, his activities fall within the opposite zone of clarity, he loses. In either event, the ambiguity of the policy language is simply irrelevant to the dispute before the court. Similarly, the doctrine of honoring reasonable expectations applies only if what Buirkle asserts as a reasonable expectation of coverage concerns coverage for activities of a type falling within the twilight zone of uncertainty rather than within one of the zones of clarity at either end of the spectrum for activities that clearly are business pursuits, or clearly are not. Otherwise, he wins in any event, or loses in any event, and the reasonable expectations doctrine is irrelevant to the case. B. A Reverse Spin on “Business Pursuits”; The Sinopoli Case Each of the parties has invoked as a decision allegedly in its favor Sinopoli v. North River Insurance Company, 244 N.J.Super. 245, 581 A.2d 1368 (1990), cert, denied, 127 N.J. 325, 604 A.2d 600 (1991). Their respective efforts fail because in that case the court was interpreting the meaning of “business pursuits” where used in an insurance policy with a reverse spin. That spin contrasts with the more common usage, and the usage in the Homeowners Policy at issue here. In Sinopoli, an “exclusion” from the “personal liability coverage” of a Homeowners Policy declared that the policy did not cover any loss under its personal liability coverage For bodily injury or property damage 3. Arising out of any business activities of an insured, except: b. Those within the term business pursuits; ____ 244 N.J.Super. at 249, 581 A.2d at 1369-70. Rather than denying coverage for injury arising out of “business pursuits” as the Homeowners Policy at issue here does; the “except ... business pursuits” clause of the policy before the court in Sinopoli, as reported in the court’s opinion, restored 'coverage for “bodily injury” that would otherwise have been taken away by the “exclusion” of “bodily injury ... [a]rising out of any business activities of an insured____” Moreover, the inapplicability of Sinopoli as an aid to determining the meaning of “business,” “business pursuits,” and “connected with business, profession or occupation” as used in the two policies at issue here is underscored by the fact that both “business” and “business pursuits” were defined in the Sinopoli policy, and defined in a rather distinctive way. “Business” was defined as including “a trade, profession or other occupation (including farming) and use of any premises for such purposes.” 244 N.J.Super. at 251 n. 1, 581 A.2d at 1371 n. 1. The distinctive definition of “business pursuits” that the Sinopoli policy supplied in its glossary declared that the term “means,” among other things: 1. occupation as a clerical office employee, including executives whose activities are limited to clerical office work; and 2. occupation as a sales person, cashier or messenger — but not those engaged in installation, demonstration, or servicing---- 244 N.J.Super. at 249, 581 A.2d at 1370. I conclude that the distinctions among occupations in clause 2 of the Sinopoli policy are not implicit in the objectively manifested meaning of (i) the phrase “business pursuits” in an insurance policy that does not contain any definition of “business pursuits” and is “written in plain English,” or (ii) the phrase “business, profession or occupation” in an insurance policy that does not contain a definition of this phrase and is “written in plain English.” In determining the meaning of any term used in a policy, a court must, of course, look first to the policy definition itself, if there is one. ' ’ Thus, for example, the meaning of “business pursuits” as used in a policy defining it in a special way, for use to restore coverage otherwise taken away by an “exclusion” of “bodily injury ... arising out of any business activities,” is not helpful in determining the precise meaning of the exclusion of coverage for “business pursuits” in the Homeowners Policy at issue here. C. Other Precedents In search of guidance as to how the highest court of New Jersey would interpret and apply (i) the “business pursuits” clauses of the Homeowners Policy and (ii) the Clause of the Personal Catastrophe Liability Policy using the phrase “connected with business, profession or occupation of anyone insured,” we must look for analogies in New Jersey precedents and for precedents or analogies in the law of other jurisdictions that might be persuasive to the New Jersey court. I conclude that, both in New Jersey and in American law generally, precedents have established two zones of clarity at the polar extremes. In these zones of clarity, precedents require a court to rule “as