QSP, INC. v. AETNA CASUALTY SURETY CO., 256 Conn. 343 (2001)

773 A.2d 906

QSP, INC., ET AL. v. THE AETNA CASUALTY AND SURETY COMPANY ET AL.

(SC 16269)Supreme Court of Connecticut

Borden, Katz, Palmer, Sullivan and Vertefeuille, Js.[*]

Syllabus
The plaintiffs, which sold products used in school and youth group magazine fund-raising campaigns, sought a declaratory judgment to determine whether, pursuant to certain commercial general liability and excess liability policies, the defendant insurers were obligated to defend and indemnify them in a certain federal antitrust class action. The antitrust action had been brought by the plaintiffs’ customers, who alleged that the plaintiffs had monopolized the school and youth group magazine fund-raising market, depriving their customers of substantial fund-raising revenues that would have been received if there had been competition in that market. The plaintiffs argued that because the antitrust complaint contained allegations of defamation, commercial disparagement, bad faith litigation and unfair competition, they were entitled to defense and indemnification under the provisions of their policies applicable to personal injury, advertising injury and advertising offense. The trial court granted the defendants’ motions for summary judgment, and the plaintiffs appealed. Held:

1. The trial court properly determined that the allegations in the antitrust action that the plaintiffs had defamed and commercially disparaged their competitors did not entitle the plaintiffs to personal injury coverage under the policy provisions applicable to defense of defamation or commercial disparagement claims, and that the allegation that the plaintiffs had threatened litigation as part of their campaign of anticompetitive disparagement did not trigger personal injury coverage under the provisions applicable to vexatious litigation or malicious prosecution; the customers who brought the antitrust action alleged that those actions by the plaintiffs were directed at the plaintiffs’ competitors, not at them.

2. The plaintiffs could not prevail on their claims that the provisions of their policies covering “advertising injury,” “advertising offense” and “unfair competition” should be construed broadly to cover the allegations made in the antitrust action; there was nothing in the record either to establish a causal connection between the plaintiffs’ advertising or unfair competitive practices and the injuries alleged in the antitrust action, or to show that the plaintiffs improperly interfered with anyone’s business or property, or that they did so through advertising.

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3. The trial court properly determined that the defendants had no duty to defend because the injuries claimed in the antitrust action did not “arise out of” the torts of defamation, disparagement, malicious prosecution or vexatious suit covered under the policies, but rather arose out of the existence of a monopoly, and there was no coverage where the underlying action alleged only consequential damages by parties who were not directly injured by the covered torts; the “arising out of” language contained in the insurance policies referred to the injury suffered directly as a consequence of the covered torts and could not be used to expand the list of enumerated offenses or to broaden coverage to include even those remote injuries suffered by a tenuously connected plaintiff.

4. The defendants had no duty to indemnify the plaintiffs, there being no duty to indemnify where there is no duty to defend.

Argued November 28, 2000

Officially released June 5, 2001

Procedural History
Action to recover damages for breach of certain general liability insurance contracts issued by the defendants as a result of their refusal to defend and indemnify the plaintiffs in a separate federal antitrust action brought against them, and for other relief, brought to the Superior Court in the judicial district of Danbury, where the court Levin, J., denied the plaintiffs’ motion for partial summary judgment and granted the motions for summary judgment filed by the defendant General Star National Insurance Company et al., and rendered judgment thereon for those defendants, from which the plaintiffs appealed to the Appellate Court; thereafter, the trial court granted the motion for articulation filed by the defendant Federal Insurance Company and issued an articulation of its decision declaring that the summary judgment also applied to that defendant, from which the plaintiffs filed a separate appeal to the Appellate Court which, sua sponte, consolidated the appeals; the appeals were subsequently transferred to this court Affirmed.

Frances J. Brady, with whom were Jerold Oshinsky and, on the brief Samuel L. Jefferson, Jr., Michael T.

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Sharkey and Marilyn B. Fagelson, for the appellants (plaintiffs).

Alan H. Barbanel, pro hac vice, with whom were Michael C. Deakin and, on the brief, Peter D. Clark, Stephen D. Treuer, pro hac vice, and Thomas E. Greiff, pro hac vice, for the appellee (defendant General Star National Insurance Company).

Bruce D. Celebrezze, pro hac vice, with whom were Linda L. Morkan, Theodore J. Tucci and, on the brief, Jeffrey A. Meyers, pro hac vice, an Stephen E. Goldman, for the appellees (defendants American Manufacturers Mutual Insurance Company et al.).

David F. Bennett, William T. Corbett, Jr., pro hac vice, and William J. Metcalf, pro hac vice, filed a brief for the appellee (defendant Federal Insurance Company).

Opinion
SULLIVAN, J.

This appeal arises from a declaratory judgment action filed by the plaintiffs, Reader’s Digest Association, Inc. (Reader’s Digest), and QSP, Inc. (QSP), with respect to a controversy with the defendants, American Manufacturers Mutual Insurance Company and American Motorists Insurance Company (collectively American Motorists), General Star National Insurance Company (GenStar) and Federal Insurance Company (Federal),[1]
over potential insurance coverage to be provided by the defendants under commercial general liability and excess liability policies that they had issued to the plaintiffs. The policies covered, among other things, the defense of actions based on advertising or personal injury. The plaintiffs sought a declaration as to whether they were entitled, under

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the terms of any or all of the policies effective during the relevant time period, to the defense of and indemnification for an underlying antitrust class action filed in federal court and entitled Roman Catholic Bishop of San Diego v. Reader’s Digest Assn., Inc., QSP, Inc., United States District Court, Docket No. 93-1953-IEG (CM) (S.D.Cal.) (Bishop
action).[2] The trial court concluded that the defendants were not under a duty to defend the plaintiffs in the Bishop action. We agree and therefore affirm the judgment.

The following facts and procedural history are relevant to the disposition of the issues on appeal. QSP is a corporation organized and existing under the laws of the state of Delaware, with its principal place of business in Ridgefield. It is a wholly owned subsidiary of Reader’s Digest. Reader’s Digest is a corporation organized and existing under the laws of the state of Delaware, with its principal place of business in Pleasantville, New York. American Motorists sold commercial general liability insurance coverage to Reader’s Digest for the period from 1990 to 1996.[3] GenStar and Federal provided excess liability coverage to Reader’s Digest from 1989 to 1994. QSP, as a subsidiary of Reader’s Digest, is covered as an insured under the relevant policies.

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In December, 1993, the plaintiffs in the Bishop action filed their federal antitrust class action lawsuit, alleging that QSP and Reader’s Digest had violated federal antitrust laws by monopolizing the school and youth group magazine fund-raising market. The class of plaintiffs in th Bishop action consisted of all school-related entities in the continental United States that had purchased magazine fund-raising programs from QSP in any one or more years from 1990 to 1993. The Bishop plaintiffs alleged that QSP and Reader’s Digest had eliminated or weakened competition in the school fund-raising market by conducting “anticompetitive, predatory and exclusionary acts” including, but not limited to: (1) defamation of the character and competence of their competitors; (2) commercial disparagement; (3) unfair competition; and (4) threatening and instituting bad faith litigation as part of a campaign of anticompetitive disparagement[4] as a result of the alleged unlawful conduct of Reader’s Digest and QSP. The Bishop plaintiffs claimed that they were deprived of substantial magazine fund-raising revenues that they otherwise would have received if there were competition in the market. They further claimed that, because of the diminished revenue, they were forced to cut important educational and extracurricular programs and activities.

