Insurance — advertising injury

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Wisconsin Court of Appeals

Civil

Insurance — advertising injury

An insurer covering advertising injury had a duty to defend a claim alleging misappropriation and use of the plaintiff’s website source code and site content and an internet advertising system that was designed to place advertisements for the company on potential customers’ computers.

“Air Engineering states potentially covered claims that do not base liability on a showing of a knowing violation of another’s rights and infliction of advertising injury. For example, the elements of breach of a fiduciary duty are: (1) the defendant owes a fiduciary duty to the plaintiff, (2) the defendant breached that duty, and (3) the defendant’s breach of the duty caused the plaintiff’s damages. Berner Cheese Corp. v. Krug, 2008 WI 95, ¶40, 312 Wis. 2d 251, 752 N.W.2d 800. There is no requirement that the plaintiff prove a knowing violation of another’s rights. A claim for unjust enrichment requires that the defendant know that he has received a benefit, Staver v. Milwaukee County, 2006 WI App 33, ¶24, 289 Wis. 2d 675, 712 N.W.2d 387, but it does not require a showing that the defendant knowingly acted to violate another’s legal rights and inflict advertising injury. Finally, under WIS. STAT. § 134.90, trade secret misappropriation can occur when a person knows or should have known his or her actions were improper. WIS. STAT. § 134.90(2)(a), (b)2. The statute does not require actual knowledge or intent. There may be other exclusions in the policy that apply to these claims, and there may be other claims that could be proven without showing knowledge or intent. All we say is that there are claims set forth in the complaint that survive the ‘knowing violation’ exclusion. The inclusion in the complaint of an allegation of willful and malicious conduct does not relieve Acuity of its duty to defend.”

Reversed and Remanded.

Recommended for publication in the official reports.

2012AP103 Air Engineering, Inc., v. Industrial Air Power, LLC

Dist. II, Ozaukee County, Malloy, J., Neubauer, J.

Attorneys: For Appellant: Schott, Pat J., Brookfield; Fredrick, Kristin Posekany, Brookfield; For Respondent: Rice, Christine Marie, Milwaukee