In addition to providing expert witness services, Gauntlett & Associates is often requested to consult on a variety of topics of interest to its clients. These include:
STRUCTURING INSURANCE PROGRAMS
Helping structure appropriate insurance programs that best utilize the existing market and often negotiate unique provisions to address intellectual property, antitrust/unfair competition exposures.
MERGERS & ACQUISITION CONSULTATION
Analyzing appropriate policies to acquire in the context of mergers and acquisitions, either representing the acquired or acquiring company to protect the representations and warranties made in connection with that activity.
CLAIMANT'S COVERAGE ANALYSIS
Evaluating from a plaintiff's perspective what insurance coverage a defendant or counter-defendant might have that could be responsive to the asserted claims to facilitate settlement with insurance proceeds or, in some instances, to avoid allowing the opposing party to have the benefits of insurance and thereby heightening the probability that the case can be speedily resolved.
NEW STRATEGIES FOR UNAUTHORIZED COVERAGE OPPORTUNITIES
Gauntlett & Associates brings its expertise to bear in evaluating insurance coverage opportunities for a number of significant litigation matters now making headlines:
- Shareholder class action claims for subprime mortgage matters
- Class action antitrust lawsuits
- Business method patent infringement lawsuits
PUSHING THE COVERAGE ENVELOPE
Santa's Best Craft, LLC v. St. Paul Fire & Marine Ins. Co., 611 F.3d 339 (7th Cir. (Ill.) 2010)
The Seventh Circuit U.S. Court of Appeals on July 1, 2010 affirmed an insurance coverage judgment obtained by Gauntlett & Associates against St. Paul Fire and Marine Insurance Company.
The appellate court affirmed a judgment that St. Paul owed $1.3 million to defend companies sued in Ohio for alleged infringement of a competitor's slogans used on packages of Christmas lights ("Patent-pending ‘Stay-on' feature keeps bulbs lit," "New Technology," "String Stays Lit even if a bulb is loose or missing!" and "worry-free lighting."). The case was remanded to consider requiring St. Paul reimburse the settlement paid by the insureds upon proof that the primary focus of the settlement was on claims potentially covered under the policy. The court also remanded for consideration of prejudgment interest for late defense payments and settlement reimbursement.
Indian Harbor Ins. Co. v. Hartford Cas. Ins. Co., No. B192829, 2007 WL 2955564, at *9 (Cal. Ct. App. Oct. 11, 2007) ("The facts presented here are similar to those in El-Com Hardware, Inc. v. Fireman's Fund Ins. Co. (2001) 92 Cal.App.4th 205 . . . . The underlying complaint in El-Com did not refer to or describe any of the insured's advertising or promotional literature, nor did it use any variation of the word ‘advertise.' . . . Here, as in El-Com, the Skechers catalog depicting allegedly infringing products put Hartford on notice of claims potentially covered under its policy. Moreover, the Adidas complaint itself specifically alleged injury caused by Skechers's advertising products that purportedly infringed upon Adidas's Three-Stripe Mark.").
NEW OPPORTUNITIES FOR INSURANCE COVERAGE UNDER CGL POLICIES
Taken together, the cases referenced hereafter offer opportunities to revisit improper declinations of coverage under California, Ohio or Texas law. Where "advertising injury" coverage is typically issued on an "occurrence" basis, and the alleged wrongful acts for which coverage is denied may go back a number of years, the potential defense fee recovery available to policyholders who pursue "buried treasure" by unearthing improper late notice/independent counsel denials could be significant.
New case law makes the applicability of California coverage law more likely in a number of circumstances.
First, California will rarely recognize the conflict of interests unless the policy issues behind the distinct rule would necessarily create a different result.
Western Int'l Syndication Corp. v. Gulf Ins. Co., 222 Fed. Appx. 589, 594, (9th Cir. (Cal.) 2007)
Second, California coverage law will apply if a conflict of law arises where the underlying suit is in California, as this is the place of performance.
Frontier Oil Corp. v. RLI Ins. Co., 153 Cal. App. 4th 1436, 1461 (Cal. Ct. App. (2d Dist.) 2007)
Third, recent case authority clarifies the right to independent counsel in California. In typical scenarios encountered by litigants in intellectual property disputes, an insurer that asserts an "expected and intended conduct", "knowledge of falsity", and the "first publication exclusion". Each may independently create a conflict entitling the insured to retain independent counsel at the insurer's expense.
J.R. Marketing, LLC v. Hartford Casualty Ins. Co., No. A115846, 2007 WL 4217443, at *8 (Cal. Ct. App. (1st Dist.) Nov. 30, 2007)
Fourth, recovery of defense fees precipitated by pursuit of intellectual property lawsuits may elicit counterclaims, which are themselves covered, thereby funding the cost of affirmative litigation.
Aurafin-OroAmerica, LLC v. Federal Ins. Co., No. 04-56681, 2006 WL 1880088 (9th Cir. (Cal.) June 26, 2006)
Adobe Systems, Inc. v. St. Paul Fire & Marine Ins. Co., No. C 07-00385 JSW, 2007 WL 3256492, at *9 (N.D. Cal. Nov. 5, 2007)
Fifth, California recently expanded the "genuine dispute doctrine" to permit an award of bad faith damages for reasonable attorneys' fees expended in proving coverage only where insurers withheld benefits.
Wilson v. 21st Century Ins. Co., 42 Cal. 4th 713, 724 n.7 (2007) ("In the insurance bad faith context, a [coverage] dispute is not ‘legitimate' unless it is founded on a basis that is reasonable under all the circumstances.").
In a trio of recent decisions, Ohio courts have broadly defined the scope of "advertising injury" coverage in relation to claims for trademark and copyright infringement coverage. These cases broadly construe "advertising injury" coverage for offenses of "misappropriation of advertising ideas or style of doing business" (1986 CGL ISO) and its successor "use of another's advertising idea in your ‘advertisement' " (1998 CGL ISO).
These courts have found that these offenses encompass a range of unfair competition claims, including forms of false advertising, false designation of origin, as well as trade dress and trademark infringement claims.
AMCO Ins. Co. v. Lauren-Spencer, Inc., 500 F. Supp. 2d 721, 733 (S.D. Ohio 2007) (copyright/trade dress infringement)
Westfield Ins. Co. v. Factfinder Marketing Research, Inc., 860 N.E.2d 145 (Ohio Ct. App. 2006) (trade dress case)
Ohio Discount Merchandise, Inc. v. Westfield Ins. Co., No. 2006CA00059, 2006 WL 2773245, at *5 (Ohio Ct. App. Sept. 26, 2006) (copyright infringement)
The Texas Supreme Court clarified that "advertising injury" and "personal injury" coverage cases, like those for "bodily injury" and "property damage," are subject to the notice prejudice rule, placing the burden on the insurer to prove that late notice created prejudice before eliminating possible coverage.
PAJ, Inc. v. Hanover Ins. Co., 243 S.W.3d 630 (Tex. 2008) (trademark infringement)
In another seminal decision, the Texas Supreme Court, on rehearing, three years after its earlier opinion, reaffirmed the rule that an insurer that paid a settlement could not seek reimbursement of monies paid (absent an agreement to permit such reimbursement) should it be determined that it had no duty to cover its insured. Implicit in this analysis (which depended on the absence of the word reimbursement that was not in the policy) is the rule that defense fees paid are also not subject to reimbursement.
Excess Underwriters at Lloyds, London v. Frank Casing's Crew & Rental Tools, 246 S.W. 3d 42 (Tex. 2008)