Premier Pools Management Corp. v. Colony Insurance Co.

Filing 82

ORDER signed by District Judge John A. Mendez on 7/25/18. The Court GRANTS Defendant's Motion for Summary Judgment 74 and DENIES Plaintiff's Motion for Partial Summary Judgment 74 . The dates set for the Pretrial Conference and Trial are VACATED. CASE CLOSED. (Mena-Sanchez, L)

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UNITED STATES DISTRICT COURT

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EASTERN DISTRICT OF CALIFORNIA

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PREMIER POOLS MANAGEMENT CORP.,
a Nevada Corporation,
Plaintiff,

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No.

ORDER GRANTING DEFENDANT’S
MOTION FOR SUMMARY JUDGMENT
AND DENYING PLAINTIFF’S
MOTION FOR SUMMARY JUDGMENT

v.
COLONY INSURANCE COMPANY, a
Virginia Corporation,

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2:13-cv-02038-JAM-EFB

Defendant.

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I.

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INTRODUCTION

Plaintiff Premier Pools Management Corp. (“Plaintiff”)

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brings this lawsuit against Defendant Colony Insurance Company

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(“Defendant”) alleging that Defendant breached the parties’

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insurance agreement by declining to defend Plaintiff in a lawsuit

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brought against it by Premier Pools, Inc. (“PPI”) in Texas state

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court (the “Texas Case”).

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ECF No. 38-1.

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judgment motion in April 2014.

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that Plaintiff was not a named insured under the parties’

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insurance agreement’s plain language and so Defendant had no duty

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to defend in the Texas Case.

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Circuit reversed.

See Second Amended Complaint (“SAC”),

This Court granted Defendant’s first summary
ECF No. 20.

Id. at 8.

The Court reasoned

In May 2016, the Ninth

ECF No. 27 (the “Ninth Circuit Ruling”), 649
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Fed. Appx. 490 (9th Cir. 2016).

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After the Ninth Circuit mandate issued, Plaintiff filed its

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SAC in August 2017 and Defendant initially moved for judgment on

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the pleadings in January 2018.

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that motion was denied without prejudice for failing to meet and

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confer, Plaintiff filed its motion for partial summary judgment

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in April 2018.

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seeks summary judgment on its first claim for declaratory relief,

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second claim for breach of insurance contract — duty to defend,

See ECF Nos. 38-1 and 45.

ECF No. 54; ECF No. 71 (“Pl. Mem.”).

After

Plaintiff

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and third claim for breach of insurance contract — duty to

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indemnify.

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for summary judgment as to all of Plaintiff’s claims – the three

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claims Plaintiff moved on and also Plaintiff’s claims for breach

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of the implied covenant of good faith and fair dealing and its

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claim for punitive damages.

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opposed the cross-motion.

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were heard on June 26, 2018.

Pl. Mem.

Defendant opposed and filed a cross-motion

Def. Mem., ECF No. 74.
Pl. Opp., ECF No. 75.

Plaintiff

The motions

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II.

FACTUAL AND PROCEDURAL BACKGROUND

Plaintiff entered into an insurance agreement with Defendant

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in 2010 (the “Policy”).

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follows:

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The Pertinent policy language reads as

“We will pay those sums that insured becomes legally
obligated to pay as damages because of ‘personal and
advertising injury’ to which this insurance applies.
We will have the right and duty to defend the insured
against any ‘suit’ seeking those damages.”
“‘Personal and advertising injury means’ injury,
including consequential ‘bodily injury’, arising out of
one or more of the following offenses: ... Oral or
written publication, in any manner, of material that
slanders or libels a person or organization or
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disparages a person’s or organization’s goods, products
or services ... The use of another’s advertising idea
in your ‘advertisement’; or Infringing upon another’s
copyright, trade dress or slogan in your
‘advertisement.’”

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“‘Advertisement’ means a notice that is broadcast or
published to the general public or specific marketing
segments about your goods, products or services for the
purpose of attracting customers or supports.”

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See Insurance Policy No. AC800001A-2, Ex. 1 to SAC, ECF No.

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38-1, at 29, 55-65; Insurance Policy No. AC800001A-3, Ex. 2

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to SAC, ECF No. 38-1, at 95, 124-134.

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exclusions state, in relevant part:

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“Knowing Violation Of Rights Of Another: ‘Personal and
advertising injury’ caused by or at the direction of
the insured with the knowledge that the act would
violate the rights of another and would inflict
‘personal and advertising injury’.”

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“Material Published With Knowledge Of Falsity:
‘Personal and advertising injury’ arising out of oral
or written publication of material, if done by or at
the direction of the insured with knowledge of its
falsity.”

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“Infringement Of Copyright, Patent, Trademark Or Trade
Secret: ‘Personal and advertising injury’ arising out
of the infringement of copyright, patent, trademark,
trade secret or other intellectual property rights.
Under this exclusion, such other intellectual property
rights do not include the use of another’s advertising
idea in your ‘advertisement.’ However, this exclusion
does not apply to infringement, in your
‘advertisement’, of copyright, trade dress or slogan.”

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The Policy’s coverage

Id.

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A.

The Texas Case – The First Trial

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In July 2012, Premier Pools, Inc. (“PPI,” with its principal

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place of business in Lewisville, Texas) filed its First Amended

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Petition (“FAP”) in Texas state court against Plaintiff and Shan

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Pools, Inc. (Plaintiff’s licensee incorporated in Allen, Texas),

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bringing claims for: (1) common law trade name infringement;
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(2) common law service mark infringement; (3) unfair competition;

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(4) infringement of Texas service mark; and (5) trade name and

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service mark dilution. SAC, ECF No. 38-1, Ex. 6, at 217-244.
The FAP includes the following relevant allegations:

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“... I[n] 2011, Defendant Pools Management licensed
Defendant Shan to use the name “Premier Pools and Spas”
and began advertising Defendant Shan as its
“Dallas/Fort Worth location on its website.” FAP, ¶ 2.
“Defendants have taken advantage of Plaintiff’s well
known “Premier Pools” name and mark, and its reputation
for providing services of the highest quality, to cause
Plaintiff to lose business and harm its valuable
reputation.” FAP, ¶ 2.
“For over 22 years, the Dodds have built a favorable
and valuable reputation for themselves in this
geographic area under the trade name and service mark
‘Premier Pools’ [.]” FAP, ¶ 12.
“In early 2012, Defendant Pools Management blanketed
the Dallas-Fort Worth market with advertising about
‘Premier Pools and Spas’ and its operations in Dallas,
sending advertisements to homes all over the DallasFort Worth area…” FAP, ¶ 21.
“Beyond all of the confusion that is being caused and
the business that is being lost, Plaintiff’s reputation
and goodwill are being seriously harmed because
Defendant Shan’s work does not rise to the level of
quality and professionalism that has defined
Plaintiff’s business.” FAP, ¶ 34.
“A direct example of how Defendant Shan’s work is
tarnishing Plaintiff’s reputation occurred in Flower
Mound, when a city official, as a courtesy, called
Plaintiff to ask if a pool that had been built in the
area was Plaintiff’s product, saying effectively that
the pool that had been built was so deficient and in
violation of the relevant code provisions that it could
not have been Plaintiff’s work.” FAP, ¶ 34.

