Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-azd-4_09-cv-00102/USCOURTS-azd-4_09-cv-00102-0/pdf.json

Nature of Suit Code: 190
Nature of Suit: Other Contract Actions
Cause of Action: 28:1332 Diversity-Breach of Contract

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IN THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF ARIZONA

VENTANA MEDICAL SYSTEMS, INC.,

Plaintiff, 

vs.

ST. PAUL FIRE & MARINE

INSURANCE COMPANY,

Defendant. 

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No. CIV 09-102-TUC-CKJ (CRP)

ORDER

On January 13, 2010, Magistrate Judge Charles R. Pyle issued a Report and

Recommendation [Doc. # 78] in which he recommended that this Court deny the Motion for

Partial Summary Judgment [Doc. # 11] filed by Plaintiff Ventana Medical Systems, Inc.

(“Ventana”), grant the Motion for Summary Judgment [Doc. # 37] filed by Defendant St.

Paul Fire & Marine Insurance Company (“St. Paul”), deny Ventana’s Requests for Judicial

Notice [Doc. #s 16 and 63], deny St. Paul’s Motion for Discovery under Fed.R.Civ.P. 56(f)

as moot [Doc. # 37]; and grant, after St. Paul timely complies with L.R.Civ. 54.2, St. Paul’s

request for attorney fees under A.R.S. § 12-341.0 [Doc. # 37]. The magistrate judge advised

the parties that any objections were to be filed and served within 14 days after being served

with a copy of the Report and Recommendation. Ventana has filed an Objection and St.

Paul has filed a Response. Ventana has also filed a Motion, and a Revised Motion, for

Leave to File Reply Brief [Doc. #s 82 and 84].

 

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I. Motions for Leave to File Reply Brief

Ventana requests leave to file a reply brief. Ventana asserts that Defendant’s

response cites two new cases not argued before the magistrate judge – Ventana asserts that

Defendant is raising new arguments in an attempt to avoid inconsistencies with the Report

and Recommendation. St. Paul asserts, however, that no legal authority gives Ventana the

right to file a reply and that no good cause exists for allowing Ventana to file yet another

brief. St. Paul also asserts that Ventana’s stated reason for seeking leave to file a Reply is

pretextual for wanting to again make the same arguments that it has already made in other

filings. Rather, St. Paul asserts that no legal authority prohibits St. Paul from citing

additional support for the Report and Recommendation.

Although Fed.R.Civ.P. 72(b)(2) provides for a response to objections to a Report and

Recommendation, the rule does not provide for a reply. No explicit provision is made for

reply papers. Indeed, another court has stated:

While the petitioner has requested that he be allowed to file a reply to the

respondent's response to his objections, the Court will not permit him to do so

because Fed.R.Civ.P. 72(b)(2) does not authorize the filing of such a reply, see

Cannon Partners, Ltd. v. Cape Cod Biolab Corp., 225 F.R.D. 247, 250

(N.D.Cal.2003); Bradberry v. Schriro, 2009 WL 971298, at *1 (D.Ariz. April 8,

2009), and because the petitioner's proposed reply does not add anything significant

to the several memoranda the petitioner has already filed.

Hess v. Ryan, 651 F.Supp.2d 1004, 1009 n. 1 (D.Ariz. 2009). As in Hess, Ventana’s

proposed reply does not add anything significant to the extensive briefing of issues in this

case. Moreover, the Court does not find it appropriate to consider additional evidence,

which may provide a basis to consider additional argument. See e.g., Pan Am. World

Airways, Inc. v. International Bhd. of Teamsters, 894 F.2d 36, 40 n. 3 (2nd Cir. 1990). The

Court will deny the requests.

II. Report and Recommendation – Preliminary Issues

This Court “may accept, reject, or modify, in whole or in part, the findings or

recommendations made by the magistrate.” 28 U.S.C. § 636(b)(1). Further, under 28

U.S.C. § 636(b)(1), if a party makes a timely objection to a magistrate judge's

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The Court notes that, although Ventana repeatedly discusses the Second Amended

Complaint (SAC”) in its Objection, Ventana does not specifically object to the magistrate

judge’s determination that the First Amended Complaint (“DAC”) should be considered in

the analysis of the claims and does not dispute the findings of the magistrate judge (e.g.,

Ventana did not provide the SAC to St. Paul, Ventana has not offered any relevant law that

supports a conclusion that St. Paul had a duty to discover the SAC, and that the claims

against Ventana did not change from the DAC to the SAC). The Court adopts this analysis.

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recommendation, then this Court is required to “make a de novo determination of those

portions of the [report and recommendation] to which objection is made.” The statute does

not “require [] some lesser review by [this Court] when no objections are filed.” Thomas

v. Arn, 474 U.S. 140, 149-50, 106 S.Ct. 466, 88 L.Ed.2d 435 (1985). Rather, this Court is

not required to conduct “any review at all . . . of any issue that is not the subject of an

objection.” Id. at 149. 

Indeed, the Ninth Circuit has recognized that a district court is not required to review

a magistrate judge's report and recommendation where no objections have been filed. See

United States v. Reyna-Tapia, 328 F.3d 1114 (9th Cir.2003) (discussing the standard of

review employed by the district court when reviewing a report and recommendation to

which no objections were made); see also Schmidt v. Johnstone, 263 F.Supp.2d 1219, 1226

(D.Ariz. 2003) (reading the Ninth Circuit's decision in Reyna-Tapia as adopting the view

that district courts are not required to review “any issue that is not the subject of an

objection.”). In other words, if there is no objection to a magistrate judge's

recommendation, then this Court may accept the recommendation without review. See e.g.,

Johnstone, 263 F.Supp.2d at 1226 (accepting, without review, a magistrate judge's

recommendation to which no objection was filed).

In this case, Ventana has objected to specific portions of the Report and

Recommendation. As to those portions not objected to, the Court has reviewed the Report

and Recommendation and finds that those portions are well-taken. The Court will adopt

those portions of the Report and Recommendation.1

 Additionally, the Court specifically

incorporates the factual and procedural background as set forth by the magistrate judge and,

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therefore, will not repeat it here.

Additional filings have been made since the issuance of the Report and

Recommendation. On January 25, 2010, St. Paul filed a Motion Regarding Attorney Fees

and Costs [Doc. # 79]. Further, on February 19, 2010, Ventana filed a Motion for Leave to

File a Reply Brief [Doc. # 82]; on February 22, 2010, Ventana filed a Revised Motion for

Leave to File a Reply Brief [Doc. # 84]. On March 5, 2010, March 24, 2010, and April 9,

2010, Ventana filed Notices of Supplemental Authority. On March 29, 2010, and April 14,

2010, St. Paul filed Responses to the Notices of Supplemental Authority.

