SCOUT, LLC, an Idaho limited liability company, dba Double Tap Pub, Plaintiff-Appellant,
TRUCK INSURANCE EXCHANGE, an inter-insurance exchange organized under the laws of the State of California, Defendant-Respondent, and FARMERS GROUP, INC., a California corporation, Defendant.
from the District Court of the Fourth Judicial District of
the State of Idaho, Ada County. Hon. Steven Hippler, District
decision of the district court is affirmed.
Simmons Townsend, PLLC, Boise, for appellant. Chynna C.
& Burke, P.A., Boise, for respondent. Jeffrey A. Thomson
case stems from Truck Insurance's refusal to defend its
insured, Scout, LLC, in a trademark infringement action
brought over Scout's use of the trademark ROGUE in the
advertisement of its restaurant, Gone Rogue Pub. Scout claims
that its use of ROGUE constituted an advertising injury that
was covered by the insurance it purchased from Truck
Insurance. Truck Insurance does not dispute that ordinarily
Scout's advertising injury would be covered and it would
accordingly have a duty to defend, but contends that in this
situation coverage was properly declined based on a prior
publication exclusion found in the policy. The district court
granted summary judgment to Truck Insurance after determining
that a Facebook post of Scout's Gone Rogue Pub logo
before insurance coverage began triggered the prior
publication exclusion, thereby relieving Truck Insurance of
the duty to defend Scout. Scout appeals the district
court's decision granting Truck Insurance summary
judgment. We affirm the judgment of the district court.
FACTUAL AND PROCEDURAL BACKGROUND
October 1, 2012, Scout, an Idaho limited liability company,
purchased Casa Del Sol, a downtown restaurant in
Boise. The members of Scout decided to renovate the
restaurant into a pub and brand it as Gone Rogue
Pub. On October 10, Scout posted a public picture of the
Gone Rogue logo on Facebook, accompanied by the words,
"Here is our new logo! Signs are going up today and
tomorrow! Hope everyone likes it! Let us know what you guys
think!" In the same month, Scout registered Gone Rogue
Pub as an assumed business name with the Idaho Secretary of
State. No other advertising or logos were displayed until
after November 7, 2012.
November 7, 2012, Scout requested a commercial business
insurance policy through Truck Insurance and a policy was
issued by Farmers Insurance. Scout then began the process of
opening Gone Rogue Pub: obtaining an alcohol license, hanging
signs, and ordering merchandise and glassware emblazoned with
the Gone Rogue Pub logo. Gone Rogue Pub officially opened
sometime around November 21, 2012.
well with Gone Rogue Pub until the Oregon Brewing Company
(OBC) noticed Gone Rogue's similarity to its federally
registered ROGUE trademarks. In January 2013, OBC informed
Gone Rogue that it believed Gone Rogue was infringing on five
of its registered ROGUE trademarks, including use of the mark
in connection with: (1) beer and ale; (2) restaurant, pub and
catering services; (3) beverage glassware; (4) beer; and, (5)
clothing. All registrations predated Gone Rogue's use by
at least two years. For a year-and-a-half OBC attempted to
negotiate a deal with Gone Rogue, but to no avail.
October 2014, OBC filed suit against Scout, alleging in part
that "[i]n October 2012, long after OBC's first use
and registration of the mark ROGUE, [Gone Rogue Pub]
commenced use of the mark ROGUE as the name of their
restaurant and bar." OBC asserted six different claims
against Scout: (1) trademark counterfeiting under the Lanham
Act; (2) trademark infringement; (3) unfair competition and
false designation of origin under the Lanham Act; (4)
cyber-squatting under the Lanham Act; (5) unfair business
practices under Idaho law; and, (5) common law trademark
infringement. Exhibits were attached to the complaint
featuring a host of screenshots from Scout's Facebook
page showing Gone Rogue's marks. OBC sought injunctive
relief, attorney fees and costs, and treble damages.