QSP and Reader’s Digest entered into a settlement agreement with th Bishop plaintiffs in October, 1996. The terms of the settlement expanded the class of Bishop plaintiffs to include all United States schools that had purchased magazine fund-raising programs from QSP between 1990 and 1995, and obligated

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Reader’s Digest and QSP to pay members of the class of Bishop plaintiffs $15 million, plus certain additional cash equivalents.[5] QSP and Reader’s Digest gave notice of the lawsuit and settlement to their primary carriers, American Motorists, which refused either to defend them in the Bishop action or to reimburse them for costs incurred in defending or settling the class action lawsuit. American Motorists stated that their insurance policies covered only claims by competitors, and did not cover claims by customers, like the Bishop plaintiffs, who alleged damages flowing from the anticompetitive conduct of the insured. Additionally, American Motorists argued that their policy provisions covering “advertising injury,” “advertising offense,” and “personal injury” did not cover federal antitrust violations when those violations “arose out of” covered offenses, such as defamation, disparagement, malicious prosecution or unfair competition, where those offenses had not been committed against the Bishop plaintiffs.[6] GenStar and Federal, as Reader’s Digest’s excess liability carriers, also refused to defend Reader’s Digest and QSP or indemnify them for damages awarded in th Bishop action under the “advertising offense” section of their policies, claiming that the Bishop plaintiffs’ injuries arose out of the existence of a monopoly, rather than out of unfair competition committed in the course of advertising activities.[7]

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QSP and Reader’s Digest filed the present action in the Superior Court in response to the insurance companies’ refusal to defend or indemnify them in the underlying Bishop action. In their complaint, QSP and Reader’s Digest alleged that because the antitrust complaint in the underlying Bishop action alleged defamation, commercial disparagement, bad faith litigation and unfair competition, they were entitled to defense and indemnification on the ground that their insurance policies expressly covered claims arising out of those offenses. The defendants responded that there was no duty to defend because: (1) the Bishop action was based solely on allegations of illegal monopolization and antitrust violations, rather than any offenses enumerated under the relevant policy provisions; and (2) the

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Bishop plaintiffs did not suffer any direct injury as a result of the alleged offenses.

In a thorough and well reasoned decision, the trial court, Levin, J., granted the cross motions by the defendants for summary judgment.[8]
The trial court found that “the defendants were not under a duty to defend [QSP and Reader’s Digest] in the Bishop action because (1) th Bishop plaintiffs [did] not state facts showing defamation, disparagement, malicious prosecution or unfair competition [as recognized under the `personal injury,’ `advertising injury’ or `advertising offense’ sections of the American Motorists and GenStar policies]; (2) the Bishop plaintiffs did not allege that they were the targets of those offenses; and (3) the antitrust injuries which the Bishop plaintiffs [did] allege [did] not `arise out of’ these torts.” QSP and Reader’s Digest appealed to the Appellate Court on their motion, and the matter was transferred to this court pursuant to Practice Book § 65-2.[9]
We agree with the conclusions of the trial court and, therefore, affirm its judgment.[10]

On appeal, QSP and Reader’s Digest claim that the trial court, in granting the defendants’ cross motions for summary judgment, improperly concluded that the defendants had no duty to defend or indemnify them in the underlying antitrust action. QSP and Reader’s Digest challenge the trial court’s granting of summary judgment in the insurers’ favor, relying on the settled principle that “an insurer’s duty to defend, [is] much broader in scope and application than its duty to indemnify, [and] . . . [t]he obligation of the insurer to defend does not depend on whether the injured party will

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successfully maintain a cause of action against the insured but on whether he has, in his complaint, stated facts which bring the injury within the coverage.” (Citation omitted; internal quotation marks omitted.) Springdale Donuts, Inc. v. Aetna Casualty Surety Co. of Illinois, 247 Conn. 801, 807, 724 A.2d 1117 (1999). QSP and Reader’s Digest argue that, because the antitrust claim in the underlying Bishop
action was couched in terms of defamation, commercial disparagement, bad faith litigation and unfair competition, they were entitled to defense and indemnification under the “personal injury,” “advertising injury” and “advertising offense” sections of the relevant policies. We conclude that these allegations do not trigger the defendants’ duty to defend.

Before addressing the merits of this dispute, we set forth the standard of review for summary judgment which is well established. “Summary judgment shall be rendered forthwith if the pleadings, affidavits and any other proof submitted show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law. . . . In deciding a motion for summary judgment, the trial court must view the evidence in the light most favorable to the nonmoving party.” (Internal quotation marks omitted.) Orkney v. Hanover Ins. Co., 248 Conn. 195, 201, 727 A.2d 700 (1999); see Practice Book § 17-49.

Our standard of review with respect to insurance contracts is also well settled. “It is the function of the court to construe the provisions of the contract of insurance. . . . The [i]nterpretation of an insurance policy . . . involves a determination of the intent of the parties as expressed by the language of the policy . . . [including] what coverage the . . . [insured] expected to receive and what the [insurer] was to provide, as disclosed by the provisions of the policy. . . . [A] contract of insurance must be viewed in its entirety, and the

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intent of the parties for entering it derived from the four corners of the policy . . . [giving the] words . . . [of the policy] their natural and ordinary meaning . . . [and construing] any ambiguity in the terms . . . in favor of the insured. . . .” (Citations omitted; internal quotation marks omitted.) Springdale Donuts, Inc. v. Aetna Casualty Surety Co. of Illinois, supra, 247 Conn. 805-806.[11] “`[B]ecause the proper construction of a policy of insurance presents a question of law, the trial court’s interpretation of the policy is subject to de novo review on appeal.'” Id., 806; see also Imperial Casualty Indemnity Co. v. State, 246 Conn. 313, 322 n. 6, 714 A.2d 1230 (1998).

“It is well established [however] that a liability insurer has a duty to defend its insured in a pending lawsuit if the pleadings allege a covered occurrence, even though facts outside the four corners of those pleadings indicate that the claim may be meritless or not covered. . . .” (Citation omitted.) Fitzpatrick v. American Honda Motor Co., 78 N.Y.2d 61, 63, 575 N.E.2d 90, 571 N.Y.S.2d 672 (1991); see also, e.g., Ruder Finn, Inc. v. Seaboard Surety Co., 52 N.Y.2d 663, 669-70, 22 N.E.2d 518, 439 N.Y.S.2d 858 (1981). “[T]he oft-stated principle [is] that the duty to defend is broader than the duty to indemnify. . . .” (Citation omitted.) Fitzpatrick v. American Honda Motor Co., supra, 65.

I PERSONAL INJURY
We begin our analysis with a review of the language of the American Motorists policies. The American

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Motorists’ commercial general liability policies provide that the insurer “will pay those sums that the insured becomes legally obligated to pay as damages because of [a] `personal injury’ . . . to which this coverage part applies. [The insurer] will have the right and duty to defend any `suit’ seeking those damages. . . . [The insurer] may . . . investigate any `occurrence’ . . . and settle any claim or `suit’ that may result. . . .” Section V (10) of the policy provides in relevant part that “`[p]ersonal injury’ means injury, other than `bodily injury,’ arising out of . . . malicious prosecution . . . [or] [o]ral or written publication of material that slanders or libels a person or organization or disparages a person’s or organization’s goods, products or services. . . .”[12] An “`occurrence'” is defined in section V (9) as “an accident, including continuous or repeated exposure to substantially the same general harmful conditions.” In order for the allegations of the underlying complaint to fall within the policy coverage for “personal injury,” the complaint must allege an injury that “arose out of” one of the offenses listed in the policy.

