Punitive Damages – 2
In Dart Industries Inc. v. Liberty Mutual Insurance Co., 484 F.2d 1295 (9th Cir. 1973), the underlying complaint alleged that the insured corporation’s president sent a defamatory letter to a customer on corporate letterhead. The jury found that the president intentionally spread the falsehoods contained in the letter. The carrier contended that Section 533 precluded coverage for the underlying lawsuit. The court disagreed. The court held that Section 533 does not bar coverage for a corporation when “there remains a complete absence of proof that the policy-making management of the corporation approved, ratified, or had any knowledge of the letter or its libel.”
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