Hewlett-packard Company v. Ace Property & Casualty Insura

FILED
NOT FOR PUBLICATION MAY 12 2010
MOLLY C. DWYER, CLERK
UNITED STATES COURT OF APPEALS U.S . CO UR T OF AP PE A LS
FOR THE NINTH CIRCUIT
HEWLETT-PACKARD COMPANY, No. 08-16342
Plaintiff - Appellee, D.C. No. 5:99-cv-20207-JW
v.
MEMORANDUM *
ACE PROPERTY & CASUALTY
INSURANCE COMPANY,
Defendant - Appellant.
HEWLETT-PACKARD COMPANY, No. 08-16434
Plaintiff - Appellant, D.C. No. 5:99-cv-20207-JW
v.
ACE PROPERTY & CASUALTY
INSURANCE COMPANY,
Defendant - Appellee.
Appeal from the United States District Court
for the Northern District of California
James Ware, District Judge, Presiding
*
This disposition is not appropriate for publication and is not precedent
except as provided by 9th Cir. R. 36-3.
page 2
Argued and Submitted April 13, 2010
San Francisco, California
Before: KOZINSKI, Chief Judge, NOONAN and CALLAHAN, Circuit
Judges.
'[T]he duty to defend, although broad, is not unlimited; it is measured by the
nature and µinds of risµs covered by the policy.' Waller v. Trucµ Ins. Exch., 900
P.2d 619, 628 (Cal. 1995). The policy here was a 'foreign' general liability
policy, and coverage was limited to 'claim or suit resulting from an occurrence
outside the United States of America, its territories or possessions, Canada, Cuba
and North Korea.' Yet Nu-µote only conducted its business inside the United
States, and any injury to Nu-µote resulted from an occurrence in the United States.
Because there was no potential for coverage of Nu-µote's counterclaims under the
policy, ACE had no duty to defend.
REVERSED.
FILED
Hewlett-Pacµard Co. v. ACE Prop. & Cas. Ins. Co., Nos. 08-16342, 08-16434 12 2010
MAY
CALLAHAN, Circuit Judge, dissenting: MOLLY C. DWYER, CLERK
U.S . CO UR T OF AP PE A LS
I respectfully dissent from my colleagues' conclusion that there was no
potential for coverage under the policy. Nu-µote's counterclaims alleged that
Hewlett-Pacµard Company ('HP') engaged in false advertising and anti-
competitive conduct throughout the worldwide marµet for inµjet printer refill
products, including all of North America and Europe. Nu-µote further alleged that
such unfair competition both within and outside the policy territory negatively
impacted its ability to enter and thrive in the 'relevant marµet.' Thus, the
counterclaims may be reasonably read as alleging an 'occurrence' within the
policy territory.
Moreover, the policy territory provision does not specifically linµ coverage
to the place where the offense occurred, but rather generally requires ACE to pay
'for damages occurring in the course of' and 'arising out of' enumerated
advertising activities such as unfair competition. This language may be reasonably
read as providing coverage for offenses that occur within the policy territory but
cause injury elsewhere, just as Nu-µote alleged. Because the policy territory
provision is susceptible to an interpretation that creates a potential for coverage,
and because ACE has failed conclusively to show otherwise, the policy must be
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construed in HP's favor. Pension Trust Fund v. Fed. Ins. Co., 307 F.3d 944, 949
(9th Cir. 2002); MacKinnon v. Trucµ Ins. Exch., 73 P.3d 1205, 1213, 1218 (Cal.
2003). Accordingly, I would affirm the district court's holding that ACE had a
duty to defend. Given my colleagues' contrary conclusion on this dispositive
issue, there is no need to address the other issues raised in the appeal and cross-
appeal.
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