QSP and Reader’s Digest first contend that the trial court improperly concluded that the defendants had no duty to defend them in the Bishop
action because it is an action for federal antitrust violations not covered by the policies. More specifically, QSP and Reader’s Digest claim that the trial court should have found coverage because the charges of federal antitrust violations in the Bishop action rested on underlying allegations of defamation, disparagement and malicious prosecution,

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all covered offenses under the “personal injury” section of the American Motorists policy. We disagree.

As stated previously, the duty to defend does not arise only when the injured party can successfully maintain a cause of action against the insured. That duty arises when the complaint states facts that bring the injury within the policy coverage. See Moore v. Continental Casualty Co., 252 Conn. 405, 409, 746 A.2d 1252 (2000) (“[i]f an allegation of the complaint falls even possibly within the coverage, then the insurance company must defend the insured”). “On the other hand, if the complaint alleges a liability which the policy does not cover, the insurer is not required to defend.” (Internal quotation marks omitted.) Springdale Donuts, Inc. v. Aetna Casualty Surety Co. of Illinois, supra, 247 Conn. 807; see also First Investors Corp. v. Liberty Mutual Ins. Co., 152 F.3d 162, 165 (2d Cir. 1998) (duty to defend under New York law “exceedingly broad” but not without limits). “[T]he duty to defend derives . . . not from the complaint [as] drafted by a third party, but rather from the insurer’s own contract with the insured. . . .”Fitzpatrick v. American Honda Motor Co., supra, 78 N.Y.2d 68.

QSP and Reader’s Digest claim that the following allegations in th Bishop complaint trigger coverage under the “personal injury” provisions of the American Motorist policy:[13] (1) paragraph 29(c) alleges that QSP and Reader’s Digest “defamed the character and competence of individual owners, officers, agents and employees of competitors . . . by falsely stating . . . that such individuals had embezzled or stolen large sums of money, had been fired by QSP for dishonesty or incompetence, or had illegally taped conversations”; (emphasis added); (2) paragraph 29 (d) alleges that QSP

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and Reader’s Digest “disparaged competing firms by misrepresenting their reliability, capability, integrity and financial stability” through false statements; (emphasis added); (3) paragraph 29(e) alleges that QSP and Reader’s Digest “threatened and instituted bad faith litigation” as part of their campaign of anticompetitive disparagement. (Emphasis added.)

QSP and Reader’s Digest claim that because the Bishop complaint describes the underlying offenses in terms of defamation, disparagement and malicious prosecution, there is at least a possibility of coverage. The defendants, on the other hand, argue that the Bishop plaintiffs simply were using these tort-based descriptions to identify the primary charge: wilful violation of federal antitrust laws by Reader’s Digest and QSP. We agree with the defendants and conclude that there is no duty to defend under the personal injury provision of the American Motorists’ policy because the Bishop plaintiffs are not the proper parties to raise the allegations that QSP and Reader’s Digest claim trigger coverage, nor did the Bishop plaintiffs suffer any injury that would be causally connected to any offense covered under “personal injury.”

First, we address the claim by QSP and Reader’s Digest that paragraph 29(c) of the Bishop complaint, which alleges that QSP and Reader’s Digest “defamed the character and competence of individual owners, officers, agents and employees of competitors”; (emphasis added); brings the Bishop action within their policy coverage under the “personal injury” provision as defined previously. The trial court disagreed, concluding that “[b]ecause the Bishop plaintiffs did not allege that they themselves were defamed, the Bishop action did not allege a claim for defamation which the defendants were required to defend.” We agree with the trial court. Where the alleged defamatory statements were not made about the Bishop plaintiffs, they

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do not satisfy the “of and concerning” element crucial to prevailing on a common-law defamation claim. See Daley v. Aetna Life Casualty Co., 249 Conn. 766, 795, 734 A.2d 112 (1999); Torosyan v. Boehringer Ingelheim Pharmaceuticals, Inc., 234 Conn. 1, 27, 662 A.2d 89 (1995); see als Eckhaus v. Alfa-Laval, Inc., 764 F. Sup. 34, 37 n. 4 (S.D.N.Y. 1991); 3 Restatement (Second), Torts § 564 and comment (a) (1976) (“[a] defamatory communication is made concerning the person to whom its recipient correctly, or mistakenly but reasonably, understands that it was intended to refer”).[14]

In order for QSP and Reader’s Digest to establish that the Bishop
plaintiffs suffered prima facie defamation, they must show that: (1) QSP and Reader’s Digest made a defamatory statement; (2) the defamatory statement identified the Bishop plaintiffs to a reasonable third person; (3) the defamatory statement was published to a third person; and (4) th Bishop plaintiffs’ reputation suffered injury as a result of the defamatory statement. See Lizotte v. Welker, 45 Conn. Sup. 217, 219-20, 709 A.2d 50 (1996), aff’d, 244 Conn. 156, 709 A.2d 1 (1998); see also 3 Restatement (Second), supra, § 559 (“[a] communication is defamatory if it tends to so harm the reputation of another as to lower him in the estimation of the community or to deter third persons from associating or dealing with him”). Where a plaintiff cannot prove a fundamental element of the underlying tort, e.g., defamation, a claim for personal injury coverage will be denied. See Liberty Bank of Montana v. Travelers Indemnity Co. of America, 870 F.2d 1504, 1508 (9th Cir. 1989); Brooklyn Law School v. Aetna Casualty Surety Co., 661 F. Sup. 445, 453
(E.D.N.Y. 1987).

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The Bishop plaintiffs were not the parties about whom the defamatory statements allegedly had been made by QSP and Reader’s Digest, nor had the Bishop plaintiffs suffered any harm to their reputation from the alleged defamation. Instead, as the Bishop complaint suggests, QSP and Reader’s Digest defamed “individual owners, officers, agents and employees of competitors in the school/youth group magazine fund raising market. . . .” (Emphasis added.) QSP and Reader’s Digest do not provide any authority that the “of and concerning” element is unnecessary when establishing a cause of action for defamation. See, e.g., Auvil v. CBS 60 Minutes, 800 F. Sup. 941, 944 (E.D.Wash. 1992) (court aware of no case law suggesting that publication not “of and concerning” identifiable target can be converted into “of and concerning” attack due to actions of third parties). They argue only that no “of and concerning” requirement appears in the policy language. This observation is inapposite because we interpret the words of the policies according to their “common, ordinary and customary meaning.” Izzo v. Colonial Penn Ins. Co., 203 Conn. 305, 309, 524 A.2d 641 (1987). In this case, it was the competitors of QSP and Reader’s Digest who allegedly were defamed, and they have been compensated through the settlement of a separate underlying action brought on their behalf entitled Burkett v. Reader’s Digest Assn., Inc., San Diego County Superior Court, Case No. 621222 (Burkett action). Th Bishop plaintiffs make no claim for damages arising out of defamation. We conclude, therefore, that QSP and Reader’s Digest are not entitled to “personal injury” coverage for defamation charges that never were alleged in the Bishop complaint. If the Bishop plaintiffs did suffer damages as a result of the defamation by QSP and Reader’s Digest of their magazine fund-raising competitors, those damages were indirect and only tenuously related to that defamatory conduct.

