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Alterra Excess and Surplus Insurance Co. v. Estate of Fuller

California Court of Appeals, First District, Second Division

March 9, 2015


Superior Court, City and County of San Francisco No. CGC-12-522867 Honorable Leslie C. Nichols

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[Copyrighted Material Omitted]

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[Copyrighted Material Omitted]

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Law Offices of Thomas A. Cohen and Thomas A. Cohen for Defendant and Appellant.

Gordon & Rees, Arthur Schwartz and Randall P. Berdan for Plaintiff and Respondent.



The Estate of Buckminster Fuller (Estate), through its co-executors, appeals from a judgment on the pleadings holding that Alterra Excess and Surplus Insurance Company (Alterra) had no duty to defend, and therefore no duty to indemnify, its insured in an action brought by the Estate against the insured. The basis of the judgment was that an exclusion in the Alterra policy, referred to by all below as the “intellectual property” exclusion, applied to preclude any obligation on the part of Alterra. We reach the same conclusion, and we affirm.


General Historical Background

R. Buckminster Fuller, nicknamed “Bucky” (Fuller), was a celebrated designer, author, and inventor. He was credited with many, and diverse,

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creations, and was particularly well known for popularizing the geodesic dome. He died in 1983. According to the Estate’s own pleadings, in 1985 it registered its claim as the successor in interest to all of Fuller’s rights, and has “licensed those rights on many occasions. The licensees include Apple Computer, which used Bucky’s image (along with those of John Lennon, Pablo Picasso, Albert Einstein, Mahatma Gandhi, Frank Lloyd Wright and others) in its ‘Think Different’ advertising campaign. In 2004, the U.S. Postal Service licensed the rights to Bucky’s image for a postage stamp. The stamp artwork is a painting which originally appeared on the cover of Time magazine in 1964 depicting Bucky’s head in the pattern of a geodesic dome. In 2003, Xerox Corporation licensed rights to Bucky’s name and likeness.” In short, it appears that various commercial enterprises have used Fuller, and perhaps his nickname, to assist in the marketing of their products.

At some point, Maxfield & Oberton Holdings, LLC (Maxfield) entered the picture, attempting to do just that-apparently without permission or payment. Specifically:

Beginning at least as early as 2009, Maxfield manufactured and distributed several products under the Buckyball and related trademarks. Again according to the Estate’s pleadings, these items included several variations on Buckyballs, Buckyball gift packs, Buckycubes, Bucky sidekick, and The Big Book of Bucky. Elaborating, the Estate described some of this as follows:

“13. According to the recent press release by [Maxfield], Buckyballs were ‘inspired and named after famous architectural engineer and inventor, R. Buckminster Fuller, Buckyballs and Buckycubes are the world’s most popular adult desktoys and have been compared to famous desktoys of yore such as Newton’s Cradle, the Zen Garden, and Pin Art. Buckyballs and Buckycubes are distributed by NYC based Maxfield & Oberton Holdings. Founded in 2009, the company’s products are sold today in over 5,000 U.S. retail locations and 15 countries around the world.’ It claims to be the world’s best selling desktoy. [¶]... [¶]

“15. Buckyballs are 216 round rare earth magnets packaged in a cube shape. The packaging states: Buckyballs by Zoomdoggle. The included Quick State Guide demonstrates several shapes that can be made with the round magnets. In order of apparent difficulty, those shapes are the chain, the tube, the sheet, the hexagon, triangles, tricks and the cube. Only the triangle can be formed into a shape that resembles the Carbon 60 buckyball sphere. The ‘Let’s Get Tricky’ section states: ‘Anything is possible in the world of Bucky.’ [¶]... [¶]

“18. The Big Book of Bucky is a paperback book which provides instructions on how to make various shapes with Buckyballs. The book

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states: ‘Buckyballs were named for Buckminster Fuller.’ After briefly summarizing Bucky’s accomplishments, it states: ‘He was smart, He was crazy. He was fun. Remind you of anything?’

“19. Until recently, the Frequently Asked Questions page on [Maxfield’s] website ( posted this question and answer: ‘3. Where does the name Buckyballs come from?’ ‘The name Buckyballs is a nod to Buckminster ‘Bucky’ Fuller, a famous architectural-type best known for the geodesic dome (a sphere made of triangles). It’s a fun shape to make with Buckyballs. FUN FACT: The Carbon 60, one of the strongest atomic structures known to man, are sometimes called Fullerenes. They too were named after Fuller for their similarity to geodesic domes.’ ”

Such conduct was the basis of the first of the two lawsuits involved here: the Estate’s action alleging that the commercial use of Fuller’s name was not authorized.

