Hudson Insurance v. Colony Insurance
624 F.3d 1264
| 9th Cir. | 2010Background
- Hudson defended All Authentic in NFL Properties LLC v. All Authentic Corp. under its policy; Colony refused to defend.
- NFL complaint alleged counterfeit Steelers jerseys and asserted rights to the Steel Curtain mark; NFL Properties claimed to protect NFL marks and rights.
- Colony policy covered personal and advertising injury, including infringement of slogans, but had an exclusion for infringement of IP rights except in advertising remaining allowed.
- Hudson incurred defense costs >$900,000; NFL Action settled; Hudson sued Colony for equitable contribution for 50% of defense costs.
- District court held Colony had a duty to defend because the NFL complaint potentially stated slogan infringement, which Colony policy covered.
- Colony appeals, arguing no potential slogan infringement and other defenses; Ninth Circuit reviews de novo.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Did the NFL complaint state potential slogan infringement? | Hudson | Colony | Yes; potential slogan infringement stated. |
| Is speculation about unpled claims a bar to coverage? | Hudson | Colony | No; duty to defend extends to potential coverage based on facts alleged. |
| Does failure to plead a slogan claim defeat coverage due to standing/ownership doubts? | Hudson | Colony | No; ambiguous statements supporting standing to sue preserve potential coverage. |
| Does the 'election/conscious avoidance' theory apply to defeat a duty to defend? | Hudson | Colony | No; absence of explicit pleading does not negate duty to defend when facts suggest coverage. |
| Did the district court properly grant summary judgment on the duty to defend? | Hudson | Colony | Yes; district court correctly found a duty to defend and entitlement to equitable contribution. |
Key Cases Cited
- Montrose Chem. Corp. of Cal. v. Superior Court, 6 Cal.4th 287 (Cal. 1993) (broad duty to defend; doubt resolved in insured's favor)
- CNA Cas. of Cal. v. Seaboard Sur. Co., 222 Cal.Rptr.2d 276 (Cal. App. 2002) (duty to defend broad; resolve doubts in favor of coverage)
- Gunderson v. Fire Insurance Exchange, 37 Cal.App.4th 1106 (Cal. App. 1995) (speculation cases; focus on facts alleged, not labeled claims)
- Cincinnati Ins. Co. v. Zen Design Group, Ltd., 329 F.3d 546 (6th Cir. 2003) (underlying complaint can state slogan infringement even if not labeled)
- Microtec Research, Inc. v. Nationwide Mut. Ins. Co., 40 F.3d 968 (9th Cir. 1994) (absence of pleaded disparagement claim does not negate duty to defend)
- Low v. Golden Eagle Ins. Co., 99 Cal.App.4th 109 (Cal. App. 2002) (ambiguities resolved in insured's favor when duty to defend)
- Hurley Constr. Co. v. State Farm Fire & Cas. Co., 10 Cal.App.4th 533 (Cal. App. 1992) (absence of pleaded element does not defeat defense duty)