776 F.3d 603
9th Cir.2014Background
- Street Surfing obtained general liability policies from Great American E&S covering advertising injury from August 2005 to September 2007.
- Noll sued Street Surfing in 2008 for trademark infringement, unfair competition, and unfair practices; Street Surfing tendered defense to Great American in 2008.
- Great American denied coverage citing IP exclusion and AI amendment; district court later found the prior publication exclusion foreclosed defense.
- Street Surfing settled with Noll in 2009; Street Surfing then sued for a declaration of defense and settlement obligation in 2011.
- On appeal, the court held the prior publication exclusion relieves the insurer of a duty to defend; IP and AI arguments not reached.
- Court applied California law on the duty to defend and the interpretation of the prior publication exclusion under Ringler/Kim Seng framework.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Noll action potentially falls within policy coverage | Street Surfing argues Noll action is within coverage for use of another’s advertising idea (and possibly slogan). | Great American contends IP and AI exclusions exclude coverage; precluded by policy terms. | Noll action potentially falls within coverage for use of another’s advertising idea. |
| Whether Noll action also falls within slogan infringement coverage | Street Surfing claims slogan infringement coverage could apply due to Streetsurfer/Street Surfing tie. | Court rejects slogan coverage because no use of a slogan by Noll; Street Surfing’s own slogan use is irrelevant. | Noll action does not fall within slogan infringement coverage. |
| Whether the prior publication exclusion applies to the Noll action | Street Surfing contends the exclusion does not conclusively apply due to pre-coverage facts or lack of substantial similarity. | Great American asserts the prior publication exclusion bars coverage for republication of pre-coverage ads or substantially similar post-coverage ads. | Prior publication exclusion applies; bars coverage for injuries arising from republication of pre-coverage ad or substantially similar post-coverage ads. |
| Whether extrinsic evidence establishes pre-coverage publication (logo on Wave) before August 2005 | Street Surfing disputes conclusiveness of pre-coverage publication evidence. | Extrinsic evidence shows Street Surfing affixed its logo to the Wave before coverage, constituting an advertisement. | Extrinsic evidence shows pre-coverage publication via affixed logo; exclusion applies. |
| Whether post-coverage advertisements are 'fresh' wrongs not barred by the exclusion | Street Surfing argues post-coverage ads using Noll’s idea are not substantially similar to pre-coverage ads, thus not barred. | Post-coverage ads are substantially similar in the wrongful act to pre-coverage ads; not fresh wrongs. | Post-coverage ads are not fresh wrongs; prior publication exclusion applies. |
Key Cases Cited
- Waller v. Truck Ins. Exch., Inc., 900 P.2d 619 (Cal. 1995) (duty to defend broader than indemnity; and arises when potential coverage exists)
- Montrose Chem. Corp. v. Superior Court, 861 P.2d 1153 (Cal. 1993) (duty to defend lasts until underlying case ends or no potential for coverage)
- Ringler Assocs., Inc. v. Md. Cas. Co., 96 Cal. Rptr. 2d 136 (Cal. Ct. App. 2000) (prior publication exclusion analyzed in context of defamation/advertising)
- Kim Seng Co. v. Great Am. Ins. Co., 101 Cal. Rptr. 3d 537 (Cal. Ct. App. 2009) (fresh wrongs doctrine; pre-coverage use vs. post-coverage new matter)
- Taco Bell Corp. v. Cont’l Cas. Co., 388 F.3d 1069 (7th Cir. 2004) (prior publication exclusion not bar where post-coverage ads allege fresh, distinct wrongs)
- Horace Mann Ins. Co. v. Barbara B., 846 P.2d 792 (Cal. 1993) (broad duty to defend; limits by exclusions)