MARYLAND CASUALTY COMPANY, et al.
BLACKSTONE INTERNATIONAL LTD, et al.
Argued: February 5, 2015
Circuit Court for Baltimore County Case No.: 03-C-11-004834
Barbera, C.J., Harrell, Battaglia, Greene, Adkins, McDonald, Watts, JJ.
Under Maryland law, an insurance company has a duty to defend its insured for any claims brought against it that are potentially covered under the insured's policy. Thus, a duty to defend may extend even beyond instances in which an insured is liable and the insurer must indemnify. In this case, we must assess whether an insurance company had a duty to defend its insured under a commercial general liability policy's "advertising injury" clause against a suit sounding in breach of contract and arising out of a joint business venture.
FACTS AND LEGAL PROCEEDINGS 
The Business Venture
In October 2006, Robert M. Gray, President of RMG Direct, Inc. ("RMG"), first met John F. Black, President and Chief Executive Officer of Blackstone International, Ltd. ("Blackstone"). During their initial conversation, Black informed Gray that he "was in the business of manufacturing and selling lamps and other lighting products designed to assist low vision consumers." Gray then informed Black of his role at RMG and his "professional background in the vision field." The two men then proposed a joint venture to "market and sell lighting products to people with low vision problems, " and agreed to discuss the venture at a later date.
Approximately one month later, Gray and Black met to discuss the possibility of working together. At this time, Gray outlined his experience in low vision medicine and his working relationships with many of the field's leading practitioners. In early December 2006, Gray visited Blackstone's offices, where he met Blackstone's Product Development Manager and a member of its sales department. At this meeting, Black and Gray "agreed that RMG and Blackstone would form a confidential relationship and collaborate [on a] joint venture to develop plans for the design, marketing and sale of low vision lighting products to retailers[.]" Gray also agreed to work "in exchange for remuneration."
Throughout the next four years, Gray-working on behalf of RMG-worked in collaboration with Black and Blackstone employees to develop and market their joint venture. During this time, Gray performed multiple tasks without compensation, including: (1) developing the product brand name "Vision Enhance"; (2) creating graphics for use in sales sheets; (3) developing and reviewing packaging and marketing of "Vision Enhance"; (4) contacting low vision experts and sufferers on behalf of the venture, which involved obtaining written testimonials; and (5) "procur[ing] the placement of a full page color ad[vertisement in an industry journal, ] introducing the 'Vision Enhance' brand."
As part of his work with Blackstone, Gray participated in the development of a sales presentation to Wal-Mart Stores, Inc. ("Wal-Mart") in an effort to place the product line for sale in its stores. Although Gray did not attend the presentation, he played a significant role in creating the materials and responding to Wal-Mart's inquiries. Although Black had informed Gray that no progress had been made with Wal-Mart, Gray learned that "Vision Enhance" was stocked and sold in Wal-Mart locations across the United States. Blackstone continued to sell "Vision Enhance" and other low vision lighting products-which Gray believes were procured through its initial relationship with the retailer via "Vision Enhance"-under the label "Mainstays" at Wal-Mart locations. Blackstone "us[ed] all, or substantially all, of the ideas, information, input and efforts of Gray[, ]" including "the use of the 'Vision Enhance' name on the boxes[, and use of] the same or substantially similar box design, copy on the box, and product instructions[.]"
While performing this work for Blackstone, Gray believed that RMG and Blackstone had reached an agreement that Blackstone would create a new division for its low vision products, and that RMG would receive a 7% sales commission for and a 50% equity interest in the low vision products. In mid-2007, Gray approached Black in an effort to memorialize their verbal agreement. Over the course of the following months, Gray proposed multiple written agreements, each of which Black modified or rejected. The two men never reached a written agreement.
On February 22, 2010, RMG filed suit against Blackstone and Black in the Circuit Court for Baltimore County. It later filed two amended complaints, alleging substantially the same facts and the following causes of action: breach of contract (Count I); promissory estoppel (Count II); unjust enrichment (Count III); quantum meruit (Count IV); intentional misrepresentation (Count V); and accounting (Count VI). This Second Amended Complaint formed the basis of the underlying suit.
Blackstone's Insurance Policy
Blackstone has been insured by Maryland Casualty Company and Northern Insurance Company of New York (collectively, "Insurers") for commercial general liability insurance since 2001. Its Commercial General Liability Coverage Form (the "Policy") included coverage for Personal and Advertising Injury Liability. In relevant part, the Policy provides:
[Insurer] will pay those sums that the insured becomes legally obligated to pay as damages because of "personal and advertising injury" to which this insurance applies. We will have the right and duty to defend the insured against any "suit" seeking those damages. However, we will have no duty to defend the insured against any "suit" seeking damages for "personal and advertising injury" to which this insurance does not apply. We may, at our discretion, investigate any offense and settle any claim or "suit" that may result.
In part, the Policy defines "personal and advertising injury" as "injury . . . arising out of . . . [t]he use of another's advertising idea in your 'advertisement.'" Under the terms of the Policy, "'Advertisement' means a notice that is broadcast or published to the general public or specific market segments about your goods, products or services for the purpose of attracting customers or supporters."