III. Notice of Supplemental Authority

Ventana’s Notices of Supplemental Authority ask the Court to consider Infor Global

Solutions (Michigan), Inc. v. St. Paul Fire & Marine Ins. Co., ___ F.Supp.2d ___, 2010 WL

691150 (N.D.Cal. Feb. 19, 2010), American Best Food, Inc. v. Alea London, Ltd., 2010 WL

963933 (W.D.Wash. March 8, 2010), and Hyundai Motor America v. National Union Fire

Ins. Co. of Pittsburgh, Pa., 2010 WL 1268234 (9th Cir. April 5, 2010). However, none of

these cases provide controlling precedent as to Arizona law and the Court declines to

consider these cases. 

IV. Analysis by Magistrate Judge

Ventana asserts that the magistrate judge should have focused on the potential

coverage arising out of the facts asserted in the complaint and extrinsic evidence known to

St. Paul when it denied coverage rather than improperly focusing on the gravamen of the

suit and labels of causes of action. This Court disagrees with Ventana’s characterization.

Rather, the magistrate judge set forth the history of the prior patent infringement lawsuit

with Digene Corporation (“Digene”), see R & R, pp. 8-10, Ventana’s request to St. Paul for

coverage, see R & R, pp. 10-12, and discussed the parameters of St. Paul’s duty in denying

coverage, see R & R, pp. 19-24. The magistrate judge also discussed whether the facts

constituted a covered claim for disparagement, see R & R, pp. 24-28, and discussed whether

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Similar language is contained within the DAC. See St. Paul’s Statement of Facts

(“DSOF”), Declaration Ex. 2, DAC [Doc. # 41-2], ¶¶ 26, 29, 53, 54, 65, 81, 87, 91, 93, 

3

Similar language is contained within the DAC. See DSOF, Declaration Ex. 2, DAC

[Doc. # 41-2], ¶¶ 21 (January 2000 agreement), 40 (September 23, 2002, agreement), 75.

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the facts constituted a covered claim for an unauthorized use of a slogan, see R & R, pp. 24,

28-30. The Court finds the magistrate judge’s analysis was proper.

Ventana also asserts that the magistrate judge’s analytic approach was not consistent

with analysis of offenses-based coverage. Ventana’s Objection, pp. 4-5. It is not entirely

clear what type of analysis, rather than an analytic approach, Ventana believes should be

utilized. The magistrate judge set forth the standards and applied those standards. Without

a more specific objection, the Court merely finds that, generally, the magistrate judge

properly evaluated the standards and claims.

V. Whether Fact Allegations Known to St. Paul Compelled a Defense

Ventana asserts that the magistrate judge improperly applied Arizona law by failing

to determine whether fact allegations known to St. Paul required St. Paul to provide a

defense under the 2001 and 2002 policies. 

A. Applicable Insurance Policy

The magistrate judge determined that St. Paul did not have a duty to defend under the

2001 policy. The magistrate judge, therefore, analyzed St. Paul’s alleged duty to defend

under the 2002 insurance policy.

Ventana asserts, however, that Digene’s SAC repeatedly alleges Ventana’s “ongoing”

misconduct from 2001 onward.2

 Indeed, Ventana points out that Digene’s claim for tortious

interference alleges liability due to two agreements that predate the 2002 Beckman

Instruments (“Beckman”) acquisition press release.3

 Ventana also asserts that the liability

arose as of 2001 – the SAC asserts liability generally for conduct that arose under both the

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Similar language is in the DAC. See DSOF, Declaration Ex. 2, DAC, ¶¶ 81,87, 91.

5

Language similar to that attributed to Digene’s SAC is also found in the DAC. See

DSOF, Declaration Ex. 2, DAC, ¶ 29.

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2001 and 2002 policies.4 Ventana alleges that its March 2, 2001, press release advertised

the launch of Ventana’s probes.5

 Ventana also states that Digene’s lawyers, in a letter brief

and oral argument, argued that Ventana’s September 24, 2002, press release attempted to

legitimize pre-existing offending products, and that Digene’s discovery focused on liability

from Ventana’s 2001 product launch.

Although Ventana has not objected to the magistrate judge’s conclusion that

consideration of the DAC, rather than Digene’s SAC is appropriate, Ventana has based some

of its supporting facts on Digene’s SAC. Because comparable language is also included in

the DAC, the Court will consider these arguments.

St. Paul disputes Ventana’s arguments by asserting that the policies only provide

coverage for a personal injury or advertising injury offense if it is committed during the

policy period. Indeed, the 2001 and 2002 policies both refer to “a personal injury offense

committed while [the] agreement is in effect.” St. Paul’s Supplemental Statement of Facts

(“DSSOF”), Declaration, Ex. 1, 2001 Policy, [Doc. # 67-2], p. 53 of 111, and Declaration,

Ex. 9, 2002 Policy, [Doc. #12-3], p. 23 of 60. Similarly, both polices refer to an

“advertising injury offense committed while this agreement is in effect.” DSSOF,

Declaration, Ex. 1, 2001 Policy, [Doc. # 67-2], p. 54 of 111, and Declaration, Ex. 9, 2002

Policy, [Doc. # 12-3], p. 24 of 60. St. Paul asserts that Digene’s amended complaint

included no allegations that even hinted at a personal injury or advertising injury offense

“committed” in 2001. 

However, Ventana also asserts that the magistrate judge “[m]isperceived that for

purposes of evaluating a defense, reference to a “2001 product launch” in the September

2002 Ventana press release did not satisfy the policy language, which required only

“[m]aking known . . . material that disparages the products . . . of others[.]” Ventana’s

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Objection, p. 2. Specifically, Ventana asserts the magistrate judge assumed the term

“‘launch’ used in reference to Ventana’s 2001 product launch is necessarily limited to the

act of physical delivery of a product, rather than the introduction of new merchandise to the

general public typically occurring ‘through a special ad campaign [such as a press release]

or PR push[.]” Ventana’s Objection, p. 2, n. 8, citing Product Launch – (Marketing &

Webb): Definition, http://en.mimi.hu/marketingweb/product_launch.html; see also Go Big

Network, product launch definition, http://www.gobignetwork.com/Information/Go-BIG/

Dictionary/product-launch-definition.html; Business definition for Poland product launch,

http://dictionary.bnet.com/definition/productpluslaunch.html.

