Lead Opinion
MEMORANDUM
At issue in this case is whether three insurance companies (collectively the “Insurers”) had a duty to defend Willowood USA, LLC (“Willowood”) against a suit by the Repar Corporation (“Repar”) arising from Willowood’s agreement to distribute Repar’s tebueonazole products (“TEBU-CON”) and to indemnify Willowood for the settlement of that suit. The district court twice granted summary judgment to the Insurers, finding that because their policies did not cover Repar’s claims, they had no duty to defend the suit or provide indemnification for the settlement. We have jurisdiction of Willowood’s appeals under 28 U.S.C. § 1291. We reverse and remand to determine whether the settlement was for a covered claim.
1. “If the complaint, without amendment, may impose liability for conduct covered by the policy, the insurer is put on notice of the possibility of liability and it has a duty to defend.” Ferguson v. Birmingham Fire Ins. Co., 254 Or. 496, 460 P.2d 342, 347 (1969). The Insurers’ policies each cover injury arising from “use of another’s advertising idea in your ‘advertisement.’” Oregon courts broadly interpret the term “arising out of’ in this context. Ristine ex rel Ristine v. Hartford
2. The “facts that form[ ] the basis for the settlement” determine whether the insurer must indemnify. Id. at 1044. Willo-wood proffered a declaration from trial counsel, a letter from counsel to Willo-wood’s CEO, and the declaration from the CEO, all indicating that the Repar settlement was at least in part based on covered breach of implied contract claims. This was sufficient to create a triable issue on whether the settlement was for a covered claim, and we remand for a trial on that issue. See Ledford v. Gutoski, 319 Or. 397, 877 P.2d 80, 84 (1994).
REVERSED and REMANDED.
This disposition is not appropriate for publication and is not precedent except as provided by Ninth Circuit Rule 36-3.
Dissenting Opinion
dissenting:
As the majority notes, Willowood’s insurance policies cover injuries “arising out of ... the use of another’s advertising idea in your ‘advertisement.’ ” But the policies also exclude coverage for injuries “arising out of the infringement of copyright, patent, trademark, trade secret or other intellectual property rights.” Oregon courts “broadly” interpret the term “arising out of’ to mean “flowing from,” “having its origin in,” or with “a causal connection.” Ristine ex rel. Ristine v. Hartford Ins. Co. of Midwest, 195 Or.App. 226, 97 P.3d 1206, 1208 (2004) (internal quotation marks omitted).
I agree with the majority that the name TEBUCON may constitute an advertising idea. But, as the district court observed, TEBUCON is also, first and foremost, a trademark. See generally Sport Supply Grp., Inc. v. Columbia Cas. Co., 335 F.3d 453, 462-65 (5th Cir. 2003) (discussing distinction between trademark and advertising idea). Repar’s claims for advertising injury based on Willowood’s use of the TEBUCON name all arise out of the misuse of that trademark—the so-called “gravamen” of the Second Amended Complaint. As such, these claims are expressly excluded from coverage. And, unlike the breach of contract exclusion, the intellectual property exclusion contains no exception for trademarks that are also advertising ideas. Reviewing the policies and the Second Amended Complaint de novo, see Rocky Mountain Farmers Union v. Corey, 730 F.3d 1070, 1086 (9th Cir. 2013); N. Pac. Ins. Co. v. Hamilton, 332 Or. 20, 22 P.3d 739, 741-42 (2001), I would affirm the district court order granting summary judgment in favor of the insurance companies on the duty to defend.
As for the duty to indemnify, this is an even narrower obligation and “arises only when the insurance policy actually covers the harm.” Am. Med. Response Nw., Inc. v. ACE Am. Ins. Co., 31 F.Supp.3d 1087, 1097 (D. Or. 2014) (citing Nw. Pump & Equip. Co. v. Am. States Ins. Co., 144 Or.App. 222, 925 P.2d 1241, 1243 (1996) (en banc)). Because “[t]he pleadings clearly took the case out of ... coverage,” Jarvis v. Indem. Ins. Co. of N. Am., 227 Or. 508, 363 P.2d 740, 744 (1961); see also Mut. of Enumclaw Ins. Co. v. Jonas, 35 Fed.Appx. 556, 558 (9th Cir. 2002) (“No duty to indemnify exists if no claim in a complaint falls within a policy’s coverage.”), I would also affirm the district court order grant
I found the district court analysis of these issues—which the majority does not address—thorough and well-reasoned, and I believe the district court accurately applied Oregon law to the facts of this case. For these reasons, I respectfully dissent.