Design Basics LLC v. Campbellsport Bldg. Supply Inc.

99 F.Supp.3d 899

DESIGN BASICS LLC, Plaintiff

v. CAMPBELLSPORT BUILDING SUPPLY INC., Berlin Building Supply Inc., Kiel Building Supply Inc., Drexel Inc., Drexel Building Supply Inc., Joel M. Fleischman also known as Joel C. Fleischman, and Albert J. Fleischman, Defendants and Counterclaim–DefendantsandWilson Mutual Insurance Company, Intervenor Defendant and Counterclaimant.

Case No. 13–C–560.

United States District Court, E.D. Wisconsin.

Signed April 10, 2015.

Dana A. LeJune, Dana Andrew LeJune Attorney at Law, Houston, TX, Michael T. Hopkins, Hopkins McCarthy LLC, Milwaukee, WI, for Plaintiff.

Barrett J. Corneille, Chester A. Isaacson, Shannon A. Buttchen, David J. Pliner, Corneille Law Group, Madison, WI, John P. Fredrickson, Boyle Fredrickson SC, Milwaukee, WI, for Defendants and Counterclaim–Defendants.

Katelyn P. Sandfort, Ryan R. Graff, Nash Spindler Grimstad & McCracken LLP, Manitowoc, WI, for Intervenor Defendant and Counterclaimant.

DECISION AND ORDER

RUDOLPH T. RANDA, District Judge.

This Decision and Order addresses summary judgment motions filed by Intervenor Defendant and Counterclaimant Wilson Mutual Insurance Company (“Wilson Mutual”) (ECF No. 41) and the Defendants, Campbellsport Building Supply Inc. (“Campbellsport”), Berlin Building Supply Inc. (“Berlin”), Kiel Building Supply Inc. (“Kiel”), Drexel Inc. (“Drexel”), Drexel Building Supply Inc. (“Drexel Building”), Joel M. Fleischman also known as Joel C. Fleischman (“Joel”),¹ and Albert J. Fleischman (“Albert”) (collectively the “Defendants”). (ECF No. 62.) Also addressed are a motion to compel (ECF No. 82), a motion for partial judgment on the pleadings (ECF No. 73), and an expedited non-dispositive motion for leave to file a supplemental reply brief (ECF No. 96), all filed by the Defendants. The latter motion to file a supplemental reply is granted and that brief has been considered.

SUMMARY JUDGMENT

Wilson Mutual seeks declaratory judgment that there “is no insurance coverage” for Design Basics' allegations against the Defendants. (Mot. 1.) By cross-motion, filed almost five months after Wilson Mutual's and after Design Basics had filed a First Amended Complaint (“Amended Complaint”) (ECF No. 52), the Defendants seek declaratory judgment that Wilson Mutual is obligated to indemnify them for those acts of infringement occurring from March 21, 2010, through at least April 1, 2014, and is obliged to provide a defense for all infringement claims alleged in the Amended Complaint.

Summary Judgment Standard

Summary judgment should be granted if “the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed.R.Civ.P. 56(a). The plain language of the rule “mandates the entry of summary judgment, after adequate time for discovery and upon motion, against a party who fails to make a showing sufficient to establish the existence of an element essential to that party's case, and on which that party will bear the burden of proof at trial.” Celotex Corp. v. Catrett, 477 U.S. 317, 322, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). The Court must accept as true the evidence of the nonmovant and draw all justifiable inferences in its favor. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 255, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). Summary judgment is appropriate only if, on the record as a whole, a rational trier of fact could not find for the non-moving party. Rogers v. City of Chi., 320 F.3d 748, 752 (7th Cir.2003). When confronted by cross-motions for summary judgment, “inferences are drawn in favor of the party against whom the motion under consideration was made.” McKinney v. Cadleway Prop., Inc., 548 F.3d 496, 500 (7th Cir.2008).

Relevant Facts²

Plaintiff Design Basics LLC (“Design Basics”) is in the business of designing and promoting house plans. Campbellsport, Berlin, Kiel, Drexel, and Drexel Building (the “Defendant Companies”) were or are in the business of providing building materials and services to professional contractors and homeowners. Albert was the president of Campbellsport and Drexel from their inception until January 1997 when Joel became president of the two companies. Joel was also the president of Berlin and Kiel which were incorporated in 1999 and 2003, respectively. In early 2013 the four companies merged into Drexel Building, and Joel is its president.

Wilson Mutual issued business and commercial umbrella policies to the Defendant Companies beginning in March 2008:

a. Businessowners Policy No. BP218869, issued to Campbellsport from March 21, 2008 to March 21, 2009.

b. Commercial Umbrella Policy No. CU218871, issued to Campbellsport from March 21, 2008 to March 21, 2009.

c. Businessowners Policy No. BP218869, issued to Campbellsport, Berlin, Kiel, and Drexel from March 21, 2009 to March 21, 2010.

d. Commercial Umbrella Policy No. CU218871, issued to Campbellsport from March 21, 2009 to March 21, 2010.

e. Business insurance Policy No. 32.00407–80, issued to Campbellsport, Berlin, Kiel, and Drexel from March 21, 2010 to April 2, 2013 (includes both commercial general liability coverage and umbrella coverage).

f. Business insurance Policy No. 32.013280–30, issued to Drexel Building from April 1, 2013 to April 1, 2014 (includes both commercial general liability coverage and umbrella coverage).