a matter of law” on one hand, that a claim of the type before the court is for an injury arising out of “business pursuits” (or is “connected with business, profession or occupation”), or, on the other hand, that a claim of the type before the court is not for an injury arising out of “business pursuits” (or is not “connected with business, profession or occupation”). In between these zones of clarity is a large zone in which a court must determine an issue of first impression — that is, decide a case the outcome of which depends upon an issue of law as yet undecided. A court deciding an issue of fust impression in this indeterminate zone might expand one of the zones of clarity, or might determine that ambiguity exists and that the policyholder (insured) should have coverage because the ambiguity must be resolved in the policyholder’s favor or because the policyholder had a reasonable expectation of coverage that must be honored. The first step to deciding this case is to determine whether any of the claims against Buirkle in the Underlying Action is either in the zone of coverage established by precedents, or at least is in the zone yet undecided (in which ease an issue of first impression must then be addressed). If none of the claims against Buirkle is in either of these zones, his claim that Hanover had a duty to defend lacks merit. The precedents may be usefully analyzed from two separate perspectives: (i) What factors have precedents approved as matters a court is to consider in deciding whether an injury is one arising out of “business pursuits”? (ii) What was each fact pattern that a court ruled to be within coverage, outside coverage, or in a zone of uncertainty by reason of which the court invoked a rule of resolving ambiguity against the insurer or a rule of honoring reasonable expectations of the policyholder? 1. Factors Illustrative of pronouncements about factors are opinions that focus upon the nonexclusive list of categories below. In each category, New Jersey court opinions, if any, are listed first: (i) Proñt motive. E.g. Sun Alliance Ins. Co. of Puerto Rico, Inc. v. Soto, 836 F.2d 834, 836 (3rd Cir.1988) (profit motive may be shown by such activity as a means of livelihood, a means of earning a living, procuring subsistence or profit, commercial transactions or engagements); See also Travelers Indemnity Co. v. Fantozzi, 825 F.Supp. 80, 84 (E.D.Pa.1993) (citing Sun Alliance); In re San Juan Dupont Plaza Hotel Fire Litigation, 789 F.Supp. 1212, 1219 (D.P.R.1992) (construing California law; collecting cases from various jurisdictions); State Farm v. Hiermer, 720 F.Supp. 1310, 1315 (S.D.Ohio 1988), affirmed 884 F.2d 580 (6th Cir.1989); Becker v. State Farm, 664 F.Supp. 460, 462 (N.D.Cal.1987); Horace Mann v. Combs, 626 F.Supp. 354, 357 (S.D.Iowa 1986). But see American Family Mut. Ins. Co. v. Nickerson, 813 F.2d 135, 136 (8th Cir.1987) (under Missouri law, profit motive is irrelevant to business pursuits determination when the questioned conduct is incidental to insured’s regular employment). See also Job A. Sandoval, Annotation, Construction and Application of “Business Pursuits” Exclusion Provision in General Liability Policy, 48 A.L.R.3d 1096, 1101 & 1992 Supp. at 103 (1973). (ii) Degree of continuity (on a regular, irregular, single act continuum). E.g., Travelers Indemnity Co. v. Fantozzi, 825 F.Supp. 80, 84 (E.D.Pa.1993) (married couple’s babysitting activities that took place on a daily basis over the course of more than four years were determined to be excluded business pursuits); Becker v. State Farm, 664 F.Supp. 460, 462 (N.D.Cal.1987) (concluding that although the purchase of a movie theater was a one-shot deal, it was to be an ongoing business, and was therefore, an excluded business activity; Horace Mann v. Combs, 626 F.Supp. 354, 357 (S.D.Iowa 1986) (insured co-owner of pontoon boat did not engage in excluded business pursuit even though co-owner rented boat and earned profits therefrom; there was no partnership agreement between the co-owners, and insured earned no profit from the rental); State Farm Fire & Casualty Co. v. Drasin, 152 Cal.App.3d 864, 869, 199 Cal.Rptr 749 (1984) (insureds’ limited partnership interest in mining leases was a business pursuit, even though one of the insureds was an attorney by profession). See also Sandoval, Annotation, 48 A.L.R.3d at 1100-01 & 1992 Supp. at 101-03). (iii) Multiple Non-investment Activities (part-time business pursuits versus hobbies). E.g., compare Stem v. Insurance Co. of North America, 62 N.J. 582, 303 A.2d 883 (1973) (insured engaged primarily in trucking and warehouse business, serving as elected director of local