Canadian Insurance v. Rusty's Island Chip Co.
Opinion
Opinion
Vogel, J.
In this declaratory relief action brought by an insurance company against two third party claimants that had obtained a liability judgment against the carrier’s insured, the trial court held that the claimants, having been dragged into this coverage dispute by the carrier, had no standing to litigate the carrier’s waiver of its right to deny coverage. We reverse.
Background
Rusty’s Island Chip Company (a partnership comprised of Rusty Vaster-ling and Carol Mersch) distributes potato chips under its registered trademarks, “Rusty’s Island Chips” and “Island Chips.” Aloha Pacific, Inc., is Rusty’s exclusive licensee. In 1989, Rusty’s was having some financial problems and it suspended its operations (but it did not abandon or otherwise dispose of its trademarks). At about that time, Jay Feinberg and Gary Quick, having failed in their efforts to buy Rusty’s, started a new potato chip company, Island Industries, Inc. Island then made various offers to Vaster-ling to purchase or obtain by assignment all of Rusty’s trademarks but Vasterling refused to sign anything. Island nevertheless started using Rusty’s trademarks and, when asked to stop, refused.