## Facts

- Roto-Rooter granted John A. Brundage and related companies a franchise to provide sewer and drain-cleaning services in a defined territory and to use Roto-Rooter’s marks under specified conditions.
- Roto-Rooter alleged Brundage breached the franchise agreement by operating a competing business (“The Drain Doctor”) and by improperly using Roto-Rooter marks and business indicia (e.g., uniforms, vehicles, telephone lines, equipment) in connection with unauthorized services.
- Roto-Rooter sued Brundage and the companies, asserting claims including federal trademark/servicemark infringement, false designation of origin, state servicemark infringement, dilution/injury to business reputation, unfair competition, and breach of contract.
- Brundage held a commercial general liability policy with “personal injury” and “advertising injury” coverage, and tendered defense of the Roto-Rooter suit to Massachusetts Bay.
- Massachusetts Bay denied a defense, asserting the complaint did not allege covered “personal injury” or “advertising injury.”
- Brundage filed a declaratory-judgment action seeking a ruling that Massachusetts Bay owed a duty to defend and reimbursement of defense costs; the parties filed cross-motions for summary judgment.

## Issues

1. Whether the underlying trademark and unfair-competition allegations potentially fell within the policy’s “advertising injury” coverage, triggering the insurer’s duty to defend.
2. Whether the policy language (including “misappropriation of advertising ideas or style of doing business”) was ambiguous as applied and, if so, how it should be construed under New York law.
3. Whether, if any claim was potentially covered, the insurer was required to defend the entire underlying action.

## Decision

- The court granted Brundage’s motion for summary judgment and denied Massachusetts Bay’s motion.
- The court held Massachusetts Bay had a duty to defend the underlying action because at least one cause of action potentially alleged an “advertising injury” within the policy’s coverage.
- The court concluded the duty to defend extended to the entire underlying suit once potential coverage was shown.
- The court ordered Massachusetts Bay to reimburse reasonable defense costs incurred in the underlying litigation (with the amount to be determined separately).

## Legal Principles

- Under New York law, the duty to defend is broad and arises when the allegations suggest a reasonable possibility of coverage; uncertainty about ultimate liability or indemnity does not defeat the duty to defend.
- If any claim in the underlying complaint potentially falls within coverage, the insurer must defend the entire action.
- Ambiguous insurance-policy terms are construed against the insurer and in favor of the insured, particularly at the duty-to-defend stage.
- “Advertising injury” provisions that include “misappropriation of advertising ideas or style of doing business” can potentially encompass trademark infringement, false designation of origin, dilution, and unfair-competition allegations when the wrongful conduct is plausibly tied to the insured’s promotional or public-facing use of another’s marks or business identity.

## Conclusion

The court held that the insurer wrongfully refused to defend because the underlying complaint’s allegations of improper use of another’s marks and related business indicia could reasonably be read as “advertising injury,” requiring Massachusetts Bay to provide a defense and reimburse defense costs under the CGL policy.


J.A. Brundage Plumbing & Roto-Rooter, Inc. v. Massachusetts Bay Ins. Co., 818 F. Supp. 553 (W.D.N.Y. 1993)