Iolab Corp. v. Seaboard Surety Co.

OVERVIEW

In this diversity action, plaintiff-appellant Iolab Corporation (“Iolab”) seeks indemnification from its primary and excess insurers to satisfy a settlement entered into in a prior patent infringement action (the “Jensen loss”). Iolab appeals the district court’s decision to dismiss the claims against, or grant summary judgment in favor of, the insurers. Iolab claims that the Jensen loss is covered by a provision in the insurance policies protecting Iolab against liability for acts of piracy arising out of or committed in advertising. Iolab also contends that it was not required to exhaust its primary coverage nor to establish that excess coverage was triggered by the Jensen loss before bringing suit against its excess insurers. Although the district court did not state the reasons for its conclusions, we affirm. We hold that the district court properly dismissed the claims against or granted summary judgment in favor of the primary insurers because the Jensen loss was not covered under the policies. In addition, we affirm the district court’s decision with respect to the excess insurers on the separate and independent ground that under California law, Iolab was…