Plaintiff Hartford Casualty Insurance Company, under 28 U.S.C. § 2201 et seq. and Fed.
R. Civ. P. 57, and for its Complaint for Declaratory Judgment, states as follows:
corporation organized and existing under the laws of the State of Indiana with its principal place
Missouri.
2. Defendant U.S. Fidelis, Inc. (“US Fidelis”) was at all times relevant a corporation
organized and existing under the laws of the State of Missouri with its principal place of business
3. Defendant BMW of North America, LLC (“BMW NA”) was at all times relevant
a limited liability company organized and existing under the laws of the State of Delaware with
its principal place of business located at 300 Chestnut Ridge Road, Woodcliff Lake, New Jersey
1593517.1
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Delaware corporation, which is a wholly owned subsidiary of Bayerische Motoren Werke AG
(“BMW AG”).
existing under the laws of the Federal Republic of Germany, with its principal place of business
at Petuelring 130, 80809 Munich, Germany. BMW AG designs and manufactures motor
vehicles, parts, and other products for sale in Europe and for export and sale throughout the
world.
5. This Court has jurisdiction of this action by virtue of 28 U.S.C. §§ 2201 et seq.
under the federal declaratory judgment act and 28 U.S.C. § 1332 because the amount in
Missouri.
7. Venue is proper pursuant to 28 U.S.C. § 1391 in that the defendant resides within
this judicial district, and upon information and belief, the insurance contracts sought to be
General Allegations
a declaration of the parties’ respective rights and obligations under those policies.
with respect to such controversy is imminent and inevitable, as set forth below.
10. All necessary and proper parties are before this Court for the matters in
controversy. All parties who have or claim any interest in this matter and would be affected by
any declaration of this Court have been made parties to this action.
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Policies of Insurance
insurance. The policy is identified as Policy Number 84 SBQ BX1103 SA. The policy was
12. The Policy provides commercial general liability coverage subject to a $1,000,000
personal and advertising injury limit, and $2,000,000 general aggregate limit with an effective
13. The Policy was renewed by separate policies, each bearing the same policy
numbers for the policy periods: July 1, 2006 until July 1, 2007; July 1, 2007 until July 1, 2008;
July 1, 2008 until July 1, 2009; and July 1, 2009 until July 1, 2010 (the “Renewal Policies”).
14. Each of the Renewal Policies also provides commercial general liability coverage
subject to a $1,000,000 personal and advertising injury limit, and $2,000,000 general aggregate
15. Hartford also issued an umbrella policy for the initial Policy period with a
$1,000,000 each occurrence limit, a $1,000,000 general aggregate limit and a $10,000 self-
insured retention, and issued umbrella policies with each Renewal Policy period with a
$10,000,000 each occurrence limit, a $10,000,000 general aggregate limit and a $10,000
self-insured retention.
16. The following insuring clause is contained in the liability coverage section of The
Policy1:
1
The Policy is quoted in relevant part. A copy of the 2009-2010 Renewal Policy is
attached as Exhibit A. Hartford will provide certified copies of the Policy and Renewal Policies
during discovery but will not expand this filing by attaching copies of each policy to this
complaint.
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BUSINESS LIABILITY COVERAGE FORM
A. COVERAGES
Insuring Agreement:
a. We will pay those sums that the insured becomes legally obligated
to pay as damages because of . . . “personal and advertising injury”
to which this insurance applies. We will have the right and duty to
defend the insured against any “suit” seeking those damages.
However, we will have no duty to defend the insured against any
“suit” seeking damages for . . . “personal and advertising injury” to
which this insurance does not apply.
(2) Our right and duty to defend ends when we have used
up the applicable limit of insurance in the payment of
judgments, settlements or medical expenses to which
this insurance applies.
...
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17. The following definitions are contained in The Policy:
...
...
B. Exclusions
...
...
...
(a) Copyright;
...
Underlying Claim
19. On July 22, 2009, BMW of North America, LLC and Bayerische Motoren Werke
AG (hereafter “BMW”) filed a Complaint and Demand for Trial by Jury against US Fidelis in
the United States District Court for the District of New Jersey, Case Number 2:09-cv-03607-
KSH-PS (the “BMW Complaint”). A copy of the BMW Complaint is attached as Exhibit B.
20. US Fidelis has sought coverage and a defense from Hartford pursuant to the
Policy and/or the Renewal Policies arising out of the allegations against it in the BMW
Complaint.
21. The damages alleged in the BMW Complaint are alleged to relate to 2006 model-
year BMW automobiles. See BMW Complaint, Ex. B. and Exhibits A and B therein.
