Third Circuit disallows extrinsic evidence to establish a “fresh wrong” when advertising injury began prior to insurance policy inception.

The Navajo Nation brought suit in the District of New Mexico against Urban Outfitters, Anthropologie and affiliated companies for advertising and selling goods under federally registered Navajo trademarks beginning in March 2009. Hanover Insurance was the insurance carrier for these defendants, but it did not begin insurance coverage until July 2010—sixteen months after the alleged infringement began, according to Navajo Nation’s lawsuit. Hanover brought an action in the Eastern District of Pennsylvania against its insureds seeking a declaratory judgment that no coverage was owed based upon a coverage exclusion for “personal and advertising injury” liability “arising out of oral or written publication of material whose first publication took place before the beginning of the policy period.” The Third Circuit affirmed the District Court’s order granting Hanover’s motion for judgment on the pleadings. Looking to the “four corners” of the underlying complaint pursuant to Pennsylvania law, the Third Circuit found it apparent that the post-coverage advertisements shared a common objective and theme with those published as early as March 2009. The Third Circuit rejected the insured’s argument that extrinsic evidence should be considered to establish that a “fresh wrong” took place and held that the language of the complaint and policy controlled whether coverage was owed.

_{Case Law Alerts, 1st Quarter, January 2016}

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