The magistrate judge stated:

Ventana’s supplemental memorandum is riddled with blatantly incorrect statements

of the facts. In another example, Ventana contends that Digene’s amended complaint

contained pertinent factual allegations linking 2001 press releases to the September

2002 press release. Ventana stated “[a]lso pertinent is the content of its September

24, 2002 web posting which expressly referenced Ventana’s marketing of an HPV

35 probe since the last quarter of 2001.” (Doc 62, p 13) (emphasis in original).

This is wrong. Ventana’s September 2002 press release did not reference any

marketing from 2001. It did state that Ventana launched one of its HPV products in

2001, but there is not a single word about marketing or any reference to a press

release from 2001. Mentioning the launch date of a product is not the same as

referencing a specific press release about that product. The difference is significant

when Ventana attempts to argue a claim of implicit disparagement based on a 2001

press release that was never mentioned. It is disingenuous for Ventana to suggest the

2001press release was implicated.

R & R, p. 17, emphasis in original. St. Paul asserts, however, that the magistrate judge read

the 2002 press release like St. Paul did . . . and found no content that could be considered

disparagement – express or implied. 

The Court agrees with Ventana that the magistrate judge’s characterization of

“launch” fails to consider that it may include marketing. Therefore, when the DAC made

allegations about the September 24, 2002, press release, marketing in the fourth quarter of

2001 may have been implicated. See, DSOF, Declaration Ex. 2, DAC, ¶¶ 80, 86, 90

(“Ventana’s September 24, 2002 news release and web site posting was knowingly and

willfully false and/or misleading.”). However, the detailed DAC discussed conduct in 2001,

yet did not allege any covered offense in 2001. Indeed, Ventana has not shown that counsel

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Ventana has not objected to this conclusion of the magistrate judge as found on page

18 of the Report and Recommendation. The Court adopts this finding.

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for Digene “clarified” that Digene was suing over the 2001 press releases.6

B. Estoppel Based on Insufficient Notice

Ventana asserts that St. Paul’s failure to articulate a specific factual basis for the

denial of coverage in its denial letter is contrary to Ninth Circuit authority that an insurer’s

denial “must ‘provide a reasonable explanation of the basis in the insurance policy in

relation to the facts or applicable law for denial of a claim.’” Lutz v. First Fin. Ins. Co., Inc.,

247 Fed.Appx. 911, 912 (Alaska 2007) (insufficient denial notice may result in insurer being

equitably estopped from raising coverage defenses). 

St. Paul asserts that it provided a detailed statement of the allegations in the amended

complaint, cited language from both the 2001 Policy and the 2002 Policy, explained that the

amended complaint did not include allegations that fell within the policies’ personal injury

or advertising injury coverage, explained that certain exclusions applied, and invited

Ventana to provide any additional information for further consideration. St. Paul also points

out that, when Ventana contested the coverage disclaimer, Ventana only referred St. Paul

to the September 24, 2002, press release and argued that it alone triggered a duty to defend;

St. Paul asserts it reviewed the press release and notified Ventana that the allegations

relating to the press release did not alleged covered offense. 

Initially, the Court notes that the Ninth Circuit was discussing Alaska law in Lutz.

Moreover, the court determined the denial notice was insufficient because it did not

reference any specific law or facts related to the dispute, referenced policy provisions that

did not include the defense, and contained a material misstatement of Alaska law. 

The July 18, 2003, denial letter in this case specifically stated what documents had

been reviewed. See Declaration, Ex. 6, [Doc. # 14-4], p. 1 of 13 (St. Paul “has received and

reviewed the material presented as well as the polices issued by St. Paul to [Ventana].”).

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In the context of the letter, it is clear that St. Paul is referring to the September 24,

2002, press release.

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The letter also included a summary of the litigation and the claim, a discussion of the

coverage under the 2001 policy, a discussion of the coverage under the 2002 policy, and a

discussion of the coverage under the 2003 policy. The denial letter also set forth the

definitions of relevant terms and set forth St. Paul’s determination that (1) the allegations

did not seek damages for bodily injury or property damage as defined under the policies or

qualify as an event under the policies. (2) the claims in the amended complaint did not

allege a personal injury offense under the policies, and (3) the claims in the amended

complaint do not fall within the definition of an advertising injury offense under the policies.

The denial letter also discussed the exclusions contained within the policies and the damages

that were not covered by the policies. 

Moreover, the September 9, 2003, letter from St. Paul informed Ventana that it had

considered the policy language, the press release, and the allegations included in the

complaint.7

 See Declaration, Ex. 6, [Doc. # 14-6], p. 1 of 6; see also Declaration, Ex. 6

[Doc. # 14-6], pp. 3-4 of 6, 6 of 6 (“None of the alleged actions of Ventana (including the

dissemination and web posting of the September 24, 2002 press release) constitute a

personal injury offense.), emphasis omitted.

Unlike the situation in Lutz, St. Paul’s denial letter referenced specific facts and

discussed specific terms of the polices. The denial letter and follow-up letter specifically

informed Ventana on what documents St. Paul had considered in reaching its conclusion.

The Court finds St. Paul is not estopped from raising coverage defenses. 

VI. Whether Allegations Evidenced Ambiguity Such that Coverage was Required

Ventana asserts that the magistrate judge erred in relying on Kepner v. Western Fire

Ins. Co., 109 Ariz. 329, 509 P.2d 222 (Ariz. 1973), and United States Fld. & Guar. Corp.

v. Advance Roofing & Supply Co., Inc., 163 Ariz. 476, 788 P.2d 1227 (App. 1989), but

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Ventana also takes issue with the magistrate judge’s chastisement of Ventana for

asserting that an Arizona insurer’s duty to investigate is mandatory.

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disregarding Aetna Cas. & Sur. Co. v. Dannenfeldt, 778 F.Supp. 484 (D.Ariz. 1991), in

determining that an insurer may (but need not) refuse to defend based on known facts

outside the complaint even when alleged facts trigger the defense duty.8

 Ventana argues

that, post-Kepner, the Arizona Court of Appeals reversed summary judgment for the insurer

due to genuinely disputed extrinsic facts impacting the coverage potential without regard to

whether the insurer had investigated. Granite State Ins. Corp. v. Mountain States Tel. &

Tel. Co., 117 Ariz. 432, 573 P.2d 506 (App. 1977). In Granite State, the court stated that

“the duty to defend should focus on the facts rather than upon the allegations of the

complaint which may or may not control the ultimate determination of liability.” 573 P.2d

at 509; see also Dannenfeldt, 778 F.Supp. at 499, quoting Baugh Const. Co. v. Mission Ins.

