Hewlett-Packard Awarded $51 Million Judgment Against Insurer, ACE : HP's Counsel, Gauntlett & Associates, Now Seeks Bad Faith Damages from ACE

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Federal District Court Judge James Ware found ACE Insurance Company owed Hewlett-Packard more than fifty-one million dollars in defense expenses, prejudgment interest and costs for defending an antitrust counterclaim under “advertisers’ injury” coverage. The judge then credited ACE with a partial payment during the suit of $11.7 million. Gauntlett & Associates’ David Gauntlett and James Lowe represented HP in the federal suit in San Jose.

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Because ACE refused to decide in the succeeding years whether to defend and never did defend HP, any delay by HP in giving notice should be irrelevant to the recovery of defense expenses. Additionally ACE sold an insurance policy with a provision expressly waiving any insurer defenses based on failure to comply with technical policy terms such as giving early notice of a suit.

David Gauntlett noted that HP was not only awarded 100% of its requested litigation expenses paid to outside counsel including the expenses of prosecuting HP's affirmative claims because they were shown to be necessary for the defense of the antitrust claims, but HP also recovered the expense of its in-house counsel time based on reasonable market rates.

HP had initiated suit against Nu-kote for patent infringement, trademark infringement, and false advertising claims arising from Nu-kote's infringement of cartridge and ink technology and use of deceptive packaging mimicking HP's trade dress for inkjet printer cartridges. Gauntlett successfully argued that the costs incurred in prosecuting the patent and trademark infringement claims were "reasonable and necessary" as defense costs to respond to Nu-kote's antitrust counterclaims related to advertising.

HP plans to appeal a court ruling that it could not recover defense expenses of the counterclaim that occurred before the defense was tendered to the insurer. Gauntlett & Associates partner James Lowe stated, "Because ACE refused to decide in the succeeding years whether to defend and never did defend HP, any delay by HP in giving notice should be irrelevant to the recovery of defense expenses. Additionally ACE sold an insurance policy with a provision expressly waiving any insurer defenses based on failure to comply with technical policy terms such as giving early notice of a suit."

About Gauntlett & Associates (G&A) http://www.gauntlettlaw.com

G&A is a dynamic global law firm with a practice focusing upon representing corporate policyholders seeking insurance coverage for intellectual property, antitrust/unfair competition and other business tort defense claims as well as employment liability. G&A can also represent clients in the underlying business tort and intellectual property cases, but only in those cases where the referral source does not wish to undertake the representation.

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Richard A. Beserra
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