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“By using the name ‘Premier Pools and Spas,’ Defendant
Shan has unfairly competed with Plaintiff by
appropriating Plaintiff’s valuable goodwill and
business and injuring Plaintiff thereby. FAP, ¶ 50.

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On March 5, 2013, four days after receiving Plaintiff’s

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tender of the Texas state court case, Colony’s adjuster, Becky

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Vogel (“Vogel”) notified Plaintiff’s founder Paul Porter
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(“Porter”) by email that Defendant was “in receipt of the notice

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of the lawsuit in Texas alleging trademark infringement.

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will investigate this matter under a full and complete

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reservation of rights as afforded by the policy.”

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Lodgment (“PNOL”), ECF No. 71-5, Ex. 2, ECF No. 71-7.

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asked Porter for a copy of PPI’s complaint against Plaintiff to

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investigate whether there was coverage under the Policy.

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March 15, 2013, Vogel told Porter that based on her initial

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review, it appeared PPI was alleging trade name and service mark

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claims that the Policy did not cover.

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Colony

Pl. Notice of
Vogel also

Id.

On

(“Vogel Decl.”), ECF No. 74-4, ¶ 4.

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Decl. of Rebekah Vogel

To investigate further, Vogel spoke with Plaintiff’s counsel

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in the Texas Case, Leland de la Garza (“de la Garza”), on March

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27, 2013, and went through each of the offenses listed in the

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definition of “personal and advertising injury” with him.

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Decl., ¶ 5.

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(1) no allegation in the lawsuit that Plaintiff used PPI’s

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advertising ideas or that Plaintiff was infringing upon a

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copyright, trade dress or slogan; (2) that “Premier Pools” was

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not a slogan; and (3) the PPI lawsuit was purely a trade name and

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service mark infringement matter.

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that he recalls reviewing the claims with Vogel but does not

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recall her using the terms “offenses” and he does not believe he

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stated that “PPI was not alleging any claim that fit within the

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covered offenses.”

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Decl.”), ECF No. 75-5, ¶ 2.

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Vogel

Vogel claims that de la Garza told her there was

Id.

de la Garza testified

Decl. of Leland de la Garza (“de la Garza

The next day, Colony (via Vogel) formally denied Plaintiff’s
tender by letter.

SAC, Ex. 8, ECF No. 38-1, at 247-256.
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Vogel

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explained in her letter that trade name infringement and service

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mark infringement did not fit within the “Personal and

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Advertising Injury” definition under the Policy and that

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Plaintiff was not named as an insured on the Policy.

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Defendant also reserved the right to rely on the exclusion for

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“Infringement Of Copyright, Patent, Trademark Or Trade Secret”

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claims and reserved the right to assert that Plaintiff did not

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qualify as an insured.

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Id.

Id.

The Texas Case went to trial in July 2013 and the jury found

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in favor of PPI, but awarded no damages.

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(“Porter Decl.”), ECF No. 71-3, ¶¶ 6-7.

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was granted, a second trial.

Decl. of Paul Porter
Plaintiff moved for, and

Id.

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B.

The Texas Case – The Second Trial

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In July 2012, Plaintiff again tendered a coverage request to

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Defendant, and Defendant again declined.

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September 2013, PPI brought substantially the same claims against

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Plaintiff and Shan Pools in its Second Amended Petition (“SAP”).

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PNOL, Ex. 1, ECF No. 71-6.

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claims are that the second claim is styled “Common Law Trademark

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and Service Mark Infringement,” the fifth claim is styled

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“Trademark, Trade Name and Service Mark Dilution” and PPI added a

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claim for declaratory judgment.

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to Vogel.

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Porter Decl., ¶ 7.

In

The only apparent differences in the

Id.

Porter did not send the SAP

Vogel Decl., ¶ 9.
1.

Allegations And Testimony About Advertising

The SAP added new allegations that Plaintiff created a

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letter purportedly from the Better Business Bureau (“BBB”) that

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Plaintiff used in its advertising and sales that falsely

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attributed BBB complaints to PPI to make it look like PPI
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committed the actions giving rise to the BBB complaints.

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¶¶ 46-48.

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wrote a bogus letter purporting to be from the BBB dated April 9,

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2012.

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erroneously named “Premier Pools and Spas of Allen Texas with the

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complaint you have inquired about.

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been placed in the bureau of a smaller pool builder in

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Lewisville, Texas also using the name Premier Pools.

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corrected this error and offer you our apologies for this

Id.

SAP,

Specifically, PPI alleged that Defendant Shan Johnson

In it, Johnson allegedly wrote that the BBB

We have

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inconvenience.”

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this letter to one or more of his sales personnel and told them

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to show this to customers if they inquired about complaints filed

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against Defendant Shan with the BBB.

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BBB denied authoring this letter.

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alleged that this letter was created to show to potential

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customers to attempt to deflect inquiries about BBB complaints

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against Shan Johnson to PPI, and “falsely make it look like the

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offending conduct was committed by [PPI].”

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Id., ¶ 46.

This complaint should have

PPI alleged Shan Johnson had given

Id.

PPI alleged that the

Id., ¶ 47.

Finally, PPI

Id.

PPI expert Karl D. Weisheit (“Weisheit”) also wrote in his

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November 2013 report that Plaintiff sent advertisements

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throughout the Dallas-Fort Worth area about “Premier Pools and

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Spas” that confused customers into thinking they were looking at

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advertisements by PPI.

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advertisements falsely claimed Plaintiff had operated in the area

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since 1988 because PPI had operated in the area since 1989.

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One of Plaintiff’s representatives testified that customers cared

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about how long the companies had been around.

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No. 71-10, Trial Transcr. Vol. 7, 247:24-248:13.

PNOL, Ex. 3.

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For example, the

Id.

PNOL Ex. 5, ECF

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At the second trial in September 2014, PPI’s representatives

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testified that their advertising relied almost entirely on their

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name and what it represented.

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Transcr. Vol. 7, 191:15-22; PNOL Ex. 6, ECF No. 71-11, Trial

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Transcr. Vol. 8, 53:13-20.

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testified that they falsely showed pools built by Plaintiff’s

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franchises outside the Dallas-Fort Worth area and tried to pass

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them off like they had been built in the Dallas-Fort Worth area.

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PNOL Ex. 5, Trial Transcr. Vol. 7, 135:6-15.

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PNOL Ex. 5, ECF No. 71-10, Trial

Plaintiff’s representatives also

After the case closed and the parties prepared jury

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instructions, PPI’s counsel argued that false advertising

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constituted independent tortious activity that was required for

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PPI’s unfair competition claim.

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Transcr. Vol. 11, 37:18-38:2.

