United States District Court, D. Hawaii
STATE FARM FIRE AND CASUALTY COMPANY, an Illinois Corporation, Plaintiff,
JOAN PRESCOTT, dba ALOHA HAPPY PLACE, Defendant.
ORDER GRANTING PLAINTIFF'S MOTION FOR SUMMARY
A. OTAKE UNITED STATES DISTRICT JUDGE.
the Court is Plaintiff State Farm's Motion for Summary
Judgment on its declaratory relief action, seeking a judgment
that State Farm is not required to defend its insured
Defendant Joan Prescott against a complaint brought against
her. For the reasons set forth below, the Motion is GRANTED.
Farm insures Joan Prescott's bed and breakfast business
with a business liability policy (the “Policy”).
The Policy requires State Farm to indemnify Prescott for
certain specified liabilities, and to defend Prescott against
lawsuits that may give rise to those covered liabilities. ECF
No. 17-10. In May of 2017, Ronald Ober (“Ober”)
sued Prescott in the Circuit Court of the Third Circuit of
the State of Hawai'i (the “Underlying Suit”).
ECF No. 17-7. Prescott sought State Farm's defense of the
Underlying Suit, and it appears State Farm began defending
the suit with a reservation of rights. See ECF No.
17-1 at 10. State Farm then brought this action seeking a
declaratory judgment that the Policy does not require State
Farm to defend Prescott in the Underlying Suit.
The Underlying Suit
Underlying Suit alleges the following: (1) that Prescott
began using Ober's trade name of “Volcano
Inn” for her competing bed and breakfast despite
knowing that Ober was already using the name, see
ECF No. 17-7 at ¶¶ 1-16; (2) that in 2009, Ober
received a judgment against Prescott for using the
“Volcano Inn” name, and that the judgment barred
Prescott's continued use of the name, see ECF
No. 17-7 at ¶¶ 17-18; (3) that Prescott entered
into a settlement agreement with Ober in 2012, in which
Prescott stated that she no longer used the name
“Volcano Inn” in any business capacity,
see ECF No. 17-7 at ¶ 22; and (4) that despite
the state court judgment and settlement agreement, since at
least 2012 to the present, Prescott has continued to use the
name “Volcano Inn” in her internet listings,
advertising, and domain name, see ECF No. 17-7 at
Underlying Suit asserts seven causes of action, as described
Count I-Infringement, Conversion and Theft of Trade
alleges that Prescott's use of the name “Volcano
Inn” for her bed and breakfast, such as in her domain
name, internet listings, and advertisements, infringed on
Ober's trade name. Id. at 7.
Count II-Constructive Trust
II alleges that Prescott was unjustly enriched by using the
name “Volcano Inn, ” and seeks to hold all unjust
proceeds in constructive trust for plaintiff Ober.
Id. at 7-8.
Count III-Equitable Lien
III alleges that Prescott was unjustly enriched by using the
name “Volcano Inn, ” and seeks to establish an
equitable lien on the property so that Ober can recover the
unjust proceeds. Id. at 8.
Count IV-Interference with Prospective Economic
IV alleges that Prescott's use of the name “Volcano
Inn” interfered with Ober's ...