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Albion Engineering Co. v. Hartford Fire Insurance Co.

United States District Court, D. New Jersey

March 26, 2018

ALBION ENGINEERING COMPANY, Plaintiff,
v.
HARTFORD FIRE INSURANCE COMPANY, Defendant.

          TREVOR J. COONEY ARCHER & GREINER, PC ONE CENTENNIAL SQUARE On behalf of Plaintiff

          KATHERINE E. TAMMARO MATTHEW RICHARD MAJOR WILSON ELSER MOSKOWITZ EDELMAN & DICKER LLP, On behalf of Defendant

          OPINION

          NOEL L. HILLMAN, U.S.D.J.

         This matter concerns the breadth of Plaintiff Albion Engineering Company's insurance coverage with Defendant Hartford Fire Insurance Company. Before the Court is Plaintiff's Motion for Partial Summary Judgment, Defendant's Motion to Strike Plaintiff's Motion, Defendant's Cross-Motion for Summary Judgment, and Defendant's Motion for Leave to File a Reply. For the reasons that follow, the Court will deny the motion to strike, grant the motion for leave to file a reply, and grant summary judgment in favor of Defendant.

         I.

         The Court takes its facts from Plaintiff's Statement of Undisputed Material Facts, Defendant's Responsive and Counter-Statement of Material Facts, and Plaintiff's Response to Defendant's Counter-Statement of Material Facts, along with the supporting documents to these pending motions.

         Defendant issued Commercial Package Policy No. 13 SBQ PZ6512 to Plaintiff for the period from May 1, 2005 to January 1, 2006 (the “Policy”). The Policy was renewed through January 1, 2007. The Policy provided, in pertinent part, the following coverage under the heading of “Business Liability Coverage”:

We will pay on behalf of the insured those sums that the insured becomes legally obligated to pay as damages because of . . . “personal and advertising injury” to which this insurance applies. We will have the right and duty to defend the insured against any “suit” seeking those damages. However, we will have no duty to defend damages for . . . “personal and advertising injury” to which this insurance does not apply.

         In the “Liability and Medical Expenses Definitions” section, “personal and advertising injury” is defined:

         “Personal and advertising Injury” means injury, including consequential “bodily injury, ” arising out of one or more of the following offenses:

d. Oral, written or electronic publication of material that slanders or libels a person or organization or disparages a person's or organization's goods, products or services . . . .

         The dispute over insurance coverage in this matter relates to another action pending in this Court, Newborn Bros. Co., Inc. v. Albion Engineering Co., Civ. No. 12-2999 (NLH) (the “Newborn Suit”). On May 18, 2012, Newborn Bros. Co, Inc. (“Newborn”) filed a complaint against Plaintiff in the Newborn Suit (the “Newborn Complaint”).[1] The Newborn Complaint asserted two counts: (1) false advertising and product marking in violation of the Lanham Act § 43, 15 U.S.C. § 1125(a) and (2) tortious unfair competition through false statements and material omissions. The Newborn Complaint provides:

This action seeks under federal and state statutory law redress for Albion's deliberate and unlawful false and misleading advertising, product origin marking, and product packaging of merchandise subject to this action, i.e. [various dispensing guns and caulking accessories], which have been and are being marked, packaged, advertised and sold based on false and misleading representations of the true manufacturer and geographic origin and based on knowingly concealed and omitted material facts about the true manufacturer and geographic origin.

         Namely, the Newborn Complaint alleges Plaintiff “distinguished” its caulking guns and accessories “from Newborn's equivalent and competitive goods based on country of origin, claiming that such Albion products are made in the United States of America or are manufactured or built by Albion in America.” The Newborn Complaint alleges the subject merchandise was in fact made in Taiwan, like Newborn's products.

         On August 26, 2013, Plaintiff notified Defendant of the Newborn Suit, sending a copy of the Newborn Complaint to Defendant. Defendant acknowledged receipt of the submission by an August 26, 2013 letter, and, on September 13, 2013, Defendant sent a letter to Plaintiff disclaiming coverage and denying a defense on the underlying suit. On May 10, 2017, Plaintiff provided Defendant with the following documents filed in the underlying suit: (1) Newborn's Motion for Summary Judgment, (2) Newborn's Statement of Facts Not in Dispute, and (3) the Joint Final Pretrial Order.

         Plaintiff filed this action on May 18, 2017. On June 30, 2017, Plaintiff filed an Amended Complaint attaching a February 19, 2013 Memorandum of Law in Opposition to Albion's Motion for Leave to Amend its Answer in the Newborn suit, a Declaration of Albert S. Lee, a June 2011 e-mail from Bob Reynolds, and a March 2011 letter from Mark Schneider. Plaintiff's Amended Complaint asks for a “binding judicial declaration” that “Hartford's Policy obligates Hartford to defend Albion in the Newborn Suit, including against underlying claimant's Lanham Act claim.” Plaintiff filed a July 5, 2017 Motion for Partial Summary Judgment. Additional communications were attached between Schneider and other Albion employees, as well as communications with a potential purchaser and a customer. Defendant responded to this motion with a July 13, 2017 Motion to Strike and an August 7, 2017 Cross-Motion for Summary Judgment. On September 5, 2017, Defendant filed a Motion for Leave to File a Reply in further support of its Cross-Motion for Summary Judgment.

         II.

         This Court has diversity jurisdiction over this matter pursuant to 28 U.S.C. § 1332. Plaintiff is a New Jersey corporation with its principal place of business in New Jersey, making it a citizen of New Jersey. Defendant is a Connecticut corporation with its principal place of business in Connecticut, making it a citizen of Connecticut. As the parties' citizenship is diverse and the amount in controversy is in excess of $75, 000, exclusive of interest and costs, this Court has diversity jurisdiction pursuant to 28 U.S.C. § 1332.