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advertising had been tried, but stated “I’m not sure why we

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didn’t try a false advertising claim because it’s certainly

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present, but we didn’t.”

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instruction on PPI’s unfair competition claim stated, in relevant

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part, that “[t]o prove unfair competition, it is not necessary to

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prove that Defendants intended to deceive the public, nor that

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anyone was actually deceived.

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deception must be shown, and a mere possibility of deception is

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not enough.”

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Plaintiff’s counsel argued that Premier Pools is just defined as

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a “high quality pool, a first class pool.”

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PPI’s counsel responded in rebuttal that “[t]he deception, the

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clever thing is, well, if you advertise, if you spend more, you

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have a bigger website, you have search engine optimization, you

PNOL Ex. 7, ECF No. 71-12, Trial
The Court disagreed that false

Id., 44:4-9.

Id., 74:8-18.

The Court’s jury

However, either actual or probable

During closing arguments,

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Id., 113:21-23.

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have the mark ... you can’t advertise your way to a good

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reputation.”

Id., 157:17-23.

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Recently in a deposition, Plaintiff’s attorney from the

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Texas Case testified that PPI’s only slogan was its name, Premier

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Pools.

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52:12-53:11, 57:17-58:10.

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2.

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PNOL Ex. 8, ECF No. 71-13, Depo. of Leland de la Garza,

Defendant’s Involvement In The Second Trial

At the second trial, Plaintiff retained Veritas Advisory
Group (“Veritas”) as rebuttal damages experts.

Porter Decl.,

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¶ 12; SAC, ¶ 30.

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and asked Defendant to pay for Veritas’s services.

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Defendant agreed to pay $25,000 for the expert’s services and

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reserved its rights. Def. Not. of Lodgment of Exhibits (“DNOL”),

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ECF No. 74-8, Ex. 4, ECF No. 74-12.

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reservations was that it

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Plaintiff, however, could not afford Veritas
Id.

One of Defendant’s explicit

continues its denial of coverage to Premier Pools on
all the grounds previously asserted in its
correspondence and its papers filed in the matter of
Premier Pools Management Corp. v. Colony Insurance
Company, Case No. 2:13-cv-02038-JAM-EFB (E.D. CA),
including without limitations that Premier Pools is not
an insured under the Colony policy, that the claims in
the Underlying Action do not fall within the policy’s
“personal and advertising injury” coverage and that
coverage for the claims are barred by various
exclusions [.]

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Id.

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Porter Decl., ¶ 3.

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at the second trial, Defendant also had a representative attorney

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attend the second trial.

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Fine (“Fine Depo.”), ECF No. 71-14, 58:10-24.

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Defendant never sought reimbursement of these fees it paid.
In addition to paying for Veritas’s services

PNOL Ex. 9, ECF No. 14, Depo. of Ellen

In October 2014, the jury found Plaintiff liable to PPI for
trademark and tradename infringement and unfair competition and
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awarded $287,876.00 in damages for lost profits.

SAC, Exs. 10-

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11, at 259-78.

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April/May 2017 while the appeal of the judgment was pending.

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Porter Decl., ¶¶ 14-17; SAC, ¶ 77.

Plaintiff settled the Texas Case with PPI in

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C.

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See

The Ninth Circuit Ruling And Remand

In May 2016, the Ninth Circuit reversed this Court’s

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previous grant of Defendant’s motion for summary judgment.

ECF

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No. 27 (“Ninth Circuit Ruling”), 649 Fed. Appx. 490 (9th Cir.

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2016).

The Ninth Circuit found that the Policy documents were

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ambiguous as to which entities were insured and that the policy

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should be interpreted as a “layman would read it and not as it

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might be analyzed by an attorney or an insurance expert.”

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2 (internal quotation marks and citation omitted).

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Circuit concluded that, when the extrinsic evidence is

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considered, Plaintiff “sufficiently established that it was an

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insured so as to trigger a duty to defend under California law.”

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Id., at 3 (internal citation omitted).

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Circuit held that “because there was potential coverage for the

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underlying suit, Colony had a duty to defend it.”

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Circuit, however, explicitly noted that “Colony raises other

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coverage defenses.

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decision to the Declarations Certificates.

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consider the additional coverage issues for the first time on

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appeal, leaving those issues for the district court on remand to

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consider in the first instance.”

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Id. at

The Ninth

Accordingly, the Ninth

Id.

The Ninth

However, the district court confined its
We decline to

Id., at 3-4.

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III. OPINION

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A.

Law Of the Case – Ninth Circuit Ruling

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Plaintiff argues that because the coverage issue was briefed

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extensively and argued by Defendant in the Ninth Circuit, the

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holding from the Ninth Circuit Ruling should be read broadly and

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that law of the case means that the Ninth Circuit has already

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decided that Defendant had a duty to defend.

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Opp., at 2-4.

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Pl. Mem. at 17; Pl.

Defendant responds that Plaintiff has mischaracterized the

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law of the case doctrine and the Ninth Circuit opinion.

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Mem. at 19-20.

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claims that were not actually decided.

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F.3d 714, 720 (9th Cir. 2010) (internal citation and quotation

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marks omitted).

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judgment on one issue, and the Ninth Circuit reversed, ruling

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that the issue was for a jury to decide.

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remand, the district court granted summary judgment a second time

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on a different ground. Id.

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that law of the case did not bar the district court from granting

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summary judgment a second time. Id.

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that, in applying law of the case, the statement in the initial

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appellate opinion had to be read in the context of the entire

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opinion.

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Def.

Law of the case does not apply to issues or
Mortimer v. Baca, 594

In Mortimer, the district court granted summary

Id. at 718-19.

After

The Ninth Circuit affirmed and ruled

The Ninth Circuit explained

Id. at 720.

Here, similarly, this Court previously granted Defendant’s

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summary judgment motion on the basis that Plaintiff did not

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qualify as an insured entity under Defendant’s policies.

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Court did not address whether the Policy covered the claims

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alleged in the Texas Case.

ECF No. 20.
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The

The Ninth Circuit’s

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written opinion reversed this Court’s ruling on whether Plaintiff

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qualified as an insured entity.

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Ninth Circuit Ruling at 3.

Plaintiff contends that the Ninth Circuit’s statement that

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it declined to rule on additional coverage issues just means that

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the Ninth Circuit declined to delve into the numerous coverage

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issues raised by Defendant in its appellate opposition brief.

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Pl. Opp. at 3.

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statement does not mean the Ninth Circuit did not consider the

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potential for coverage because the Ninth Circuit Panel asked

Plaintiff asserts that the Ninth Circuit’s

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several questions about the potential for coverage at oral

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argument.

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found a potential for coverage and reserved “any additional

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actual coverage issues for the Court on remand.”

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Id.

Plaintiff also claims that the Ninth Circuit

Id. at 4.

Defendant responds that if Plaintiff was correct in

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asserting that the Ninth Circuit summarily adjudicated the duty

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to defend, it would have instructed this Court to enter judgment

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for Plaintiff.

