Cosser v. One Beacon Ins. Group

In Cosser v. One Beacon Ins. Group, 15 AD3d 871 [4th Dept 2005] plaintiffs were sued in federal court by L. & J. G. Stickley, Inc. (Stickley) for copying, manufacturing and marketing an exclusive "Stickley" formula for furniture polish. In the federal action, Stickley alleged causes of action for, inter alia, false advertising, false designation of origin under the Lanham Act (15 USC 1125 [a]), false advertising, unfair competition, and misappropriation of trade secrets. Plaintiffs brought an action in state court seeking a judgment declaring that, pursuant to the terms of two commercial general liability insurance policies issued by defendant to plaintiffs, defendant has a duty to defend and indemnify plaintiffs in the federal action. The plaintiffs in Cosser moved for partial summary judgment seeking a declaration that their insurer had a duty to defend them in the federal action and must contribute to plaintiffs' defense costs. The insurer likewise cross-moved for summary judgment on its claim that no coverage existed under the policies in question. The insurer, in Cosser, asserted the very same arguments as the insurers assert here - that the underlying complaint does not allege an "advertising injury," and that, in any event, the claims in the underlying complaint are excluded because plaintiffs' alleged wrongful conduct was knowing and intentional. Although the trial court agreed with the insurer, and declared that there was no coverage under the subject policies, on appeal, the Fourth Department reversed, holding that the trial court erred in concluding that the allegations in the federal complaint did not trigger possible coverage for advertising injury. The Fourth Department stated: In granting defendant's cross motion, the court agreed with defendant that the causes of action in the federal complaint did not trigger possible coverage for advertising injury. That was error. We note at the outset that the court erred in agreeing with defendant that the complaint in the federal action fails to allege an advertising injury covered by the terms of the policies at issue. The complaint therein alleges the misuse or infringement of Stickley's trademark (see Allou Health & Beauty Care v. Aetna Cas. & Sur. Co., 269 AD2d 478, 479-480, 703 N.Y.S.2d 253 [2nd Dept 2000]) or "trade dress" within the terms of the policies at issue (see American Mfrs. Mut. Ins. Co. v. Quality King Distribs., 287 AD2d 527, 529, 731 N.Y.S.2d 234 [2nd Dept 2001]; see also Maritime Fish Prods. v. World-Wide Fish Prods., 100 AD2d 81, 86-87, 474 N.Y.S.2d 281 [1st Dept 1984]). (Id. at 873.)