MLR Obtains Summary Judgment in Duty to Defend Matter

This week, Maloney Lauersdorf Reiner attorneys Nick Thede and Andy Lauersdorf obtained summary judgment on behalf of their client on the issue of the duty to defend in Crum & Forster Spec. Ins. Co. v. Willowood USA, LLC et al., Civ. No. 13-CV-01923-MC (D. Or. Oct. 28, 2014).  The case addressed whether various insurance companies had a duty to defend an insured under the personal and advertising injury provisions of a commercial general liability (CGL) policy.  The court previously granted summary judgment in favor of the insurers, but invited additional briefing after an amended complaint was filed in the underlying action.  Crum & Forster Spec. Ins. Co. v Willowood USA, LLC et al., 2014 WL 3797673 (D. Or. Aug. 1, 2014).  After considering the additional briefing and argument, the court issued a second extensive opinion granting summary judgment in favor of MLR’s client.

The underlying litigation against the insured related to an agreement with a third-party to distribute an agricultural pesticide product.  According to the allegations levied against the insured in the underlying litigation, the agreement allowed the insured to distribute the pesticide product using the third-party’s federally registered trademark.  The complaint alleged that the insured violated the terms of the agreement and infringed the third-party’s trademark rights.  The third-party sued the insured for breach of an implied-in-fact contract, quasi-contract/unjust enrichment, federal trademark infringement, and federal unfair competition.

In the opinion, the trial court addressed a number of issues relating to coverage under the personal and advertising injury clause in the respective insurance policies.  The court initially determined that the underlying complaint did not state facts sufficient to trigger coverage under the insurers’ policies.  First, the court determined that the allegations in the underlying complaint did not constitute “disparagement,” including trade libel, defamation, or quasi-contract/unjust enrichment, as the term was used in the policy.  Second, the court found that the complaint did not state facts sufficient to implicate coverage for “use of another’s advertising idea” in the insured’s “advertisement.”  Third, the court found that the “breach of contract exclusion” and “intellectual property exclusion” applied to the allegations in the underlying complaint.

Maloney Lauersdorf Reiner is working on the case in conjunction with Jeffrey Charlston of Charlston Revich & Wollitz, LLC in Los Angeles.  We regularly represent clients in litigation throughout Oregon and the Pacific Northwest concerning an insurance company’s duty to defend, including cases involving issues similar to those addressed in the Crum & Forster Specialty Ins. Co. v. Willowood USA, LLC case.  Please contact us with any questions concerning this case or any other matter you see addressed in our Insurance Coverage Blog.

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