bank, had attended eight meetings when bank became insolvent; shareholders’ claim for breach of duties of fidelity and diligence was within “business pursuits” clause and therefore outside scope of coverage of a personal excess liability policy) with Pacific Indem. Co. v. Linn, 766 F.2d 754, 766 (3rd Cir.1985) (construing Pennsylvania law; professional service exclusion and business enterprises exclusion found to be ambiguous; “Dr. Linn’s writing of the book did not constitute his business, although a profit motive cannot be denied.... [Doctor] simply co-authored a diet book. This authorship did not connote a “business” in terms of an ongoing operation with assets owned by Linn.”) and with Southern Guaranty Insurance Company v. Duncan, 131 GaApp. 761, 206 S.E.2d 672 (1974) (business pursuits did not include spare time racing interest of insured, who was gainfully employed as a mechanic). See also Burdge v. Excelsior Ins. Co., 194 N.J.Super. 320, 323-24, 476 A.2d 880, 883 (1984) (court draws distinction between business pursuits and constitutionally protected political activity, concluding that campaign activities of an office seeker, even if an incumbent, do not constitute business pursuits). See also 7A John A. Appleman, Insurance Law and Practice, § 4501.10 (Berdal ed.) (“The business activity need not be the sole occupation, and part-time business activities are excluded----”). (iv) Investment Activity (minimal or “hobby” to major; active or passive investor). E.g., In re San Juan Dupont Plaza Hotel Fire Litigation, 789 F.Supp. 1212 (D.P.R.1992) (holding that investment activities at issue were “easily distinguishable from spare time pur- ' suits,such as hobbies or leisure activities”); Lumbermen’s Mutual Casualty Co. v. United Services Automobile Association, 218 N.J.Super. 492, 528 A.2d 64 (1987) (practicing psychiatrist, with friends, established several health clubs, of which he was president, but not involved in daily management; when club failed, he allegedly made, in interview with reporter, defamatory statements about management; trial court determined no coverage on alternative grounds of lack of coverage for defamation and applicability of “business pursuits” exclusion; appellate court affirmed on first ground and did not reach “business pursuits” exclusion). 2. Fact Patterns Reexamining the precedents from the perspective of identifying the fact patterns before the courts in decided cases one may conclude, in general, though with possible differences among courts at the margins, that two zones of clarity have been established. First, coverage has been allowed, despite a “business pursuits” exclusion, when the activities alleged to be business pursuits involved a single or a small number of instances and a very small part of the insured’s total time committed to making earnings or profits. E.g., Solomon v. Continental Ins. Co., 122 N.J.Super. 125, 299 A.2d 413 (1972) (insured husband and wife were found not to have engaged in business pursuits in connection with for-profit gun dealership conducted by non-resident son in outbuildings of parents’ residential premises; due to ambiguity of exclusion clause insurer could not deny coverage for claim asserted against insureds by fireman who was injured when gunpowder stored in outbuilding exploded during fire); Southern Guaranty Insurance Company v. Duncan, 131 Ga.App. 761, 764, 206 S.E.2d 672, 674 (1974) (insured, who was gainfully employed as a mechanic, enjoyed a spare time racing interest; neighbor was injured by stray piece of metal while insured was working on a vehicle that the insured had adapted for racing; business pursuits exclusion did not apply). Second, coverage has been denied when the activities alleged to be business pursuits continued over a period of years and occupied a substantial part of the insured’s total time -committed to making earnings or profits. E.g., Stem v. Insurance Co. of North America, 62 N.J. 582, 303 A.2d 883 (1973) (insured engaged primarily in trucking and warehouse business, serving as elected director of local bank, had attended eight meetings when bank became insolvent; shareholders’ claim for breach of duties of fidelity and diligence was within “business pursuits” clause and therefore outside scope of coverage of a personal excess liability policy); Sun Alliance Ins. Co. of Puerto Rico, Inc. v. Soto, 836 F.2d at 835-36 (3rd Cir.1988) (exclusion applied to claims against insured arising from fire in commercial property owned by corporation of which insured was sole shareholder and president, where; corporation paid salary, insured owned and operated corporation at a profit, and apartment complex owned