Opinion ID: 721571
Heading Depth: 3
Heading Rank: 1

Heading: Advertising Injury Exclusion

Text: 69 Stanford claims that the primary policy is ambiguous when applied to a claim for contract liability that allegedly interferes with the right to possess property. In support of this claim, Stanford points to the policies' exclusion of advertising injury arising out of failure of performance of contract.... Stanford contends that because the contract exclusion applies to advertising injury only, personal injury arising out of failure of performance of contract must remain covered. We are not persuaded. 70 First, Stanford is claiming that there is a duty to defend based on the policies' personal injury provision. It is not claiming coverage under the advertising injury provision. Thus, the advertising injury exclusions are inapplicable and unrelated to the personal injury provision under which Stanford is claiming a duty to defend exists. 71 Second, Stanford is attempting to use a policy exclusion to expand the policies' insuring agreement. It is well established in California that an exclusion cannot act as an additional grant or extension of coverage. See St. Paul Fire & Marine Ins. Co. v. Coss, 80 Cal.App.3d 888, 145 Cal.Rptr. 836, 840-841 (1978) (provision excluding liability assumed by the Insured under any contract or agreement except an incidental contract; but this exclusion does not apply to a warranty of fitness or quality ... or a warranty [that work will be performed in a workmanlike manner] cannot act to grant or extend additional coverage); Fresno Economy Import Used Cars, Inc. v. United States Fidelity & Guar. Co., Inc., 76 Cal.App.3d 272, 142 Cal.Rptr. 681, 687 (1977) (provision excluding liability assumed by the Insured under any contract or agreement except an incidental contract; but this exclusion does not apply to a warranty of fitness did not expand insuring agreement to cover contractual warranty claims). In interpreting an insurance contract, this court must first look to the insuring agreement and determine whether coverage exists. If coverage exists, then this court must look to the contract exclusions to see if coverage is otherwise excluded. If coverage does not exist under the insuring agreement, the inquiry is at an end. There is no need to look to the exclusions because they cannot expand the basic coverage granted in the insuring agreement. See St. Paul Fire, 145 Cal.Rptr. at 840-841. 72 The insuring agreement in the present case covers only liability arising in tort. Thus, there is no coverage for liability arising in contract. There is no need to examine the advertising injury exclusion, because this exclusion cannot be used to extend or grant additional coverage for personal injury arising in contract. See id.