23. BMW seeks injunctive and monetary relief from US Fidelis for its claims of
trademark infringement, unfair competition, false advertising and also seeks declaratory
judgment with regard to their “BMW” mark and their “3 SERIES,” “5 SERIES,” “6 SERIES,”
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24. BMW claims that US Fidelis has made and is making false, misleading and
confusing commercial use of its marks. See BMW Complaint, Ex. B., ¶ 23.
25. BMW claims that with the use of protected marks, the potential exists to deceive
the reader that US Fidelis is affiliated with, or received permission from BMW, to make such
26. Specifically, BMW alleges that US Fidelis has solicited its customers in New
Jersey using its protected marks seeking sales of US Fidelis’ extended warranty products. See
27. BMW claims that US Fidelis has solicited groups of BMW 3-Series, 5-Series and
7 Series owners similarly stating that their warranties are about to expire. See BMW Complaint,
28. The allegations include solicitations both by direct mail and by telephone. See
29. In every claim or count, BMW’s allegations are that US Fidelis’ alleged acts were
“deliberate, willful, and intentional, with full knowledge and in conscious disregard of BMW’s
rights in its marks.” See BMW Complaint, Ex. B., ¶¶ 47, 53, 59, 65, 69, and 73.
30. BMW claims that certain aspects of US Fidelis’ alleged solicitations are false
and/or misleading in that it warrants every new vehicle for four years or fifty thousand miles and
as such the claim that some customers’ warranties may be expiring soon is untrue. See BMW
31. BMW alleges that it has received customer complaints arising from US Fidelis’
solicitations including confusion as to whether the contact was affiliated with, or connected to,
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32. BMW claims to have received customer complaints that BMW improperly
disclosed sensitive customer information to US Fidelis, which BMW denies. See BMW
33. BMW claims damage under the Lanham Act, § 32, 15 U.S.C. § 1114(1) for
federal trademark infringement; § 42(a), 15 U.S.C. § 1125 for federal unfair competition and
false designation of origin; § 43(a), 15 U.S.C. § 1125 for false advertising; trademark
infringement and unfair competition under the common law of New Jersey; unfair competition
under the New Jersey unfair competition act, N.J.S.A. § 56:4-1 et seq.; and declaratory
judgment, 28 U.S.C. §§ 2201-2202. See BMW Complaint, Ex. B., ¶¶ 46, 52, 58, 64, 68, and 72.
34. A jury trial on the claims against US Fidelis has been demanded, but not yet
scheduled; a settlement conference is presently set for January 19, 2010. See BMW Complaint,
36. The Policies set forth in the insuring grant the coverage agreement for which
coverage for “personal and advertising injury” applies. See Ex. A, § A (1) (a) and (b) (2).
37. Coverage is only available for “personal and advertising injury” caused by an
offense arising out of US Fidelis’ business if such offense was committed in the “coverage
38. Following the Policies’ grant of coverage, exclusions narrow the scope of
coverage, including the exclusion for “personal and advertising injury.” See Ex. A, § B (1) (p)
(7).
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39. This exclusion’s bar for coverage for violation of intellectual property rights,
specifically including trademark, applies to each and every Count in the BMW Complaint and
the Court enter a Judgment that Policy Number 84 SBQ BX1103 SA, beginning on its Effective
Date and including all Renewal Policies, provides no coverage for defendant US Fidelis, Inc. for
41. The allegations in every Count of the BMW Complaint allege that US Fidelis’
acts “have been and are deliberate, willful, and intentional with full knowledge and in conscious
disregard of BMW’s rights.” See BMW Complaint, Ex. B., ¶¶ 47, 53, 59, 65, 69, and 73.
42. The Policy and the Renewal Policies exclude coverage for “Expected or Intended
43. Each claim for US Fidelis’ “deliberate, willful and intentional” use of BMW’s
trademarks in its letters and phone calls falls within this exclusion, which precludes coverage for
the Court enter a Judgment that Policy Number 84 SBQ BX1103 SA, beginning on its Effective
Date and including all Renewal Policies, provides no coverage for defendant US Fidelis, Inc. for
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COUNT III–No Coverage for Prior Publications
45. The Policy and the Renewal Policies exclude coverage “for material whose first
publication took place before the beginning of the policy period.” See Ex. A, § B (1) (p) (2).
46. To the extent that any of US Fidelis’ publications occurred prior to the effective
date listed in the 2005–2006 Policy, July 1, 2005, this exclusion would apply.
47. To the extent any of US Fidelis’ publications occurred prior to the effective date
of each Renewal Policy, this exclusion would apply to each such policy.
the Court enter a Judgment that Policy Number 84 SBQ BX1103 SA provides no coverage for
defendant US Fidelis, Inc. for claims made against it in the BMW Complaint arising out of
publications that first occurred prior to July 1, 2005, and for Judgment that each Renew Policy
provides no coverage for defendant US Fidelis, Inc. for claims made against it in the BMW
Complaint arising out of publications that first occurred prior to each such policies’ effective
date.