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We next address the argument by QSP and Reader’s Digest that th Bishop complaint states a cause of action for commercial disparagement, also known as “injurious falsehood” or “trade libel,” committed by QSP and Reader’s Digest against their competitors. Paragraph 29(d) of th Bishop complaint alleges in relevant part that QSP and Reader’s Digest “disparaged competing firms by misrepresenting their reliability, capability, integrity and financial stability” by falsely alleging, among other things, that they did not deliver magazine orders despite having been paid. Included in the definition of “personal injury” in the American Motorists’ policy is coverage for injuries arising out of the “[o]ral or written publication of material that . . . disparages a person’s or organization’s goods, products or services. . . .”

Defamation or disparagement of a business’ goods and services may be considered trade libel; Securitron Magnalock Corp. v. Schnabolk, 65 F.3d 256, 265 (2d Cir. 1995), cert. denied, 516 U.S. 1114, 116 S.Ct. 916, 133 L.Ed.2d 846 (1996); Van-Go Transport Co. v. Board of Education, 971 F. Sup. 90, 98 (E.D.N Y 1997); and is recognized by Connecticut and New York courts as a species of defamation. See Charles Parker Co. v Silver City Crystal Co., 142 Conn. 605, 612, 116 A.2d 440 (1955); Proto
v. Bridgeport Herald Corp., 136 Conn. 557, 566, 72 A.2d 820 (1950); see also Ruder Finn, Inc. v. Seaboard Surety Co., supra, 52 N.Y.2d 670-71 (where statement impugns basic integrity or creditworthiness of business, action for defamation lies and injury conclusively presumed) Jurlique, Inc. v. Austral Biolab Pty., Ltd., 187 App.Div.2d 637, 639, 590 N.Y.S.2d 235 (1992) (“trade defamation is the knowing publication of a false matter derogatory to the plaintiff’s business calculated to prevent or interfere with relationships

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between the plaintiff and others to its detriment”).[15] In order to sustain an action for commercial disparagement, an insured must “[paint] a picture which . . . conceivably could subject [it] to liability for commercial disparagement.” Tews Funeral Home, Inc. v. Ohio Casualty Ins. Co., 832 F.2d 1037, 1043 (7th Cir. 1987), citing Ruder Finn, Inc. v Seaboard Surety Co., supra, 862.

The torts of trade libel and commercial disparagement, like defamation, require that the alleged damaging statement be made concerning the plaintiff. See Unelko Corp. v. Rooney, 912 F.2d 1049, 1050
(9th Cir. 1990), cert. denied, 499 U.S. 961, 111 S.Ct. 1586, 113 L.Ed.2d 650 (1991) (claims for product disparagement or

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trade libel or tortious interference with business relationships subject to same first amendment requirements that govern defamation); Erlich v Etner, 224 Cal.App.2d 69, 73, 407 P.2d 649, 36 Cal.Rptr. 256 (1964) (cause of action for injurious falsehood or disparagement resembles that for defamation). This is consistent with our treatment of business disparagement like defamation, requiring that the statement that disparages a person’s goods or services be made “of and concerning” the person stating the cause of action. See, e.g., Charles Parker Co. v Silver City Crystal Co., supra, 142 Conn. 609-15; Ruder Finn, Inc. v Seaboard Surety Co., supra, 52 N.Y.2d 670-71. Not only were the Bishop
plaintiffs not harmed in their trade or business, but no such claim of business disparagement was made by the Bishop plaintiffs in their complaint.

It is clear from the allegations of the Bishop complaint that any commercially disparaging conduct on the part of QSP and Reader’s Digest had been directed against their competitors and not against the Bishop
plaintiffs. Because the Bishop plaintiffs were not the targets of the alleged commercial disparagement committed by QSP and Reader’s Digest, the complaint simply does not give rise to a disparagement action. As a result, the complaint did not trigger coverage for commercial disparagement under the defendants’ policies.

We finally address the claim by QSP and Reader’s Digest that th Bishop plaintiffs’ allegations of “malicious prosecution” triggered personal injury coverage.[16]

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In a malicious prosecution or vexatious litigation action, “it is necessary to prove want of probable cause, malice and a termination of [the] suit in the plaintiffs’ favor.” DeLaurentis v. New Haven, 220 Conn. 225, 248, 597 A.2d 807 (1991).[17] “[Establishing] a cause of action for vexatious suit requires proof that a civil action has been prosecuted not only without probable cause but also with malice Bridgeport Hydraulic Co. v. Pearson, 139 Conn. 186, 194, 91 A.2d 778
(1952). . . . It must also appear that the litigation claimed to be vexatious terminated in some way favorable to the defendant therein.” (Citation omitted.) Merrill Lynch, Pierce, Fenner Smith, Inc. v. Cole, 189 Conn. 518, 538, 457 A.2d 656 (1983).[18]

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The Bishop plaintiffs did not allege that they had suffered injury as a result of “malicious prosecution” or “vexatious litigation.” In paragraph 29(e) of the Bishop complaint, the Bishop plaintiffs alleged that QSP and Reader’s Digest “threatened and instituted bad faith litigation” as part of their campaign of anticompetitive disparagement. Paragraph 29(m) also alleged that QSP and Reader’s Digest “made unfounded allegations of possible legal and ethical violations, and have threatened to initiate actions against individual lawyers and their firms if they participated in [the Bishop] action.”[19] Again, we conclude that, because th Bishop plaintiffs did not allege that they had suffered personal injury due to vexatious litigation or malicious prosecution, personal injury coverage was not triggered.

QSP and Reader’s Digest rely on Ethicon, Inc. v. Aetna Casualty Surety Co., 737 F. Sup. 1320 (S.D.N.Y. 1990), in which the court found a duty to defend in an antitrust action that, when stripped of its antitrust label, met the requirements for a malicious prosecution claim in California. The present case is different. In Ethicon, Inc., the plaintiffs in the underlying antitrust action

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were also the victims of the vexatious litigation. As a result, the court held that they satisfied the elements necessary to raise such a claim and trigger personal injury coverage. The Bishop plaintiffs, on the other hand, are not claiming injuries as a result of vexatious litigation and do not base their complaint on that charge.

In this case, the threats of litigation were lodged against competitors of QSP and Reader’s Digest, and their lawyers, not the Bishop
plaintiffs. The use of the phrase “bad faith litigation” in their description of the antitrust allegations does not bring the Bishop
complaint within the policy coverage. Therefore, the Bishop complaint was not a personal injury action arising out of vexatious litigation or malicious prosecution and could not trigger personal injury coverage under that policy language.

II ADVERTISING INJURY
QSP and Reader’s Digest also make a claim for coverage under the “advertising injury” and “advertising offense” provisions of the American Motorists and GenStar policies. First, they claim that “the Bishop
complaint’s allegation that [Reader’s Digest] and QSP engaged in a `campaign’ of disparagement, misstatements to customers in promoting [Reader’s Digest] and QSP, and subsidizing promotional activities constitute advertising.” Second, QSP and Reader’s Digest argue that several subparagraphs of paragraph 29 of the Bishop complaint give rise to coverage under GenStar’s policies for the advertising offense of unfair competition. The trial court concluded that “[b]ecause the Bishop
complaint did not allege that any wrong covered by the defendants’ policies was caused by advertising, there was no duty to defend under the advertising injury [or] advertising offense coverage of either [the

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American Motorists or GenStar policies]” and that the Bishop complaint did not allege a cause of action for unfair competition under the advertising offense provision of the GenStar and Federal policies because “it neither alleged the misappropriation of a commercial advantage belonging to the Bishop plaintiffs, nor [did it allege] that the Bishop
plaintiffs suffered [a] competitive injury.”