December 3, 2013, Scout informed Truck Insurance of the OBC
lawsuit and requested coordination for legal representation.
Scout's liability policy included coverage for any
"'advertising injury' . . . caused by an offense
committed in the course of advertising your goods, products
or services; but only if the offense was committed in the
'coverage territory' during the policy period."
An advertising injury was defined as "[m]isappropriation
of advertising ideas or style of doing business; or
[i]nfringment of copyright, title or slogan." However,
the policy was clear that Truck Insurance would "have no
duty to defend the insured against any 'suit' seeking
damages for . . . 'advertising injury'" to which
the insurance did not apply.
Insurance took the position that Scout's claim was not
covered under the liability policy because of an exclusionary
provision in the policy that denied coverage for any
"'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
OBC complaint stated that the infringing activity began in
October 2012-a month before Scout's liability coverage
commenced--when Scout posted the Gone Rogue Pub logo on its
wanting to scuffle with OBC without assistance from Truck
Insurance, Scout settled with OBC, agreeing to cease using
ROGUE as a mark. Scout then rebranded "Gone Rogue
Pub" as "Double-Tap Pub." A suit was
thereafter brought by Scout against Truck Insurance alleging
breach of contract, breach of the covenant of good faith and
fair dealing, and bad faith failure to defend. After the
parties conducted written discovery, Truck Insurance moved
for summary judgment, arguing that there was no duty to
defend, ergo no breach of contract. Scout countered with its
own motion for summary judgment, contending that the prior
publication exclusion was inapplicable to the OBC complaint,
thus Truck Insurance breached its duty to defend Scout in the
district court concluded that there was no duty to defend on
Truck Insurance's part. A judgment was then entered
dismissing Scout's claims with prejudice. Scout timely
appealed the judgment. We affirm the judgment of the district
ISSUES ON APPEAL
Whether the district court properly granted summary judgment
dismissing the breach of contract claims on its determination
that no duty to defend existed because of the insurance
contract's prior publication exclusion.
Whether the district court properly granted summary judgment
dismissing the breach of implied covenant of good faith and
fair dealing and bad faith claims on the grounds that there
was no breach of contract.
Whether Scout is entitled to attorney fees on appeal under
Idaho Code section 41-1839.
STANDARD OF REVIEW
reviewing a grant of a motion for summary judgment, this
Court applies the same standard used by the district court in
ruling on the motion. Farm Bureau Inc. Co. of Idaho v.
Kinsey, 149 Idaho 415, 418, 234 P.3d 739, 742 (2010).
"Summary judgment is properly granted when 'the
pleadings, depositions, and admissions on file, together with
the affidavits, if any, show that there is no genuine issue
as to any material fact and that the moving party is entitled
to judgment as a matter of law.'" Id.;
see Idaho R. Civ. P. 56. This Court liberally
construes all disputed facts and draws all reasonable
inferences from the record in favor of the nonmoving party.
Nettleton v. Canyon Outdoor Media, LLC, 163 Idaho
70, 72-73, 408 P.3d 68, 70-71 (2017). "The moving party
carries the burden of proving the absence of a genuine issue
of material fact." Id. at 73, 408 P.3d at 71.
Each party's motion for summary judgment is evaluated on
its own merits; the filing of cross-motions for summary
judgment does not establish the absence of genuine issues of
material fact, nor does it transform the trial court that
hears the motions into the trier of fact. Id.
A duty to defend was not triggered because the prior
publication exclusion removed any liability from Truck
district court held that the prior publication exclusion in
Truck Insurance's liability policy clearly and
unambiguously excluded coverage for the allegations found in
the OBC complaint when read broadly. The parties do not
dispute that the allegations in the OBC complaint are
advertising injuries covered by the business liability
policy, but only dispute whether the prior publication
exclusion allowed Truck Insurance to deny the duty to defend.
The relevant portions of the insurance policy pertaining to
coverage are as follows: