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Holyoke Mutual Insurance Co. v. Vibram USA, Inc.

Supreme Judicial Court of Massachusetts, Suffolk

September 12, 2018

HOLYOKE MUTUAL INSURANCE COMPANY IN SALEM & another[1]
v.
VIBRAM USA, INC.

          Heard: February 6, 2018.

         Civil action commenced in the Superior Court Department on July 31, 2015. The case was heard by Mitchell H. Kaplan, J., on motions for summary judgment.

         The Supreme Judicial Court granted an application for direct appellate review.

          Steven P. Wright for the defendant.

          Robert L. Ciociola for Maryland Casualty Company.

          Michael D. Riseberg (David B. Stanhill also present) for Holyoke Mutual Insurance Company in Salem.

          Laura A. Foggan, of the District of Columbia, & Jon C. Cowen, for Complex Insurance Claims Litigation Association, amicus curiae, submitted a brief.

          Present: Gants, C.J., Lenk, Gaziano, Lowy, Budd, Cypher, & Kafker, JJ.

          LOWY, J.

         This appeal stems from an insurance coverage dispute between the insured, Vibram USA, Inc. (Vibram), [2] and two insurers, Holyoke Mutual Insurance Company in Salem and Maryland Casualty Company, which had issued several general commercial liability policies (the policies) to Vibram.[3] The heirs of the late, famed marathon runner Abebe Bikila sued Vibram in Federal court for improperly using the name "Bikila" to advertise Vibram's running shoes. Vibram tendered the defense to the insurers, who denied coverage on the ground that a provision in the policies covering improper use of another's advertising idea did not cover the claims raised in this action. The insurers, however, agreed to fund Vibram's defense under a reservation of rights. The insurers then commenced an action in the Superior Court seeking a declaration that they were not obligated to defend Vibram in the underlying action. A Superior Court judge granted the insurers' motion for summary judgment on that ground. Vibram appealed.

         We conclude that the allegations in the underlying complaint were sufficient to trigger the insurers' duty to defend under the provision of the policies covering the use of another's advertising idea, and therefore, the insurers have an obligation to defend Vibram in the underlying action. Accordingly, we reverse the allowance of the insurers' motion for summary judgment.[4]

         1. Factual background and procedure.

         a. The policies.

         Between 2009 and 2011, Vibram, a producer of minimalistic shoes that simulate walking and running barefoot, purchased from the insurers the policies, which, among other things, provide coverage for "personal and advertising injury liability." With certain enumerated exceptions, the policies state that the insurers have a duty to defend Vibram from any suit seeking damages for covered losses, particularly for claims seeking damages against Vibram for "advertising injury."

         The particular form of advertising injury at issue in this case is the one described in clause (f) of the policies as "[t]he use of another's advertising idea in your 'advertisement.'" The policies define "advertisement" as a "notice that is broadcast or published to the general public or specific market segments about your foods, products or services for the purpose of attracting customers or supporters." The policies do not define the term "advertising idea."

         b. The ...


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