Co., 836 F.2d 1164, 1168 (9th Cir. 1988) (“when the allegations of the complaint are

ambiguous or inadequate, the insurer must investigate facts which might give rise to

potential liability”).

Ventana argues that the “ambiguity” of the underlying complaint was not disputed,

nor was the press release that St. Paul eventually did discover and read. Ventana asserts that

neither Kepner nor Advance Roofing directly rejected or contradicted Granite State’s or

Dannenfeldt’s central points that in Arizona a court must consider the facts as they exist or

may evolve rather than merely the facts as pled when deciding a duty to defend and that

those facts are not limited to those the insurer raises. Indeed, Ventana argues that an

investigation duty is not relevant because St. Paul knew of the press release that allegedly

disparaged Digene.

However, Ventana’s argument fails to consider that the Dannenfeldt court’s

discussion of investigating facts which might lead to potential liability was not based on

Arizona law. See e.g., Dannenfeldt, 778 F.Supp. at 499 (discussing California case law);

Baugh Const., 836 F.2d at 1168 (discussing Washington case law). Nonetheless, the

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principle is consistent with Granite State. However, contrary to Ventana’s assertion that

whether there is a duty to investigate is not relevant, the court in Advance Roofing stated:

[W]hile a liability insurer may initially rely on the allegations of the underlying

complaint to determine whether it must provide its insured with a defense, it may not

rely on that determination, without investigating the facts, once the insured has come

forward and made some factual showing that the suit is actually one for damages

resulting from events which do fall into policy terms.

Advance Roofing, 163 Ariz. at 480, quoting Johnson v. Aid Ins. Co. of Des Moines, IA, 287

N.W.2d 663, 788 P.2d 1227, 1232 (Minn. 1980). The magistrate judge discussed this

obligation. See R & R, 21. Further, the magistrate judge correctly stated the standard. See

R & R, p. 22 (“St. Paul needed to investigate beyond the amended complaint only if

Ventana made some factual showing that the Digene litigation was for damages falling

within St. Paul’s insurance policy.”)

However, in light of this Court’s determination that the September 24, 2002, press

release, when it referred to the 2001 launch of the probe, may have included marketing, this

Court must determine how that affects whether the September 24, 2002, press release

triggered a duty upon St. Paul to investigate further.

After receiving the July 18, 2003, denial letter, Ventana responded by asserting that

Digene’s claims “under the Delaware Deceptive Trade Practices Act and Lanham Act based

on an allegedly false and misleading press release and web posting promoting Ventana and

its products” required St. Paul to provide coverage. Declaration, Ex. 7, [Doc. # 14-5].

When St. Paul responded with its September 9, 2003, letter, St. Paul specifically informed

Ventana what documents had been considered. Declaration, Ex. 8, [Doc. # 14-6]. The letter

also stated:

If you have any additional information as to why you believe that the actions of

Ventana (in the issuing and posting of the 9/24/02 press release or in any other

activity outlined in the Complaint) indicates that coverage is triggered under the

policies, please provide that information as soon as possible for St. Paul’s review.

Declaration, Ex. 8, [Doc. # 14-6], p. 6 of 6. In other words, St. Paul was clearly inviting

Ventana to clarify to St. Paul what, if any, was the significance of the issuing and posting

of the press release as it pertained to possible coverage. Ventana did not come forward with

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The Court notes that, after Ventana came forward with its August 19, 2003, letter

with its reference to the press release, St. Paul reevaluated its decision in light of the “new”

information.

10As previously discussed by the Court, Ventana asserts that St. Paul failed to

articulate a specific factual basis for the denial of coverage in its denial letter. Therefore,

Ventana asserts that it had no occasion to call St. Paul’s attention to Ventana’s website

referencing the March 2001 press release announcing the launch of the probe. However, this

Court has found that St. Paul’s denial letter referenced specific facts and discussed specific

terms of the policies. There was no basis for St. Paul to investigate when Ventana did not

provide further information to St. Paul. Indeed, Ventana asserts that reference to the “web

site posting” in Digene’s allegations required St. Paul to investigate the web site. Ventana’s

Objections, p. 8. However, a plain reading of the DAC indicates that the September 2002

press release and web site contained the same information. See SAC [Doc. # 54], Ex. 2

(press release) and Declaration of Christopher Butler [Doc. # 45], Ex. A (web posting).

There was no basis for St. Paul to search for and/or review a repetitive document where

Ventana had not come forward with some additional factual showing to trigger a duty of St.

Paul to investigate.

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any further information. This Court finds that simply presenting the press release, without

any further clarification, does not constitute Ventana coming forward and making a factual

showing that the suit falls within the policy terms. The Court finds Ventana’s attempts to

create a connection between the 2002 press release and conduct in 2001 are not supported

by the evidence in the record. The Court finds that, as a matter of law, St. Paul had no duty

to defend under the 2001 policy.

Moreover, the magistrate judge appropriately considered “the 2002 insurance policy,

Digene’s amended complaint, and the September 2002 news release[,]” Ventana’s

Objection, p. 8, because Ventana did not come forward with some additional factual

showing to trigger a duty of St. Paul to investigate.9

 The Court agrees with the magistrate

judge’s determination that, under a summary judgment standard, St. Paul was not required

to investigate facts, as applied to the 2002 policy, beyond the DAC and the 2002 press

release. Further, because the Court agrees that consideration of additional information is not

appropriate, the Court agrees with the magistrate judge’s recommendation to deny Ventana’s

request for judicial notice of additional documents.10

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A. Consideration of Facts Known or Knowable to St. Paul

Ventana asserts that, under case authority consistent with Arizona law, facts made

known to St. Paul at any time should be considered to determine that St. Paul should provide

a defense under the 2001 policy. Ventana asserts:

There is no Arizona case that says that facts evidencing potential coverage after a

coverage case is initiated may not be considered where, as here, St. Paul explained

that even if provided earlier, the facts Ventana relies upon would not have changed

its coverage analysis. See Teletronics Int’l, Inc. v. CNA Ins. Co./Transportation Ins.

