Insurance Policyholder Advocate & Attorney David Gauntlett : Gauntlett Law Firm : Insurance Recovery, Policy Interpretation : Irvine, Orange County, California

Sony Computer Entm’t Am., Inc. v. American Home Assur. Co., ___ F.3d ___, 2008 WL 2736012 (9th Cir. (Cal.) 2008) (Hall, Schroeder; dissent by Bybee)

Affirming district court Judge Hamilton, the court found no duty to defend arising out of negligent misrepresentation, false advertising under BPC § 17500, unfair business practices under BPC § 17200, and other related claims.

The pertinent policy, issued through an AIG entity, American Home Assurance Co., provided multimedia professional liability coverage and supplemented a policy, also issued by the same insurer, for commercial general liability coverage. The court appears to have assumed applicable law to be that the insurer’s construction of policy terms must be reasonable as opposed to a viable potential definition, in direct contrast to the Supreme Court of California’s recent analysis in MacKinnon. Thus, it stated:
 

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Wausau Business Ins. Co. v. Fisher Printing Co., Inc., 2008 WL 2704874 (N.D. Ill. July 8, 2008) (Kennelly)

The underlying suit asserted unlawful intentional copying of copyrighted images and repeated use of Ashley’s protected trademarks and images. The court, applying Illinois law, focused principally on the exclusions.
The court found the exclusion inapplicable, following Taco Bell Corp. v. Continental Cas. Co., 388 F.3d 1069 (7th Cir. (Ill.) 2004):

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North Plainfield Bd. of Educ. v. Zurich American Ins. Co., No. 05-4398 (MLC), 2008 WL 2074013 (D.N.J. May 15, 2008)

Few courts have found what one court recently mischaracterized as the “knowing violation of rights of another” exclusion bars even a defense for otherwise potentially covered claims.  The court found this exclusion evidenced an additional reason for not finding a defense due.

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