         III.

         The Court begins by addressing Defendant's July 13, 2017 Motion to Strike. Defendant argues Plaintiff's Motion for Partial Summary Judgment violated two Local Civil Rules: Local Civil Rule 7.2(d) and Local Civil Rule 5.3. Defendant argues Local Civil Rule 7.2(d) was violated due to Plaintiff's alleged “attempt to circumvent the Court's page limit” by using “138 single-spaced footnotes.” Defendant argues Local Civil Rule 5.3 was violated because Plaintiff's “statement of undisputed material facts relies, in part, upon heavily redacted exhibits that were filed without leave of Court, without a sealing order and without any justifiable basis.” Defendant asks this Court to strike the motion and require its refiling in accordance with the Court's Local Civil Rules.

         Local Civil Rule 7.2(b) provides that briefs are not to exceed forty pages and that “[b]riefs of greater length will only be accepted if special permission of the Judge . . . is obtained prior to submission of the brief.” Local Civil Rule 7.2(d) provides:

Each page of a brief shall contain double-spaced text and/or single spaced footnotes or inserts. Typeface shall be in 12-point non-proportional font (such as Courier New 12) or an equivalent 14-point proportional font (such as Times New Roman 14). If a 12-point proportional font is used instead, the page limits shall be reduced by 25 percent (e.g., the 40 page limit becomes 30 pages in this font and the 15 page limit becomes 11.25 pages). Footnotes shall be printed in the same size of type utilized in the text.

         The Court finds Local Civil Rule 7.2 was not violated by Plaintiff. Plaintiff's brief consists of forty pages and 138 footnotes. Of these 138 footnotes, all consist of citations except the first two, which present mere background information.[2]Under these circumstances, the Court will not strike Plaintiff's motion. Not only does it not appear to be an attempt to circumvent the Court's page requirements, but the Court finds it does not explicitly violate the Court's Local Civil Rules, nor does it violate the spirit of this Court's Local Civil Rules. See Allyn Z. Lite, N.J. Federal Practice Rules, Comment 4 to L. Civ. R. 7.2 (Gann 2018). While the Court does not seek to encourage or endorse the overuse or disingenuous use of footnotes, it will not find a violation of Local Civil Rule 7.2 here.

         Local Civil Rule 5.3 governs confidentiality orders and the restriction of public access on the Court's docket. Local Civil Rule 5.3(b)(6) provides: “Absent extraordinary circumstances, a party shall not file a motion or other materials with redacted information, absent a confidentiality order which expressly grants leave to file under seal or other appropriate leave of Court.”

         Defendant indicates that Exhibits 17, 18, and 19 to Plaintiff's Motion for Partial Summary Judgment are heavily redacted. These documents are Newborn's February 19, 2013 Memorandum of Law in Opposition to Defendant Albion Engineering Co.'s Motion for Leave to Amend its Answer, the April 11, 2016 Newborn Motion for Summary Judgment and Statement of Material Facts Not in Dispute, and the May 23, 2016 Albion Memorandum of Law in Opposition to Plaintiff Newborn's Motion for Summary Judgment. These documents, all taken from the Newborn Suit, are indeed heavily redacted.

         The Court begins by noting that the fact that a Discovery Confidentiality Order was previously entered in the Newborn Suit, and that the Court granted various motions to seal, does not mean that the same redactions in that suit are proper here. See, e.g., TD Bank, N.A. v. Hill, No. 12-7188, 2015 U.S. Dist. LEXIS 97409, at *15-17 (D.N.J. July 27, 2015) (finding that “the document was sealed in [a prior lawsuit] does give the Court pause, ” but that the plaintiff needed to demonstrate in the present case that the Rule 5.3 factors were satisfied); Emmanouil v. Roggio, No. 06-1068, 2007 U.S. Dist. LEXIS 28831, at *7-8 (D.N.J. Apr. 19, 2007) (“The Court understands that a prior order was entered and takes guidance from this decision, however the entry of a prior order sealing information is not wholly dispositive of instant motion. . . . The Court must determine whether the sensitivity of the information meets the high burden of sealing under the conditions of this case as they currently exist, rather than blindly relying on a prior sealing order.”).

         Ordinarily, the Court would find that Local Civil Rule 5.3 was violated by Plaintiff's filing of these redacted documents without an order from this Court and without the providing of unredacted versions. The Court finds “extraordinary circumstances” to be present here, however, given the unique procedural posture of this case in conjunction with the Newborn Suit. The sole issue before the Court today is Defendant's duty to defend in the Newborn Suit. “[F]acts outside the complaint may trigger the duty to defend.” SL Indus. v. Am. Motorists Ins. Co., 607 A.2d 1266, 1272 (N.J. 1992).

[T]he duty to defend is triggered by facts known to the insurer. Although the insurer cannot ignore known information simply because it is not included in the complaint, the insurer has no duty to investigate possible ramifications of the underlying suit that could trigger coverage. Rather, the insured being sued is responsible for promptly conveying to its insurance company the information that it believes will trigger coverage.

Id.

         Newborn's Motion for Summary Judgment and the accompanying Statement of Facts Not in Dispute were provided on May 10, 2017 in their redacted form. Thus, only the unredacted parts of those documents can support a duty to defend. As the Court finds no indication that any of these documents were ever provided to Defendant in an unredacted form, the Court finds that the redacted information in these documents is inconsequential in determining Defendant's duty to defend and in this Court rendering its decision. Accordingly, these facts, even if supportive of coverage, would not trigger the duty to defend, as they were not facts known to Defendant. As these documents were presumably docketed as evidence of what was provided to Defendant, and as only documents that have ...


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