Co., 302 F. Supp. 2d 442, 449 (D. Md. 2004), rev’d and remanded on other grounds

by 120 Fed. Appx. 440 (4th Cir. (Md.) 2005) (“[T]he failure to provide – or the

unavailability of – relevant extrinsic evidence does not eradicate the insurer’s duty

to defend once the insurer is presented with that information. . . . [I]f . . . the insurer

‘would have declined the defense in any event based on its mistaken conclusion that

there was no potential coverage [ ] the insurer should not later be allowed to use the

delay as a bar to reimbursing the insured for the reasonable expenses incurred in

defending the covered claim.’” (emphasis added)).

Ventana’s Objections, p. 10, n. 41. The Court disagrees with Ventana’s assertion that

consideration of additional information is consistent with Arizona case law. Rather, as the

magistrate judge discussed and this Court has discussed, in determining whether an insurer

must provide a defense, the insurer must investigate the facts once an insured “has come

forward and made some factual showing that the suit is actually one for damages resulting

from events which do fall into policy terms.” Advance Roofing, 163 Ariz. at 480. Where

an insured has not made some factual showing, and an insurer has not investigated, it is

simply not reasonable to consider additional information at a later time to determine whether

there has been a breach. See e.g., Granite State, 117 Ariz. at 436 (where insurer refuses to

defend when coverage was required, insurer breaches contract). The Court finds this

objection is not well-taken.

VII. Disparagement – Magistrate Judge’s Failure to Distinguish Cases

Ventana argues that the magistrate judge failed to acknowledge that a number of

cases “have found disparagement is not limited by the policy language to product-to-product

comparison and includes attacks on another’s assertion of intangible property rights

associated with its products, such as Digene’s claim to exclusivity in promotion of HPV 35

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probes premised on its patent rights.” Ventana’s Objection, p. 2. Initially, the Court notes

that Ventana has not provided any authority for the apparent assertion that a court must

discuss and/or distinguish all cases cited by a party, irregardless of how numerous,

redundant, or pertinent the cases may be.

Nonetheless, the Court will discuss the cases cited by Ventana in this objection.

Ventana cites to Western Int’l Syndication Corp. v. Gulf Ins. Co., 222 Fed. Appx. 589,

592-93 (9th Cir. (Cal.) 2007), for the assertion that there is a duty to defend based on a

covered “disparagement” by insured’s alleged misstatements to banks about a competitor’s

trademarks ownership and validity. Similarly, Ventana cites to Atlantic Mut. Ins. Co. v. J.

Lamb, Inc., 100 Cal. App. 4th 1017, 1035 (2002), for the assertion that there is a duty to

defend where an insured allegedly made statements to a competitors’ customers that the

competitor’s products infringed on the insured’s patent rights. Additionally, Ventana cites

to Liberty Mut. Ins. Co. v. OSI Industries, Inc., 831 N.E.2d 192, 199 (Ind. Ct. App. 2005),

for the assertion that a “disparagement” based on an insureds’ statements that their disputed

oven technology was “exclusive” and “secret,” thereby creating market confusion and

deterring purchases of competitor’s products, may be covered. Initially, the Court notes that

none of these cases discuss Arizona law. Further, these cases involve allegations that

insureds made false statements regarding the exclusive right to a product or where the

insureds falsely accused others of infringing upon an insured’s rights. 

Ventana asserts:

Even if Ventana made no explicit false statement that Digene lacked particular rights

to its HPV portfolio, it is implied when Ventana states that it possesses those rights.

Thus, in two specific cases, where courts found disparagement of another’s intangible

property rights, there were no explicit statements that the claimants lacked such

rights.39 This reflects the nature of rights, especially patent rights: the existence of

one party’s rights means the nonexistence of another’s as a number of analogous

cases have found.40

39Western Int’l Syndication Corp., 222 Fed. Appx. at 592 (“The statements

[that the Apollo Show would not be distributed for the 2003/2004 broadcast

season] . . . ‘[are] reasonably understood to cast doubt upon the existence or

extent of [the Apollo’s] property in . . . intangible things . . . .’ ”); OSI Indus.,

Inc., 831 N.E.2d at 199 (“Liebermann’s statements disparaged the

‘Thermodyne Oven’ by creating confusion about the product and the

technology in the marketplace because it was unclear as to which company,

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OSI/Beltec or Thermodyne, had the rights to and was producing an oven with

the unique technology.”).

40Patent rights are analogous to rights to claim FDA approval. See Pennfield

Oil Co., 2007 WL 1290138, at *1, *8 (“[T]he false assertion that [Pennfield]

had FDA approval for multiple uses in advertising and loose-leaf inserts . . .

[will] implicitly disparage Amphora’s product because Amphora is the only

other manufacturer of the product with FDA approval.”).

Ventana’s Objection, p. 10. The magistrate judge stated:

Ventana also attempts to allege some disparagement by arguing its September 2002

press release negated Digene’s exclusivity to the HPV patents. This is simply wrong.

Beckman had a valid sub-license to Digene’s patents. Digene never had an exclusive

right to the patents. Whether Beckman was actively developing products using its

access to those patents is irrelevant to this analysis. Digene did not allege that

Ventana stated its product was better than Digene’s product or that it had exclusive

access to the patents. In fact, Ventana in its press release, did not name any

competitor and did not make any product comparisons. It simply stated that it had

access to the HPV intellectual property. This is not disparagement, explicit or

implicit.

 R & R, p. 28. 

The Court agrees with the magistrate judge’s consideration of Digene’s allegations.

See DSOF, Declaration Ex. 2, DAC [Doc. # 41-2]; September 24, 2002, press release [Doc.

# 12-2]. The statements by Ventana do not constitute disparagement.

VIII. Consideration of Vague or Ambiguous Fact Allegations

Ventana also asserts that the magistrate judge failed to consider that Arizona law

provides that when fact allegations are vague or ambiguous in answering the questions

raised by the policy or whether Ventana was “making known . . . material that disparages

the products . . . of others,” extrinsic evidence must be evaluated to determine whether a

duty of defense arises. Ventana’s Objection, p. 3. Ventana asserts that, because the covered

disparagement could have occurred during the 2001 policy period and the court cannot find

to a certainty that no “disparagement” occurred during that policy period, a defense was

owed. 

St. Paul asserts, however, that Digene’s allegations were not ambiguous. Moreover,

St. Paul asserts that extrinsic evidence must be examined only if an insured has provided

information to the insurer and “drawn its attention to the information that supposedly

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demonstrates that the suit is actually one for which coverage exists.” St. Paul’s Response,

p. 13, citing Advance Roofing, 788 P.2d 1227, and Tri-Star Theme Builders, Inc. v.

