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Aloha Pacific2/28/2000
As amended March 28, 2000. No change in judgment.
ALOHA PACIFIC, INC., ET AL., PLAINTIFFS AND APPELLANTS,
V.
CALIFORNIA INSURANCE GUARANTEE ASSOCIATION, DEFENDANT AND RESPONDENT
(Super. Ct. No. BC 196063)
Pircher, Nichols & Meeks and James L. Goldman for Plaintiffs and Appellants. Black, Campean & Hall, Frederick G. Hall and Daniel Eli for Defendant and Respondent.
The opinion of the court was delivered by: Dau, J.
CERTIFIED FOR PUBLICATION
APPEAL from a judgment of the Superior Court of Los Angeles County, Sherman W. Smith, Jr., Judge. Affirmed.
In this case we consider whether California Insurance Guarantee Association (CIGA) is barred from contesting whether a claim is "within the coverage of an insurance policy of insolvent insurer," as used in Insurance Code section 1063.1, subdivision (c)(1), where a third-party claimant has obtained a judgment declaring that the insurer (now insolvent) had no basis to deny coverage for the claim. Interpreting the statute so as to leave no part of it useless or deprived of meaning, we hold that the statute permits CIGA to contest whether the claim is within policy coverage, and CIGA is not bound by the prior judgment against the insolvent insurer. We then interpret the policy in question, which covers "injury arising out of . . . piracy, unfair competition, or infringment of copyright, title or slogan," but which does not apply to "injury arising out of . . . infringement of trademark, service mark or trade name, other than titles or slogans . . . ." We conclude that this policy language does not cover the claims at issue in this case, which are for trademark infringement and false designation of origin brought under the Lanham Act (15 U.S.C. ยงยง 1114(1)(a), 1125(a)), and for unfair competition under section 17200 of the California Business and Professions Code.
I. FACTUAL AND PROCEDURAL BACKGROUND
Appellant Rusty's Island Chip Co. (Rusty's) is a partnership comprised of Rusty Vasterling II and Carol Mersch. The partnership owns the federally registered trademark "Rusty's Island Chips," the trademark "Island Chips," and the trade dress associated with those marks (together, the "marks"). Before 1989 Rusty's used the marks in connection with the manufacture, marketing, distribution and sale of "Maui style" potato chips. In October 1989 Rusty's licensed the marks to appellant Aloha Pacific, Inc. (Aloha), which began marketing chips in packaging using the marks in various parts of the United States, including Southern California. In November 1989 appellants sued Island for trademark infringement in federal district court, in an action entitled Rusty's Island Chip Co. v. Island Industries, Inc., C.D. Cal. Civil No. 89 6679 JMI (the "federal action"), seeking preliminary and permanent injunctions.
Island was insured by Canadian Insurance Company of California, which initially declined to defend Island in the federal action on the ground that no money damages were sought.
In February 1990 the federal court enjoined Island from using the marks pending the outcome of the case. Appellants amended their complaint in April 1990 to add Island's principals, Jay Feinberg and Gary Quick (collectively, Feinberg), as defendants and to include a claim for money damages and a cause of action for unfair competition. As amended, appellants' complaint alleged Rusty's ownership of the federally registered trademark "Rusty's Island Chips" and the trademark "Island Chips" and the trade dress associated with the marks, that def
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