Michael Taylor Designs, Inc. v. Travelers Property Casualty Co. of America

ORDER RE CROSS-MOTIONS FOR SUMMARY JUDGMENT

I. INTRODUCTION

This is an insurance coverage dispute. Plaintiff Michael Taylor Designs, Inc. (“MTD”), a furniture retailer, was sued in an underlying action for allegedly infringing the trade dress of one of its former suppliers by offering “cheap synthetic knockoffs” of that supplier’s wicker furniture products. Defendant Travelers Property Casualty Company declined to defend MTD under a commercial liability policy it had issued, until after the complaint in the underlying action was amended to allege expressly a claim for “disparagement,” as well as trade dress infringement. In this action, MTD seeks a determination that Travelers had a duty to defend even under the original allegations of the underlying complaint.

The insurance policy at issue includes an endorsement entitled “Web Xtend Liability,” that expressly deletes a provision found in the body of the policy form that otherwise would have provided coverage for trade dress infringement, and instead promises coverage only where the insured has “disparaged” the goods, products, or services of another. The primary question presented in this case, therefore, is whether the…