49. The Policy and the Renewal Policies only extend coverage for “damages because
of ‘bodily injury’, ‘property damage’ or ‘personal and advertising injury’ to which this insurance
50. To the extent that BMW seeks an award of punitive or exemplary damages for US
Fidelis’ willful acts, such damages are not damages for “bodily injury”, “property damage” or
“personal and advertising injury” and are uninsurable as a matter of Missouri public policy.
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WHEREFORE, Plaintiff Hartford Casualty Insurance Company respectfully requests that
the Court enter a Judgment that Policy Number 84 SBQ BX1103 SA provides no coverage for
defendant US Fidelis, Inc. for claims for punitive or exemplary damages made against it in the
BMW Complaint.
52. The Policy and the Renewal Policies only extend coverage for “damages because
of ‘bodily injury’, ‘property damage’ or ‘personal and advertising injury’ to which this insurance
53. BMW’s claims for injunctive relief are not claims for damages; therefore,
coverage is not afforded by the insuring grant of the Policy or the Renewal Policies.
the Court enter a Judgment that Policy Number 84 SBQ BX1103 SA provides no coverage for
defendant US Fidelis, Inc. for claims for injunctive relief made against it in the BMW
Complaint.
55. Policy 84 SBQ BX1103 SA sets forth in the insuring grant the coverage
agreement for which coverage for “personal and advertising injury” applies. See Ex. A, § A (1)
56. Coverage is only available for “personal and advertising injury” caused by an
offense arising out of US Fidelis’ business if such offense was committed in the “coverage
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57. The definition of “personal and advertising injury” includes claims of copyright
58. BMW alleges that it suffered injury or damages as a result of US Fidelis’ use of
its trademarks.
the Court enter a Judgment that Policy Number 84 SBQ BX1103 SA provides no coverage for
defendant US Fidelis, Inc. for claims for trademark infringement made against it in the BMW
Complaint.
60. BMW’s allegations consist of offenses arising out of the continuing use of its
trademarks.
61. If the Court determines that coverage applies, which plaintiff specifically denies,
US Fidelis’ infringing acts constitute a single occurrence as of the date it first used BMW’s
62. The date of first publication will either fall within or prior to one of Hartford’s
the Court enter a Judgment that the claims made against US Fidelis in the BMW Complaint
publication.
64. Hartford issued Umbrella Policies for each policy period. See Ex. A.
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65. Coverage for personal and advertising injury is only available under the umbrella
66. For all of the reasons stated above, there is no coverage under the Umbrella
Policies.
the Court enter a Judgment that Umbrella Policy Number 84 SBQ BX1103 SA, beginning on its
Effective Date and including all Renewal Policies, provides no coverage for defendant US
67. Plaintiff Hartford Casualty Insurance Company hereby requests a trial by jury.
CONCLUSION
Plaintiff Hartford Casualty Insurance Company prays the Court enter a declaratory
judgment finding that Hartford owes neither a duty to defend nor a duty to indemnify defendant
US Fidelis under the Policy or the Renewal Policies for the following reasons:
A) All of the policies at issue exclude coverage for claims for violation of
expected or intended injuries, and all of the allegations against US Fidelis allege only
C) All of the policies at issue exclude coverage for material published prior to
each policy’s effective date, and the materials allegedly published by US Fidelis predate
the effective dates of some or all of the policies at issue and are thus excluded from
coverage;
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D) None of the policies at issue include coverage for punitive or exemplary
damages, which are not claims for damages for “personal and advertising injury,” so the
E) None of the policies at issue include coverage for claims for injunctive
relief, which are not claims for damages for “personal and advertising injury,” so the
is not “personal or advertising injury” as defined in the policies, so such claims are not
covered;
G) Since none of the claims trigger any duty to defend or to indemnify under
the Policy or Renewal Policies, none of the claims are covered under the umbrella policy
WHEREFORE, the Court should enter judgment in favor of plaintiff Hartford on all
counts and award Hartford its costs incurred herein, plus any other relief that the Court deems
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Respectfully submitted,
s/ Michael E. Brown
Michael E. Brown MO #49979
M. Courtney Koger MO #42343
KUTAK ROCK LLP
Suite 500
1010 Grand Boulevard
Kansas City, MO 64106
Telephone No. (816) 960-0090
Facsimile No. (816) 960-0041
Courtney.Koger@kutakrock.com
Mike.Brown@kutakrock.com
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