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TIGERA GROUP v. COMMERCE & INDUS. INS. CO.

January 7, 1991

TIGERA GROUP, INC., a Delaware corporation, Plaintiff,
v.
COMMERCE AND INDUSTRY INSURANCE COMPANY, a New York corporation, Defendant



The opinion of the court was delivered by: VUKASIN

 J. P. VUKASIN, UNITED STATES DISTRICT JUDGE

 INTRODUCTION

 BACKGROUND

 Defendant, Commerce and Industry Insurance Company ("Commerce"), issued to Fortune Systems Corporation ("Fortune"), a computer software manufacturer, a comprehensive general liability policy for the policy period of March 2, 1986 to March 2, 1987. Plaintiff, Tigera Group, Inc. ("Tigera") is Fortune's successor in interest.

 The insurance policy required Commerce to indemnify and defend Fortune in actions alleging "advertising injury". The policy defined "advertising injury" as:

 
"Injury arising out of an offense committed during the policy period occurring in the course of the named insured's advertising activities, if such injury arises out of libel, slander, defamation, violation of right of privacy, piracy, unfair competition, or infringement of copyright, title or slogan." (emphasis added).

 In the summer of 1988, two of Tigera's "master dealers" or distributors, Computer Sales Company ("CSC") and Lars Runquist ("Runquist"), filed suit against Tigera in California and Connecticut state courts. These actions essentially alleged that Tigera made misrepresentations to CSC and Runquist in the course of negotiating certain "master dealer" or distributor contracts. Tigera tendered the defense of these actions to Commerce, which rejected defense and denied coverage.

 On May 15, 1989, Tigera filed in this court its complaint for declaratory relief and for damages for breach of contract and for bad faith. The parties subsequently agreed to sever the bad faith and breach of contract causes of action so that the court could first address the claim for declaratory relief.

 DISCUSSION

 1. Standard for Summary Judgement.

 Summary judgment should be granted where it is shown that there is no genuine issue of material fact and that the moving party is entitled to judgment as a matter of law. See Fed. R. Civ. P. 56(c); Celotex Corp. v. Catrett, 477 U.S. 317, 106 S. Ct. 2548, 91 L. Ed. 2d 265 (1986); Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 106 S. Ct. 2505, 91 L. Ed. 2d 202 (1986). In Celotex, the Supreme Court made it clear that summary judgment, when appropriate, is a favored method of resolution, and that:

 
summary judgment is mandated, after adequate time for discovery and upon motion, against a party who fails to make a showing sufficient to establish the existence of an element essential to that party's case and on which that party will bear the burden ...

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