Interstate Bakeries Corp. v. Onebeacon Ins. Co.
| Decision Date | 06 September 2012 |
| Docket Number | No. 11–1802.,11–1802. |
| Parties | INTERSTATE BAKERIES CORPORATION, Appellant, v. ONEBEACON INSURANCE COMPANY, Appellee. |
| Court | U.S. Court of Appeals — Eighth Circuit |
OPINION TEXT STARTS HERE
David A. Gauntlett, argued, James A. Lowe, Andrew M. Sussman, on the brief, Irvine, CA, for appellant.
Laurence R. Tucker, argued, Tyson H. Ketchum, on the brief, Kansas City, MO, for appellee.
Before SMITH, COLLOTON, and GRUENDER, Circuit Judges.
Interstate Bakeries Corporation (“IBC”) 1 appeals the district court's 2 order holding that OneBeacon Insurance Company (“OneBeacon”), IBC's insurer, does not have a duty to defend IBC in a suit brought by Flowers Bakeries Brands, Inc. (“Flowers”). For the reasons that follow, we affirm.
The central question in this case is whether OneBeacon has a duty to defend IBC in an action (“underlying litigation”) that Flowers brought against IBC. According to the complaint in the underlying litigation (“Flowers Complaint”), Flowers produces and markets “fresh breads and buns under the NATURE'S OWN trademark.” Flowers claims that the Nature's Own mark has “significant fame and public recognition,” “tremendous power as a source identifier,” “commercial magnetism and good will,” and “positive associations and prestigious connotations.” The Flowers Complaint further alleges that IBC “is using or preparing to use, or has stated an intent to use and otherwise promoted, the NATURE'S PRIDE and NATURE'S CHOICE trademarks in connection with packaged breads, which marks are confusingly similar to Flowers'[s] NATURE'S OWN trademark.” Ultimately, the Flowers Complaint asserts five specific counts against IBC: (1) federal trademark infringement, (2) federal unfair competition, (3) state trademark dilution, (4) common law and state unfair competition, and (5) unfair and deceptive trade practices.
IBC maintained an “Advertiser Advantage” insurance policy with OneBeacon that provided coverage for loss resulting from “claims arising from an occurrence committed by the insured during the policy term in or for scheduled advertising and arising from” any of seven enumerated grounds.3 IBC submits that the following two grounds are applicable here: “(5) infringement of title or slogan” and “(6) unfair competition and claims under Section 43(a) of the Lanham Act or similar state statutes” when alleged with a cause of action set forth under ground (5). The policy excluded from coverage claims “for or arising from infringement or dilution of trademark, trade name, trade dress, service mark or service name or unfair competition arising therefrom,” with the explicit proviso that “this exclusion shall not apply to claims for infringement of title or slogan.”
After OneBeacon refused to defend IBC in the underlying lawsuit, IBC initiated this action seeking a declaration that OneBeacon has a duty to defend IBC. IBC filed a motion for partial summary judgment, arguing that “Nature's Own” is a “slogan” and a “title” under the policy. The district court rejected IBC's contentions and denied IBC's motion. The court then entered a judgment in favor of OneBeacon because the parties agreed that the court's construction of the policy in its order denying IBC's motion for summary judgment resolved all of the issues IBC raised in the action. IBC appeals the adverse judgment and the district court's underlying order denying its motion for summary judgment. We affirm the judgment that OneBeacon does not have a duty to defend IBC in the underlying litigation because we conclude that the Flowers Complaint failed to allege facts that would indicate the trademarked phrase “Nature's Own” is potentially a “title” or a “slogan” and that the record in this case is insufficient to establish what a reasonable investigation by OneBeacon would have revealed about Flowers's use of the “Nature's Own” trademark.
We review de novo the district court's underlying order denying IBC's motion for summary judgment. See Myers v. Lutsen Mountains Corp., 587 F.3d 891, 892 (8th Cir.2009). “We may affirm the judgment of the district court ‘on any basis disclosed in the record, whether or not the district court agreed with or even addressed that ground.’ ” Warner Bros. Entm't, Inc. v. X One X Prods., 644 F.3d 584, 591 (8th Cir.2011) (quoting PFS Distribution Co. v. Raduechel, 574 F.3d 580, 591 (8th Cir.2009)). In a diversity action such as this, “[s]tate law governs the interpretation of insurance policies,” Secura Ins. v. Horizon Plumbing, Inc., 670 F.3d 857, 861 (8th Cir.2012), and the parties agree that Missouri law controls, see Kaufmann v. Siemens Med. Solutions USA, Inc., 638 F.3d 840, 843 (8th Cir.2011). “If the Supreme Court of Missouri has not addressed an issue, we must predict how the court would rule, and we follow decisions from the intermediate state courts when they are the best evidence of Missouri law.” Eubank v. Kan. City Power & Light Co., 626 F.3d 424, 427 (8th Cir.2010).
