The Burlington Insurance Company v. Eden Cryogenics, LLC, 2:14-cv-00066

Burlington insured Eden Cryogenics under a series of commercial general liability (CGL) policies; Eden and two employees were sued by PHPK for trade-secret misappropriation and related claims.
Burlington denied coverage early, invoking an Intellectual Property (IP) exclusion among other defenses.
A jury in the underlying PHPK suit found Eden, Hensley, and Mitchell liable for willful misappropriation and awarded compensatory and punitive damages; Eden later sought defense costs and indemnity from Burlington.
On cross-motions for summary judgment the district court held Burlington had a duty to defend under the policies, but certain indemnity defenses (Knowing Violation and IP Exclusion) precluded indemnification for some damages; punitive damages were not covered.
The court declined to resolve the insureds’ bad-faith claim on summary judgment and allowed discovery on bad faith to proceed.
Burlington moved for reconsideration and for immediate appellate review under Rule 54(b) and 28 U.S.C. § 1292(b); the court denied both motions and denied reconsideration.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Duty to defend under CGL policies (IP Endorsement)	IP endorsement and other policy provisions exclude coverage for the PHPK suit.	The IP endorsement does not bar coverage; Burlington breached its duty to defend.	Duty to defend exists; Burlington breached that duty.
Indemnification for compensatory damages	Knowing Violation and IP Exclusion preclude indemnity for all defendants.	Defendants argued indemnity should apply except where exclusions clearly control.	Knowing Violation bars indemnity for Eden and Hensley; IP Exclusion bars indemnity for Mitchell (as found earlier).
Bad-faith claim disposition	Burlington: denial was reasonably justified; bad faith can be decided as a matter of law pre-discovery.	Defendants: bad-faith allegations require discovery and jury determination.	Court refused to decide bad faith on summary judgment; allowed bad-faith claim to proceed to discovery.
Request for immediate appeal (Rule 54(b) and §1292(b))	Immediate appellate review is warranted on duty-to-defend and bad-faith rulings.	Defendants: no just reason to depart from normal appellate sequence; issues are discretionary and not fit for interlocutory appeal.	Denied certification under Rule 54(b) and denied permission for interlocutory appeal under §1292(b).

Howard v. United States, 533 F.3d 472 (6th Cir. 2008) (Rule 59(e) permits district courts to correct their own errors)
In re Ford Motor Co. Securities Litig., 381 F.3d 563 (6th Cir. 2004) (Rule 59(e) relief is discretionary)
GenCorp, Inc. v. Am. Int'l Underwriters, 178 F.3d 804 (6th Cir. 1999) (standards for granting Rule 59(e) relief)
United States v. Strip, 868 F.2d 181 (6th Cir. 1989) (contracts should be read as a whole)
Motorists Mut. Ins. Co. v. Said, 590 N.E.2d 1228 (Ohio 1992) (discussion of reasonable justification in bad-faith context)
Zoppo v. Homestead Ins. Co., 644 N.E.2d 397 (Ohio 1994) (bad-faith jury instruction and reasonable justification sent to jury)
Planned Parenthood Sw. Ohio Region v. DeWine, 696 F.3d 490 (6th Cir. 2012) (factors for Rule 54(b) certification)
In re City of Memphis, 293 F.3d 345 (6th Cir. 2002) (standards for §1292(b) interlocutory appeals)