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Blackstone Int'l, Ltd. v. Maryland Casualty Co.

Court of Special Appeals of Maryland

February 28, 2014


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[Copyrighted Material Omitted]

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Appeal from the Circuit Court for Baltimore County. Mickey J. Norman, Judge.


Argued by: Mark H. Kolman (John A. Gibbons, Omid Safa, Dickstein Shapiro LLP on the brief (all of Washington, D.C. for Appellant.

Argued by: Charles L. Simmons, Jr. (Michael R. Naccarato, James R. Jeffcoat, Gorman & Williams on the brief) all of Baltimore, MD for Appellee.

Panel: Eyler, Deborah S., Matricciani, Clagett, Marjorie L. (Specially Assigned), JJ. Opinion by Matricciani, J.


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[216 Md.App. 476] Matricciani, J.

On May 17, 2011, Maryland Casualty Company and Northern Insurance Company of New York, (collectively, " the Insurers" ), brought a complaint for declaratory judgment in the Circuit Court for Baltimore County, against Blackstone International, Ltd., and John R. Black (collectively, " Blackstone" ). The complaint asked the circuit court to declare that the parties' insurance policy did not cover a lawsuit brought against Blackstone by RMG Direct, Inc. (" RMG" ), and that the Insurers had no duty to defend Blackstone in that suit. Blackstone counter-claimed for opposite declarations and asked the court to order the Insurers to pay the costs of litigation in the RMG case and in the present case, as well as to indemnify Blackstone for any damages arising from that case.

Blackstone moved for partial summary judgment on the duty to defend in the underlying litigation, and the Insurers moved for summary judgment as to both their duty to defend and their duty to indemnify. The circuit court granted the Insurers' motion and entered summary judgment in their favor, from which Blackstone timely appealed, bringing the case before this Court.

Question Presented

Blackstone presents the following question for our review, which we have rephrased to comport with our discussion:

I. Did the trial court err when it entered summary judgment in favor of the Insurers on the grounds that the [216 Md.App. 477] underlying claims against Blackstone did not constitute " advertising injuries" under the parties' insurance agreement?

For the reasons that follow, we answer yes, and we therefore reverse the judgment of the Circuit Court for Baltimore County and remand the case for further proceedings.

Factual and Procedural History

Blackstone designs and manufactures lighting products, including those that mimic natural light, which are known as

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" full spectrum" lights. In February 2010, Blackstone was sued by RMG, whose complaint claimed, in part, that the two parties had agreed to a " joint venture to develop plans for the design, marketing and sale of low vision lighting products to retailers." RMG further alleged that Blackstone had promised to give RMG seven percent of its gross revenues from the sale of these products, and that RMG was to have a " fifty-percent [] interest in the newly created brand for the sale of low vision light products."

RMG claimed that its efforts in the joint venture yielded expert evaluations and product testimonials, the " Vision Enhance" brand name, the slogan " to help you see better ," and the product's packaging design and " copy" (the content displayed on the packaging). According to the complaint, Blackstone used and distributed this content in various forms, including its product packaging, a website, a trade publication advertisement, and third-party catalogs, as well as in sales sheets, informational offerings, and marketing presentations to retailers such as Wal-Mart. According to RMG, sales were so successful that Wal-Mart adopted the product into its own private-label line of products.

RMG asserted several causes of action in its complaint against Blackstone. First, RMG claimed that Blackstone breached an oral contract[1] between the parties by failing to pay RMG either its commission or profits from its one-half interest in the parties' new venture. Second, RMG claimed [216 Md.App. 478] that its detrimental reliance on Blackstone's promises estopped Blackstone from withholding those payments. Third, RMG claimed that Blackstone was unjustly enriched because it " continues to retain the benefit conferred upon it by Plaintiff through, in part, its use of concepts, expert evaluations, [the] 'Vision Enhance' brand name[,] and packaging, all of which were developed by [RMG] or with [RMG]'s ...

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