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Aix Specialty Insurance Co. v. Dginguerian

United States District Court, S.D. Florida

September 20, 2019

AIX SPECIALTY INSURANCE COMPANY, Plaintiff,
v.
AMY DGINGUERIAN, et al, Defendants.

          ORDER

          CECILIA M. ALTONAGA UNITED STATES DISTRICT JUDGE

         THIS CAUSE came before the Court on Plaintiff/Counter-Defendant, AIX Specialty Insurance Company's Motion for Final Summary Judgment [ECF No. 61], submitted with a Statement of Material Facts ("PL's SOF") [ECF No. 62]. The Court has carefully reviewed the Complaint [ECF No. 1], the parties' submissions, [1] the record, and applicable law.

         I. BACKGROUND

         This is an insurance coverage dispute. (See generally Mot.) Plaintiff seeks summary judgment declaring its Commercial Lines Policy ("Insurance Policy")[2] [ECF No. 1-3] does not provide coverage for the claims asserted in an underlying lawsuit - Dginguerian v. Porky's Cabaret, Case No. 18-cv-22231 (S.D. Fla. filed June 5, 2018) ("Underlying Litigation") - brought by the Model Defendants against Cabaret. (See Mot. 2). Cabaret and the Model Defendants argue the Model Defendants' claims are covered. (See generally Models' Resp.; Cabaret Resp.).[3]

         A. The Underlying Litigation

         The Model Defendants commenced the Underlying Litigation against Cabaret on June 5, 2018, each stating separate claims for (1) violations of the Lanham Act, 15 U.S.C. section 1125(a), for "False Advertising" and "False Endorsement" (Counts I and II); (2) violation of section 540.08, Florida Statutes, "Right of Publicity" and "Unauthorized Misappropriation of Name/Likeness" (Count III); (3) violation of the "Common Law Right of Publicity" for "Unauthorized Misappropriation of Name and Likeness" (Count IV); (4) conversion (Count V); and (5) unjust enrichment (Count VI). (PL's SOF ¶ 3; see generally Complaint, Underlying Litigation (hereinafter the "Underlying Complaint") [ECF No. 1] ¶ 18-cv-22231). The Model Defendants claim Cabaret used their images to promote its business without their authorization. (See PL's SOF ¶ 4). The parties agree the claims of only one Model Defendant - Sarah Underwood - fall within the time period covered by the Insurance Policy. (See Cabaret Resp. 2; Models' Resp. 4 n.2; Underlying Complaint 221-233).[4]

         Ms. Underwood is a model, actress, and television host. (See Underlying Compl. ¶¶ 281, 283). She has modeled for Playboy magazine and appeared in films and several episodes of reality television programs. (See Id . ¶¶ 282-283). Ms. Underwood alleges Cabaret posted a stolen image of her to its Facebook page on August 26, 2014, to advertise for a "back to school party, " implying Ms. Underwood was a stripper at Cabaret. (Id. ¶ 286). She further alleges Xcitement magazine posted an image of her on August 26, 2014 as part of an advertisement for Cabaret, insinuating Ms. Underwood was a stripper for Cabaret. (See id.). According to Ms. Underwood, Cabaret did not seek permission to use her image, and she was never hired by nor compensated to advertise for Cabaret. (See Id . ¶¶ 287-290).

         B. The Insurance Policy

         From October 15, 2013 through October 15, 2014, Cabaret was insured under the Insurance Policy issued by Plaintiff. (See PL's SOF ¶ 1). Under the Insurance Policy, Plaintiff must pay for damages the insured "becomes legally obligated to pay . . . because of 'personal and advertising injury.'" (Insurance Policy § I.B.I.a. (alteration added)). The Insurance Policy defines "personal and advertising injury" to include injury arising out of:

d. Oral or written publication, in any manner, of material that slanders or libels a person or organization or disparages a person's or organization's goods, products or services;
e. Oral or written publication, in any manner, of material that violates a person's right of privacy;
f. The use of another's advertising idea in your "advertisement"; or
g. Infringing upon another's copyright, trade dress or slogan in your "advertisement".

(Id. §§ V.l4.d-g). Plaintiff has the "right and duty to defend" the insured against any action seeking damages for personal or advertising injury. (Id. LB. 1 .a).

         As with all policies, there are several exclusions to coverage. (See generally Id . § LB.2). Under the "Infringement of Copyright Patent, Trademark or Trade Secret, " exclusion ("IP Exclusion"), insurance does not apply to "[p]ersonal and advertising injury" arising out of the infringement of copyright, patent, trademark, trade secret or other intellectual property rights." (Id. I.B.2.i (alteration and emphasis added)).

         There are exceptions to the IP Exclusion. First, "other intellectual property rights do not include the use of another's advertising idea in [insured's] 'advertisement.'" (Id.). Second, the IP Exclusion does not apply to "infringement, in [insured's] 'advertisement', of copyright, trade dress or slogan." (Id. (alterations added)).

         Read together, coverage for personal advertising injury includes damages arising from (1) oral or written publication that slanders or libels a person or organization or disparages a person's or organization's goods, products or services; (2) violations of privacy; (3) use of another's idea in the insured's advertisement; and (4) copyright, trade dress or slogan infringement. And read together, coverage for personal advertising injury excludes damages arising from (1) patent, trade mark, and trade secret infringement; and (2) other intellectual property rights. (See Id . §§ I.B.1.b, I.B.2.i, V.15).

         C. The Motion

         As noted, Plaintiff filed its Motion for Final Summary Judgment on May 17, 2019. (See generally Mot.) Neither Cabaret nor the Model Defendants filed cross-motions for summary judgment. On July 9, 2019, Cabaret filed its Sur-Reply to Plaintiffs Motion requesting the Court "deny in its entirety [Plaintiffs] Motion for Final Summary Judgement and, instead, grant summary judgment to Cabaret and order [Plaintiff] to defend and indemnify Cabaret in the Underlying Litigation." (Id. 8 (alteration added)). No party suggests there are any triable issues of fact.

         II. SUMMARY ...


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