United States District Court, W.D. Washington, Seattle
ORDER ON CROSS MOTIONS FOR SUMMARY JUDGMENT
L. ROBART UNITED STATES DISTRICT JUDGE.
the court are the parties' cross motions for summary
judgment, including: (1) Plaintiff Massachusetts Bay
Insurance Company's (“Massachusetts Bay”)
motion for summary judgment (Plf. MSJ (Dkt. # 33)), and (2)
Defendants John Ural, Mike Czerwinski, Jim Hewitt
(collectively, “Individual Defendants”), and
Walflor Industries, Inc.'s (“Walflor”)
(collectively, “Defendants”) motion for summary
judgment (Def. MSJ (Dkt. # 31)). Massachusetts Bay seeks (1)
a declaration that it has no duty to defend Defendants in the
lawsuit presently pending in King County Superior Court,
entitled Stuc-O-Flex International, Inc. v. Low and
Bonar, Inc., et al., No. 17-2-30700-9
(“the Underlying Lawsuit”), and (2) a ruling that
it is entitled to reimbursement of the monies it has already
paid to defend Defendants in the Underlying Lawsuit. (Plf.
MSJ at 1.) Defendants, on the other hand, seek a declaration
that Massachusetts Bay owes them a duty to defend in the
Underlying Lawsuit. (Def. MSJ at 1.) If, however,
Massachusetts Bay does not owe them a duty to defend,
Defendants seek an order that Massachusetts Bay is not
entitled to reimbursement of the defense costs it has already
incurred in the Underlying Lawsuit, or in the alternative, an
order certifying that issue to the Washington Supreme Court.
(See id.) The court has considered the motions, the
parties' submissions in support of and opposition to the
motions, the relevant portions of the record, and the
applicable law. Being fully advised,  the court GRANTS
Massachusetts Bay's motion and DENIES Defendants'
Bay issued a business owners policy to Walflor for the period
December 8, 2015, to December 8, 2016. (Compl. (Dkt. # 1)
¶ 3.1 (identifying policy number OD2-A797754-00).)
Walflor renewed the policy for the period December 8, 2016,
to December 8, 2017. (Id. (identifying policy number
policies provide coverage, in pertinent part, as follows:
a. We will pay those sums that the insured
becomes legally obligated to pay as damages because of
“bodily injury”, “property damages”
or “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. However, we will have no duty to defend the
insured against any “suit” seeking damages for
“bodily injury”, “property damage” or
“personal and advertising injury”, to which this
insurance does not apply. . . .
b. This insurance applies:
(2) To “personal and advertising
injury” caused by an offense arising out of your
business . . . .
(Colville Decl. (Dkt. # 35) ¶ 10, Ex. 8 (attaching
policy number OD2-A797754-00) at 67-68; id. ¶
11, Ex. 9 (attaching policy number OD2-A797754-01) at 90-91;
11/21/18 Alvord Decl. (Dkt. # 32) ¶ 3, Ex. 2 at 67.) The
policies further provide:
15. “Personal and advertising
injury” means injury, including consequential
“bodily injury” arising out of one or more of the
Oral or written publication, in any manner, of material that
slanders or libels a person or organization or disparages a
person's or organization's goods, products or
The use of another's advertising idea in your
“advertisement”; or g.
Infringing upon another's copyright, trade dress or
slogan in your “advertisement”.
(Colville Decl. ¶ 10, Ex. 8 at 82-83; id.
¶ 11, Ex. 9 at 108; 11/21/18 Alvord Decl. ¶ 3, Ex.
2 at 81-82.) The policies define “advertisement”
as “a notice that is broadcast or published to the
general public or specific market segments about your goods,
products or services for the purpose of attracting customers
or supporters. . . .” (Colville Decl. ¶ 10, Ex. 8
at 80; id. ¶ 11, Ex. 9 at 81; 11/21/18 Alvord
Decl. ¶ 3, Ex. 2 at 80.)
addition, the policies contain the following exclusion:
Additional Exclusions Applicable To “Personal and
This insurance does not apply to “Personal and
m. Infringement of Copyright, Patent, Trademark or
Arising out of the infringement of copyright, patent,
trademark, and 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
(Colville Decl. ¶ 10, Ex. 8 at 75-76; id.
¶ 11, Ex. 9 at 100-01.)
Finally, each policy contains an endorsement entitled,
- DEFENSE COSTS, ” which provides:
The following applies to any provision in this Policy, or in
any endorsement attached to this Policy that sets forth a
duty to defend:
If we initially defend an insured or pay for an insured's
defense but later determine that none of the claims, for
which we provided a defense or defense costs, are covered
under this insurance, we have the right to reimbursement for
the defense costs we have incurred.
The right to reimbursement under this provision will only
apply to the costs we have incurred after we notify you in
writing that there may not be coverage and that we are
reserving our rights to terminate the defense or payment of
defense costs and to seek reimbursement for defense costs.
(Id. ¶ 10, Ex. 8 at 137; id. ¶
11, Ex. 9 at 157.)