533 F.Supp.3d 1013
D. Colo.2021Background
- Travelers insured Luna and Boyer’s under multiple Colorado-issued commercial and umbrella policies that provide coverage for "personal injury" and "advertising injury" but contain several exclusions (e.g., knowing-violation, material-with-knowledge-of-falsity, quality/performance, intellectual-property).
- Two putative class actions in Washington (the "Kona Class Actions") challenged multiple coffee sellers, including Boyer’s: (1) Kona Farmers Action (Lanham Act claim for false designation/false advertising/unfair competition) and (2) Kona Consumers Action (express/implicit warranty, fraud, unjust enrichment).
- Plaintiffs in the Kona suits allege defendants marketed and labeled non‑Kona coffee as "Kona" (e.g., use of "Kona," "Café Kona," "Kona Blend"), harming Kona farmers’ reputation/prices and deceiving consumers.
- Travelers sued in federal court for a declaratory judgment that it has no duty to defend or indemnify Boyer’s for the Kona suits; the parties filed cross‑motions for summary judgment. The Consumers Action was later voluntarily dismissed but Travelers still sought coverage for defense costs.
- The district court denied Travelers’ attempt to rely on extrinsic internet evidence under Colorado’s complaint rule, analyzed whether the underlying complaints alleged "advertising"/"personal injury" (disparagement or slogan infringement), and ruled Travelers has no duty to defend or indemnify.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Ripeness of dismissed Kona Consumers Action | Coverage ripe because Travelers’ complaint remains and costs were incurred | Dismissal without prejudice renders coverage not ripe | Court: Justiciable controversy remains as to incurred costs; addressed coverage merits |
| May court consider extrinsic internet evidence / apply "material published prior to policy period" exclusion | Yes; Travelers asked judicial notice of web evidence to trigger exclusion | No; Colorado complaint rule bars extrinsic evidence to show duty to defend | Court: Declined to consider extrinsic web evidence; complaint rule controls; exclusion not shown |
| Whether complaints allege "disparagement" (advertising/personal injury) | No disparagement alleged; use of "Kona" is product labeling, not disparagement | Allegations of deceptive marketing/packaging could disparage Kona goods and trigger coverage | Court: Allegations too remote to constitute disparagement of farmers’ goods or consumers; no coverage under disparagement offenses |
| Whether Kona plaintiffs alleged infringement of a "slogan" (advertising injury) | "Kona" is not a slogan used as an advertising tagline; it’s a source/product identifier | "Kona" (and variants) can be a phrase/slogan used to attract attention; ambiguous and should favor coverage | Court: "Kona" alleged as a source/product name, not a slogan under the policy definition; no coverage for slogan infringement |
Key Cases Cited
- Celotex Corp. v. Catrett, 477 U.S. 317 (1986) (summary judgment standard)
- Anderson v. Liberty Lobby, Inc., 477 U.S. 242 (1986) (genuine‑issue and materiality standards for summary judgment)
- Apartment Inv. & Mgmt. Co. v. Nutmeg Ins. Co., 593 F.3d 1188 (10th Cir. 2010) (insurer duty to defend under Colorado law)
- Chavez v. Arizona Auto. Ins. Co., 947 F.3d 642 (10th Cir. 2020) (scope of Colorado complaint rule for duty to defend)
- Thompson v. Maryland Casualty Co., 84 P.3d 496 (Colo. 2004) (liberal construction for insureds; disparagement elements)
- Cotter Corp. v. American Empire Surplus Lines Ins. Co., 90 P.3d 814 (Colo. 2004) (insurer bears burden to show exclusions entirely apply)
- Compass Ins. Co. v. City of Littleton, 984 P.2d 606 (Colo. 1999) (duty to defend/indemnify analysis)
- Pompa v. American Family Mutual Insurance Co., 520 F.3d 1139 (10th Cir. 2008) (narrow exception to complaint rule for indisputable facts)
- United Fire & Casualty Co. v. Boulder Plaza Residential, LLC, 633 F.3d 951 (10th Cir. 2011) (no duty to indemnify where no duty to defend)
- Leprino Foods Co. v. Factory Mutual Ins. Co., 453 F.3d 1281 (10th Cir. 2006) (allocation of burdens where exclusions asserted)