El-Com Hardware, Inc. v. Fireman's Fund Insurance

Plaintiffs and appellants El-Com Hardware, Inc. (El-Com), Paul Zamberg, and Elie Vrobel appeal a summary judgment granted in favor of defendant and respondent Fireman’s Fund Insurance Company on appellants’ action for breach of an insurance contract and breach of the covenant of good faith and fair dealing. They contend respondent was obligated to defend them under the insurance policy’s advertising injury coverage after they were sued in federal court for “trade dress” infringement.

Background

Appellant El-Com manufacturers, distributes, advertises and sells hardware and fasteners for cases, cabinets, enclosures and exhibits. Its customer base includes consumers, distributors, and dealers. One of its products is an automatically positioned latch assembly. Appellant Zamberg is president of El-Com. Appellant Vrobel is an officer of El-Com.

I. The Policies

On April 1, 1998, respondent issued a one-year commercial general liability policy to appellants. The policy was renewed the following year, effective April 1, 1999, to April 1, 2000.

Pertinent to this appeal, the policies provided coverage for “Advertising Injury Liability,” whereby respondent agreed to “pay those…