Hawkeye-Security Ins. Co., 653 F.Supp.2d 973, 983 (D. Ariz. 2009) (when an insured comes

forward with extrinsic evidence, it must point to specific evidence showing the existence

of a covered claim and cannot “drop hundreds of pages of documents onto the lap of the

insurance company . . . and expect the insurance company to simply discover on its own

whether coverage is implicated; and, even more so, expect and assert that the insurance

company is on notice of everything that is contained in the hundreds of pages of

documents.”).

Although invited to by St. Paul, Ventana did not provide “additional information as

to why [Ventana] believe[d] that the actions of Ventana (in the issuing and posting of the

9/24/02 press release or in any other activity outlined in the Complaint) indicate[d] that

coverage [was] triggered under the policies” to St. Paul. Declaration, Ex. 7 Doc. # 14-6, p.

6 of 6. The Court agrees that Digene’s allegation were not vague or ambiguous. 

IX. Implicit Disparagement 

Ventana asserts that the cases do not support a denial of a defense as implicit

disparagement is adequately alleged. Specifically, Ventana asserts that the magistrate judge

erred in relying on Parkham Indus. Distributors, Inc. v. Cincinnati Ins. Co., No. 3:06CV-53-

S, 2008 WL 451023 at *4, *5 (W.D.Ky. Feb. 15, 2008), and Heritage Mutual Ins. Co. v.

Advanced Polymer Tech, Inc., 97 F.Supp.2d 913, 932 (S.D.Ind. 2000). Ventana criticizes

these cases because they did not address the possibility that an “attack on the rights of

another to assert claims for an intangible property right” could be an implicit disparagement

and assumed that implicit disparagement was not actionable. Ventana’s Objection, pp. 12-

13. 

However, the magistrate judge cited a number of cases, including Parkham and

Advanced Polymer, in discussing disparagement. Indeed, the magistrate judge stated that

“Digene did not allege disparagement and Ventana has not shown that a reasonable juror

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11The Court having determined that consideration of the claims under the 2001 policy

is not appropriate, the Court will not address Ventana’s arguments as to the 2001 policy. See

Ventana’s Objections, pp. 13-14.

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could find that Digene alleged facts of implicit disparagement, if such a tort arguably exists

under Arizona insurance law.” R & R., p. 28. In other words, the magistrate judge assumed

such claim was available under Arizona law. Moreover, the magistrate judge also discussed

that Digene did not allege that Ventana stated its product was better than Digene’s product

or that it had exclusive access to the patents. The Court agrees with the magistrate judge’s

thorough analysis – no reasonable juror could find that Digene alleged facts of implicit

disparagement.

X. Analysis of the Intellectual Property Exclusion in the 2002 Policy11

Ventana asserts that the magistrate judge conflated his analysis of the intellectual

property exclusion in the 2002 policy with the distinct “notice of a change of policy

language” in a separate document. Further, Ventana asserts that neither the “notice of

change” nor the new expansionary sentence in the policy apprised Ventana of the change

to its rights. 

The magistrate judge specifically addressed whether St. Paul had provided notice of

the change to Ventana:

St. Paul gave Ventana notice of the changes to its 2002 policy. (Doc 12-3, Ex 9, pp

55-60). St. Paul included in the notice a description of the changes to the IP

exclusion. St. Paul explained it “[a]dded a second paragraph to exclude coverage for

other injury or damage or medical expenses alleged in a claim or suit that also alleges

infringement or violation of intellectual property rights or laws.” (Doc 12-3, Ex 9,

p 56) .

R & R, p. 7. The magistrate judge further stated:

St. Paul clearly identified the changes it was making to Ventana’s insurance policy

when it issued the 2002 policy. In a section of the 2002 policy titled in bold and all

caps “CHANGES THAT LIMIT OR EXCLUDE COVERAGE - REGARDLESS

OF THE LAW THAT APPLIES”, St. Paul identified the broadened IP exclusion.

(Doc 12-3, Ex 9, p 56). St. Paul stated “[a]dded a second paragraph to exclude

coverage for other injury or damage or medical expenses alleged in a claim or suit

that also alleges infringement or violation of intellectual property rights or laws.”

(Doc 12-3, Ex 9, p 56). Furthermore, this sentence was conspicuous, plain and clear

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in the insurance policy. Under the bolded Intellectual Property section, St. Paul set

out a separate paragraph in which it stated “[n]or will we cover any other injury or

damage or medical expenses alleged in a claim or suit that also alleges any such

infringement or violation.” (Doc 12-3, Ex 9, p 40). This statement is not ambiguous.

Taken in conjunction with the paragraph above it, St. Paul intends to exclude from

its general liability policy any damages that arise from intellectual property violations

and any damages that arise from any other claims when a claim of intellectual

property violation is asserted.

R & R, p. 31, emphasis in original. The Court disagrees with Ventana’s assertion that

neither the “notice of change” nor the new expansionary sentence in the policy apprized

Ventana of the change to its rights; rather, the Court agrees with the magistrate judge that

St. Paul clearly identified the changes. The change to the policy was conspicuous and

phrased in clear language. See Philadelphia Indem. Ins. Co. v. Barerra, 200 Ariz. 9, 21 P.3d

395 (2001). 

Moreover, Ventana’s assertion that the magistrate judge did not address the issue of

whether, in light of the change in the policy, the policy is truly conspicuous, plain and clear

in communicating the import of that change, simply ignores the magistrate judge’s

discussion of all of the specific language communicated by St. Paul regarding the change

in the policy. Similarly, the Court disagrees with Ventana’s assertion that the language of

the exclusion is subject to an alternate interpretation. See Ventana’s Objection, p. 15

(“Limiting the exclusionary provision to indemnity and thereby resolving the issue of how

to allocate damages in a ‘mixed action,’ as well as eliminating a need to adjudicate causation

by determining whether damages were for a covered claim versus an uncovered claim, is an

equally viable reading of that provision.”). The language of the policy was clearly

communicated to Ventana and is not ambiguous. The Court agrees with the magistrate

judge’s conclusion that St. Paul intended “to exclude from its general liability policy any

damages that arise from intellectual property violations and any damages that arise from any

other claims when a claim of intellectual property violation is asserted.” R & R, p. 31.

Furthermore, the magistrate judge did not conflate this discussion with its

consideration of whether the IP exclusion applied to the claims. Rather, the magistrate

judge quoted the IP exclusion in its entirety, discussed whether a trademarked slogan was

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involved, and considered the analysis in a similar case. See Molecular Bioproducts, Inc. v.