“The duty to defend is determined by comparing the language of the insurance policy with the allegations in the complaint.” McCormack Baron Mgmt. Servs., Inc. v. Am. Guar. & Liab. Ins. Co., 989 S.W.2d 168, 170 (Mo.1999). “If the complaint merely alleges facts that give rise to a claim potentially within the policy's coverage, the insurer has a duty to defend.” Id. at 170–71. In addition, an insurer cannot “merely rest upon the allegations contained within the petition.” Stark Liquidation Co. v. Florists' Mut. Ins. Co., 243 S.W.3d 385, 392 (Mo.Ct.App.2007). Rather, the insurer should also consider “other facts it knew, or could have learned from a ‘reasonable investigation’ at the time the lawsuit was filed.” Secura Ins., 670 F.3d at 861 (quoting Trainwreck W. Inc. v. Burlington Ins. Co., 235 S.W.3d 33, 42 (Mo.Ct.App.2007)). The duty to defend “is to be determined from the cause of action pleaded, at the time the action is commenced, not from what [a later] investigation or a trial of the case may show the true facts to be.” Trainwreck, 235 S.W.3d at 39 (emphasis omitted) (quoting Inter–State Oil Co. v. Equity Mut. Ins. Co., 183 S.W.2d 328, 332 (Mo.Ct.App.1944)). In determining whether there is a duty to defend, a court is barred from “reading into [a complaint] any factual assumptions.” See Penn–Star Ins. Co. v. Griffey, 306 S.W.3d 591, 599 (Mo.Ct.App.2010).
The insured, IBC, bears the burden of proving coverage, and the insurer, OneBeacon, has the burden of showing that an exclusion from coverage applies. See Truck Ins. Exch. v. Prairie Framing, LLC, 162 S.W.3d 64, 80 (Mo.Ct.App.2005). “To extricate itself from a duty to defend a suit against the insured, the insurer must demonstrate that there is no possibility of coverage.” Custom Hardware Eng'g & Consulting, Inc. v. Assurance Co. of Am., 295 S.W.3d 557, 561 (Mo.Ct.App.2009). “The presence of some insured claims in the underlying suit gives rise to a duty to defend, even though uninsured claims or claims beyond the coverage may also be present.” Lampert v. State Farm Fire & Cas. Co., 85 S.W.3d 90, 93 (Mo.Ct.App.2002).
“The interpretation of an insurance policy is a question of law.” McCormack, 989 S.W.2d at 171. We must “ascertain the intention of the parties and ... give effect to that intention.” Secura Ins., 670 F.3d at 861 (quoting J.E. Hathman, Inc. v. Sigma Alpha Epsilon Club, 491 S.W.2d 261, 264 (Mo.1973)). The intention of the parties “is presumptively expressed by the ‘plain and ordinary meaning’ of the policy's provisions,” id. (quoting Mo. Emp'rs Mut. Ins. Co. v. Nichols, 149 S.W.3d 617, 625 (Mo.Ct.App.2004)), “which are read ‘in the context of the policy as a whole,’ ” id. (quoting Am. States Ins. Co. v. Mathis, 974 S.W.2d 647, 649 (Mo.Ct.App.1998)).
Because IBC asserts that OneBeacon has a duty to defend IBC under policy provisions relating only to infringement of titles and slogans, IBC only succeeds if, given the record in this case, the phrase “Nature's Own” is potentially a “title” or a “slogan” under the policy. IBC contends that the phrase “Nature's Own” constitutes both a “title” and a “slogan.” We address each contention in turn.
IBC argues that the phrase “Nature's Own” is the title of the wrappers in which Flowers packages its bread products and that the Flowers Complaint alleging infringement of the “Nature's Own” trademark therefore alleges infringement of a title for which the policy provides coverage. The policy defines “title” as the “caption or name of matter.” We look to the dictionary definition of “caption” and “name” because those words are not defined in the policy. See Schmitz v. Great Am. Assurance Co., 337 S.W.3d 700, 708 (Mo.2011). As relevant to the facts of this case, “caption” is defined as “the heading esp[ecially] of an article or document,” Merriam–Webster's Collegiate Dictionary 184 (11th ed. 2005), and “name” is “a word or phrase that constitutes the distinctive designation of a person or thing,” id. at 823. The policy defines “matter” in part as “any communication, regardless of its nature or form, including but not limited to advertising, ... creative expression, [and] data,” where “advertising” is defined in part as “advertising, publicity, [and] press releases or promotion of the insured's services or products....”
We assume without deciding that, as IBC contends, Flowers's bread packaging is a “matter” under the policy and that the trademarked phrase “Nature's Own” could be used as a “title” of the bread wrappers. Even with these assumptions, however, we hold that neither the allegations in the Flowers Complaint nor the record as to facts known or reasonably ascertainable to OneBeacon when the claim was filed give rise to a claim potentially within the policy's coverage for infringement of a title. See Farr v. Farm Bureau Ins. Co. of Neb., 61 F.3d 677, 682 (8th Cir.1995) (...
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