19‐778‐cv
Nanette Lepore v. Hartford Fire Insurance Company

                                  UNITED STATES COURT OF APPEALS
                                      FOR THE SECOND CIRCUIT

                                                  SUMMARY ORDER

RULINGS BY SUMMARY ORDER DO NOT HAVE PRECEDENTIAL EFFECT. CITATION TO A SUMMARY
ORDER FILED ON OR AFTER JANUARY 1, 2007, IS PERMITTED AND IS GOVERNED BY FEDERAL RULE
OF APPELLATE PROCEDURE 32.1 AND THIS COURTʹS LOCAL RULE 32.1.1. WHEN CITING A
SUMMARY ORDER IN A DOCUMENT FILED WITH THIS COURT, A PARTY MUST CITE EITHER THE
FEDERAL APPENDIX OR AN ELECTRONIC DATABASE (WITH THE NOTATION ʺSUMMARY ORDERʺ). A
PARTY CITING A SUMMARY ORDER MUST SERVE A COPY OF IT ON ANY PARTY NOT REPRESENTED
BY COUNSEL.


              At a stated term of the United States Court of Appeals for the Second
Circuit, held at the Thurgood Marshall United States Courthouse, 40 Foley Square, in
the City of New York, on the 7th day of February, two thousand twenty.

PRESENT:            DENNIS JACOBS,
                    DENNY CHIN,
                    JOSEPH F. BIANCO,
                                         Circuit Judges.
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NANETTE LEPORE, ROBERT SAVAGE,
ROBESPIERRE, INC., a New York Corporation, and
NLHE, LLC, a New York Company,
                       Plaintiffs‐Appellants,

                                     ‐v‐                                             19‐778‐cv

HARTFORD FIRE INSURANCE COMPANY, a
Connecticut Corporation,
                         Defendant-Appellee.

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FOR PLAINTIFFS‐APPELLANTS:                                   DAVID A. GAUNTLETT (James A. Lowe, on
                                                             the brief), Gauntlett & Associates, Irvine,
                                                             California.
FOR DEFENDANT‐APPELLEE:                    DAVID SIMANTOB (Katherine E. Tammaro,
                                           on the brief), Wilson, Elser, Moskowitz,
                                           Edelman & Dicker, LLP, New York, New York.

              Appeal from the United States District Court for the Southern District of

New York (Failla, J.).

              UPON DUE CONSIDERATION, IT IS HEREBY ORDERED,

ADJUDGED, AND DECREED that the judgment of the district court is AFFIRMED.

              Plaintiffs‐appellants Nanette Lepore, Robert Savage, Robespierre, Inc., and

NLHE LLC (ʺplaintiffsʺ) appeal from the March 13, 2019 judgment of the district court

granting the motion of defendant‐appellee Hartford Fire Insurance Company

(ʺHartfordʺ) for summary judgment and denying plaintiffsʹ cross‐motion for partial

summary judgment. The district court explained its reasoning in an opinion and order

entered March 12, 2019. We assume the partiesʹ familiarity with the underlying facts,

procedural history, and issues on appeal.

              Plaintiffs purchased umbrella and primary commercial general liability

insurance policies from Hartford. The policies provided that Hartford ʺwill pay those

sums that the insured becomes legally obligated to pay as damages because of ʹpersonal

and advertising injury,ʹʺ which is defined as, among other things, ʺinjury . . . arising out

of one or more of the following offenses: . . . Oral, written or electronic publication of

material that slanders or libels a person or organization or disparages a personʹs or

organization[ʹ]s goods, products or services.ʺ J. Appʹx at 716, 720. The coverage was

                                            ‐2‐
limited by two relevant exclusions. First, the policies contained an intellectual property

(ʺIPʺ) exclusion, which excluded coverage for:

               (1) ʺPersonal and advertising injuryʺ arising out of any
               actual or alleged infringement or violation of any intellectual
               property right, such as copyright, patent, trademark, trade
               name, trade secret, service mark or other designation of
               origin or authenticity; or

               (2) Any injury or damage alleged in any claim or ʹsuitʹ that
               also alleges an infringement or violation of any intellectual
               property right, whether such allegation of infringement or
               violation is made by you or by any other party involved in
               the claim or ʺsuitʺ, regardless of whether this insurance
               would otherwise apply.

J. Appʹx at 698.

               Second, the policies contained a breach of contract exclusion, which

provided that the policies did not apply to ʺʹ[p]ersonal and advertising injuryʹ arising

out of a breach of contract, except an implied contract to use anotherʹs ʹadvertising ideaʹ

in your ʹadvertisementʹ.ʺ J. Appʹx at 705.

               The instant action derives from a 2016 suit filed in New York state court

(the ʺNL suitʺ).1 The NL suit arose out of the 2014 sale by Lepore of the core assets of

her business, including ʺsubstantially all of her trademarks, copyrights . . . and other

intellectual property . . . [including] her primary namesake trademark.ʺ J. Appʹx at 746.

The NL suit asserted seventeen causes of action, including breach of contract and


1      The case, which is still pending, is styled NL Brand Holdings LLC v. Nanette Lepore, No.
0656682/2016 (N.Y. Sup. Ct.).
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tortious interference with advantageous business relationship, and alleged that

plaintiffs violated the licensing agreement by, inter alia, ʺflouting all contractual

requirements governing use of the Purchased IP, failing to adhere to non‐compete and

non‐disparagement obligations and public‐statement prohibitions, and wrongfully co‐

mingling the Licensed Marks with the products and marks of third‐party collaboration

partners.ʺ J. Appʹx at 749‐50.