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contends that what the parties briefed on appeal and argued on

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appeal do not matter – what matters is what the Ninth Circuit did

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and did not decide. Id.

Def. Reply, ECF No. 79, at 2.

Defendant also

The Court agrees.

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The Ninth Circuit only reversed this Court’s ruling that

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Plaintiff was not an insured under the Policy, since that was the

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only issue before it.

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coverage issues and specifically stated that it was “leaving

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those issues for the district court on remand to consider…”.

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This Court, therefore, must now address for the first time the

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other coverage issues raised by the parties in these motions.

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The Ninth Circuit did not decide any other

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B.

Duty To Defend

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Words in an insurance policy must be interpreted as they are

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understood by the average insured person, not as they may be

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understood by an intellectual property lawyer.

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Truck Ins. Exch., 31 Cal. 4th 635, 647-48 (2003).

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duty to defend its insured against claims is triggered when the

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facts alleged in the complaint create a potential for coverage.

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Scottsdale Ins. Co. v. MV Transp., 36 Cal. 4th 643, 654 (2005).

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This is regardless of the technical legal causes of action

See MacKinnon v.
An insurer’s

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pleaded by the third party.

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90 Cal. App. 4th 500, 510 (2001).

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where extrinsic facts known to the insurer suggest the claim may

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be covered.

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the complaint, or otherwise known by the insurer, suggest a claim

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potentially covered by the policy, the insurer’s duty to defend

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arises.

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Id. at 509-10.

Barnett v. Fireman’s Fund Ins. Co.,
The duty to defend also exists

If any facts fairly inferable from

Scottsdale Ins. Co., 36 Cal. 4th at 654-55.

Where there is any issue of a potential for coverage and

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therefore a duty to defend, the insurer must defend until it can

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secure an adjudication that there is no such potential or duty.

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Montrose Chem. Corp. v. Sup. Ct., 6 Cal. 4th 287, 295 (1993).

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insurer must protect the insured’s interests as if it were its

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own and it may not deny a claim without thoroughly investigating

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it.

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1617, 1623 (1996) (internal citation and quotation marks

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omitted).

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forms and the policy in favor of coverage; exclusions are

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strictly interpreted against the insurer.

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omitted).

An

Mariscal v. Old Republic Life Ins. Co., 42 Cal. App. 4th

Accordingly, an insurer must liberally construe claim

Id. (internal citation

The duty to defend does not depend on whether facts
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supporting a covered claim predominate or generate the claim and

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the labels applied to claims do not govern coverage.

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Trust Fund v. Federal Ins. Co., 307 F.3d 944, 951 (9th Cir.

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2002).

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Pension

There are, however, limitations on the duty to defend.

The

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duty is limited by the nature and kind of risk covered by the

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policy.

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9 Cal. 4th 27, 38 (1994).

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defend by speculating about extraneous facts regarding potential

La Jolla Beach & Tennis Club, Inc. v. Indus. Indem. Co.,
An insured may not trigger the duty to

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liability or ways in which the third party claimant might amend

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its complaint at some future date.

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37 Cal. App. 4th 1106, 1114 (1995).

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defend is not extinguished until the insurer negates all facts

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suggesting potential coverage.1

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Gunderson v. Fire Ins. Exch.,
In addition, the duty to

Scottsdale, 36 Cal. 4th at 655.

Once the insurer determines on the basis of the lawsuit and

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the facts known to it at that time that there was no potential

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for coverage, the insurer does not have a continuing duty to

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investigate or monitor the lawsuit to see if the third party

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later made some new claim not found in the original lawsuit.

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Gunderson, 37 Cal. App. 4th at 1117.

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available at the time of tender shows no coverage and information

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available later shows otherwise, a duty to defend may then arise.

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Am. States Ins. Co. v. Progressive Cas. Ins. Co., 180 Cal. App.

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4th 18, 26 (2009).

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But where information

Plaintiff argues that an insurer has a continuing duty to
evaluate a potential for coverage all the way thru trial in the
case. Pl. Opp. at 5. But Montrose, the case Plaintiff cites for
this proposition, does not support this argument. 6 Cal. 4th at
299.
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1.

Disparagement

Plaintiff claims that PPI’s SAP alleged Plaintiff disparaged

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PPI’s products or services, thus triggering Defendant’s duty to

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defend under the Policy’s “Personal and advertising injury”

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provision.

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did not tender the SAP to Defendant, Defendant is charged with

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knowledge of the SAP and what happened at the second trial since

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it had a representative there.

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contends that even if the BBB allegations from the SAP are

Pl. Mem. at 18.

Plaintiff argues that, even if it

Pl. Mem. at 15.

Plaintiff also

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alleged against Shan Johnson, they apply to Plaintiff because

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PPI’s causes of action were brought against both defendants.

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Id.

Disparagement concerns damage to the reputation of products,

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goods, or services.

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Distrib., Inc., 59 Cal. 4th 277, 288-89 (2014).

15

elements to a disparagement claim in the context of commercial

16

liability coverage: “A false or misleading statement (1) must

17

specifically refer to the plaintiff’s products or business, and

18

(2) must clearly derogate that product or business.

19

requirement must be satisfied by express mention or by clear

20

implication.”

21

Hartford Casualty Ins. Co. v. Swift
There are two

Each

Id. at 291.

Here, Plaintiff points to PPI’s allegations that Plaintiff

22

created a letter specifically stating that Plaintiff was accused

23

of falsely informing potential customers that a BBB complaint was

24

wrongly attributed to Plaintiff when it should have been

25

attributed to PPI.

26

Plaintiff asserts that, since these allegations are extensions

27

and amendments to PPI’s initial allegations of disparagement,

28

Defendant had a duty to defend these foreseeable allegations from

Pl. Mem. at 19 (citing SAP, ¶¶ 46-48).

15

1

the beginning.

2

Id.

Plaintiff also contends that Swift Distrib. (relied on by

3

Defendant), a case where no coverage was found for disparagement,

4

does not apply because there was no alleged inferiority in the

5

competing product in that case.

6

297.

7

Plaintiff’s inferior product is alleged to have been attributed

8

to PPI.

9

advertising such services in the same market for its ‘Dallas/Fort

Swift Distrib., 59 Cal. 4th at

In contrast, Plaintiff claims that the FAP alleges

Pl. Mem. at 22 (citing FAP, ¶¶ 2, 34, 61 (“By

10

Worth’ location through its website and through mailed

11

advertisements, Defendant Pools Management has actively

12

contributed to Defendant Shan’s dilution of Plaintiff’s trade

13

name and mark, and has done so knowingly since no later than July

14

of 2011”)).

15

Plaintiff also argues that Total Call, Int’l, Inc. v.

16

Peerless Ins. Co. (also relied on by Defendant), 181 Cal. App.

17

4th 161, 170-71 (2010) does not apply.

