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11/27/96 B.H. SMITH v. ZURICH INSURANCE COMPANY

November 27, 1996

B.H. SMITH, INC., AN ILLINOIS CORPORATION, PLAINTIFF-APPELLEE,
v.
ZURICH INSURANCE COMPANY, A FOREIGN STOCK INSURANCE COMPANY, DEFENDANT-APPELLANT.



Appeal from the Circuit Court of Cook County. Honorable Kenneth L. Gillis, Judge Presiding.

Released for Publication January 15, 1997.

The Honorable Justice Gallagher delivered the opinion of the court. Tully, P.j., and Greiman, J., concur.

The opinion of the court was delivered by: Gallagher

JUSTICE GALLAGHER delivered the opinion of the court:

This appeal arises out of an insurance coverage dispute between plaintiff, B.H. Smith, Inc. (Smith) and defendant, Zurich Insurance Company (Zurich). Zurich appeals from trial court orders granting summary judgment in favor of Smith, denying Zurich's motion for summary judgment and entering judgment against Zurich in the amount of $384,190.84. On appeal, Zurich contends that the trial court erred in finding that an underlying complaint alleging trademark infringement and unfair competition triggered Zurich's duty to defend and indemnify Smith under its advertising injury coverage. We affirm.

Smith imports women's handbags and accessories and sells such items to retailers. Smith is insured under a commercial general liability policy issued by Zurich. The relevant portions of the insurance policy provide:

1. Insuring Agreement

a. We will pay those sums that the insured becomes legally obligated to pay as damages because of "personal injury" or "advertising injury" to which the insurance applies . . . We will have the right and duty to defend any "suit" seeking those damages.

The policy defines "advertising injury" as:

1. Injury arising out of one or more of the following offenses:

a. Oral or written publication of material that slanders or libels a person or organization or disparages a person's or organization's goods, products or services.

b. Oral or written publication of material that violates a person's right of privacy.

c. Misappropriation of advertising ideas or style of ...


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