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Travelers Property Casualty Company of America v. Dish Network, LLC

United States District Court, C.D. Illinois, Springfield Division

March 24, 2014

TRAVELERS PROPERTY CASUALTY COMPANY OF AMERICA, f/k/a THE TRAVELERS INDEMNITY COMPANY OF ILLINOIS, Plaintiff,
v.
DISH NETWORK, LLC, Defendant.

OPINION

SUE E. MYERSCOUGH, District Judge.

This cause is before the Court on the Motion for Summary Judgment (d/e 20) filed by Plaintiff Travelers Property Casualty Company of America, f/k/a The Travelers Indemnity Company of Illinois ("Travelers"). Travelers seeks an order declaring that Travelers has no duty to defend DISH Network, LLC, ("DISH Network") under the Travelers Policy, granting Travelers' Summary Judgment Motion, and dismissing with prejudice DISH Network's Counterclaims.

Defendant DISH Network has filed a Cross-Motion for Partial Summary Judgment (d/e 24) in which DISH Network seeks an order granting the Cross-Motion and declaring that Travelers has a duty to defend DISH Network's interests in the Underlying Lawsuit captioned as United States of America and the States of California, Illinois, North Carolina, and Ohio v. DISH Network L.L.C., Case No. 3:09-03073 (C.D. Ill.) ("Underlying Lawsuit").

DISH Network's Cross-Motion for Partial Summary Judgment is GRANTED. Travelers has a duty to defend DISH Network's interests in the Underlying Lawsuit. Furthermore, Travelers' Motion for Summary Judgment is DENIED, as is Travelers' request for an order dismissing DISH Network's Counterclaims with prejudice. Additionally, DISH Network's Motion to Stay (d/e 33) is DENIED AS MOOT.

I. JURISDICTION AND VENUE

DISH Network is a Colorado Limited Liability Company with its principal place of business in Englewood, Colorado. Travelers is an insurance company incorporated in Connecticut with its principal place of business in Hartford, Connecticut. The amount in controversy exceeds $75, 000. Based on these facts, subject-matter jurisdiction exists pursuant to the Court's diversity jurisdiction. 28 U.S.C. § 1332.

Venue is proper in the Central District of Illinois, Springfield Division, because the Underlying Lawsuit that gives rise to this action was instituted against DISH Network in this Court. 28 U.S.C. § 1391.

II. LEGAL STANDARD

Summary judgment is proper if the movant shows that no genuine dispute exists as to any material fact and that the movant is entitled to judgment as a matter of law. Fed.R.Civ.P. 56(a). The movant bears the initial responsibility of informing the court of the basis for the motion and identifying the evidence that demonstrates the absence of a genuine issue of material fact. Celotex Corp. v. Catrett , 477 U.S. 317, 323 (1986). No genuine issue of material fact exists if no reasonable jury could find in favor of the nonmoving party. Brewer v. Bd. of Trs. of the Univ. of Ill. , 479 F.3d 908, 915 (7th Cir. 2007). When ruling on a motion for summary judgment, the court must consider the facts in the light most favorable to the nonmoving party, drawing all reasonable inferences in the nonmoving party's favor. Woodruff v. Mason , 542 F.3d 545, 550 (7th Cir. 2008).

III. BACKGROUND

DISH Network is a Colorado Limited Liability Company, with its principal place of business in Englewood, Colorado. Travelers is an insurance company incorporated in the state of Connecticut with its principal place of business is Hartford, Connecticut.

DISH Network was originally incorporated as EchoStar Satellite Corporation. EchoStar Satellite Corporation was then converted into a limited liability company, EchoStar Satellite LLC. EchoStar Satellite LLC was subsequently renamed DISH Network LLC. DISH Network provides direct-to-the-home satellite television products and services.

Travelers sold a commercial general liability policy to DISH Network's predecessor, EchoStar Communications Corporation, for the period August 1, 2003, to August 1, 2004. On May 11, 2012, Travelers filed a One-Count Amended Complaint seeking an order that declares Travelers has no duty to defend DISH Network's interests in the Underlying Lawsuit pursuant to the Travelers Policy. See Am. Compl., d/e 8.

DISH Network filed an Answer to the Amended Complaint on June 14, 2012. See Answer, d/e 13. In the Answer, DISH Network raises three Counterclaims. In Count I, DISH Network seeks an order declaring Travelers has a duty to defend DISH Network's interests in the Underlying Lawsuit. In Count II, DISH Network alleges that Travelers breached the insurance contract. In Count III, DISH Network alleges a bad faith failure to defend. See id.

A. The United States, California, Illinois, North Carolina, and Ohio Filed a Second Amended Complaint Against DISH Network in the Underlying Lawsuit on March 12, 2013

The Second Amended Complaint ("Underlying Complaint") in the Underlying Lawsuit that names DISH Network as the defendant was filed on March 12, 2013, in the United States District Court for the Central District of Illinois, Springfield Division. United States & the States of Cal., Ill., N.C. , & Ohio v. DISH Network, L.L.C., Case No. 3:09-cv-03073, d/e 257. The Underlying Complaint generally alleges that DISH Network, either directly or indirectly, injured consumers in the United States by making unsolicited telemarketing phone calls proscribed by state and federal laws, including the Telemarketing Sales Rule, the Telephone Consumer Protection Act (TCPA), and California, Illinois, North Carolina, and Ohio law. The plaintiffs in the Underlying Lawsuit seek injunctive relief and money damages.

B. The Commercial General Liability Policy Contains Provisions for Bodily Injury, Property Damage, Personal Injury, or Advertising Injury Liability Coverage

Travelers issued the Commercial General Liability Policy at issue, policy number TC2J-GLSA-419J7603-TIL-03, to EchoStar Communications Corporation for the period August 1, 2003, through August 1, 2004. The Travelers Policy provides that Travelers will pay for damages arising out of bodily injury or property damage caused by the insured and not expected or intended by the insured:

Coverage A. Bodily Injury and Property Damage Liability provides:
>1. Insuring Agreement.
a. We will pay those sums that the insured becomes legally obligated to pay as damages because of "bodily injury" or "property damage" to which the insurance applies. We will have the right and duty to defend any "suit" seeking those damages.
***
2. Exclusions.
This insurance does not apply to:
a. Expected or Intended Injury
"Bodily Injury" or "property damage" expected or intended from the standpoint of the insured.

D/e 25, Ex. 7 at 22 (emphasis added).

The Travelers Policy also provides that Travelers will pay for damages arising out of personal injury or advertising injury caused by the insured:

Coverage B. Personal and Advertising Injury Liability provides:
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 this insurance applies. We will have the right and duty to defend any "suit" seeking those damages.

D/e 25, Ex. 7 at 25.

However, the Travelers Policy excludes coverage for personal injury if the injury is a result of advertising done by or for the insured:

b. This insurance applies to:
(1) "Personal injury" caused by an offense arising out of your business, excluding advertising, publishing, broadcasting or telecasting done by or for you....

Id. (emphasis added).

DISH Network argues that, under the Travelers Policy, Definitions 1.b (Advertising Injury), 3 (Bodily Injury), 13.e (Personal Injury), and 15.b (Property Damage) trigger Travelers' duty to defend DISH Network's interests in the Underlying Lawsuit:

1. "Advertising injury" means 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 doing business; or
d. Infringement of copyright, title, or slogan.
***
3. "Bodily Injury" means bodily injury, sickness or disease sustained by a ...

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