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Santa's Best Craft, LLC v. St. Paul Fire and Marine Insurance Co.

September 16, 2008

SANTA'S BEST CRAFT, LLC; SANTA'S BEST CRAFT; AND H.S. CRAFT MANUFACTURING CO., PLAINTIFFS,
v.
ST. PAUL FIRE AND MARINE INSURANCE COMPANY, DEFENDANT.



The opinion of the court was delivered by: Judge Robert W. Gettleman

MEMORANDUM OPINION AND ORDER

Plaintiffs Santa's Best Craft, LLC ("SBC"), Santa's Best Craft ("Santa's Best"), and H.S. Craft Manufacturing Co. ("H.S. Craft")*fn1 have filed a two-count second amended complaint against defendant St. Paul Fire and Marine Insurance Company ("St. Paul"). That complaint alleges that defendant breached its contractual obligations under a general liability policy (the "St. Paul Policy" or "Policy") by refusing to defend plaintiffs in a lawsuit filed in the Southern District of Ohio, JLJ, Inc. et al. v. Santa's Best Craft, LLC, et al., No. C-3-02-00513 (the "JLJ action"). On July 20, 2004, this court held that defendant had a duty to defend plaintiffs in the JLJ action. Santa's Best Craft LLC et al. v. St. Paul Fire and Marine Ins. Co., 2004 WL 1730332 (N.D. Ill. July 30, 2004) ("Santa's Best I").

Defendant has now filed a motion asking this court to reconsider its July 20, 2004, decision. Additionally, the parties have filed cross-motions for summary judgment regarding defendant's duty to reimburse defense expenses of Monogram Licensing, Inc., a licensee of SBC, as well as plaintiffs' settlement expenses. For the reasons discussed below, the court: denies defendant's motion for reconsideration; grants defendant's motion for summary judgment as to the Monogram expenses; grants defendant's motion for summary judgment as to the settlement reimbursement; denies plaintiffs' motion for prejudgment interest; denies defendants' motion to strike plaintiffs' L.R. 56.1 Statement; and denies as moot defendant's motions for summary judgment as to Count II of the second amended complaint and its affirmative defenses.

FACTS*fn2

Facts Relevant to Defendant's Motion for Reconsideration

Santa's Best manufactures and distributes strings of Christmas lights under the name "STAY-ON." Defendant issued two Commercial General Liability Coverage policies to Santa's Best: No. CK01204882, for the period of January 1, 2002, through January 1, 2003 (the "2002 policy"), and No. CK0205353, for the period of January 1, 2003, through January 1, 2004 (the "2003 policy"). Both policies included the following "advertising injury" provisions:

Advertising Injury Liability. We'll pay amounts any protected person is legally required to pay as damages for covered advertising injury that:

* results from the advertising of your products, your work, or your completed work; and

* is caused by an advertising injury offense committed while this agreement is in effect.

Advertising injury means injury, other than bodily injury or personal injury, that's caused by an advertising injury offense.

Advertising injury offense means any of the following offenses:

* Libel, or slander, in or with covered material.

* Making known to any person or organization covered material that disparages the business, premises, products, services, work, or completed work of others. .

* Unauthorized use of any advertising idea or advertising material, or any slogan or title, of others in your advertising.

Advertising means attracting the attention of others by any means for the purpose of:

* seeking customers or supporters; or

* increasing sales or business.

Advertising idea means a manner or style of advertising that others use and intend to attract attention in their advertising.

Advertising material means any covered material that:

* is subject to copyright law; and

* others use and intend to attract attention in their advertising.

Slogan means a phrase that others use and intent to attract attention in their advertising. But we won't consider slogan to include a phrase used as, or in, the name of:

* any person or organization, other than you; or

* any business, or any of the premises, products, services, work, or completed work, of any person or organization, other than you.

The 2002 and 2003 policies provided certain exclusions, including:

Intellectual property. We won't cover injury or damage or medical expenses that result from any actual or alleged infringement or violation of any of the following rights or laws:

* Copyright.

* Patent.

* Trade dress.

* Trade name.

* Trade ...


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