18

Call, the California Court of Appeal found no disparagement

19

because the gravamen of the relevant allegations against the

20

insured were that the insured misstated its own products’

21

capabilities, to the detriment of the entire industry and not the

22

underlying plaintiff specifically.

23

Here, PPI alleged that Plaintiff misstated its capabilities to

24

the detriment of PPI specifically.

25

Pl. Mem. at 22.

In Total

181 Cal. App. 4th at 170-71.

FAP, ¶¶ 2, 19, 31-34, 61.

Plaintiff contends this case is more like Tria Beauty v.

26

Nat’l Fire Ins. Co., No. C 12-05465, 2013 WL 2181649 (N.D. Cal.

27

May 20, 2013).

28

the policy language included coverage for claims that sounded in

Pl. Mem. at 22.

There, the key issue was whether

16

1

disparagement in the broader sense of injurious falsehoods, as

2

opposed to a narrower category of claims that met the pleading

3

requirements for trade libel.

4

In denying summary judgment for the insurer, the Northern

5

District of California stated that the term “disparages” in the

6

policy should be resolved by construing the language in a way

7

that is consistent with the plaintiff’s objectively reasonable

8

expectations, and in case of doubt, against the insurers.

9

The Northern District of California cited Travelers Prop. Cas.

Tria Beauty, 2013 WL 2181649, *5.

Id.

10

Co. v. Charlotte Russe Holding, Inc., 207 Cal. App. 4th 969, 976-

11

80 (2012) in holding that “the disparagement policy language at

12

issue here covered implied disparagement claims based on

13

statements about the insured’s own products.”

14

argues that, similarly, its alleged advertising about its own

15

products—that it was established in 1988 and that it built

16

certain pools in the Dallas Fort-Worth area—impliedly disparaged

17

PPI.

18

15; PNOL Ex. 7, Transcr. Vol. 11, 97:21-99:21).

19

Id.

Plaintiff

Pl. Mem. at 23 (citing PNOL Ex. 5, Transcr. Vol. 7, 135:6-

Defendant counters that there was no implicit disparagement

20

in the Texas Case because the PPI lawsuit only alleged that

21

Plaintiff copied PPI’s good name and traded on its good

22

reputation.

23

cases that the California Supreme Court cited in Swift.

24

Mem. at 12.

25

Co., 838 F.2d 346 (9th Cir. 1988), the Ninth Circuit found the

26

insurer had no duty to defend under its trade libel coverage

27

provision because disparagement claims did not arise from

28

allegations that the policyholder had “palmed off” the

Def. Mem. at 11.

In support, Defendant relies on
Def.

In Aetna Casualty & Surety Co. v. Centennial Ins.

17

1

competitor’s products as its own.

2

underlying complaint did not allege any publication which

3

directly cast aspersions on the underlying plaintiff’s product or

4

business.

5

F.3d 1135 (9th Cir. 2003), the Ninth Circuit found that the

6

insurer had no duty to defend because an entity’s imitation of a

7

product design did not constitute disparagement.

8

1137, 1142.

9

F.3d 968, 972 (9th Cir. 1994), the Ninth Circuit ruled that the

10

insurer had no duty to defend based on disparagement because the

11

underlying claims were only that Microtec palmed off the

12

underlying plaintiff’s compilers and not that Microtec made a

13

false or injurious statement about the quality of the underlying

14

plaintiff’s compilers.

15

Id.

838 F.2d at 349, 351.

The

In Homedics, Inc. v. Valley Forge Ins. Co., 315

315 F.3d at

In Microtec Research v. Nationwide Mut. Ins. Co., 40

40 F.3d at 972.

Defendant also argues that, just like all the aforementioned

16

Ninth Circuit cases and Swift Distrib., PPI here did not allege

17

that Plaintiff specifically referred to PPI in its advertisements

18

or specifically disparaged PPI’s products or services.

19

at 12.

20

PPI and only alleged that Plaintiff misappropriated its name,

21

which caused confusion.

22

had no duty to defend under a disparagement theory.

23

Defendant adds that coverage under the disparagement provision

24

does not arise from PPI’s alleged damage to its reputation from

25

consumers thinking PPI did the inferior work.

26

Def. Mem.

PPI did not allege Plaintiff’s advertisements referred to

Id.

Accordingly, Defendant argues it
Id.

Def. Mem. at 13.

Defendant further contends that Plaintiff’s reliance on Tria

27

Beauty is misplaced because it predated Swift Distrib., which is

28

binding on this Court’s application of California law as a
18

1

California Supreme Court holding.

2

v. Allstate Ins. Co., 68 F.3d 1160, 1164 (9th Cir. 1995)).

3

Defendant also notes that Tria Beauty has questionable persuasive

4

value because it followed Charlotte Russe, which Swift Distrib.

5

specifically addressed and disapproved of.

6

2013 WL 2181649, * 6; Swift Distrib., 59 Cal. 4th at 295.

7

Def. Mem. at 13 (citing Aceves

Id.; Tria Beauty,

Defendant asserts that, as a general matter, the new BBB

8

allegations from the SAP did not trigger a duty to defend

9

because: (1) Plaintiff never tendered the SAP to Defendant;

10

(2) the BBB allegations were made against Shan Johnson and not

11

Plaintiff; and (3) the claim based on the BBB letter would fall

12

within the Policy exclusions for “material published with

13

knowledge of falsity” and “knowing violation of rights of

14

another.”

15

denied coverage in March 2013, it told Plaintiff to forward any

16

information which they thought would be relevant to policy

17

coverage.

18

tendered it, or even attached it in this case until Plaintiff’s

19

summary judgment motion.

20

Defendant’s representative attended did not mention the BBB

21

allegations.

22

Travelers Casualty & Surety Co. v. Employers Ins. Of Wasau, 130

23

Cal. App. 4th 99 (2005), where the California Court of Appeal

24

found the insurer had no duty to defend because facts giving rise

25

to potential coverage were only asserted in the fourth amended

26

complaint, which was never tendered.

27
28

Def. Mem. at 21-22.

Id. at 22.

Id.

Defendant mentions that when it

But Plaintiff never forwarded the SAP or

Id.

And the Second Trial that

In support of its argument, Defendant cites

Id.

Finally, Defendant reasons that the BBB letter, if bogus,
could not have been written without knowing it was false.
19

Def.

1

Mem. at 22.

2

Violation Of Rights Of Another” and “Material Published With

3

Knowledge Of Falsity” Policy exclusions.

4

The BBB allegations would fall within the “Knowing

Id.

Plaintiff counters that the BBB allegations establish a

5

potential for coverage under the Policy because the alleged

6

conduct involved disseminating damaging information (the BBB

7

complaint) against PPI, which “directly cast aspersions” on PPI’s

8

business.

9

that Plaintiff casted aspersions on PPI’s business.

Pl. Opp. at 16.

But the BBB allegations do not state
Plaintiff

10

also fails to address the Ninth Circuit cases about disparagement

11

that Defendant cited and fails to address Defendant’s claim that

12

Tria Beauty relies on law that has been disapproved of by the

13

California Supreme Court.

