23 F.3d 226 (9th Cir. 1994), 92-56351, Everest and Jennings, Inc. v. American Motorists Ins. Co.

Docket Nº:92-56351.
Citation:23 F.3d 226
Party Name:30 U.S.P.Q.2d 1534 EVEREST AND JENNINGS, INC., Plaintiff-Appellant, v. AMERICAN MOTORISTS INSURANCE COMPANY, Defendant-Appellee.
Case Date:April 13, 1994
Court:United States Courts of Appeals, Court of Appeals for the Ninth Circuit
 
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Page 226

23 F.3d 226 (9th Cir. 1994)

30 U.S.P.Q.2d 1534

EVEREST AND JENNINGS, INC., Plaintiff-Appellant,

v.

AMERICAN MOTORISTS INSURANCE COMPANY, Defendant-Appellee.

No. 92-56351.

United States Court of Appeals, Ninth Circuit

April 13, 1994

Argued and Submitted March 10, 1994.

Page 227

Mary Craig Calkins (argued) and Kirk A. Pasich and Wendy I. Kirchick (on the brief), Hill, Wynne, Troop & Meisinger, Los Angeles, CA, for plaintiff-appellant.

Kristin E. Meredith (argued) and Lane J. Ashley (on the brief), Sedgwick, Detert, Moran & Arnold, Los Angeles, CA, for defendant-appellee.

Appeal from the United States District Court for the Central District of California.

Before: BRIGHT, [*] WIGGINS, and T.G. NELSON, Circuit Judges.

Opinion by Judge BRIGHT.

BRIGHT, Senior Circuit Judge:

Burke Incorporated (Burke), a wheelchair manufacturer, sued its competitor Everest and Jennings (E & J) alleging patent infringement. E & J requested its insurer, American Motorists Insurance Company (AMICO), to defend E & J in the Burke suit, and indemnify E & J in the event Burke won a damage award. After AMICO declined to defend or indemnify E & J, E & J instituted this action seeking a declaratory judgment as to AMICO's duties, and damages for breach of contract and breach of an implied covenant of good faith and fair dealing. AMICO moved for dismissal on the grounds that the advertising injury and personal injury provisions in E & J's business insurance policy did not require AMICO to defend or indemnify E & J in an action for patent infringement. The district court found AMICO had no duty to indemnify or defend and dismissed the case.

E & J now appeals, contending that the district court erred (1) in determining that the advertising injury provision of the contract did not cover patent infringement claims; and (2) in granting the motion for dismissal without adequately considering E & J's separate coverage under the personal injury provision. We affirm.

I. BACKGROUND

Burke's suit against E & J alleged patent infringement in the manufacture and sale of a special wheelchair called the "CARRETTE Scooter" (the Scooter). 1 E & J requested AMICO, its business insurer, to defend E & J in the Burke action and, if unsuccessful, to indemnify E & J for any resulting damages. E & J grounded its request in provisions of the E & J-AMICO insurance contract which required the insurer to defend and/or indemnify

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the insured in any suit against E & J alleging "advertising injury" or "personal injury". 2 E & J alleged that its defense in the Burke suit would relate integrally to advertising because Burke became aware of the potential infringement due to E & J's advertising, and because E & J succeeded in selling the Scooter in part due to advertising. Additionally, E & J anticipated that Burke would prove its damages by demonstrating the extent to which E & J advertised and sold the allegedly infringing product.

AMICO declined to defend E & J, concluding that neither the advertising injury provision nor the personal injury provision triggered AMICO's obligation to defend or indemnify E & J in the Burke action. After successfully defending Burke's suit on its own, 3 E & J filed this action seeking a declaratory judgment concerning AMICO's duties to defend in the trial court and on appeal and indemnify E & J in the Burke suit for legal fees at trial and for damages in case of a loss on appeal. E & J's complaint also alleged breach of contract and breach of the covenant...

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