QSP and Reader’s Digest challenge the trial court’s conclusions and argue that: (1) the term “advertising” should be defined broadly, to include a “campaign” of conduct; and (2) the term “unfair competition” also should be defined broadly to include underlying allegations of antitrust violations, even where the acts constituting such violations are not committed directly against the parties bringing the cause of action. We are not persuaded by their argument and, therefore, agree with the conclusions of the trial court.

We first address the claim of QSP and Reader’s Digest that the defendants have a duty to defend under the “advertising injury” and “advertising offense” sections of their policies. Section V (1) of the American Motorists policies provides in relevant part that “`[a]dvertising injury’ means injury arising out of . . . [o]ral or written publication of material that slanders or libels a person or organization or disparages a person’s or organization’s goods, products or services. . . .” This coverage applies to only “`[a]dvertising injury’ caused by an offense committed in the course of advertising [the insured’s] goods, products or services. . . .” GenStar’s policy language defines “`Advertising Offense'” in relevant part as any “(1) libel, slander or defamation . . . [or] (3) piracy or unfair competition or idea misappropriation under an implied contract. . . .” (Emphasis added.) The policy states that GenStar will “defend any suit against the Insured seeking damages on account of . . . [an] advertising offense,” where

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such offense is “committed or alleged to have been committed in any advertisement, publicity article, broadcast or telecast and arising out of the Named Insured’s advertising activities.”

A
The trial court in this case defined “`advertisement,'” according to its dictionary definition, as “`the act or process of advertising . . . a public notice; esp: one published in the press or broadcast.’ Webster’s Ninth New Collegiate Dictionary (1991).” We defined the word “advertise” in Schwartz v. Planning Zoning Commission, 208 Conn. 146, 155, 543 A.2d 1339 (1988), as follows: “to announce publicly esp[ecially] by a printed notice or a broadcast; [and] to call public attention to esp[ecially] by emphasizing desirable qualities so as to arouse a desire to buy or patronize.” “Black’s Law Dictionary defines advertising in a manner that would include such dissemination of information [as]: [a]ny oral, written, or graphic statement made by the seller in any manner in connection with the solicitation of business. . . .” (Internal quotation marks omitted.) Elan Pharmaceutical Research Corp. v. Employers Ins. of Wausau, 144 F.3d 1372, 1377 (11th Cir. 1998). As pointed out by the trial court, in New York, advertising has been defined by the courts as “the calling of information to the attention of the public, by whatever means.” Koffler v. Joint Bar Assn. Grievance Committee, 51 N.Y.2d 140, 146, 412 N.E.2d 927, 432 N.Y.S.2d 872 (1980).

“Courts have differed over precisely what type of conduct constitutes advertising activity. A number of courts have defined the term expansively to include even individual sales pitches to individual consumers; but other courts have defined it more narrowly.” Elan Pharmaceutical Research Corp. v. Employers Ins. of

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Wausau, supra, 144 F.3d 1376.[20] The court in Elan Pharmaceutical Research Corp. stated that “[a] plain and ordinary reading of the definition of advertising activity in [the insurer’s] policies would include an insured’s dissemination of information to promote a product or service.” Id., 1377. “Moreover, the courts that have considered the issue of advertising activity in similar contexts have defined it in terms that include the dissemination of information to promote a product. See e.g. Smartfoods, Inc. v. Northbrook Property Cas. Co., 35 Mass. App. 239, 243-44, 618 N.E.2d 1365, 1368 (1993) (`[A]dvertising means a public announcement to proclaim the qualities of a product. . . . Wide dissemination of information is typically the objective of advertising.’). . . .” Elan Pharmaceutical Research Corp. v Employers Ins. of Wausau, supra, 1377 (dissemination of clinical studies to develop market for one of Elan’s products appears to fall well within definition of advertising activity provided in insurance policies and case law). A common theme, however, is the requirement that information must be publicly or widely disseminated in order to be considered “advertising.” See Delta Pride Catfish, Inc. v Home Ins. Co., 697 So.2d 400, 403 (Miss. 1997).

QSP and Reader’s Digest argue that the term “advertise” should be broadly defined; see Amsel v. Brooks, 141 Conn. 288, 299, 106 A.2d 152
(1954) (term “`advertise'” covers “a wide range . . . through [a] whole gamut of means and devices for arousing public interest

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and patronage”); and should include the “campaign” of monopolistic conduct that ultimately gave rise to the underlying antitrust action. We disagree. The Bishop complaint, phrased in terms of monopolistic and anticompetitive conduct, never mentions the word “advertising,” nor is there any evidence that the alleged anticompetitive conduct was facilitated by a widespread advertising campaign by QSP and Reader’s Digest against the Bishop plaintiffs. To the contrary, there is little evidence in the record that even suggests that a derogatory advertising campaign was launched by QSP and Reader’s Digest against their competitors in the magazine fund-raising market. QSP and Reader’s Digest seem to be relying on catchphrases from their own complaint, such as “`scheme’ to obtain monopoly power,” and “advertising . . . the Reader’s Digest name,” to sustain an argument that they launched a campaign of anticompetitive and disparaging conduct that would be covered under the auspice of advertising injury.[21] There is nothing in the record that suggests that the alleged defamatory or disparaging conduct would have taken place in connection with advertising against anyone other than competitors in the magazine fund-raising market. More importantly, there is nothing in the Bishop complaint that warrants a charge of advertising injury in the first place. Thus, because there was no public dissemination of defamatory or disparaging materials, there can be no causal connection between the advertising by QSP and Reader’s Digest and the injuries alleged by the Bishop plaintiffs.

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B
QSP and Reader’s Digest also argue that there is coverage under the “advertising offense” provision of the GenStar and Federal policies because the Bishop complaint stated a cause of action for common-law “unfair competition.”[22] GenStar’s policy language defines “advertising offense” to include “unfair competition“; (emphasis added); and states that GenStar will “defend any suit against the Insured seeking damages on account of [unfair competition] . . . committed or alleged to have been committed in any advertisement, publicity article, broadcast or telecast and arising out of the Named Insured’s advertising activities.”[23] In order to trigger coverage for “unfair competition,” the policies require that the underlying action allege not only the offense itself, but also that it arose out of the insured’s advertising activities.