St. Paul Mercury Ins. Co., 2003 WL 23198852 (S.D.Cal. 2003). Additionally, the

magistrate judge discussed other arguments presented by the parties (e.g., St. Paul’s

argument that, even under the 2001 policy, the factual allegations that Ventana contend

amount to implicit disparagement and unauthorized use of a slogan derive from Ventana’s

alleged use of Digene’s patents; Ventana’s argument seeking to distinguish Molecular;

distinguishing Align Technology, Inc. v. Federal Ins. Co., 2009 WL 4282098 (N.D.Cal.

2009)). 

Ventana also asserts that the magistrate judge’s suggestion that claims of implicit

disparagement constitute an alleged misuse of Digene’s two HPV patents and, therefore, fall

within the patent infringement exclusion is contrary to settled law. See

Aurafin-OroAmerica, LLC v. Federal Ins. Co., 188 Fed. Appx. 565, 566-67 (9th Cir. (Cal.)

2006). In Aurafin-OroAmerica, the court stated:

The district court also erred when it held that even if D & W’s counterclaims alleged

a potential defamation claim, the intellectual property exclusion precluded coverage.

First, there is no intellectual property right to be free from patent misuse. Patent

misuse does not allege infringement of one’s patents. Rather, patent misuse is an

equitable defense to a claim of patent infringement that ‘arose to restrain practices

that did not in themselves violate any law, but that drew anticompetitive strength

from the patent right, and thus were deemed to be contrary to public policy. The

policy purpose was to prevent a patentee from using the patent to obtain market

benefit beyond that which inheres in the statutory patent right.’

188 Fed.Appx. at 566-67, quoting Mallinckrodt, Inc. v. Medipart, Inc., 976 F.2d 700, 704

(Fed.Cir.1992). Ventana asserts that, because patent misuse is not a true intellectual

property claim, it does not fall within the policy’s IP exclusion.

The magistrate judge stated:

. . . Even if this Court were to apply St. Paul’s 2001 insurance policy with its more

narrow IP exclusion, the alleged claims of implicit disparagement and unauthorized

use of a slogan would still be excluded under the IP exclusion. These alleged claims

arise from Ventana’s alleged misuse of Digene’s two HPV patents.

R & R, p. 33. This Court does not read the magistrate judge’s statement to imply that claims

of implicit disparagement constitute an alleged misuse of Digene’s two HPV patents. There

was no discussion by the magistrate judge of any significant meaning of the word misuse

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as it applies to patents. Rather, the plain reading of the magistrate judge’s statement, in the

context of the R & R, is that the alleged claims arise from the alleged unlawful use of the

patents. The Court finds this objection is not well-taken.

XI. Knowledge of Falsity Exclusion

Ventana asserts that the magistrate judge improperly applied the “knowledge of

falsity” exclusion despite a plethora of recent case authority clarifying that, on the pertinent

facts here, that exclusion could not bar a defense where liability could attach for conduct

that would not implicate the exclusion. Aearo Corp. v. American Int’l Specialty Lines Ins.

Co., 676 F. Supp. 2d 738 at 748 (S.D. Ind. 2009) (a majority of courts have determined that

the exclusion does not apply if the plaintiff in the underlying action could have succeeded

without proving intentional misconduct); Orlando Nightclub Enterprises, Inc. v. James River

Ins. Co., 2007 WL 4247875, at *8 (M.D.Fla. Nov.30, 2007) (collecting cases). The Aearo

Corp. court explained:

These courts reason that, if the insured were to proceed to trial without the defense

of its insurer, it could be found liable under a theory that did not require a showing

of intentional conduct and was otherwise covered under the insurance policy. In such

a case, the insurer would have a duty to indemnify the insured for its losses. Because

the duty to defend is broader than the duty to indemnify, the insurer is thus required

to defend the insured if the underlying lawsuit could succeed on any theory without

proof of intentional conduct. [Citation omitted.] These cases are persuasive and are

consistent with principles of Indiana law. See American States Ins. Co. v. Kiger, 662

N.E.2d 945, 947 (Ind.1996) (ambiguous policy exclusions are to be construed strictly

against the insurer); Transamerica Ins. Services v. Kopko, 570 N.E.2d 1283, 1285

(Ind.1991) (duty to defend is broader than duty to indemnify).

Aearo Corp. at 748-49. The magistrate judge discussed this principle:

Other courts have held false material exclusions relieve a duty to defend in cases

involving claims of falsity, even when “the statute underlying the action allows relief

on a lesser showing of culpability.” Del Monte Fresh Produce N.A., Inc. v.

Transportation Ins. Co., 500 F.3d 640, 646 (7th Cir.2007). Where a complaint

alleges claims that could be either intentional tort allegations or a negligence tort

action, however, the false material exclusion would not waive a duty to defend. Id. at 644. In contrast, specific allegations of fraud with no alternative negligence theory

are allegations to which the false material exclusion would apply.

Ventana alleges its September 2002 press release and statements it made regarding

its access to Digene’s HPV patents were claims of implicit disparagement and

unauthorized use of a slogan. Ventana alleges these claims can be found in the

factual allegations of Digene’s amended complaint in Counts VII, VIII, and IX.

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These counts alleged violations of Delaware Deceptive Trade Practices Act,

violations of the federal Lanham Act and violations of common law unfair

competition. By definition, all three claims require plaintiff to prove some type of

deception or falsity on the part of defendant. (See Delaware Deceptive Trade

Practices Act, 6 Del.C. § 2531, et. seq.; Lanham Act U.S.C. § 1125(a); and Common

Law Unfair Competition, Rest., Torts, §§ 711-743). These are specific allegations

of fraud. Ventana has not shown that these claims have any alternative negligence

theory that could be covered under the insurance policy. Thus, the Magistrate Judge

recommends the 2002 false material exclusion would apply and relieve St. Paul of

any potential duty to defend.

R & R, pp. 33-34. The Court agrees with the magistrate judge that, while there were

specific allegations of fraud (see, DSOF, Declaration Ex. 2, DAC, ¶¶ 80, 86, 90 (“Ventana’s

September 24, 2002 news release and web site posting was knowingly and willfully false

and/or misleading.”)), there were no alternative allegations that could be covered under the

insurance policy. The Court finds the 2002 false material exclusion applies and relieves St.

Paul of any potential duty to defend.

