Selective Insurance Company of America, a New Jersey corporation, Plaintiff,
Smart Candle, LLC, a Minnesota limited liability company, Defendant.
William A. LeMire, Esq. and Arthur, Chapman, Kettering, Smetak & Pikala, PA, counsel for plaintiff.
Peter J. Gleekel, Esq., Bradley J. Walz, Esq. and Winthrop & Weinstine, PA, counsel for defendant.
DAVID S. DOTY, District Judge.
This matter is before the court upon the motions by plaintiff Selective Insurance Company of America (Selective) for summary judgment and by defendant Smart Candle, LLC (Smart Candle) for partial summary judgment. Selective also moves to strike as untimely the reply memorandum submitted by Smart Candle in support of its motion. Based on a review of the file, record and proceedings herein, and for the following reasons, the court denies the motion to strike and grants the motion by Selective for summary judgment.
This insurance-coverage dispute arises out of a lawsuit (Underlying Action) between non-party Excell Consumer Products Ltd. (Excell) and Smart Candle. On November 30, 2011, Excell filed the Underlying Action, alleging (1) unfair competition under the Lanham Act, (2) unfair business practices under New York law, (3) unfair competition under New York law and (4) false or fraudulent registration. Am. Compl. Ex. B, at ¶¶ 34-90. Excell alleged that Smart Candle sold products bearing the trademark, corporate name and trade name "Smart Candle" and used the domain name "smartcandle.com." Id . ¶ 29. Excell also sought to enjoin Smart Candle from such use. Id. at Prayer for Relief.
Selective insured Smart Candle at all times relevant to the Underlying Action. See VonderHaar Aff. Exs. 5, 6. Selective provided liability coverage through both the "Businessowners Coverage" and "Commercial Umbrella Coverage" sections of policy S1744104 (Policy). The Businessowners Coverage section provided that Selective "will pay those sums that [Smart Candle] becomes legally obligated to pay as damages because of... personal and advertising injury'.... [Selective] will have the right and duty to defend [Smart Candle] against any suit seeking those damages." See, e.g., VonderHaar Aff. Ex. 5, at BP00030110-31 (internal quotation marks omitted). Similarly, the Commercial Umbrella Coverage section stated that Selective "will pay on behalf of [Smart Candle] the... loss in excess of the retained limit that [Smart Candle] becomes legally obligated to pay as damages because of... personal and advertising injury'.... [Selective] will have the right and duty to defend [Smart Candle] against any suit seeking those damages...." See, e.g., id. at CXL40403-1 (internal quotation marks omitted).
The Policy expressly excludes coverage under both the Businessowners and Commercial Umbrella Coverage components for personal and advertising injury that arises "out of the infringement of... trademark... or other intellectual property rights, " but clarifies that coverage remains for the "infringement in your advertisement of copyright, trade dress or slogan." See, e.g., id. at BP00030110-38, CXL40403-4 (internal quotation marks omitted). The Policy also excludes coverage for "personal and advertising injury" that arises "out of the unauthorized use of another's name or product in [Smart Candle's]... domain name... or any other similar tactics to mislead another's potential customers." See, e.g., id. at BP00030110-38.
On October 28, 2011, Smart Candle tendered the Underlying Action to Selective. VonderHaar Aff. Ex. 2. On January 12, 2012, Selective informed Smart Candle that the claims were not covered by the Policy. Am. Compl. Ex. C. On November 20, 2012, and November 28, 2012, Smart Candle renewed and reiterated its request that Selective defend Smart Candle in the Underlying Action. VonderHaar Aff. Exs. 3, 4. On March 8, 2013, Selective again disclaimed any duty to defend Smart Candle. Am. Compl. Ex. D.
On April 16, 2013, prior to resolution of the Underlying Action, Selective filed this action, seeking a declaration that it had no duty to defend or indemnify Smart Candle. Smart Candle counterclaimed on May 13, 2013, and requested a declaration that Selective was obligated to defend and indemnify Smart Candle. Selective moved for summary judgment, and Smart Candle moved for partial summary judgment.
I. Standard of Review
"The court shall grant summary judgment if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." Fed.R.Civ.P. 56(a); see Celotex Corp. v. Catrett , 477 U.S. 317, 322 (1986). A fact is material only when its resolution affects the outcome of the case. Anderson v. Liberty Lobby, Inc. , 477 U.S. 242, 248 (1986). A dispute is genuine if the evidence is such that it could cause a reasonable jury to return a verdict for either party. See id. at 252.
On a motion for summary judgment, the court views all evidence and inferences in a light most favorable to the nonmoving party. See id. at 255. The nonmoving party, however, may not rest upon mere denials or allegations in the pleadings but must set forth specific facts sufficient to raise a genuine issue for trial. See Celotex , 477 U.S. at 324. A party asserting that a genuine dispute exists - or cannot exist - about a material fact must cite "particular parts of materials in the record." Fed.R.Civ.P. 56(c)(1)(A). If a plaintiff cannot support each essential element of a claim, the court must grant ...