THE LAWSUIT ALLEGED ANTITRUST VIOLATIONS, WHICH ARE EXCLUDED FROM COVERAGE, THE PASSING REFERENCES TO PRODUCT DISPARAGEMENT, WHICH WOULD BE COVERED, DID NOT TRIGGER THE DUTY TO DEFEND (FIRST DEPT).

The First Department upheld the declaratory judgment finding that defendant insurer does not have a duty to defend based upon the exclusion of coverage for antitrust violations. Despite the allegations in the complaint which colored the action as one for product disparagement, which would be covered, the complaint alleged antitrust violations:

The underlying lawsuit alleges, broadly, that plaintiff acquired and maintained its 90% market share of VHR (vehicle history report) sales by engaging in an anticompetitive scheme. Plaintiff contends that defendant owes it a defense in the suit because the suit alleges disparagement. It relies on the following allegations: “By contractually committing these two websites to include hyperlinks to Carfax VHRs and to exclude VHRs of any other provider, Carfax has stigmatized any listing without such a link in the eyes of consumers who infer that the absence means that the car has a blemished history.” “Carfax also utilizes its inflated revenues to disparage and falsely malign dealers in order to mislead consumers into believing its VHRs are necessary and accurate.”

These passing references to disparagement do not allege a “Wrongful Act” [within the meaning of the policy language].” They were made “only in the context of the anti-trust claims, i.e. , as legal jargon pertinent to anti-trust and not as a means of even arguably alleging a separate claim for libel, slander or product disparagement” … . Carfax, Inc. v Illinois Natl. Ins. Co., 2018 NY Slip Op 01409, First Dept 3-1-18

INSURANCE LAW (THE LAWSUIT ALLEGED ANTITRUST VIOLATIONS, WHICH ARE EXCLUDED FROM COVERAGE, THE PASSING REFERENCES TO PRODUCT DISPARAGEMENT, WHICH WOULD BE COVERED, DID NOT TRIGGER THE DUTY TO DEFEND (FIRST DEPARTMENT))/DUTY TO DEFEND (INSURANCE LAW, THE LAWSUIT ALLEGED ANTITRUST VIOLATIONS, WHICH ARE EXCLUDED FROM COVERAGE, THE PASSING REFERENCES TO PRODUCT DISPARAGEMENT, WHICH WOULD BE COVERED, DID NOT TRIGGER THE DUTY TO DEFEND (FIRST DEPARTMENT))/ANTITRUST ((INSURANCE LAW, THE LAWSUIT ALLEGED ANTITRUST VIOLATIONS, WHICH ARE EXCLUDED FROM COVERAGE, THE PASSING REFERENCES TO PRODUCT DISPARAGEMENT, WHICH WOULD BE COVERED, DID NOT TRIGGER THE DUTY TO DEFEND (FIRST DEPARTMENT))