AMCO Ins. Co. v. Inspired Technologies, Inc., No. 10-2321 (8th Cir. 2011)
Annotate this Case3M Company sued Inspired Technologies, Inc. (ITI) for allegedly unfair and false advertising, in violation of the Lanham Act, 15 U.S.C. 1051, et seq., and the Minnesota Uniform Deceptive Trade Practices Act (MDPTA), Minnesota Statutes 325D.43-325D.48, alleging that ITI engaged in an advertising campaign for its Frog Tape product that depicted 3M Tape as performing poorly in certain respects. ITI tendered a defense of the lawsuit to its liability-insurance carrier, AMCO Insurance Company (AMCO), and the lawsuit ultimately settled. Following the settlement, AMCO filed the instant declaratory judgment action against ITI, seeking a declaration that it did not owe ITI any duty to defend or indemnify because the insurance policy's knowledge-of-false exclusion excluded the 3M suit from coverage. The court found that the two interrogatory answers upon which the district court relied did not reflect that 3M alleged ITI's knowledge of falsity as to all the purportedly unfair advertising. Consequently, the court held that AMCO failed to satisfy its burden of demonstrating, as a matter of law, that every claim in 3M's complaint fell clearly outside the policy's coverage. Accordingly, because 3M alleged at least one arguably coverable claim, AMCO owed ITI a duty under Minnesota law to defend the entire suit and therefore, the district court's grant of summary judgment was reversed and remanded.
Court Description: Civil case - Insurance. District court could rely on interrogatory answers as a source of actual facts outside the complaint to determine coverage issue; however, the court erred in finding that the interrogatory answers provided by 3M in its suit against Inspired had the effect of triggering the knowledge-of-falsity provision in the commercial general-liability policy AMCO issued Inspired as the answers did not clearly demonstrate under Minnesota law that AMCO had no duty defend any parts of the 3M suit; since at least one of 3M's claims was arguably covered, AMCO owed Inspired a duty to defend the entire suit.
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