              Hartford declined to defend or indemnify plaintiffs with respect to the NL

suit, arguing that both the IP and breach of contract exclusions applied. Plaintiffs filed

an action for a declaratory judgment for a determination that Hartford had a duty to

defend them in the NL suit. Hartford moved for summary judgment dismissing the

action, and plaintiffs filed a cross‐motion for summary judgment requiring Hartford to

defend and pay reasonable defense expenses. The district court granted Hartfordʹs

motion, holding that the exclusions barred coverage.

I.     Standard of Review

              ʺWe review the district courtʹs determination on summary judgment de

novoʺ and ʺaffirm[] a grant of summary judgment only where there are no genuine

disputes concerning any material facts, and where the moving party is entitled to

judgment as a matter of law.ʺ Jones v. Cty. of Suffolk, 936 F.3d 108, 114 (2d Cir. 2019)

(internal quotation marks omitted).




                                             ‐4‐
II.    Discussion

               ʺUnder New York law, insurance policies are interpreted according to

general rules of contract interpretation.ʺ Olin Corp. v. Am. Home Assur. Co., 704 F.3d 89,

98 (2d Cir. 2012).2 ʺ[C]ontract terms are ambiguous if they are capable of more than one

meaning when viewed objectively by a reasonably intelligent person who has examined

the context of the entire integrated agreement and who is cognizant of the customs,

practices, usages and terminology as generally understood in the particular trade or

business.ʺ Olin Corp. v. OneBeacon Am. Ins. Co., 864 F.3d 130, 148 (2d Cir. 2017) (internal

quotation marks omitted). ʺIf the contract is unambiguous, its meaning is . . . a question

of law for the court to decide.ʺ JA Apparel Corp. v. Abboud, 568 F.3d 390, 397 (2d Cir.

2009). ʺ[T]he clear and explicit meaning of insurance policy provisions, interpreted in

their ordinary and popular sense[,] controls judicial interpretation unless used by the

parties in a technical sense or a special meaning is given to them by usage.ʺ Intʹl Bus.

Machs. Corp. v. Liberty Mut. Ins. Corp., 363 F.3d 137, 147 (2d Cir. 2004) (internal quotation

marks and alterations omitted) (citing McGrail v. Equitable Life Assur. Socy. of U.S., 292

N.Y. 419, 424‐25 (1944)).

               Where a policy contains exclusions, ʺif any one exclusion applies there can

be no coverage.ʺ Maroney v. New York Cent. Mut. Fire Ins. Co., 5 N.Y.3d 467, 471 (2005).



2       Although the parties do not explicitly state that New York law applies, both parties cite
to New York law for the principles of contract interpretation and do not challenge the district
courtʹs application of New York law.
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Finally, an insurance companyʹs duty to defend is ʺbroader than its duty to indemnify,ʺ

and an insurer seeking to disclaim coverage on the basis of an exclusion ʺwill be

required to provide a defense unless it can demonstrate that the allegations of the

complaint cast that pleading solely and entirely within the policy exclusions, and,

further, that the allegations, in toto, are subject to no other interpretation.ʺ Aut. Ins. Co.

of Hartford v. Cook, 7 N.Y.3d 131, 137 (2006) (internal quotation marks omitted).

              Plaintiffs argue that because no violation of IP rights was asserted in the

NL suit, the IP exclusion must be read narrowly, and the IP exclusion does not extend

to the claims in the NL suit. We disagree.

              First, although there are no direct claims for IP relief in the NL suit, the

NL complaint alleges at several points that plaintiffs violated the licensorʹs IP rights,

most directly in the unfair competition claim. In analyzing whether an exclusion

applies to a claim, our focus is ʺon the complaintʹs factual allegations rather than its

legal assertions.ʺ Euchner‐USA, Inc. v. Hartford Cas. Ins. Co., 754 F.3d 136, 142 (2d Cir.

2014); see also Town of Massena v. Healthcare Underwriters Mut. Ins. Co, 834 N.Y.S. 2d 736,

739‐40 (2007). The unfair competition claim, which alleges that plaintiffs ʺrepeatedly

used, displayed and otherwise exploited the Purchased IP . . . without authorization . . .

to further their own competing business interests,ʺ is premised entirely on alleged




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trademark infringement. J. Appʹx at 792. Thus, we conclude that the complaint in the

NL suit alleges an IP violation.

               Second, these allegations trigger the IP exclusion. The IP exclusion bars

coverage for ʺinjury or damageʺ alleged in a ʺsuitʺ that ʺalso allegesʺ ʺan infringement

or violation of any intellectual property right.ʺ J. Appʹx at 698. We interpret this

unambiguous provision in its ordinary sense. See Intʹl Bus. Machs., 363 F.3d at 147. The

IP exclusion thus bars coverage for the entire NL suit. Accordingly, we conclude that

the district court did not err when it granted Hartfordʹs motion for summary judgment

and denied plaintiffsʹ motion for partial summary judgment.3

                                             *    *    *

               We have considered plaintiffsʹ remaining arguments and conclude they

are without merit. Accordingly, we AFFIRM the judgment of the district court.

                                              FOR THE COURT:
                                              Catherine OʹHagan Wolfe, Clerk




3      Plaintiffs further argue that the district court erred in finding that the breach of contract
exclusion also barred coverage for the NL suit and that Hartford engaged in a bad faith denial.
We need not reach these questions, however, as the IP exclusion bars coverage for the entire NL
suit.
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