Policy Provisions

March 21, 2008–March 21, 2009

The March 21, 2008 to March 21, 2009, businessowner's policy contains following initial grants of coverage:

PRINCIPAL COVERAGES

“We” provide insurance for the following coverages indicated by a specific “limit” or premium charge on the “declarations.”

COVERAGE L—BODILY INJURY LIABILITY/ PROPERTY DAMAGE LIABILITY

“We” pay all sums which an “insured” becomes legally obligated to pay as “damages” due to “bodily injury” or “property damage” to which this insurance applies. The “bodily injury” or “property damage” must be caused by an “occurrence” which takes place in the “coverage territory”, and the “bodily injury” or “property damage” must occur during the policy period.

(Sandfort Aff., Ex. I pt. 2, AAIS BP–200 Ed. 1.0, at 28 of 42.) (ECF No. 4410.)

It further provides:

COVERAGE P—PERSONAL INJURY LIABILITY/ ADVERTISING INJURY LIABILITY

“We” pay all sums which an “insured” becomes legally obligated to pay as “damages” due to “personal injury” or “advertising injury” to which this insurance applies.

1. “We” cover:

a. “personal injury” arising out of an offense committed in the course of “your” business, excluding advertising, publishing, broadcasting, or telecasting done by “you” or on “your” behalf; and

b. “advertising injury” arising out of an offense committed in the course of advertising “your” goods, products, or services.

(Id., at 29 of 42.) (Emphasis added).

The policy defines advertising injury as follows:

3. “Advertising injury” means injury (other than “bodily injury,” “property damage”, or “personal injury”) arising out of one or more of the following offenses:

....

c. infringement of copyright, title, slogan, trademark, or trade name.

(Id., at 24 of 42.) It also contains the following exclusion:

ADDITIONAL EXCLUSIONS THAT APPLY ONLY TO PERSONAL INJURY AND/OR ADVERTISING INJURY

1. “We” do not pay for “personal injury” or “advertising injury” arising out of willful violation of an ordinance, statute, or regulation by an “insured” or with the “insured's” consent.

(Id., at 34 of 42.)

The March 21, 2008 to March 21, 2009, umbrella policy contains the following initial grant of coverage:

Coverage E—Excess Liability

1. “We” pay, up to “our” “limit”, all sums in excess of “underlying insurance” for which an “insured” becomes legally obligated to pay as “damages” to which this insurance applies.

This insurance applies only to:

a. “bodily injury” or “property damage”:

1) that is caused by an “occurrence” which takes place in the “coverage territory”;

2) that occurs during the policy period of this policy; and

3) that is covered by “underlying insurance”;b. “personal injury” arising out of an offense committed in the course of “your” business, excluding advertising, publishing, broadcasting, or telecasting done by “you” or on “your” behalf. The offense must be:

1) committed within the “coverage territory;”

2) committed during the policy period of this policy; and

3) covered by “underlying insurance”;

c. “advertising injury” arising out of an offense committed in the course of advertising “your” goods, products, or services.

(Id., Ex. J, AAIS UM 0200 04 00, at 8 of 21.) (ECF No. 44–11.) (Emphasis added). It also provides:

Coverage U—Umbrella Liability

1. “We” pay, up to “our” “limit” all sums in excess of either the Retained Limit shown on the “declarations” or the amount payable under “other insurance”, whichever is greater, for which an “insured” becomes legally obligated to pay as “damages” because of “bodily injury”, “property damage”, “personal injury”, or “advertising injury” to which this insurance applies.

....

b. This insurance also applies to:

2) “advertising injury” arising out of an offense committed in the course of advertising “your” goods, products or services.

(Id., at 9–10 of 21.) (Emphasis added).

The policy defines “advertising injury” as follows:

3. “Advertising injury” means injury, other than “bodily injury,” “personal injury,” or “property damage,” arising out of one or more of the following offenses:

c. infringement of copyright, title, slogan, trademark, or trade name.

(Id., at 2 of 21.) It contains an exclusion with respect to coverage U as follows:

EXCLUSIONS THAT APPLY ONLY TO COVERAGE U

25. “We” do not pay for “personal injury” or “advertising injury” arising out of willful violation of an ordinance, statute, or regulation by an “insured” or with an “insured's” consent.

(Id., at 15 of 21.)

Policy Provisions

March 21, 2009–March 21, 2010

The March 21, 2009 to March 21, 2010, businessowners policy has the following initial grant of coverage:

COVERAGE L—BODILY INJURY LIABILITY AND PROPERTY DAMAGE LIABILITY

1. Insuring Agreement

a. “We” pay all sums which an “insured” becomes

...