See id.

14

The Court finds that the FAP did not give rise to coverage

15

under the disparagement provision – the FAP simply alleges that

16

Plaintiff traded on PPI’s strong reputation and name.

17

not allege that Plaintiff directly casted aspersions on PPI’s

18

name or products or that Plaintiff made false or injurious

19

statements about the quality of PPI’s products.

20

disparagement provision does not apply.

21

Cal. 4th at 296; Aetna, 838 F.2d at 349, 351; Homedics, 315 F.3d

22

at 1137, 1142; Microtec, 40 F.3d at 972.

23

It does

The

See Swift Distrib., 59

The Court further finds that the BBB letter allegations from

24

the SAP did not trigger a duty to defend.

Defendant did not have

25

a duty to further investigate coverage until Plaintiff submitted

26

a new tender.

27

Plaintiff alleged it asked and was refused coverage for defense

28

of the Second Trial in the SAC, but it does not say when or what

See Upper Deck, 358 F.3d 608, 613 (9th Cir. 2004).

20

1

information it sent to Defendant.

2

did not rebut Defendant’s contention that it never received the

3

SAP until the recent depositions in this case.

4

17, n.66.

5

not triggered under any potential disparagement allegations.

6
7

See SAC, ¶ 31.

And Plaintiff

See Pl. Opp. at

The Court finds that Defendant’s duty to defend was

2.

Advertisement

Plaintiff claims Defendant alternately had a duty to defend

8

under the Policy’s “use of another’s advertising idea in your

9

‘advertisement’” provision because PPI alleged that Plaintiff’s

10

use of the name “Premier Pools” in advertisements harmed it.

11

Mem. at 19.

12

Pl.

Copying a competitor’s product and selling that product does

13

not constitute use of an advertising idea for an insurer’s duty

14

to defend.

15

200 Cal. App. 4th 573, 584-85 (2011).

16

infringes on a patent in their advertisement, this does not

17

constitute use of another’s advertising idea.

18

v. Pac. Nat’l Ins. Co., 76 Cal. App. 4th 856, 872 (1999).

19

when the infringement deals with an advertising idea itself, that

20

constitutes use of an advertising idea.

21

Nat. Union Fire Ins. Co. of Pittsburgh, Pa., 600 F.3d 1092, 1101-

22

1102 (9th Cir. 2010) (found advertising idea existed where the

23

infringement dealt with a way to solicit customers).

24

Oglio Entm’t Grp., Inc. v. Hartford Cas. Ins. Co.,
Even where an insured

Mez Indus., Inc.
But

Hyundai Motor Am. v.

Plaintiff points out that PPI officials testified at the

25

Second Trial that PPI’s entire advertising scheme was to use its

26

name “Premier Pools” by yard signs and referrals because the name

27

was everything.

28

FAP alleges Plaintiff took advantage of PPI’s well known “Premier

Pl. Mem. at 19.

Plaintiff also notes that the

21

1

Pools” name and mark, and its reputation for providing services

2

of the highest quality.

3

Plaintiff further argues that coverage arises from Plaintiff

4

falsely marketing that it was established in Texas in 1989 and

5

trying to exploit the fact that PPI came into the Dallas Fort-

6

Worth area in 1989.

7

Pl. Mem. at 20 (citing FAP, ¶ 2).

Id.

Defendant counters that Plaintiff’s infringement of PPI’s

8

name “Premier Pools” was not the use of another’s advertising

9

idea.

Def. Mem. at 14-15.

Defendant specifically argues that

10

“California courts and the Ninth Circuit have interpreted

11

“advertising idea” based on its plain meaning—an idea used for

12

advertising.

13

or product itself ...”

14

that “Premier Pools” is a name, and not an advertising idea.

15

Court finds that PPI did not allege that Plaintiff stole an

16

advertising idea, e.g., a special computer program designed to

17

track customer preference data.

18

Policy coverage provision does not apply.

19

3.

20

‘Advertising idea’ does not mean a company’s name
Id. at 14.

The Court agrees and finds
The

The “use of an advertising idea”

Slogan Infringement

Plaintiff next contends that Defendant’s duty to defend was

21

triggered by potential slogan infringement claims based on the

22

facts alleged in the FAP and SAP.

23

Pl. Mem. at 20.

In Street Surfing, LLC v. Great American E&S Ins. Co. 776

24

F.3d 603, 608 (9th Cir. 2014)2, the Ninth Circuit stated that the

25

definition of slogan is “a brief attention-getting phrase used in

26

advertising or promotion or a phrase used repeatedly, as in

27

2

28

Plaintiff cites to Street Surfing, 752 F.3d 853 (9th Cir. 2014)
in its moving papers, but that opinion was explicitly amended and
superseded by Street Surfing, 776 F.3d 603. Pl. Mem. at 21.
22

1

promotion.”

(citing Palmer v. Truck Ins. Exch., 21 Cal. 4th 1109

2

(1999)).

3

instances where the name of a business, product, or service, by

4

itself, is also used as a slogan.

5

4th 1109).

6

Circuit in Interstate Bakeries Corp. v. OneBeacon Ins. Co., 686

7

F.3d 539, 546 (8th Cir. 2012) mentioned that “Nature’s Own” could

8

serve as a slogan, even though it was also a name.

9

duty to defend, however, the Ninth Circuit cited Interstate

The Ninth Circuit also noted that there may be

Id. (citing Palmer, 21 Cal.

The Ninth Circuit acknowledged that the Eighth

In finding no

10

Bakeries Corp. to explain that the underlying plaintiff never

11

suggested that the insured ever used “Streetsurfer” as a slogan.

12

Id. at 609.

13

was absent because the plaintiff used “Streetsurfer” as a

14

recognizable brand name to identify his products, not as a phrase

15

promoting that brand.

16

The Ninth Circuit concluded that the duty to defend

Id.

In Palmer v. Truck Ins. Exch., 21 Cal. 4th 1109 (1999), the

17

California Supreme Court also held that a trademarked name was

18

not a slogan.

19

“Valencia” in its housing project known as “Valencia Village

20

Apartments.”

21

rejected the contention that the conduct constituted slogan

22

infringement because “the infringing use of a trademark that is

23

merely a word in a phrase used as a slogan is not the same as the

24

infringing use of a slogan.”

The insured was sued for infringing the mark

Id. at 1112-13.

The California Supreme Court

Id. at 1120.

25

Plaintiff contends that the name “Premier Pools” is an

26

advertising slogan since it is the phrase that Plaintiff and PPI

27

both used for promoting the brand Premier Pools.

28

Plaintiff cites from de la Garza’s closing argument in the Texas
23

Pl. Mem. at 21.

1
2

Case to support this argument.

Pl. Mem. at 21.

Plaintiff also argues that “Premier Pools” is both a name

3

and a slogan because it is a brief, attention-getting phrase used

4

in advertising or promotion.

