773 F. Supp. 2d 799
W.D. Mo.2011Background
- IBC filed a declaratory judgment against OneBeacon seeking defense for Flowers litigation.
- Flowers Bakeries sued IBC in the Northern District of Georgia alleging trademark and related unfair competition claims.
- OneBeacon denied defense coverage based on exclusions and lack of scheduled advertising; policy is Advertiser Advantage MEP-2458-07 (2007–2008).
- IBC tendered Flowers defense February 13, 2009; OneBeacon denied February 26, 2009, citing exclusions and absence of scheduled advertising.
- The court must interpret the policy against the Flowers allegations to determine whether any covered liability exists.
- Key issues include whether the Flowers claims fall within Section I.A.5 (infringement of title or slogan) or I.A.6 (unfair competition), and whether exclusions preclude coverage.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Duty to defend under policy terms | IBC contends the Flowers allegations trigger defense because they may fall within covered categories. | OneBeacon argues no duty due to lack of scheduled advertising and applicability of exclusions. | No; partial defense denied due to absence of covered claims under the policy's definitions and applicable exclusions. |
| Scheduled advertising requirement | IBC asserts allegations show use or preparation of nature-pride branding within policy scope as occurrence for advertising. | OneBeacon maintains no actual scheduled advertising occurred during the policy term. | No scheduled advertising during term; however, allegations may still trigger defense under other covered categories, requiring further analysis. |
| Infringement of title or slogan (Section I.A.5) | IBC argues Nature's Own as title or slogan infringement is implicated by Flowers’ claims. | OneBeacon contends Flowers does not allege slogan infringement and 'title' infringement is not clearly supported by their pleadings. | Slogan infringement reading rejected; title infringement reading rejected due to policy definitions and controlling case law. |
| Exclusions precluding coverage | Exclusions allegedly do not apply to title/slogan claims if such claims existed under I.A.5. | Exclusions E, G, H and Omnibus Endorsement preclude coverage for unfair competition and trademark claims. | Exclusions apply; coverage for Flowers’ unfair competition and trademark claims is barred. |
| Impact of IBC's admissions on coverage | IBC's later admissions about lack of covered claims do not void earlier policy in effect. | Admissions reflect no advertising claims at the time, supporting non-coverage position. | Admissions support OneBeacon's interpretation but do not create coverage where policy terms and pleadings limit coverage. |
Key Cases Cited
- Cincinnati Insurance Co. v. Zen Design Group, Ltd., 329 F.3d 546 (6th Cir. 2003) (slogan vs. house/product marks; defines slogan as promotional phrase separate from house mark)
- Hugo Boss Fashions, Inc. v. Federal Insurance Co., 252 F.3d 608 (2d Cir. 2001) (defines slogan; held BOSS not a slogan; analyzes trademark/slogan coverage carve-out)
- McCormack Baron Management Services, Inc. v. American Guarantee and Liability Insurance Co., 989 S.W.2d 168 (Mo. banc 1999) (parses coverage scope of disparagement/offense language in Missouri insurance context)
- Truck Insurance Exchange v. Prairie Framing, LLC, 162 S.W.3d 64 (Mo.Ct.App. 2005) (duty to defend standard; factors for interpreting policy in light of allegations)
- Custom Hardware Engineering & Consulting, Inc. v. Assurance Co. of Am., 295 S.W.3d 557 (Mo.Ct.App. 2009) (duty to defend; interpret policy against underlying complaint; burden-shifting framework)
- Epstein v. Columbia Insurance Co., 239 S.W.3d 667 (Mo.Ct.App. 2007) (duty to defend where claims potentially within policy coverage)