Basic Research, LLC v. Admiral Insurance Co.
2013 UT 6
| Utah | 2013Background
- Basic Research is Utah LLC insured by Admiral under two CGL policies; underlying lawsuits allege false advertising, defective product, and failure to perform.
- Slogans used to market Akävar include “Eat All You Want And Still Lose Weight” and “And we couldn’t say it in print if it wasn’t true,” licensed from Western Holdings.
- Plaintiffs sought a defense under the policy; Admiral refused, asserting the claims were not covered.
- District court granted Admiral summary judgment finding no duty to defend due to exclusions and lack of covered “personal and advertising injury.”
- Basic Research appealed, arguing policy terms were interpreted too narrowly and the claims fit within coverage.
- Court affirms district court’s grant of summary judgment, holding no duty to defend.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the claims trigger coverage for personal and advertising injury. | Basic Research argues claims arise from use of another’s advertising idea. | Admiral contends claims do not arise from use of another’s advertising idea and fall under exclusion. | No duty to defend; claims not within coverage. |
| Whether the claims are excluded by quality/performance of goods exclusion. | Claims include false advertising tied to slogans. | Exclusion G bars claims arising from failure of goods to conform to advertised statements. | Exclusion applies; no coverage. |
| Whether the four-corners of the policy and complaints show potential liability under the policy. | Allegations could yield liability under the policy’s broad personal/advertising injury language. | Language limited to injuries arising from use of another’s advertising idea; not satisfied here. | No potential liability; no duty to defend. |
Key Cases Cited
- Sharon Steel Corp. v. Aetna Cas. & Sur. Co., 931 P.2d 127 (Utah 1997) (duty to defend when facts show potential liability under policy)
- Deseret Fed. Sav. & Loan Ass’n v. U.S. Fid. & Guar. Co., 714 P.2d 1143 (Utah 1986) (whether allegations could result in liability under policy determined by four corners of contract and complaint)
- Benjamin v. Amica Mut. Ins. Co., 140 P.3d 1210 (Utah 2006) (whether allegations could result in liability under policy; eight corners review)
- Equine Assisted Growth & Learning Ass’n v. Carolina Cas. Ins. Co., 266 P.3d 733 (Utah 2011) (contract interpretation standard for determining coverage; eight corners analysis)
- Cent. Fla. Invs., Inc. v. Parkwest Assocs., 40 P.3d 599 (Utah 2002) (interpretation of contract; party intent controls)