Street Surfing v. Great Am. E&S Ins. Co.

An insurance company may deny coverage under a prior publication exclusion if the publication was used before coverage and post-coverage advertisements are substantially similar to advertisements posted before the coverage period.

Street Surfing, LLC (“Street Surfing”) began to sell an inline skateboard called the Wave in 2004. In August, 2005 Street Surfing applied for general liability insurance from Great American E&S Insurance Company (“Great American”). Great American approved the application and provided general liability insurance from August 2005 to September 2007. In 2008 Street Surfing was sued for trademark infringement, unfair competition and unfair trade practices by Ryan Noll (“Noll”), who owned the registered trademark “Streetsurfer”. Street Surfing submitted a claim for coverage from Great American but it was denied. Noll and Street Surfing settled and Street Surfing seeks a declaration that Great American was obligated to defend and settle. Initially, Great American cited the IP Exclusion and Advertising Injury Amendment (“AI Amendment”) in its policy for the basis of its denial. Later they cited the prior publication exclusion in its policy for additional basis of their denial. The prior publication exclusion disclaims coverage for “‘[p]ersonal and advertising injury’ arising out of oral or written publication of material whose first publication took place before the beginning of the policy period”. The district court concluded that the prior publication exclusion “relieved Great American of any duty to defend” and granted them summary judgment. On appeal, the panel affirmed the district court’s ruling. The panel held that while the underlying action may have fallen within the policies coverage, the prior publication exclusion applied. The panel affirmed the district court’s finding that the publication was used before coverage began because Noll’s complaint alleged advertisements were published before August, 2005. In addition, Street Surfing’s post coverage advertisements were not “fresh wrongs” that escape the exclusion because the pre-coverage advertisements and post-coverage advertisements are substantially similar. The district court’s grant of summary judgment is AFFIRMED.