The opinion of the court was delivered by: Hamilton, U.S. District Judge.
Now before the court are the motions of defendant Columbia Casualty
Company ("CCC") to dismiss pursuant to Federal Rules of Civil Procedure
12(b)(4) and (5), to dismiss pursuant to Federal Rules of Civil
Procedure 12(b)(6), and to strike. Having carefully reviewed the
parties' papers and considered their arguments and the relevant legal
authority, and good cause appearing, the court hereby rules as follows.
According to the complaint, the facts are generally as follows.
Plaintiffs purchased a commercial general liability insurance policy from
defendants for the period of March 1, 1999, through March 1, 2000. Said
policy included liability coverage for claims arising from alleged
advertising injuries, including trademark infringement, copyright
infringement, misappropriation of style of doing business, etc.
On or about June 15, 1999, Amrion, Inc. ("Amrion") filed a complaint
for trademark infringement, copyright infringement, and misappropriation
of style of doing business, among other claims, in the United States
District Court for the Northern District of California. Immediately
thereafter, plaintiffs provided defendants a copy of the complaint filed
in the Amrion action, as well as other extrinsic facts regarding the
claim, and requested that defendants provide them with a defense and
indemnification under the terms of their insurance policy.
On September 27, 1999, defendants advised plaintiffs that there was no
potential coverage under the insurance policy. Accordingly, defendants
refused to provide a defense or indemnity for plaintiffs with regard to
the Amrion action. Thereafter, plaintiffs retained the law firm of
Ropers, Majeski to represent their interests.
However, on February 8, 2000, defendants sent a letter to plaintiffs in
which defendants changed their position, accepting their duty to defend
and agreeing to pay Ropers, Majeski's prior fees and future fees in
connection with the defense of the action.
Notwithstanding the representations made in the February 8, 2000,
letter, defendants never paid for plaintiffs' defense costs and failed to
actively participate in settlement negotiations for the case. Plaintiffs
did, however, ultimately settle the case, sometime in October of 2000.
Around the same time that the Amrion action settled, plaintiffs filed
the present action against defendants in state court, alleging (1) breach
of contract; (2) breach of the implied covenant of good faith and fair
dealing; (3) coverage by estoppel; (4) fraud; (5) negligent
misrepresentation; and (6) declaratory relief. Thereafter, defendants
removed the action to this court.
CCC now moves to dismiss the action and to strike plaintiff's claims
for punitive damages. CCC also now moves to dismiss the action against
I. Motion to Dismiss Pursuant to Rules 12(b)(4) and 12(b)(5)
Federal Rules of Civil Procedure 12(b)(4) and 12(b)(5) ("Rules 12
(b)(4) and 12(b)(5)") permit a defendant to challenge the form of
summons and the method of service attempted by plaintiff, respectively.
B. CCC's Motion to Dismiss CNA Pursuant to Rules 12(b)(4) and 12(b)(5)
CCC contends that CNA is not a corporation, but rather is a federally
registered service mark/tradename used for business and promotional
purposes by CCC and other insuring entities. Accordingly, because
plaintiffs' summons designated CNA as a corporate entity rather than a
tradename, it is defective and dismissal is warranted.
Dismissals for defects in the form of summons are generally
disfavored. Such defects are considered "technical" and hence are not a
ground for dismissal unless the defendant demonstrates actual prejudice.
See Chan v. Society ...