NATIONAL CLOTHING, CO. v. HARTFORD CAS. INS.

No. 56750-1-I.

145 P.3d 394 (2006)

NATIONAL CLOTHING COMPANY, INC., a Washington corporation d/b/a National Distributors, & Costco Wholesale Corporation, a Washington corporation, for themselves and as judgment creditors of K & M Industries, Inc., LLC a California limited liability company, Respondents, v. HARTFORD CASUALTY INSURANCE COMPANY, a foreign insurer authorized by the Washington Insurance Commissioner, Appellant.

Court of Appeals of Washington, Division 1.

October 23, 2006.


Attorney(s) appearing for the Case

John Patrick Hayes, Patrick S. Brady, Forsberg & Umlauf PS, Seattle, WA, for Appellant.

Bradley William Hoff, Todd Christopher Hayes, Foster Pepper PLLC, Sarah Kirstine Johnson, Nordstrom Corporate Risk Management, Seattle, WA, for Respondents.


BECKER, J.

¶ 1 Hartford's insured, K & M, sold counterfeit shampoo to Costco. When K & M was unable to authenticate the product, Costco had to destroy it. The question is whether a general liability policy obligates Hartford to cover K & M for its breach of an implied warranty of sale, and to pay Costco for the purchase price, lost profits, and other costs associated with Costco's loss of use of the product. We conclude that the policy exclusion for...

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