5

to distinguish Palmer by claiming it only determined that

6

“Valencia” is a word and not a slogan, and cannot be applied more

7

broadly.

8

Ins. Co., 624 F.3d 1264, 1265 (9th Cir. 2010) to argue that

9

slogan infringement need not be a specific pleaded cause of

Id. at 6.

Pl. Opp. at 5.

Plaintiff attempts

Plaintiff cites Hudson Ins. Co. v. Colony

10

action in a complaint to trigger coverage. Id.

11

complaint listed causes of action for trademark infringement,

12

trademark counterfeiting, trademark dilution, unfair competition,

13

and deceptive acts and practices.

14

Hudson successfully asserted that the phrase “Steel Curtain”

15

raised the potential for coverage for trade dress infringement

16

and slogan infringement, even though neither was expressly pled.

17

Id. at 1270.

18

the insured, the Ninth Circuit noted that “Steel Curtain” was a

19

brief attention-getting phrase used to promote fan loyalty to the

20

Pittsburgh Steelers and to a subset of Steelers players.

21

1268.

22

from Cincinnati Ins. Co. v. Zen Design Grp., Ltd., 329 F.3d 546,

23

550, 556 (6th Cir. 2003), where the Sixth Circuit ruled that even

24

though it was doubtful whether WEARABLE LIGHT could legally be a

25

slogan, the complaint’s failure to refer to WEARABLE LIGHT as a

26

slogan and its failure to include slogan infringement in the

27

complaint did not alleviate the duty to defend.

28

In Hudson, the

624 F.3d 1264.

The insured in

In affirming a grant of partial summary judgment to

Id. at

The Ninth Circuit also looked favorably on the analysis

Id. at 1268-69.

Plaintiff further contends that like “Steel Curtain” in
24

1

Hudson, “Quality Vehicle Modifier” (an automobile safety

2

certification and product feature) in Ultra Coachbuilders, Inc.

3

v. Gen. Sec. Ins. Co., No. 02 CV 675, 2002 WL 31528474, *2-3

4

(S.D.N.Y. Jul. 15, 2002), and “fullblood” (a term of art within

5

the cattle industry) in Am. Simmental Ass’n v. Coregis Ins. Co.,

6

75 F. Supp. 2d 1023, 1030 (D. Neb. 1999), “Premier Pools” is also

7

a slogan.

8

Pools” has a meaning to the target audience – homeowners

9

interested in a luxurious backyard pool.

Pl. Opp. at 8.

Plaintiff contends that “Premier

Id.

Plaintiff claims

10

that the target audiences appreciate the implications of the

11

phrase suggesting they are purchasing an attractive product, like

12

Wearable Light in Zen Design.

13

“Premier Pools” is both a name and a slogan since the phrase

14

indicates “first” or “best” or “leader,” which embodies the idea

15

itself.

16

contain an idea, slogan, and a name, all in one.

17

Notably, these characterizations of the phrase “Premier Pools”

18

are not alleged in the FAP or SAP.

19

Id.

Plaintiff also asserts that

Plaintiff’s alleged infringement of the phrase thus may
Pl. Opp. at 11.

See Pl. Opp. at 8, 11.

Plaintiff also points out that the Dodd Family (founders of

20

PPI) did not use “Dodd’s Pools” as their business’s names, but

21

the slogan and idea “Premier Pools.”

22

Porter did not call Plaintiff “Porter’s Pools” or “Shan’s Pools”

23

for Shan Johnson in Texas.

24

that even if it is doubtful whether “Premier Pools” is a slogan,

25

Defendant was on notice about a slogan infringement claim and

26

should have adhered to its duty to defend.

Id.

Pl. Opp. at 11.

Similarly,

Accordingly, Plaintiff claims

Id.

27

To support its argument, Plaintiff cites A Touch of Class

28

Imports Ltd. V. Aetna Casualty Ins. Co., 901 F. Supp. 175, 177
25

1

(S.D.N.Y. 1995), where “Touch of Class” served as both a title

2

and a slogan.

3

Palmer, 21 Cal. 4th at 655-56, however, called this

4

interpretation dicta and said “we do not find the decision to be

5

persuasive precedent because the court failed to consider the

6

policy language as a whole and provided no analysis whatsoever.”

7

Pl. Opp. at 10.

The California Supreme Court in

Defendant counters these arguments by pointing out that

8

PPI’s trademarked name was not simultaneously a slogan and that

9

PPI did not allege Plaintiff used “Premier Pools” as a slogan.

10

Def. Mem. at 16-17.

11

Pools” was a name and mark that Plaintiff infringed.

12

FAP).

13

a slogan or advertising idea, but that the name was “everything”

14

because of what it indicated about PPI’s business and reputation.

15

Id. at 24-25 (citing PNOL, Ex. 6, Transcript Vol. 8, 53:13-20.)

16

As a result, no duty arose because speculating about facts not

17

found in the complaint (even if they might naturally be supposed

18

to exist along with the alleged facts) is insufficient to give

19

rise to an insurer’s duty to defend.

20

Advent, Inc. v. Nat’l Union Fire Ins. Co. of Pittsburgh, Pa., 6

21

Cal. App. 5th 443, 460 (2016) and Friedman Prof. Mgmt. Co., Inc.

22

v. Norcal Mut. Ins. Co., 120 Cal. App. 4th 17, 34-35 (2004)).

23

PPI’s FAP and SAP only alleged that “Premier
Id. (citing

Further, nobody from PPI testified that Premier Pools was

Def. Reply at 4 (citing

Defendant distinguishes Hudson by arguing that “Steel

24

Curtain” is not the name of the team and here, “Premier Pools” is

25

the name of the Texas pool company.

26

also emphasizes that Street Surfing does not help Plaintiff

27

because the Ninth Circuit in that case held that “Streetsurfer”

28

was not a slogan, since the underlying infringement complaint
26

Def. Reply at 3.

Defendant

1

alleged only that the plaintiff used “Streetsurfer” as a

2

recognizable brand name to identify his products.

3

776 F.3d at 609.)

4

out that the case did not apply California law and that the court

5

found WEARABLE LIGHT to be a slogan partially because it was not

6

the actual name of the product.

7

556-57).

8
9

Id. (citing

Defendant distinguishes Zen Design by pointing

Id. at 4 (citing 329 F.3d at

The Court agrees with Defendant’s assertion that “Premier
Pools” is more like the phrases at issue in the following cases,

10

where the respective courts found those phrases were names and

11

not slogans: Palmer, 21 Cal. 4th at 1120 (where “Valencia” was a

12

name and not a slogan), Aloha Pac., Inc. v. Cal. Ins. Guarantee

13

Ass’n, 79 Cal. App. 4th 297, 317 (2000) (“Rusty’s Island Chips”

14

and “Island Chips” were trademarks and not slogans), and N. Coast

15

Med., Inc. v. Hartford Fire Ins. Co., No. 13-CV-03406, 2014 WL

16

605672, *5-6 (N.D. Cal. Feb. 17, 2014) (finding “THERA-PUTTY” was

17

a product name and not a slogan).

