Tower Insurance Company of New York v. Capurro Enterprises, Inc. et al

Filing 53

ORDER RE: SUMMARY JUDGMENT (Illston, Susan) (Filed on 1/23/2012)

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IN THE UNITED STATES DISTRICT COURT

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FOR THE NORTHERN DISTRICT OF CALIFORNIA

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TOWER INS. CO. OF NEW YORK,

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Plaintiff,

United States District Court
For the Northern District of California

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No. C 11-03806 SI
ORDER RE: SUMMARY JUDGMENT

v.

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CAPURRO ENTERPRISES INC., et al.,

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Defendant.

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On December 15, 2011, the Court issued an order denying plaintiff/counter-defendant Tower

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Insurance Company’s (“Tower”) motion for summary judgment on its complaint for declaratory

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judgment (the “Order”). Tower’s complaint seeks a declaration that it had no duty to defend or

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indemnify its insured, defendant Capurro Enterprises, Inc. and Nicholas L. Capurro Jr. (collectively,

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“Capurro”) in an underlying action brought by a third party against Capurro.1 After denying Tower

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summary judgment on the issue of Tower’s duty to defend, the Court stated that “[i]t is not clear whether

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the parties will contend that there remains of genuine issue of material fact regarding coverage vel non,

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since Capurro did not file a cross motion for summary judgment on this issue.” Order at 14. At the

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subsequent Case Management Conference, held December 16, 2011, the Court asked the parties to

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submit letter briefs as to whether summary judgment should be granted for Capurro on the coverage

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issue, pursuant to Fed. R. Civ. P. 56(f)(1) and Cool Fuel, Inc. v. Connett, 685 F.2d 309, 311 (9th Cir.

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1982) (setting forth the standard for granting summary judgment sua sponte to a non-moving party).

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The parties subsequently filed letter briefs with the Court. Tower’s letter brief states that, “[t]he

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The underlying action, Certa ProPainters Ltd. v. Capurro, 10-CV-1542, settled. Order at 3.

issue upon which counsel most likely would have devoted his energy, had Capurro filed a cross motion,

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was the application of [the insurance contract’s] exclusion f, applicable to advertising injury ‘arising

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out of breach of contract.’”2 Tower Letter Brief, Jan. 5, 2012, Doc. 48. The letter then proceeds to set

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forth Tower’s argument as to why exclusion f would have precluded a duty to defend. Id. Capurro

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responded with its own letter brief, which extensively argues why exclusion f did not release Tower

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from its duty to defend or indemnify Capurro in the underlying action. Capurro Letter Brief, Jan. 17,

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2012, Doc. 49.

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movant when “the moving party against whom summary judgment [is] rendered had a full and fair

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opportunity to ventilate the issues involved in the motion.” 685 F.2d at 312. After reading the letter

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United States District Court
For the Northern District of California

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briefs, the Court finds that the issue of the breach of contract exclusion was not fully ventilated in the

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briefing papers for Tower’s motion for summary judgment. There, the parties disputed, and the Court

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analyzed, the insuring clause, exclusions “I” and “l”, and whether the underlying action implicated

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usage of the injured party’s trade dress. See Order, 7-10. The Court did not address whether exclusion

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f affected Tower’s duty to defend or indemnify. Therefore, if Capurro seeks summary judgment in its

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favor on the issue, it is required to file a motion to that effect.

In Cool Fuel, the Ninth Circuit stated that judgment is proper in favor of a non-

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IT IS SO ORDERED.

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Dated: January 23, 2012

___________________
SUSAN ILLSTON
United States District Judge

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“Exclusion f” excludes coverage for “‘personal and advertising injury’ arising out of a breach
of contract, except an implied contract to use another’s advertising idea in your advertisement.’”
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