“[T]he policy imposes two requirements for coverage of an advertising injury, even when a specified offense . . . is involved. First, that [the] injury must have been one arising out of the offense in order to qualify under the definition of advertising injury. Second, it must have been caused by an offense committed in the course of advertising [the insured’s] goods.” (Internal quotation marks omitted.) Julian v. Liberty Mutual Ins. Co.,

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43 Conn. App. 281, 289-90, 682 A.2d 611 (1996); see also Bank of the West v. Superior Court, 2 Cal.4th 1254, 1277, 833 P.2d 545, 10 Cal.Rptr.2d 538 (1992). The Appellate Court “construe[d] [the advertising injury] provision to mean that a covered advertising injury would have to be causally related to an offense . . . that is itself causally related to the insured’s advertising activities.” Julian v Liberty Mutual Ins. Co., supra, 290, and cases cited therein.[24]
Courts require more than a tenuous connection between advertising and the claimed injury in order to trigger advertising injury coverage. See, e.g., Simply Fresh Fruit, Inc. v. Continental Ins. Co., 84 F.3d 1105, 1108-1109 (9th Cir. 1996) (where patent infringement is independent of advertising there can be no causal connection between advertising and claimed infringement injuries); Pacific Group v. First State Ins. Co., 70 F.3d 524, 527-28 (9th Cir. 1995) (not sufficient for coverage when there is unfair competition and also advertising unless nexus between two caused injury). Instead, “the injury for which coverage is sought must be caused by the advertising itself.” Microtec Research, Inc. v. Nationwide Mutual Ins. Co., 40 F.3d 968, 971 (9th Cir. 1994).

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Paragraphs 29(f), (g), (h) and (i) of the Bishop complaint allege that QSP and Reader’s Digest “predatorily and discriminatorily undercut competitive offerings,” “engaged in predatory pricing,” “intentionally interfered with the actual or prospective contractual or other business arrangements of their competitors,” and “engaged in various unfair and misleading business practices, including . . . making false and deceitful misrepresentations” as to the nature of their organization and activities. (Emphasis added.) QSP and Reader’s Digest claim that these underlying allegations of unfair competition bring the Bishop complaint within the “advertising offense” provision of the GenStar policy. The trial court concluded, however, that the Bishop complaint “did not allege a . . . cause of action for unfair competition because it neither alleged the misappropriation of a commercial advantage belonging to the Bishop
plaintiffs, nor [did it allege] that the Bishop plaintiffs suffered competitive injury.” We agree with the trial court.

QSP and Reader’s Digest argue that Connecticut construes the term “unfair competition” as a “`generic name for a number of . . . torts involving improper interference with business prospects.'” Larsen Chelsey Realty Co. v. Larsen, 232 Conn. 480, 527 n. 23, 656 A.2d 1009 (1995).[25]
“The essence of a claim for unfair competition under New York law is that a party misappropriate the skill, expenditures and labor of another.”Crimpers Promotions, Inc. v. Home Box Office, Inc., 554 F. Sup. 838, 849
(S.D.N Y 1982), aff’d, 724 F.2d 290 (2d Cir. 1983), cert. denied, 467 U.S. 1252, 104 S.Ct. 3536, 82 L.Ed.2d 841 (1984); see also Ruder Finn, Inc. v. Seaboard Surety Co., supra, 52 N.Y.2d 663. Although

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Connecticut has not addressed the issue, New York does not require direct competition between a plaintiff and a defendant in order to sustain a cause of action for common-law unfair competition. Se Berni v. International Gourmet Restaurants of America, 838 F.2d 642, 648
(2d Cir. 1988), citing Metropolitan Opera Assn., Inc. v. Wagner-Nichols Recorder Corp., 199 Misc. 786, 795-96, 101 N.Y.S.2d 483 (1950), aff’d, 279 App.Div. 632, 107 N.Y.S.2d 795 (1951). “At a minimum, however, the law is meant to protect property rights of commercial value and a plaintiff must establish such rights as a prerequisite to relief.” (Internal quotation marks omitted.) Berni v. International Gourmet Restaurants of America, supra, 648. In order for a plaintiff to sustain a cause of action for unfair competition, there must be some evidence in the record that the defendant misappropriated a commercial or business advantage. See Ruder Finn, Inc. v. Seaboard Surety Co., supra, 671 (“misappropriation of another’s commercial advantage [is] . . . cornerstone of the tort” of unfair competition, which should not “be equated with the far more amorphous term `commercial unfairness'”); Roy Export Co. v. Columbia Broadcasting System, Inc., 672 F.2d 1095, 1105 (2d Cir.), cert. denied, 495 U.S. 826, 103 S.Ct. 60, 74 L.Ed.2d 63 (1982) (tort of unfair competition “broadly described as encompassing `any form of commercial immorality'” but requires “`misappropriat[ion] for the commercial advantage of one person . . . a benefit or “property” right belonging to another'”); Perfect Fit Industries, Inc. v. Acme Quilting Co., 618 F.2d 950, 953-54 (2d Cir. 1980), cert. denied, 459 U.S. 832, 103 S.Ct. 73, 74 L.Ed.2d 71 (1982) (same); cf. Golden Nugget, Inc. v American Stock Exchange, Inc., 828 F.2d 586, 591 (9th Cir. 1987) (no claim for unfair competition where plaintiff cannot show misappropriation of legitimate property interest). In this case, the Bishop plaintiffs were not being deprived of a commercial business

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advantage, nor did they allege such a claim in their complaint.

We acknowledge that we have interpreted the phrase “unfair competition” broadly in certain contexts. In the context of advertising injuries, however, we agree with the decision in Granite State Ins. Co. v. Aamco Transmissions, Inc., 57 F.3d 316, 320 (3d Cir. 1995), where the Court of Appeals for the Third Circuit opined that “the Supreme Court of Pennsylvania would hold that a competitor of the insured, but not its customer, can assert a claim which may be covered under the `unfair competition’ category of . . . `advertising injury’ coverage.” We agree with this reasoning and find that “the word `competition’ as used in `unfair competition’ limits coverage to claims by competitors of the insured.” Id. “[R]egardless of the nature of the insured’s conduct, a claim by a consumer of its products or services arising from that conduct hardly can be characterized as a claim for unfair competition. After all, `competition’ connotes an insured’s relationship with other persons or entities supplying similar goods or services.” Id., 319.

QSP and Reader’s Digest argue that the Bishop complaint states a cause of action for improper interference with business practices, analogous to unfair competition under the broad Larsen Chelsey Realty Co. standard, thereby warranting coverage as an “advertising injury.” GenStar argues that QSP and Reader’s Digest are manufacturing coverage by injecting into their briefs phrases like “`wrongfully competed'” or “`unfair competitive practices,'” which did not appear in the underlying action. We conclude not only that there was no claim of unfair competition raised in th Bishop complaint, but also that, even if there were such a claim, there would have been no plausible nexus between it and the insureds’ advertising activity. We conclude that there was nothing in the record to show that QSP and Reader’s Digest improperly interfered with anyone’s

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business or property, or that they did so through advertising. Emphasizing our original personal injury analysis, we therefore conclude that the Bishop plaintiffs made no allegations of advertising offenses, or unfair competition arising therefrom, that would trigger advertising injury coverage.

III
“ARISING OUT OF”

QSP and Reader’s Digest also argue that the trial court improperly concluded that the defendants had no duty to defend because: (1) th Bishop plaintiffs’ injuries did not arise out of covered torts, but rather arose out of the existence of a monopoly; and (2) there was no coverage where the underlying action alleged only consequential damages by parties not directly injured by the covered torts. QSP and Reader’s Digest assert that even though the Bishop plaintiffs’ claimed injuries were indirect, they arose out of the torts of defamation, disparagement, malicious prosecution and unfair competition, all of which are covered by the defendants’ policies. They assert, therefore, that coverage is triggered as a result of the consequential damages arising out of those offenses alleged by the Bishop plaintiffs in the underlying complaint. The defendants, on the other hand, assert that the “arising out of” language in an insurance policy refers to the injury suffered and cannot be used to expand the list of enumerated offenses or broaden coverage to include even those remote injuries suffered by a tenuously connected plaintiff. We agree with the defendants.