XII. Issues of First Impression

Ventana asserts that the magistrate judge failed to consider that this case raises a

number of issues of first impression under Arizona law. Ventana asserts that:

These issues include: (1) the “personal injury” offense of “[m]aking known . . .

material that disparages . . . others” implicated potential coverage; (2) whether two

variant St. Paul intellectual property exclusions barred a defense for otherwise

covered claims of implicit disparagement based upon Ventana’s statements that

necessarily challenged Digene’s claims of patent-based exclusivity in marketing its

HPV 35 probe; or (3) that such claims, although stated in the alternative to include

merely misleading statements, barred even a defense because such statements were

necessarily made with “knowledge of falsity.”

Ventana’s Objection, p. 4, n. 14.

St. Paul asserts, however, that “[t]his court is being called upon to resolve the same

type of issue that scores, if not hundreds, of other courts have been called upon to answer

under Arizona law. The court is presented with the issue of whether an insurer had a duty

to defend. Arizona law is settled on the rules that govern whether a duty to defend exists.”

St. Paul’s Response, pp. 14-15. St. Paul asserts that the magistrate judge properly applied

the law to this case.

The Court agrees with St. Paul. With the exception of a broader definition of

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12Although the Court agrees that whether a case involves issues of first impression is

a factor to consider, the Court does not agree that Orfaly stands for the proposition that

attorneys’ fees are rarely awarded in cases of first impression. 

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“launch,” the Court agrees with the findings and legal analyses by the magistrate judge. The

Court does not find the magistrate judge improperly relied solely on Arizona law.

XIII. Attorneys’ Fees

Ventana asserts that the magistrate improperly recommended an award of attorneys’

fees even though the arguments raised by Ventana were pertinent and raised novel issues.

Citing to Orfaly v. Tucson Symphony Soc’y, 209 Ariz. 260, 265-66, 99 P.3d 1030, 1035-36

(App. 2004), Ventana argues that the magistrate judge failed to follow Arizona authority that

provides that attorneys’ fees are rarely awarded in cases of first impression.12 

St. Paul asserts that, under Arizona law, there are seven factors a court is to consider

in determining whether an award of attorneys’ fees to a prevailing party in a contract action

is appropriate. The Supreme Court of Arizona has stated that there are several factors which

are useful in assisting a trial judge in its determination of whether attorneys’ fees should be

granted under A.R.S. § 12-341.01 (authorizes an award for attorneys’ fees in contested

contract actions):

1. The merits of the claim or defense presented by the unsuccessful party.

2. The litigation could have been avoided or settled and the successful party's efforts

were completely superfluous in achieving the result.

3. Assessing fees against the unsuccessful party would cause an extreme hardship.

4. The successful party did not prevail with respect to all of the relief sought.

[Associated Indemnity Corp. v. Jack C. Warner, 143 Ariz. 585, 589, 694 P.2d 1199,

1203 (App. 1983)]. In addition to these factors, we would include: the novelty of

the legal question presented, and whether such claim or defense had previously been

adjudicated in this jurisdiction. We also believe that the trial court should consider

whether the award in any particular case would discourage other parties with tenable

claims or defenses from litigating or defending legitimate contract issues for fear of

incurring liability for substantial amounts of attorney's fees. See Wistuber v.

Paradise Valley Unified School, 141 Ariz. 346, 687 P.2d 354 (1984).

Associated Indemnity Corp. v. Warner, 143 Ariz. 567, 570, 694 P.2d 1181, 1184 (1985).

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13The Court notes that the magistrate judge, and this Court, assumed that an implicit

disparagement claim is available in the State of Arizona.

14The Court notes that the magistrate judge recommended that this Court grant St.

Paul’s request for attorneys’ fees after St. Paul timely complies with L.R.Civ. 54.2. St. Paul

has filed a Motion Regarding Attorney Fees and Costs [Doc. # 79]. Because Ventana may

have found it appropriate to wait until this Court issued an order adopting, rejecting, or

modifying the Report and Recommendation, the Court finds it appropriate to now schedule

a deadline for a response to the motion.

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St. Paul, asserting that Ventana has violated the spirit of page-limit rules, cited to

cases in a misleading manner, made false factual assertions with record cites, misstated the

record, ignored settled rules under Arizona law, has sought to confuse matter, argues that

Ventana has caused St. Paul to incur significant expense to defend this contract action. St.

Paul asserts that the statute was intended to award fees to a prevailing party in exactly this

type of case.

The Court disagrees with Ventana’s assertion that this case dealt with issues of first

impression such that an award of attorneys’ fees is not appropriate.13 Moreover, the Court

considers that, as discussed by this Court and the magistrate judge, Ventana’s arguments

have little or no merit. Additionally, this litigation could have been avoided or, at a

minimum, the expansive nature of the issues as presented by Ventana could have been

avoided; indeed, at times it appears that Ventana deliberately sought to obscure the issues

rather than clarify and apply the relevant law to the facts. The Court also considers that no

showing of a hardship to Ventana has been shown. See Ventana’s Opposition, [Doc. # 42],

p. 17; Ventana’s Supplemental Memorandum, [Doc. # 62], p. 17. Further, an award of

attorneys’ fees in this case would not discourage other parties with tenable claims from

pursuing those claims. A consideration of the relevant factors, Associated Indemnity, 143

Ariz. at 570, indicates that an award of attorneys’ fees is appropriate.14

Accordingly, IT IS ORDERED:

1. The Report and Recommendation [Doc. # 78] is ADOPTED IN PART.

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2. Ventana’s Motion for Partial Summary Judgment [Doc. # 11] is DENIED.

3. St. Paul’s Motion for Summary Judgment [Doc. # 37] is GRANTED.

4. Ventana’s Requests for Judicial Notice [Doc. #s 16 and 63] are DENIED.

5. St. Paul’s Motion for Discovery under Fed.R.Civ.P. 56(f) [Doc. # 37] is

DENIED AS MOOT.

6. Ventana shall file any Response to St. Paul’s Motion Regarding Attorney Fees

and Costs [Doc. # 79] within 14 days after being served with a copy of this Order. St. Paul

shall file any Reply within 7 days after being served with a Response.

7. Ventana’s Motions for Leave to File Reply Brief [Doc. #s 82 and 84] are

DENIED.

8. This matter is referred to Magistrate Judge Charles R. Pyle for further

proceedings (i.e., attorneys’ fees) and report and recommendation in accordance with the

provisions of 28 U. S. C. § 636(b)(1) and L.R.Civ.P. 72.1 and 72.2.

All future filings in this case shall be designated:

09-CIV-102 TUC CKJ (CRP)

DATED this 28th day of April, 2010.

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