Keeping Up With the Counterclaims: Tria Beauty, Inc. and Kim Kardashian Are Denied Insurance Coverage

On May 21, 2013, a California Federal Judge denied insurance coverage to Tria Beauty, Inc. in a case involving false advertising allegations against rival Radiancy, Inc.  In response, Radiancy, Inc. raised several counterclaims against Tria Beauty. What made the case especially noteworthy is the involvement of Tria Beauty’s leading spokeswoman, the wildly famous and always controversial Kim Kardashian.

The coverage claim providers, National Fire Insurance Co. of Hartford, and Travelers Property Casualty Co. of America, denied coverage to Tria Beauty, Inc. The coverage dispute was argued before U.S. District Judge William Alsup, who granted the insurer’s motion for summary judgment, holding that:

[W]hile the policies would have covered Tria’s claims, other circumstances meant the insurers were off the hook. … Both insurers contend that Radiancy’s counterclaims in a separate action did not trigger coverage under clauses in the policies providing a duty to defend against injuries caused by disparagement. The insurers further contend that even if Radiancy’s counterclaims were covered under the disparagement clauses, there was no duty to defend because one or more exclusions applied.

The disparagement coverage clauses were triggered for both insurers. Travelers had no duty to defend because the intellectual-property exclusion exempted injuries from claims including trademark infringement “or any other … ‘advertising injury’ alleged in any claim or ‘suit’ that also alleges any such infringement or violation.” National Fire had no duty because the events occurred outside the policy period, which ran from January 1, 2008, through January 1, 2010.

Obviously, Tria’s attorney, Michael Bruce Abelson of Abelson Herron Halpern LLP, was disappointed with the outcome, and stated that he would be “appealing the court’s misapplication of the policy’s intellectual property exclusion.” (Law360, subscription required)

For the complete decision, click here.

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