Evanston Ins. Co. v. Tristar Prods., Inc.

537 F.Supp.3d 798

EVANSTON INSURANCE COMPANY, Plaintiff,

Hiscox Dedicated Corporate Member Limited as Representative Member of Syndicate 33 at Lloyd's, Plaintiff/Intervenor,

Westchester Surplus Lines Insurance Company, Plaintiff/Intervenor,

v.TRISTAR PRODUCTS, INC., Defendant.

No. 5:20-cv-01934

United States District Court, E.D. Pennsylvania.

Filed May 3, 2021

Marc Penchansky, Edward M. Koch, White & Williams LLP, Philadelphia, PA, for Plaintiff.

Margo E. Meta, White & Williams LLP, Philadelphia, PA, Michael O. Kassak, White & Williams LLP, Cherry Hill, NJ, for Plaintiff/Intervenor Westchester Surplus Lines Insurance Company.

Elaine Whiteman Klinger, Kennedys, Philadelphia, PA, for Plaintiff/Intervenor Hiscox Dedicated Corporate Member Limited as Representative Member of Syndicate 33 at Lloyd's.

Kevin M. Toth, Toth Law LLC, Newtown Square, PA, for Defendant.

OPINION

Westchester's Motion for Judgment on the Pleadings, ECF No. 33—GRANTED

Tristar's Cross-Motion for Judgment on the Pleadings, ECF No. 39—DENIED

Evanston's Motion for Judgment on the Pleadings, ECF No. 34—GRANTED

Tristar's Cross-Motion for Judgment on the Pleadings, ECF No. 38—DENIED

Hiscox's Motion for Judgment on the Pleadings, ECF No. 36—GRANTED

Tristar's Cross-Motion for Judgment on the Pleadings, ECF No. 40—DENIED

Joseph F. Leeson, Jr., United States District Judge

I. INTRODUCTION

This is a declaratory judgment action stemming from a dispute over three insurance providers’ alleged obligations to defend and indemnify their insured, Defendant Tristar Products, Inc. ("Tristar"), in underlying litigation. Tristar has been sued in the U.S. District Court for the Central District of California for its marketing and manufacturing of allegedly defective cookware. All three insurance providers—Evanston Insurance Company, the original Plaintiff in this action ("Evanston"), as well as Intervenor-Plaintiffs Westchester Surplus Lines Insurance Company ("Westchester") and Hiscox Dedicated Corporate Member Limited as Representative Member of Syndicate 33 at Lloyd's ("Hiscox")—sold commercial liability insurance policies to Tristar. The providers now argue these policies do not obligate them to defend or indemnify Tristar in the Central District of California litigation. Tristar disagrees. Each party has filed cross-motions for judgment on the pleadings, with each party seeking a declaration from this Court as to their respective obligations and entitlements relative to the underlying litigation under the several insurance policies. For the reasons set forth below, the insurance providers’ motions for judgment on the pleadings are granted, and Tristar's cross-motions for judgment on the pleadings are denied.

II. BACKGROUND

A. The Underlying Litigation

On or around March 3, 2020, three individual plaintiffs filed a putative class action¹ complaint against Tristar in the U.S. District Court for the Central District of California. See generally ECF No. 1 in Partida, et al. v. Tristar Products, Inc. , Case No. 5:20-cv-00436 (the "Underlying Complaint").² Tristar is a New Jersey Corporation and a lead manufacturer and marketer of "as seen on TV" products. See id. ¶¶ 33-34. Plaintiffs in the underlying action allege that Tristar manufactured, marketed, and distributed a line of purportedly non-stick cookware called "Copper Chef Signature Cookware." Id. ¶¶ 1-2. Plaintiffs aver that "[c]ontrary to [Tristar's] representations ... and as evidenced by an endless stream of consumer complaints, Copper Chef Pans do not—and cannot—work as advertised." Id. ¶ 3. In particular, Plaintiffs claim that "Copper Chef Pans [ ] lose their non-stick functionality shortly after purchase, and scratch, chip and peel, leaving customers with an overpriced Pan to which everything sticks."³ Id. Plaintiffs state that Tristar intentionally and knowingly misrepresented material facts and actively deceived purchasers of Copper Chef Pans. See id. ¶¶ 4, 154-157, 160-162, 177, 181. According to Plaintiffs, a stream of negative product reviews and online criticism evidences the fraudulent, deceptive, and unfair nature of Tristar's marketing representations as to the Copper Chef Pans.⁴ See id. ¶¶ 49-53.