by corporation, in which insured was tenant, had been operated by insured for approximately twenty years). With these observations about the state of precedents as background, I turn next to applying the guidance from precedents to the particular circumstances presented by this ease. Part VTI considers the “business pursuits” clause of the Homeowners Policy. Part VIII considers the “business, profession or occupation” clause of the Personal Catastrophe Liability Policy. VII. Applying the “Business Pursuits” Clauses of the Homeowners Policy to the Circumstances of This Case A. Historical and Evaluative Facts (“Premise Facts”) Regarding Ambiguities, Reasonable Expectations of Coverage, and Premium Rates A Homeowners Policy is designed as a package policy suitable for the great majority of homeowners. See, e.g., Worcester Ins. Co. v. Fells Acres Day School, Inc., 408 Mass. 393, 412, 558 N.E.2d 958 (1990) (“[T]he manifest design of homeowners’ insurance is to protect homeowners from risks associated with the home and activities related to the home.”) (citation omitted). See also 7A John A. Appleman, Insurance Law and Practice § 4501.02 (Berdal ed., 1979) (“This type of coverage is simply a combination of the many property and liability coverages desired by the average person.”). It is designed to supplement, not supplant, other policies available on the market. Id. Typical among the others are motor vehicle policies (private and commercial), professional liability insurance policies, and specialized policies of numerous kinds (for example, policies covering a farm or farms the homeowner owns for recreational or farming purposes, boats owned for recreation, and other recreational vehicles). Id.; id. (1992 Supp.). Before the first Homeowners Policy was fashioned in the 1950s, nearly all the coverages now included in the package called a Homeowners Policy were available on the market. Reductions of total premium costs to the policyholder as well as marketing advantages for the insurer made the Homeowners Policy an immediate success in the market. Any particular homeowner is likely to find in the package some coverages for which that homeowner has no need. Yet, when priced within the constraints of rate regulation (some form of which is in effect in every state) the policy package is still a good bargain for the vast majority of homeowners. For each of them, buying a package that pools all these different risks works out fairly and less expensively than buying all the separate policies that the particular homeowner would need. Each of the risks included in the package for which any particular policyholder has no need is in general unlikely to materialize in a large sum of losses payable to other policyholders. Thus, the risks irrelevant to the particular homeowner do not increase premium charges enough to offset the savings (to policyholders and their insurers) from the greater efficiency of marketing a package policy rather than many separate policies. A well-designed package policy serves principles of both fairness and economic efficiency. See generally Emmett J. Vaughn, Fundamentals of Risk and Insurance (5th ed.1989); John E. Pierce, Development of Comprehensive Insurance for the Household (1958) (describing the history of development of Homeowners Policy). Coverage for business pursuits (or business activities), without limitations, would be incompatible with both fairness and efficiency in the marketing of Homeowners Policies. See, e.g., Grossman v. American Family Mut. Ins. Co., 461 N.W.2d 489, 495 (Minn. App.1990) (and authorities therein). If an insurance company tried to charge the great mass of homeowners (let us say the 80% who are least involved in high-risk activities), the same premiums as it charged, let us say, that 5% of homeowners most involved in “business pursuits” (some of this 5% being engaged in high-risk, high-stakes, aggressive investment activities entirely apart from their primary business, profession, or occupation) that company could not succeed in the marketplace. Competitors would offer lower rates to the 80% of the pool whose predicted losses would be very much lower than those of the high-risk 5%. Competitors could do so because the administrative and marketing costs of identifying and pricing the different risk pools separately would fall far short of offsetting all the savings in claims costs. Even after taking account of administrative and marketing costs, competitors could attract these members of the pool with lower rates. The competitors could, of course, also effectively advertise their rates as fairer. Charging the same rates to both the 80% low-risk group and the 5%