Street Surfing, LLC v. Great American E & S Insurance
776 F.3d 603
9th Cir.2014Background
- Street Surfing, LLC obtained general liability coverage from Great American E & S Insurance Co for August 2005–September 2007 across two policies, 2005 and 2006.
- Noll sued Street Surfing in June 2008 for trademark infringement, unfair competition, and unfair business practices; Street Surfing tendered the Noll action for defense in September 2008.
- Great American denied coverage based on IP exclusion and AI amendment; the prior publication exclusion was not cited in the initial denial but reserved rights to rely on other policy provisions.
- Street Surfing settled with Noll in December 2009; Street Surfing filed suit in July 2011 seeking a defense and settlement obligations.
- The district court granted summary judgment for Great American, holding the prior publication exclusion precluded coverage; the Ninth Circuit affirmed this ruling on appeal.
- The court concluded the Noll action potentially fell within coverage for use of another’s advertising idea, but pre-coverage advertising and substantially similar post-coverage advertising were barred by the prior publication exclusion.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Does the Noll action potentially fall within the policy’s advertising-injury coverage? | Street Surfing argues Noll action fits advertising idea use. | Great American concedes potential coverage but seeks exclusion. | Yes, potential coverage existed under advertising-idea use. |
| Does the slogan-infringement coverage apply to Noll? | Street Surfing contends slogan coverage may apply due to StreetSurfer usage. | Insurer contends no slogan infringement alleged in Noll. | No slogan-infringement coverage applicable. |
| Does the prior publication exclusion apply to the Noll action? | Pre-coverage advertising use of Noll’s idea not conclusively shown; post-coverage ads may be fresh wrongs. | Pre-coverage publication bars republication during policy period if substantially similar. | Prior publication exclusion applies to injuries from post-coverage ads substantially similar to pre-coverage ad. |
| Are post-coverage advertisements “fresh wrongs” that escape the exclusion? | Post-coverage ads differ in products; may be fresh wrongs. | Advertisements used the same advertising idea; substantially similar to pre-coverage ad. | Post-coverage ads are substantially similar; not fresh wrongs. |
Key Cases Cited
- Waller v. Truck Ins. Exch., Inc., 11 Cal.4th 1 (Cal. 1995) (insurer has duty to defend if facts give rise to potential coverage)
- Montrose Chem. Corp. v. Superior Court, 6 Cal.4th 287 (Cal. 1993) (duty to defend continues until underlying suit concluded or no potential for coverage)
- Hallmark Ins. Co. v. Superior Court, 201 Cal.App.3d 1014 (Cal. App. Dist. 1 1988) ((upholding interpretation of policy terms in coverage disputes))
- Ringler Assocs., Inc. v. Md. Cas. Co., 80 Cal.App.4th 1165 (Cal. App. 2000) (prior publication exclusion analyzed by potential coverage scope)
- Kim Seng Co. v. Great Am. Ins. Co., 101 Cal.Rptr.3d 541 (Cal. App. 2010) (fresh wrongs framework for prior publication exclusions)
- Taco Bell Corp. v. Cont'l Cas. Co., 388 F.3d 1069 (7th Cir. 2004) (fresh wrongs vs. pre-coverage publication under exclusion)
- Interstate Bakeries Corp. v. OneBeacon Ins. Co., 686 F.3d 539 (8th Cir. 2012) (substantial similarity test for prior publication exclusion)
- Hudson Ins. Co. v. Colony Ins. Co., 624 F.3d 1264 (9th Cir. 2010) (context on slogan as a potential advertising injury)