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Wisconsin Counsel Ericka Hammett Prevails in Court of Appeals

Wisconsin counsel Ericka Hammett successfully defended an insurance client in the Wisconsin Court of Appeals for an insurance coverage action.

In this matter, the insured argued our client breached its duty to defend and indemnify the insured pursuant to its Claims-Made Errors & Omissions (E&O) liability policy in an underlying trademark infringement suit brought by a former licensor. The former licensor sent the insured a cease and desist letter several years before filing the lawsuit and prior to the effective date of the E&O policy.

The insured sought to recover significant defense costs and the amounts it paid in settlement of the underlying claim.

Ericka successfully argued in the circuit court and again on appeal that the E&O policy’s known loss provisions applied to preclude coverage because the claimant’s cease and desist letter, together with the insured’s response, showed that the insured knew underlying claimant’s alleged injury had occurred, or begun to occur prior to the effective date of the policy. The insured argued the policy’s known loss provisions did not apply because it was unaware of any actual or alleged continued use of claimant’s marks until claimant filed its lawsuit several years later.

The circuit court granted summary judgment in favor of the insurer and dismissed the coverage action. The Court of Appeals also found Ericka’s argument compelling and affirmed the circuit court’s dismissal of the insured’s complaint.