Court Opinion

ID: 811291
Source: CourtListenerOpinion
Date Created: 2012-11-05 20:58:39+00
Date Added: 2024-06-11T18:00:40.930305
License: Public Domain

FILED
                           NOT FOR PUBLICATION                                NOV 05 2012

                                                                          MOLLY C. DWYER, CLERK
                    UNITED STATES COURT OF APPEALS                          U.S. COURT OF APPEALS

                            FOR THE NINTH CIRCUIT

MICHAEL TAYLOR DESIGNS, INC.,                    No. 11-16052

              Plaintiff - Appellee,              D.C. No. 3:10-cv-02432-RS

  v.
                                                 MEMORANDUM*
TRAVELERS PROPERTY CASUALTY
COMPANY OF AMERICA,

              Defendant - Appellant.

                    Appeal from the United States District Court
                       for the Northern District of California
                     Richard Seeborg, District Judge, Presiding

                      Argued and Submitted October 15, 2012
                            San Francisco, California

Before: B. FLETCHER,** HAWKINS, and MURGUIA, Circuit Judges.

       This is a civil dispute governed by California law regarding an insurer’s duty

to defend. The district court entered summary judgment for Michael Taylor

        *
             This disposition is not appropriate for publication and is not precedent
except as provided by 9th Cir. R. 36-3.

        **   The Honorable Betty Binns Fletcher, Senior Circuit Judge for the
Ninth Circuit Court of Appeals, fully participated in the case and concurred in the
judgment prior to her death.
Designs, Inc. (“Taylor”), holding that Travelers Property Casualty Company of

America (“Travelers”) breached its contractual duty to defend Taylor against

accusations of trade libel, which is a false statement disparaging the quality of

another’s goods. Michael Taylor Designs, Inc. v. Travelers Prop. Cas. Co. of Am.,

761 F. Supp. 2d 904, 912 (N.D. Cal. 2011). We have jurisdiction over Travelers’s

appeal pursuant to 28 U.S.C. § 1291 and review de novo the district court’s entry

of summary judgment for Taylor. Arakaki v. Hawaii, 314 F.3d 1091, 1094 (9th

Cir. 2002). We now affirm.

      Ivy Rosequist filed a complaint against Taylor in March 2008 seeking relief

for trade dress infringement. Travelers declined to defend Taylor in the Rosequist

action because Rosequist’s complaint did not specifically state a claim for trade

libel. Rosequist’s successor-in-interest later amended the complaint to expressly

state a cause of action for trade libel in addition to trade dress infringement.

Travelers stepped in to defend Taylor against these amended allegations, and the

Rosequist action eventually settled in early 2010. In June 2010, Taylor filed the

present diversity action against Travelers, alleging Travelers breached its duty to

defend Taylor against Rosequist’s original complaint in March 2008. Taylor

argued Rosequist’s original complaint, in addition to expressly alleging trade dress

infringement, implied an action for trade libel.

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      An insurer must defend its insured if it is even “conceivable,” based on the

factual allegations in a third-party’s complaint, that the third-party could state a

claim covered by the insured’s policy. See Montrose Chem. Corp. of Cal. v. Super.

Ct., 861 P.2d 1153, 1160 (Cal. 1993) (citation omitted); see also Travelers Prop.

Cas. Co. of Am. v. Charlotte Russe Holding, Inc., 144 Cal. Rptr. 3d 12, 21 (Cal. Ct.

App. 2012) (stating an insurer must defend its insured even where a complaint

does not allege facts sufficient to succeed on the merits because merely implicating

a cause of action covered by an insurance policy triggers the duty to defend)

(citations omitted). Here, Rosequist’s original complaint alleged Taylor’s

showroom salesmen made statements to Taylor’s customers that falsely implied

Rosequist’s high-end wicker chairs were of poor quality, and this allegation made

it conceivable that Rosequist could state a claim for trade libel. See, e.g., Charlotte

Russe, 144 Cal. Rptr. 3d at 20-22 (holding a complaint alleging the insured made

statements that could give the false impression that the plaintiff’s goods were of

inferior quality triggered an insurer’s duty to defend its insured against allegations

of trade libel). Moreover, in a close case, “any” doubt as to whether an insurer has

a duty to defend must be resolved in the insured’s favor. Horace Mann Ins. Co. v.

Barbara B., 846 P.2d 792, 796 (Cal. 1993).

      AFFIRMED.

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