Everett Associates, Inc. v. Transcontinental Insurance

REVISED ORDER GRANTING DEFENDANTS’ MOTIONS FOR SUMMARY JUDGMENT

I. INTRODUCTION

Plaintiffs Everett Associates, Inc. (“Everett”.) and Donald Payne (“Payne”) bring the above-captioned action against Defendant insurance companies Transcontinental Insurance Company (“Transcontinental”) and American National Fire Insurance Company (“American”) for claims resulting from their réfusal to defend and indemnify Plaintiff in an underlying patent infringement lawsuit.

In this third round of summary judgment motions, Defendants seek summary judgment on Plaintiffs’ claims for (1) negligence; (2) negligent infliction of emotional distress; (3) emotional distress damages for breach of contract; (4) indemnification; and (5) recovery of the Clark settlement as damages for breach of contract.

II. BACKGROUND

The underlying patent case, Clark v. Living Earth Crafts, No. 97-351 (C.D.Cal.1997) (the “Clark action”), involved a suit by Roland Clark against Everett, dba Living Earth Crafts, alleging that Everett advertised, offered to sell, manufactured, and sold portable massage tables that infringed a patent owned by Clark. Everett tendered the defense of this action to Defendant Transcontinental on…