FEDERAL DISTRICT COURT FINDS INSURER LIABILE FOR BREACH OF DUTY TO DEFEND
Primed Pharms. LLC v. Starr Indem. & Liab. Co.
2023 U.S. Dist. LEXIS 44673 (S.D.N.Y. 2023)
Stern & Schurin’s client was sued for trademark and trade dress infringement. After its insurer refused to reimburse its insured for the costs of its defense, Stern & Schurin sued the insurer for breach of the duty to defend.
This case involved the “Prior Publication” policy exclusion, which precludes insurance coverage for personal and advertising injury that arose out of “oral or written publication of material whose first publication took place before the beginning of the policy period.” Here, even though the plaintiff in the underlying litigation alleged that the insured published infringing material before the start of the policy period, Stern & Schurin was still able to convince the Court that whether the insured actually published a relevant advertisement before the policy period began was a genuine issue of fact which required the insurer to defend its insured.
Agreeing with Stern & Schurin, the Court found that the insurer had failed to establish that the Prior Publication exclusion applied as a matter of law. And, correspondingly, because the insurer did not meet that burden and the possibility of coverage still existed, the insurer was obligated to provide a defense. On March 16 , 2023, Magistrate Judge Sarah L. Cave issued a comprehensive opinion awarding summary judgment. The Court then later issued another opinion ordering the insurer to reimburse the insured for the majority of its defense costs plus pre-judgment interest.