Blackstone International Ltd. v. Maryland Casualty Co.
88 A.3d 792
Md. Ct. Spec. App.2014Background
- Maryland Casualty Company and Northern Insurance Company of New York sought declaratory judgment that their policy did not cover a RMG Direct, Inc. suit against Blackstone; Blackstone counterclaimed for declarations and fees/indemnity.
- RMG alleged oral contract, unjust enrichment, promissory estoppel, and misrepresentation related to a joint venture and use of advertising content (Vision Enhance) developed with Blackstone.
- Blackstone, insured since 2001, faced claims for an advertising injury under the policy's coverage for personal and advertising injury, but the policy excludes breaches of contract except implied contracts to use another’s advertising idea.
- Insurers denied duty to defend; Blackstone settled with RMG, incurring substantial defense costs; insurers sought a ruling on the duty to defend and indemnify.
- Circuit Court granted summary judgment for the Insurers; Blackstone appealed, arguing the underlying claims potentially fell within advertising injury coverage.
- Maryland Special Appeals reversed, holding RMG’s unjust enrichment claim (and related claims) could arise from use of advertising ideas and thus triggered the duty to defend; remand ordered for damages and indemnity determinations.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether RMG's claims could constitute advertising injury under the policy | Blackstone | Insurers | Yes; potential advertising injury exists |
| Whether Blackstone used RMG's advertising ideas in its advertisements | Blackstone's claims show packaging and website conveyed RMG ideas | Advertising ideas remained Blackstone's; not 'another's' | Advertising ideas used by Blackstone potentially attributable to 'another's' under policy |
| Whether the asserted advertising injury is covered despite contract exclusions | Policy excludes breach of contract but waived exclusions; broad definition of advertising injury applies | Exclusions for breach of contract and intentional conduct should apply | Waived exclusions do not bar coverage; unjust enrichment claim falls within advertising injury |
| Whether the insured is entitled to defense costs and indemnity given the duty to defend | If duty to defend exists, Blackstone entitled to defense costs and potential indemnity | Need to prove reasonableness of fees; disputes remain | Remand to determine reasonable fees and indemnity; decision on defense costs affirmed for remand |
Key Cases Cited
- Walk v. Hartford Cas. Ins. Co., 382 Md. 1 (2004) (duty to defend when potential coverage exists; contract-based interpretation)
- Utica Mut. Ins. Co. v. Miller, 130 Md. App. 373 (2000) (duty to defend all potentially covered claims; examine broader record)
- Aetna Cas. & Sur. Co. v. Cochran, 337 Md. 98 (1995) (underlying complaint may establish potentiality of coverage; extrinsic evidence limitations)
- Montgomery Cnty. Bd. of Educ. v. Horace Mann Ins. Co., 383 Md. 527 (2004) (contract interpretation; liberal construction for insured when ambiguity exists)
- Dutta v. State Farm Ins. Co., 363 Md. 540 (2001) (insurance policy terms interpreted in ordinary meaning; liberal coverage when ambiguous)
- State Farm Mut. Auto. Ins. Co. v. DeHaan, 393 Md. 163 (2006) (causation-like standard for 'arising out of' in insurance context)
- Allstate Ins. Co. v. State Farm Mut. Auto. Ins. Co., 363 Md. 106 (2001) (declaratory judgment procedure; writing required for judgments defining rights)
- Nolt v. U.S. Fid. & Guar. Co., 329 Md. 52 (1993) (fee and expense recovery for insured when insurer denies duty to defend)