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Supreme Court of Wisconsin
February 28, 2019, Filed
[*P1] [**586] [***553] REBECCA GRASSL BRADLEY, J. In this duty to defend case, West Bend Mutual Insurance Company asks us to reverse the court of appeals' decision holding that the allegations in Abbott Laboratories' complaint against Ixthus Medical Supply, [****2] Inc. alleged a potentially covered advertising injury, and as a result, triggered West Bend's duty to defend under the commercial general liability policy West Bend issued to Ixthus.1 West Bend argues the court of appeals erred when it determined: (1) Abbott's complaint2 alleged a causal connection between the advertising activity and injury; and (2) the knowing violation exclusion did not apply. West Bend further contends that the criminal acts exclusion applies, thereby removing any duty to defend, or alternatively that application of the fortuity doctrine, public policy, [**587] and the reasonable expectation of an insured each independently eliminates its duty to defend.
[*P2] We hold the allegations in Abbott's complaint fall within the initial grant of coverage under the "personal and advertising injury liability" provision of the commercial general liability insurance policy West Bend issued to Ixthus. We further hold that neither the knowing violation nor the criminal acts exclusions apply to remove West Bend's duty to defend. Finally, we do not address West Bend's argument [****3] that the fortuity doctrine, public policy, and the reasonable expectation of an insured eliminate its duty to defend because West Bend failed to adequately raise or develop these contentions.3 We affirm the decision of the court of appeals.
[*P3] Ixthus is a medical supply company operating in Wisconsin. At all times relevant to this action, Ixthus was insured under a commercial general liability insurance ("CGL") policy with West Bend, which provided coverage for "personal and advertising injury." Specifically, the CGL policy provided:
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2019 WI 19 *; 385 Wis. 2d 580 **; 923 N.W.2d 550 ***; 2019 Wisc. LEXIS 63 ****; 2019 WL 963358
West Bend Mutual Insurance Company, Plaintiff-Respondent-Petitioner, v. Ixthus Medical Supply, Inc. and Karl Kunstman, Defendants-Appellants, Abbott Laboratories, Abbott Diabetes Care Inc. and Abbott Diabetes Care Sales Corp., Defendants-Co-Appellants.
Prior History: [****1] REVIEW of a decision of the Court of Appeals. (L.C. No. 2016CV1414).
West Bend Mut. Ins. Co. v. Ixthus Med. Supply, Inc., 2018 WI App 28, 381 Wis. 2d 472, 915 N.W.2d 456, 2018 Wisc. App. LEXIS 355 (Mar. 28, 2018)
coverage, allegations, advertising injury, duty to defend, insured, advertising, advertising activity, criminal act, trademarks, court of appeals, complaint alleges, initial grant, duty-to-defend, dilution, rights, trade dress, infringement, strips, consumers, causal connection, causation, inflict, insurance policy, circuit court, argues, covered claim, require proof, questions, damages, website
Civil Procedure, Summary Judgment, Entitlement as Matter of Law, Appropriateness, Appellate Review, Standards of Review, Insurance Law, Liability & Performance Standards, Good Faith & Fair Dealing, Duty to Defend, Antitrust & Trade Law, Consumer Protection, False Advertising, False Advertising, Lanham Act, Liability & Performance Standards, Trademark Law, Causes of Action Involving Trademarks, Dilution of Famous Marks, Evidence of Dilution, Deceptive & Unfair Trade Practices, State Regulation