Plaintiffs assert the following ten causes of action in the underlying litigation based on the above-summarized factual allegations: (1) violation of the Magnuson-Moss Warranty Act, 15 U.S.C. § 2301, et seq. ; (2) breach of express warranty; (3) breach of implied warranty of merchantability; (4) unjust enrichment; (5) violation of the California unfair competition law, Cal. Bus. & Prof. Code § 17200, et seq. (on behalf of the California class); (6) violation of the California consumers legal remedies law, Cal. Civ. Code § 1750, et seq. (on behalf of the California class); (7) violation of the California false advertising law, Cal. Bus. & Prof. Code § 17500, et seq. (on behalf of the California class); (8) violation of New York's false and deceptive business practices law, N.Y. Gen. Bus. Law § 349 (on behalf of the New York class); (9) violation of New York's false advertising law, N.Y. Gen. Bus. Law § 350 (on behalf of the New York class); and (10) violation of Pennsylvania's unfair trade practices and consumer protection law, 73 Pa. Cons. Stat. § 201-1, et seq. (on behalf of the Pennsylvania class).

B. The Relevant Insurance Policies

1. The Westchester Policies

Westchester issued to Tristar two commercial general liability insurance policies under policy numbers G237603609 001 and G27603609 002 with consecutive policy terms of June 1, 2015 to June 1, 2016 (the "2015-16 Westchester Policy") and June 1, 2016 to June 1, 2017 (the "2016-17 Westchester Policy") (collectively, the "Westchester Policies"). The 2015-16 Westchester Policy provides in relevant part as follows:

COVERAGE A – BODILY INJURY AND PROPERTY DAMAGE LIABILITY

1. Insuring Agreement

a. We will pay those sums that the insured becomes legally obligated to pay because of "bodily injury" or "property damage" to which this insurance applies. We will have the right and duty to defend the insured against any "suit" seeking those damages. However, we will have no duty to defend the insured against any "suit" seeking damages for "bodily injury" or "property damage" to which this insurance does not apply ....

* * *

b. This insurance applies to "bodily injury" and "property damage" only if:

(1) The "bodily injury" or "property damage" is caused by an "occurrence" that takes place in the "coverage territory;" [and]

(2) The "bodily injury" or "property damage" occurs during the policy period ....

ECF No. 27 at 8.⁵ The 2015-16 Westchester Policy further provides as follows:

COVERAGE B – PERSONAL AND ADVERTISING INJURY LIABILITY

1. Insuring Agreement

a. We will pay those sums that the insured becomes legally obligated to pay as damages because of "personal and advertising injury" to which this insurance applies. We will have the right and duty to defend the insured against any "suit" seeking those damages. However, we will have no duty to defend the insured against any "suit" seeking damages for "personal and advertising injury" to which this insurance does not apply ....

* * *

b. This insurance applies to "personal and advertising injury" caused by an offense arising out of your business but only if the offense was committed in the "coverage territory" during the policy period.

ECF No. 27 at 13.

The 2016-17 Westchester Policy provides as follows:

B. Insuring Agreements

Insuring Agreements 1. of Section I, Coverage A. Bodily Injury and Property Damage Liability and Coverage B Personal and Advertising Injury Liability, are deleted in their entirety and replaced by the following:

1. Insuring Agreement.

a. We will pay those sums that are excess of the Self-Insured Retention stated in Item 5. of the Declarations that the insured becomes legally obligated to pay as damages because of "bodily injury", "property damage", or "personal and advertising injury" to which this insurance applies. But:

* * *

(2) We will have no duty to defend the insured against any "suit" seeking damages for "bodily injury", "property damage", or "personal and advertising injury" except as described in Part C – Defense and Settlement of this Endorsement.

(3) We will have no duty to defend the insured against any "suit" seeking damages for "bodily injury", "property damage", or "personal and advertising injury" to which this insurance does not apply.

* * *

b. This insurance applies to "bodily injury" and "property damage" only if:

(1) The "bodily injury" or "property damage" is caused by an "occurrence" that takes place in the "coverage territory;" [and]

(2) The "bodily injury" or "property damage" occurs during the policy period ....

ECF No. 27-1 at 67-68.

Both Westchester Policies state that " ‘[b]odily injury’ means bodily injury, sickness or disease sustained by a person, including death resulting from any of these at any time." ECF No. 27 at 20; ECF No. 27-1 at 21. Both further provide that " ‘[o]ccurrence’ means an accident, including continuous or repeated exposure to substantially the same general harmful conditions." ECF No. 27 at 22; ECF No. 27-1 at 23. Both Policies define "[p]roperty damage" as follows:

a. Physical injury to tangible property, including all resulting loss of use of that property. All such loss of use shall be deemed to occur at the time of the physical injury that caused it; or

b. Loss of use of tangible property that is not physically injured. All such loss of use shall be deemed to occur at the time of the "occurrence" that caused it.

ECF No. 27 at 22; ECF No. 27-1 at 23.

The Westchester Policies also contain numerous exclusions to coverage. With respect to bodily injury and property damage liability, the Policies provide as follows:

2. Exclusions

This insurance does not apply to:

a. Expected Or Intended Injury

"Bodily injury" or "property damage" expected or intended from the standpoint of the insured. This exclusion does not apply to "bodily injury" resulting from the use of reasonable force to

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