On February 17, 2011, Blackstone and Black wrote to Insurers, requesting coverage and litigation defense under the personal and advertising injury provisions of the Policy.On May 17, 2011, Insurers filed a Complaint for Declaratory Judgment, seeking a judgment that they had no duty to defend the claims because, they argued, the Second Amended Complaint did not allege that Blackstone had engaged in advertising, that RMG had suffered an advertising injury, or that there was any "causal connection between any of RMG's claimed damages . . . and any advertising conducted by Blackstone." Insurers also contended that all six counts in the Second Amended Complaint were excluded from coverage by the Policy's terms. Thus, Insurers asserted, there was no potentiality of coverage for Blackstone's claim, and Insurers had no duty to defend.
Summary Judgment Proceedings
The parties filed cross motions for summary judgment. Following a hearing, the Circuit Court entered summary judgment in favor of Insurers. Blackstone appealed to the Court of Special Appeals, which reversed the Circuit Court. Blackstone Int'l Ltd. v. Md. Cas. Co., 216 Md.App. 471, 477, 88 A.3d 792, 795 (2014).
The intermediate appellate court concluded that the Policy's definition of "advertisement" was implicated in a Blackstone website that allegedly used RMG's advertising ideas, that "Vision Enhancement" product packaging constituted an advertisement, and that Gray's advertising ideas could be described as "another's, " although Blackstone contended that it owned the rights to the ideas due to its agreement with RMG. Id. at 482–85, 88 A.3d at 798–800. The Court of Special Appeals also rejected Insurers' contention that RMG did not allege an advertising injury. Id. at 486, 88 A.3d at 801. Concluding that Insurers had waived any defense raised by the Policy's exclusions, it reasoned that their duty to defend depended only upon whether RMG's claims "'arose out of' the use of RMG's advertising ideas in Blackstone's advertisements, without regard to whether the acts were intentional or rooted in breach of contract." Id. at 488–89, 88 A.3d at 802–03. The court also relied upon the exclusions as support for its conclusion that "had intentional conduct and breaches of contract not been excluded, they would fall within the agreement's broad and unambiguous definition of 'advertising injury.'" Id. at 488, 88 A.3d at 802 (emphasis in original). The Court of Special Appeals concluded that RMG's unjust enrichment claim did arise out of Blackstone's use of its advertising idea, and, thus, that Maryland law obligated Insurers to defend Blackstone against all of RMG's claims. Id. at 489–90, 88 A.3d at 803–04.
We granted Insurers' Amended Petition for Writ of Certiorari to consider the following questions:
1. Did the [Court of Special Appeals] err in holding that product packaging was "advertisement, " and that the "use of another's advertising idea" need not be "wrongful use, " when it substituted its own definitions of those terms for the clear and unambiguous definitions contained in the Policy?
2. Did the [Court of Special Appeals] err in applying this Court's binding precedent requiring an insured to establish all three elements of coverage for "advertising injury" to trigger the duty to defend by concluding that the "causal relationship" element was not necessary in this case?
3. Did the [Court of Special Appeals] err in finding that Insurers waived policy exclusions as bases for denial of coverage and creating liability beyond the bounds of the Policy when, as a matter of public policy, coverage may not be expanded by waiver?
4. Did the [Court of Special Appeals] err in finding that Insurers waived Policy exclusions as bases for denial of coverage when policy exclusion defenses were raised, argued, and preserved at the trial court level and on appeal?
Because we answer yes to the second question, we need not address the other questions and shall reverse the judgment of the Court of Special of Appeals.
STANDARD OF REVIEW
We review a grant of summary judgment as a matter of law. Eng'g Mgmt. Servs. v. Md. State Highway Admin., 375 Md. 211, 229, 825 A.2d 966, 976 (2003). "The standard for appellate review of a trial court's grant or denial of a summary judgment motion is whether the trial court was legally correct." Sheets v. Brethren Mut. Ins. Co., 342 Md. 634, 638, 679 A.2d 540, 542 (1996) (citation omitted). Thus, we conduct an independent review of the record to determine whether a genuine dispute of material fact exists and whether the moving party is entitled to judgment as a matter of law. Walk v. Hartford Cas. Ins. Co., 382 Md. 1, 14, 852 A.2d 98, 105–06 (2004). "We review the record in the light most favorable to the non-moving party and construe any reasonable inferences which may be drawn from the facts against the movant." Id. at 14, 852 A.2d at 106 (citation omitted).
We construe an insurance policy according to contract principles. Moscarillo v. Prof'l Risk Mgmt. Servs., Inc., 398 Md. 529, 540, 921 A.2d 245, 251 (2007). Maryland follows the objective law of contract interpretation. Sy-Lene of Wash., Inc. v. Starwood Urban Retail II, LLC, 376 Md. 157, 166, 829 A.2d 540, 546 (2003). Thus, "'the written language embodying the terms of an agreement will govern the rights and liabilities of the parties, irrespective of the intent of the parties at the time they entered into the contract.'" Long v. State, 371 Md. 72, 84, 807 A.2d 1, 8 (2002) (quoting Slice v. Carozza Props., Inc., 215 Md. 357, 368, 137 A.2d 687, 693 (1958)). "When the clear language of a contract is unambiguous, the court will give effect to its plain, ordinary, and usual meaning, taking into account the context in which it is used." Sy-Lene, 376 Md. at 167, 829 A.2d at 546 (citation omitted). "Unless there is an indication that the parties intended to use words in the policy in a technical sense, they must be accorded their customary, ordinary, and accepted meaning." Lloyd E. Mitchell, Inc. v. Md. Cas. Co., 324 Md. 44, 56–57, 595 A.2d 469, 475 (1991) (citations omitted). Although Maryland does not follow the rule that insurance ...