Procedural Background

The Underlying Action

On May 18, 2012, the Estate filed an action against Maxfield in the United States District Court for the Northern District of California: Estate of Buckminster Fuller v. Maxfield & Oberton Holdings, LLC (N.D.Cal. 2012) 906 F.Supp.2d 997 (for consistency with the briefing, the underlying action). The underlying action alleged four claims: (1) unfair competition in violation of 15 United States Code section 1125(a)-Lanham Act (15 U.S.C. § 1051 et seq.); (2) invasion of privacy (appropriation of name and likeness); (3) unauthorized use of name and likeness in violation of Civil Code section 3344.1; and (4) violation of Business and Professions Code section 17200 et seq. The Estate represented to the district court that the underlying action was properly venued in San Francisco because it was an “intellectual property matter.”

Max Specialty Insurance Co., a predecessor to Alterra, had issued an insurance policy to Maxfield that had become effective June 4, 2010, the specific terms of which will be discussed in detail below. Maxfield tendered defense of the underlying action to Alterra, which agreed to defend under a reservation of rights and appointed Cumis counsel (San Diego Federal Credit Union v. Cumis Ins. Society, Inc. (1984) 162 Cal.App.3d 358 [208 Cal.Rptr. 494]; see Civ. Code, § 2860) to defend the case.

Soon thereafter Alterra filed the second lawsuit involved here: the action for declaratory relief.

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The Coverage Action

On August 1, 2012, Alterra filed suit in the San Francisco Superior Court, naming two defendants, Maxfield and the Estate (the coverage action). The complaint sought declaratory relief and reimbursement, more specifically a declaration that Alterra’s policy did not provide coverage and therefore Alterra had no duty to defend. According to Alterra, it named the Estate as a defendant so as to bind it by the outcome of the coverage action because, as a potential judgment creditor of Maxfield, the Estate could have a claim against Alterra should it prevail in the underlying action. (Ins. Code, § 11580.)

The Estate’s involvement in the coverage action-at least its initial involvement-was short lived, as by October 29, the Estate and Alterra entered into a stipulation under which the Estate would be dismissed from the coverage action without prejudice in return for the agreement to be bound by it. The stipulation was signed on behalf of the Estate by its attorney, Thomas A. Cohen. The coverage action continued against Maxfield.

On December 10, 2012, Alterra filed a first amended complaint, with 28 paragraphs of allegations.

On that same day, Maxfield filed its answer to the first amended complaint, signed by Marc R. Lewis, of the firm of Lewis & Llewellyn, LLP. Tellingly, that answer acknowledged that Alterra’s position was well founded-and Alterra was entitled to the declaratory judgment it sought. Specifically, Maxfield’s answer admitted all 28 paragraphs in the amended complaint; stated that Maxfield had “no affirmative defenses”; and prayed for a judicial declaration that Alterra had no duty to defend or indemnify Maxfield.

With that, on January 8, 2013, Alterra filed a motion for judgment on the pleadings, set for hearing on February 4. This caused the Estate, and apparently its attorney Cohen, to stir, and to reenter the case, despite its earlier stipulation to be dismissed from it.

Beginning in mid-January 2013, and acting without leave of court, the Estate on its own behalf filed a general denial to Alterra’s first amended complaint. Then, on January 22, 2013, purporting to act as the “Assignee of the [Maxfield] Liquidating Trust, ” the Estate filed a first amended answer which denied the allegations of Alterra’s first amended complaint. On that same date, and again purporting to act as “as assignee of the [Maxfield] Liquidating Trust, ” the Estate filed opposition to Alterra’s motion for judgment on the pleadings. All the pleadings were signed by Attorney Cohen.

On February 5, 2013, the Estate, once again acting on its own behalf, filed a motion for relief from its dismissal from the coverage action, moving under

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Code of Civil Procedure section 473. A declaration from Attorney Cohen accompanied the motion for relief, which declaration detailed the machinations that had occurred behind the scenes. We quote Mr. Cohen’s declaration in some detail:

“2. Maxfield & Oberton, LLC manufactured and sold popular desk toys called Buckyballs, Buckycubes, Bucky sidekick and the Big Book of Bucky and had filed trademark applications for puzzles-Buckybars, BuckyBricks, BuckyBlocks, BuckyBigs- and for a vitamin supplement: BuckyBalls. [Maxfield] claimed that Buckyballs and Buckycubes were the world’s most popular desktoys. [Maxfield] states unequivocally in printed material and on its website that ‘Buckyballs were named for Buckminster Fuller.’ The Estate filed suit on May 18, 2012 in U.S. District Court for the Northern District of California alleging that the commercial use of Fuller’s name was not authorized and therefore ...

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