The relevant policy language covers “personal injury” and “advertising injury” arising out of defamation, disparagement, malicious prosecution or unfair competition.[26] The trial court recognized that the term “arising

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out of” is very broad, and that it is the phrase that provides the causal connection between the injury and the offense in both the American Motorists and GenStar policies. “[I]t is generally understood that for liability for an accident or an injury to be said to `arise out of’ [an occurrence or offense], it is sufficient to show only that the accident or injury `was connected with,’ `had its origins in,’ `grew out of,’ `flowed from,’ or `was incident to’ [that occurrence or offense], in order to meet the requirement that there be a causal relationship between the accident or injury and [that occurrence or offense].” Hogle v Hogle, 167 Conn. 572, 577, 356 A.2d 172 (1975), and cases cited therein. To “arise” out of means “to originate from a specified source.” Webster’s Third New International Dictionary (1961); see also Black’s Law Dictionary (7th Ed. 1999) (defining “arise” as “1. [t]o originate; to stem [from] . . . 2. [t]o result [from]”). “The phrase arising out of is usually interpreted as indicat[ing] a causal connection.” (Internal quotation marks omitted.) Coregis Ins. Co. v. American Health Foundation, United States Court of Appeals, Docket No. 99-9300 (2d Cir. February 14, 2001); see also McGinniss v. Employers Reinsurance Corp., 648 F. Sup. 1263, 1267 (S.D.N Y 1986). Simply because we recognize, however, the breadth of the term “arising out of” and often interpret coverage ambiguities in favor of the insured does not mean that we will “obligate an insurer to extend coverage based . . . [upon] a reading of the complaint that is . . . conceivable but tortured and unreasonable.”New York v. AMRO Realty Corp., 936 F.2d 1420, 1428 (2d Cir. 1991).

In the first paragraph of their complaint, the Bishop plaintiffs described their class action as one seeking “Damages and Injunctive Relief Based on Violation of Federal Antitrust Laws” through the “monopolization of trade or commerce in the sale of magazine fund raising plans . . . in violation of Section 2 of the Sherman

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[Antitrust] Act (15 U.S.C. § 2)” by QSP and Reader’s Digest. Paragraph 29 outlines the monopolistic conduct QSP and Reader’s Digest allegedly committed against their competitors, which lead to the antitrust action, including the claims of defamation, disparagement, malicious prosecution and unfair competition. As this language suggests, and the preceding analysis concludes, none of these torts were committed against the Bishop plaintiffs.

The Bishop complaint also outlined the “anticompetitive effects intended by and resulting from the monopolistic practices” of QSP and Reader’s Digest.[27] In their conclusion, the Bishop plaintiffs asserted that the antitrust violations, along with the “anticompetitive, predatory, and exclusionary acts” of QSP and Reader’s Digest caused them to suffer injury in their business and property “because they have received lower percentages of magazine subscription revenues from QSP, and/or [have] paid more for promotional prizes, than would have been the case in a competitive marketplace.”

It is plain, from a reading of the complaint, that the injuries allege arose out of the existence of a monopoly in the school fund-raising market, and not out of the torts of defamation, disparagement, malicious prosecution or unfair competition. As the trial court pointed out, the damages claimed by the Bishop plaintiffs are inextricably connected to the loss of profits they suffered as a result of the monopoly created by QSP and

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Reader’s Digest. See Lazzara Oil Co. v. Columbia Casualty Co., 683 F. Sup. 777, 780 (M.D.Fla. 1988). To avoid this conclusion, QSP and Reader’s Digest appear to rely on the general concept that where “an allegation of the complaint falls even possibly within the coverage, then the insurance company must defend the insured.” (Internal quotation marks omitted.) Community Action for Greater Middlesex County, Inc. v. American Alliance Ins. Co., 254 Conn. 387, 399, 757 A.2d 1074 (2000), quotin Moore v. Continental Casualty Co., supra, 252 Conn. 409; Fitzpatrick v American Honda Motor Co., supra, 78 N.Y.2d 61 (insurer must defend claim whenever complaint suggests reasonable possibility of coverage despite merits of action). QSP and Reader’s Digest also rely on those cases that hold that the duty to defend does not hinge on the skill or manner in which a complaint is drafted; see, e.g., Andover v. Hartford Accident Indemnity Co., 153 Conn. 439, 443-44, 217 A.2d 60 (1966); but rests on the substantive thrust of the complaint and the surrounding facts. However, “[t]he language [of the policies] in no way can be interpreted to extend coverage to other torts, not specifically enumerated, which bear [only] some similarity to those listed in the policy.” Wake Stone Corp. v. Aetna Casualty Surety Co., 995 F. Sup. 612, 617 (E.D.N.C. 1998). Therefore, although we adhere to “broad interpretation” standards in construing insurance policies, we conclude that the allegations in th Bishop complaint do not fall “even possibly within the coverage”; Moore
v. Continental Casualty Co., supra, 409; of the defendants’ policies because the Bishop plaintiffs’ damages resulted from antitrust violations, rather than the indeterminately pleaded common-law torts that serve solely as factual background in the underlying complaint.

QSP and Reader’s Digest argue that “insurers . . . have a duty to defend their insureds against antitrust suits that also allege other common law business torts

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[e.g., commercial disparagement] where the insurer has issued a general liability insurance policy.” Tews Funeral Home, Inc. v. Ohio Casualty Ins. Co., 832 F.2d 1037, 1043 (7th Cir. 1987), and cases cited therein. Although we do not disagree with this proposition, we conclude nonetheless that in order for covered common-law torts to trigger coverage, those torts and their resultant injuries must have been alleged by the proper plaintiffs. The proper plaintiffs are those individuals who can prove direct injury as a result of defamation, disparagement and the like. For example, in Tews Funeral Home, Inc., the plaintiff was one of thirty-seven other defendants in a nine count antitrust damages action brought in federal court in Illinois entitled Cedar Park Funeral Home v Illinois Funeral Directors’ Assn., Docket No. 85 C 2137. In Cedar Park Funeral Home, “Tews and the other named defendants [were] accused of conspiring to make `false, misleading and defamatory’ statements `disparaging’ the Cedar Park plaintiffs’ [funeral] services and products `with the expressed interest of discouraging’ consumers from buying the Cedar Park plaintiffs’ products and services.” Tews Funeral Home, Inc. v. Ohio Casualty Ins. Co., supra, 1040. Tews sued the defendant, Ohio Casualty Insurance Company, to determine its rights to defense and indemnification for costs arising out of the antitrust action after a dispute arose regarding coverage. The Seventh Circuit Court of Appeals, adopting the trial court opinion, found that the insurance company did have a duty to defend where “the federal suit `painted a picture which, had it been established, conceivably could have subjected defendant’s insured . . . to liability for commercial disparagement.'” Id., 1043, quoting Ruder Finn, Inc. v. Seaboard Casualty Co., supra, 52 N.Y.2d 672.

