Colony Insurance v. Corrosion Control, Inc.

390 F. Supp. 2d 1337, 2005 U.S. Dist. LEXIS 28394, 2005 WL 1127134
CourtDistrict Court, M.D. Georgia
DecidedMay 10, 2005
Docket4:04-mj-00073
StatusPublished
Cited by5 cases

This text of 390 F. Supp. 2d 1337 (Colony Insurance v. Corrosion Control, Inc.) is published on Counsel Stack Legal Research, covering District Court, M.D. Georgia primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Colony Insurance v. Corrosion Control, Inc., 390 F. Supp. 2d 1337, 2005 U.S. Dist. LEXIS 28394, 2005 WL 1127134 (M.D. Ga. 2005).

Opinion

ORDER

LAND, District Judge.

The Court presently has pending before it Plaintiffs Motion for Summary Judgment and Defendants’ Motions for Summary Judgment. As discussed below, Plaintiffs Motion is denied, and Defendants’ Motions are granted.

FACTUAL BACKGROUND

In this declaratory judgment action, Colony Insurance Company (“Colony”) alleges that it has no duty to defend Defendants Deborah Meier, Craig Meier and Corrosion Control, Inc. (“the Meier Defendants”) in a lawsuit filed against them by Corrpro Companies, Inc. (“Corrpro”) for, inter alia, misappropriation of Corrpro’s style of doing business, advertising ideas, trade secrets, trade name abbreviation and confidential information; disparagement of Corrpro’s products and services; and infringement of Corrpro’s trademarks and trade name. That action, Corrpro Companies, Inc. v. Meier et al., 3:03-CV-31 (CDL) (“the underlying action”), is currently stayed pending the outcome of this declaratory judgment action.

Colony takes the position that the only possible coverage for the claims asserted *1339 in the underlying action would exist under the “advertising injury” provisions of the policy. However, Colony maintains that the allegations contained in Plaintiffs complaint and the undisputed facts of record establish that all of Plaintiffs advertising injury claims arise from conduct that occurred prior to the effective date of the Colony policy and are not covered because they did not arise during the policy period. In the alternative, Colony maintains that even if the injury occurred during the policy period, the source of the injury was first published prior to the effective date of the policy, and thus coverage is excluded under the “first publication exclusion” contained in the Colony policy.

SUMMARY JUDGMENT STANDARD

Summary judgment may be granted only when “the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and the moving party is entitled to a judgment as a matter of law.” Fed.R.Civ.P. 56(c). The parties agree that there is no genuine issue of material fact in this case. The construction' of an insurance contract, including the question whether an insurer has a duty to defend and indemnify its insured, is a question of law. See Elan Pharm. Research Corp. v. Employers Ins. of Wausau, 144 F.3d 1372, 1375 (11th Cir.1998) (applying Georgia law). Therefore, summary adjudication is appropriate in this case.

DISCUSSION

The Colony insurance policy issued to Corrosion Control, Inc. provides that Colony will defend its insured against any suit seeking damages for “advertising injury” to which the insurance policy applies. (Colony Policy, Ex. I to Pl.’s Statement of Undisputed Material Facts.) Thus, Colony is obligated to defend the underlying action if Corrpro asserted a claim covered by the policy. See Penn-America Ins. Co. v. Disabled, American Veterans, Inc., 268 Ga. 564, 565, 490 S.E.2d 374, 376 (1997). Under Georgia law, the duty to defend is excused only if the petition unambiguously excludes coverage under the policy. Id. In other words, an insurer is only justified in refusing to defend an insured’s lawsuit if the complaint against the insured does not assert any claims upon which there would be insurance coverage. City of Atlanta v. St. Paul Fire & Marine Ins. Co., 231 Ga.App. 206, 207, 498 S.E.2d 782, 784 (1998). If the claims against the insured “might potentially or arguably fall within the policy’s coverage,” the insurer must provide a defense. Elan Pharm. Research Corp., 144 F.3d at 1375 (citing Penn-America Ins. Co., 268 Ga. at 565, 490 S.E.2d at 376). Any doubt as to an insurer’s duty to defend “should be resolved in favor of the insured.” Penn-America Ins. Co., 268 Ga. at 565, 490 S.E.2d at 376. To determine whether an insurer has a duty to defend its insured, the courts compare the language of the insurance contract with the allegations of the complaint and the facts supporting those allegations. City of Atlanta, 231 Ga.App. at 207, 498 S.E.2d at 784; see also Elan Pharm. Research Corp., 144 F.3d at 1375.

The Colony policy insures against liability for an “advertising injury” that occurs during the policy period and in the course of advertising the insured’s goods, products or services. The policy defines “advertising injury” to include disparagement of an organization’s goods, products or services; misappropriation of advertising ideas or style of doing business; and infringement of copyright, title or slogan. The policy excludes from coverage any “advertising injury” that arose “out of oral or written publication of material whose first publication took place before the be *1340 ginning of the policy period.” So to give rise to a duty to defend, Corrpro’s complaint must include at least one claim that potentially constitutes an “advertising injury” and is not excluded from coverage under one of the policy’s exclusions. Because the Court finds at least one claim that potentially constitutes an advertising injury and is not excluded from coverage, Colony has a duty to defend the underlying lawsuit.

The parties agree that paragraph 36 of Plaintiffs Complaint alleges facts to support a claim for advertising injury. That paragraph is as follows:

Following the Meiers’ termination from employment with [Corrpro], [the Meier] Defendants immediately began bidding on projects and otherwise immediately competing with [Corrpro] for projects, using [Corrpro]’s proprietary pricing structures and methods, and other proprietary data, which bids could not have been completed and submitted without [the Meier] Defendants’ possession and misappropriation of such proprietary data.

This paragraph arguably alleges an advertising injury under the provisions of the policy that define advertising injury to include misappropriation of advertising ideas or style of doing business. The question then becomes whether these allegations combined with the undisputed facts in the record establish that these claims are ex-eluded under the first publication exclusion in the Colony policy.

The policy’s first publication exclusion states that the insurance does not apply to “ ‘advertising injury’ ... [a]rising out of oral or written publication of material whose first publication took place before the beginning of the policy period.... ” The Plaintiffs complaint is silent as to whether the “advertising injury” complained of in paragraph 36 occurred prior to September 22, 1999, the policy’s effective date. 1

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390 F. Supp. 2d 1337, 2005 U.S. Dist. LEXIS 28394, 2005 WL 1127134, Counsel Stack Legal Research, https://law.counselstack.com/opinion/colony-insurance-v-corrosion-control-inc-gamd-2005.