Trenches, Inc. v. Hanover Insurance Co
Opinion
Opinion
MEMORANDUM
Trenches appeals the district court’s judgment dismissing its suit against Hanover Insurance Company (“Hanover”), Trenches’s liability insurer. Trenches claims that Hanover wrongfully refused to defend it against a third-party lawsuit. We have jurisdiction under 28 U.S.C. § 1291 , and we affirm.
The policy’s breach of contract exclusion precluded coverage of any potentially covered claim “arising out of’ Trenches’s alleged breach of the Franchise Agreements and Settlement Agreement. In California, the phrase “arising put of’ is construed broadly, even if in an exclusion, to mean “originating from,” “flowing from,” “incident to,” or “having a connection with.” Davis v. Farmers Ins. Group, 134 Cal.App.4th 100, 106-07 , 35 Cal.Rptr.3d 738 (2005) (quoting Fibreboard Corp. v. Hartford Accident & Indem. Co., 16 Cal.App.4th 492, 503-04 , 20 Cal.Rptr.2d 376 (1993)). Here, the underlying complaint filed against Trenches specifically alleged that Trenches violated its contractual obligations by continuing to use the third party’s mark and trade dress. Thus, the claims against Trenches fall within the exclusion for claims “arising out of’ a breach of contract.