Tews is distinguishable from the present case, however, because the plaintiffs in the

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underlying action in that case were the direct targets of the commercial disparagement. In this case, on the other hand, the Bishop
plaintiffs cannot argue that they suffered from commercial disparagement when it was not their goods or services that were being disparaged. The damages they suffered were economic damages arising out of the monopoly allegedly created by the commercial disparagement of the competitors of QSP and Reader’s Digest. The connection between the covered offenses and the resultant injury is far too tenuous to trigger coverage under the policies.

In Springdale Donuts, Inc. v. Aetna Casualty Surety Co. of Illinois, supra, 247 Conn. 806-807, for example, we declined to impose a duty to defend under a workers’ compensation and employer’s liability policy where the plaintiffs in the underlying action claimed injuries for slander and invasion of privacy arising out of sexual harassment and discrimination in the workplace.[28] The plaintiff sought coverage, in part, from Farmington Casualty Company for the claims that had been brought against it in the underlying action by arguing that the workers’ compensation policy language was ambiguous. We concluded, however, that the policy “[v]iewed in its entirety . . . unequivocally indicate[d] that [it] was intended to provide coverage only for claims for worker’s compensation benefits.” Id., 809. The plaintiffs in the underlying action had not gone through the workers’ compensation commission, nor did they state any claim for workers’ compensation benefits. Therefore, where the plaintiff was not making

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a claim for benefits paid pursuant to workers’ compensation law, there was no coverage under the policies. Id.

The defendants in this case cite Wake Stone Corp. v. Aetna Casualty Surety Co., supra, 995 F. Sup. 617, to support their argument that “[t]he `arising out of’ language . . . refers to the injury, not to the offense” alleged in the underlying complaint and that the “broad construction [of the phrase `arising out of’ applies to] . . . causation, not interpretation of the covered offenses.” In that case, the plaintiff, Wake Stone Corporation, argued that there was a duty to defend under its “personal injury” coverage for an underlying action brought by a competitor, Martin Marietta Corporation, for unfair trade practices. The personal injury coverage at issue, however, covered injuries arising out of libel and slander, but did not list unfair competition or unfair trade practices among the covered torts. Refusing to impose a duty to defend on the insurer, the court held that where coverage for libel or slander did not include coverage for unfair trade practices, it could not be extended to any tort simply because “a claim may arise out of the same facts as the [covered offense]. . . . Otherwise, the enumeration in the policy of covered offenses would be purposeless.” Id. We agree with this reasoning.

QSP and Reader’s Digest, on the other hand, rely on several cases to support their argument that the Bishop plaintiffs did not have to suffer direct injury in order to trigger a duty to defend. See Izzo v. Colonial Penn Ins. Co., supra, 203 Conn. 305; see also Burroughs Wellcome v Commercial Union Ins. Co., 632 F. Sup. 1213 (S.D.N.Y. 1986); Charles F. Evans Co. v. Zurich Ins. Co., 95 N.Y.2d 779, 731 N.E.2d 1109, 710 N.Y.S.2d 301 (2000). As the trial court pointed out, these cases are easily distinguishable. In Izzo, the husband of a woman injured in an automobile accident sought coverage under a $300,000 “`per occurrence'” limit of bodily

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injury coverage for loss of consortium, after his wife recovered $100,000 under the “`per person'” limit of coverage. Izzo v. Colonial Penn Ins. Co., supra, 308-309. Denying recovery for the husband, we concluded that it was the wife who could not perform the spousal functions who suffered the bodily injury, not the husband claiming a resultant loss of consortium. Id., 312. Even though we considered the loss of consortium a separate cause of action, we held that it was “derivative and inextricably attached to the claim of the injured spouse.” Id. The couple, therefore was limited to the “`per person'” coverage. QSP and Reader’s Digest claim that this language supports their argument that courts recognize policy coverage even in cases where the injury is suffered indirectly, as long as that indirect injury is derivative and inextricably connected to the direct injury. Izzo, however, dealt with bodily injury coverage, and followed the well settled principle that “damages for loss of consortium . . . are subject to `per person’ limitation.” Id., 310, and cases cited therein. Furthermore, Izzo was dealing with the unique relationship between husband and wife. Its holding, therefore, is inapposite for purposes of our analysis in this case.

The reliance by QSP and Reader’s Digest on Burroughs Wellcome an Charles F. Evans Co. is similarly misplaced. In Burroughs Wellcome v Commercial Union Ins. Co., supra, 632 F. Sup. 1215, the court found a duty to defend derivative claims brought by the spouses and grandchildren of women who had taken DES, a harmful prenatal drug prescribed from the 1940s to the 1960s to prevent miscarriages. The issue in that case, however, was whether the injuries claimed by these individuals had become apparent or had manifested themselves before termination of coverage, not whether the injuries were proximately caused by the

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claimants’ exposure to DES.[29] Again, as the trial court pointed out, the analysis has no bearing on this case.

In Charles F. Evans Co. v. Zurich Ins. Co., supra, 95 N.Y.2d 779, the plaintiff was a construction subcontractor who installed skylights in the building of a local company. Because of faulty installation, the area around the skylights leaked, causing the floor underneath them to become wet and slippery. Employees of the company occupying the building suffered “slip and fall” injuries for which their employer brought an action. In that underlying action the employer alleged that, owing to the leaking roof, his employees “`slipped and fell in puddles . . . and were injured,'” and his company was “forced to incur expenses in the form of lost time and workers compensation claims.” Id., 780. The Court of Appeals held that the defendant insurance company had a duty to defend the employer’s underlying action because the bodily injury coverage in the plaintiff’s policy covered “`those sums that the insured becomes legally obligated to pay as damages because of “bodily injury,”‘”; id.; which the court found “at least ambiguous” with respect to whether the claims in the employer’s action were covered. Id. Thus, although the plaintiff employer in the underlying action did not suffer direct bodily injury, the ambiguity in the policy was interpreted in favor of the insured. Unlike the policy in Charles F. Evans Co., the policies at issue in this case do not suffer from any ambiguities. The Bishop complaint simply does not allege damages suffered as the result of any covered offense.

The term “arising out of” requires that we look at the injuries sustained by the Bishop plaintiffs, rather than the underlying offenses that QSP and Reader’s Digest claim caused those injuries. As stated previously,

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the Bishop plaintiffs’ injuries did not arise out of the covered offenses of defamation, disparagement, malicious prosecution or unfair competition, because the schools and youth groups making up the class of plaintiffs were not the parties injured by those offenses. The injuries alleged in the Bishop action were economic injuries that arose out of the monopolization of the magazine fund-raising market by QSP and Reader’s Digest. We conclude that because there was no causal relationship between the Bishop plaintiffs’ injuries and the torts that QSP and Reader’s Digest claim caused those injuries, there is no duty to defend.

IV DUTY TO INDEMNIFY
The final contention of QSP and Reader’s Digest is that the trial court improperly concluded, as a result of the aforementioned determinations, that the defendants had no duty to indemnify the plaintiffs for th Bishop settlement. We disagree. As we previously have held, where there is no duty to defend, there is no duty to indemnify, given the fact that the duty to defend is broader than the duty to indemnify. See Heyman Associates No. 1 v. Ins. Co. of Pennsylavnia, [Pennsylvania], 231 Conn. 756, 798, 653 A.2d 122 (1995); see also Nationwide Ins. v Zavalis, 52 F.3d 689, 693 (7th Cir. 1995).

The judgment is affirmed.

In this opinion the other justices concurred.

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