Novell, Inc. v. Vigilant Insurance Company
421 F. App'x 872
10th Cir.2011Background
- Novell appeals district court’s grant of summary judgment for Vigilant on defense obligation.
- SCO sued Novell in Utah state court for slander of title; action removed to federal court; amended complaints asserted ownership disputes over Unix copyrights.
- Policy covers personal injury including publication of material that libels or slanders a person or organization; IP and other exclusions exist.
- Novell sought defense under the Policy; Vigilant denied defense citing that SCO’s allegations did not plead personal injury and citing exclusions.
- District court held SCO’s complaint did not plead defamation or potential personal injury; Novell appealed; court reviews de novo under Utah law; duty to defend measured by allegations and policy terms.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Does SCO’s complaint plead defamation to trigger coverage? | Novell contends allegations imply defamation. | Vigilant argues the slander of title claim is excluded and no defamation pleaded. | No; no potential defamation pleaded. |
| Are any exclusions or the policy terms controlling the duty to defend filers? | Novell argues exclusions do not bar potential defamation claims. | Vigilant maintains exclusions (IP, intended injury) preclude coverage; defamation not alleged. | Court need not reach exclusions; no potential defamation found. |
Key Cases Cited
- Bass v. Planned Mgmt. Servs., Inc., 761 P.2d 566 (Utah 1988) (slander of title protects economic interests, not personal reputation)
- Emp’rs Mut. Cas. Co. v. Bartile Roofs, Inc., 618 F.3d 1153 (10th Cir. 2010) (duty to defend depends on potential liability under policy terms)
- Lime Tree Village Community Club Ass'n, Inc. v. State Farm Gen. Ins. Co., 980 F.2d 1402 (11th Cir. 1993) (duty to defend when underlying complaint alleges publication causing personal injury, but distinctions noted)