18

Def. Mem. at 16.

The FAP and SAP do not allege facts suggesting a potential

19

slogan infringement claim.

Like the underlying complaint in

20

Street Surfing, the FAP and SAP only allege that Premier Pools is

21

a valuable brand that Plaintiff unfairly used.

22

09.

23

to improperly presume facts not alleged in the complaint.

24

Advent, Inc., 6 Cal. App. 5th at 460; See also Gunderson, 37 Cal.

25

App. 4th at 1114 (“An insured may not trigger the duty to defend

26

by speculating about extraneous ‘facts’ regarding potential

27

liability or ways in which the third party claimant might amend

28

its complaint at some future date.”).

776 F.3d at 608-

To find Defendant had a duty to defend, the Court would have

27

See

The Court will not do so.

1

The Court finds Defendant did not have a duty to defend a slogan

2

infringement claim that PPI did not bring.

3
4

4.

Trade Dress Infringement

Plaintiff argues Defendant had a duty to defend Plaintiff

5

because of a potential trade dress infringement claim, with

6

“trade dress” defined as a product’s “total image” or “overall

7

appearance” and “may include features such as size, shape, color

8

or color combinations, texture, graphics or even particular sales

9

techniques.”

Pl. Mem. at 23 (citing Harland Co. v. Clarke

10

Checks, Inc., 711 F.2d 966, 980 (11th Cir. 1983)).

11

claims the FAP gave Defendant notice of a potential trade dress

12

claim because of allegations of consumer confusion based on

13

Plaintiff’s use of a “Premier Pools” logo in marketing materials

14

and also because de la Garza testified that he was prepared to

15

defend a trade dress infringement claim.

16

Plaintiff

Pl. Mem. at 16, 23.

To support its argument, Plaintiff also cites a part of

17

Lanham Act Section 43(a), which states that a trade dress cause

18

of action can arise from use in commerce of “any word, term,

19

name, symbol, or device, or any combination thereof” that

20

“misrepresents the nature, characteristics, qualities, or

21

geographic origin of his or her or another’s person’s goods [.]”

22

Pl. Opp. at 17-18.

23

Defendant contends that it does not matter whether de la

24

Garza was prepared to defend against a trade dress claim.

Def.

25

Mem. at 26.

26

dress claim and that is because trade dress refers to the design

27

or packaging of a product that may acquire a distinctiveness

28

which serves to identify the product with its manufacturer or

de la Garza conceded that PPI did not plead a trade

28

1

source.

2

Inc., 532 U.S. 23, 28 (2001)).

3

design of its pools was distinctive or that Plaintiff copied that

4

design or PPI’s logo.

5

duty to defend is not based on speculation about what claims the

6

plaintiff might possibly bring since that would effectively

7

remove the limits on the duty to defend.

8
9

Id. (citing TraFix Devices, Inc. v. Mktg. Displays,

Id.

PPI also did not allege that the

Defendant also reiterates that the

Id.

Defendant further contends that Plaintiff mischaracterizes
Section 43(a) of the Lanham Act, which is not just about trade

10

dress, but is the main intellectual property and false

11

advertising federal statute (citing POM Wonderful LLC v. Coca-

12

Cola Co., 134 S. Ct. 2228, 2233 (2014)).

13

Defendant points out that this mischaracterization is important

14

because even if Plaintiff engaged in false advertising in

15

violation of the Lanham Act, this does not necessarily make its

16

conduct a trade dress violation.

17

Def. Reply at 8-9.

Id.

The Court finds that the FAP did not contain potential trade

18

dress allegations or facts giving rise to such claims.

19

no allegations that Plaintiff copied its designs and so Defendant

20

was not on notice that a trade dress claim was possible.

21
22

5.

PPI made

Libel Or Slander

Finally, Plaintiff argues that Defendant had a duty to

23

defend because the FAP and/or SAP contain potential libel

24

allegations.

25

unprivileged publication by writing… which exposes any person to

26

hatred contempt, ridicule, or obloquy, or which causes [any

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person] to be shunned or avoided, or which has tendency to injure

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[them] in his occupation.”

Pl. Mem. at 23-24.

Libel means a “false and

Cal. Civ. Code § 45.
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Plaintiff

1

contends that potential libel claims arise from PPI’s allegations

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that it lost business because of Plaintiff falsely advertising

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that Plaintiff was PPI.

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allege that Plaintiff specifically published any negative

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statements about PPI.

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any authority in support of this argument.

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Pl. Mem. at 23-24.

See id.

However, PPI did not

Plaintiff also fails to provide

Plaintiff further asserts that potential libel claims arise

8

from the SAP’s allegations that Plaintiff wrote the false BBB

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letter that falsely attributed shoddy work to PPI, causing

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potential customers to shun or avoid PPI.

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But, as explained above, Defendant was not liable for coverage

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for the SAP’s BBB allegations.

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cited any authority to support a finding that libel claims arise

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from the BBB allegations.

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potential for coverage and no duty to defend on any potential

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libel claim.

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Pl. Mem. at 23-24.

In addition, Plaintiff has not

See id.

Accordingly, there was no

The Court does not find potential for coverage based on any

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of the provisions in the parties’ insurance agreement relied upon

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by Plaintiff.

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potential for coverage under the Policy, the Court finds it had

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no duty to defend the Texas Case and summary judgment is granted

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for Defendant on Plaintiff’s First Cause of Action for

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Declaratory Relief and Second Cause of Action for Breach of

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Insurance Contract Duty to Defend.

Because Defendant has shown that there was no

25

C.

Other Causes of Action

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Defendant argues that because it has no duty to defend the

27

Texas Case, it has no duty to indemnify the judgment either.

28

Def. Mem. at 27 (citing Imperium Ins. Co. v. Unigard Ins. Co., 16
30

1

F. Supp. 3d 1104, 1116 (E.D. Cal. 2014) (“where there is no duty

2

to defend, there cannot be a duty to indemnify”) (citing and

3

quoting Certain Underwriters at Lloyd’s of London v. Sup. Ct., 24

4

Cal. 4th 945, 958 (2001))).

5

because Defendant had no duty to defend, it had no duty to

6

indemnify.

7

defend and a duty to indemnify, Plaintiff’s claims for breach of

8

the covenant of good faith and fair dealing and for punitive

9

damages must also be dismissed as a matter of law. Def. Mem at

The Court agrees and finds that

Because the Court finds Defendant lacked a duty to

10

30-34. Defendant’s motion for summary judgment on these causes of

11

action is granted.

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13

IV.

ORDER

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For the reasons set forth above, the Court GRANTS

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Defendant’s Motion for Summary Judgment and DENIES Plaintiff’s

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Motion for Partial Summary Judgment.

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pretrial conference and trial are vacated.

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IT IS SO ORDERED.
Dated: July 25, 2018

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The dates set for the