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MATTOCKS v. DAYLIN

June 17, 1978

CHARLOTTE MATTOCKS, as parent and natural guardian of KEVIN MATTOCKS and CHARLOTTE MATTOCKS, in her own right
v.
DAYLIN, INC. v. SULLCRAFT MANUFACTURING CO., a corporation, t/d/b/a ANSON PAJAMA CO. v. DAN RIVER, INC. v. COMMERCIAL UNION INSURANCE COMPANY v. INSURANCE COMPANY OF NORTH AMERICA


Gerald J. Weber, United States District Judge.


The opinion of the court was delivered by: WEBER

[EDITOR'S NOTE: The following court-provided text does not appear at this cite in 452 F. Supp.]

ORDER

 AND NOW this 17th day of June, 1978, we declare that the claims asserted against Sullcraft Manufacturing Co. are covered by the insurance policy issued by Insurance Company of North America and further that the Insurance Company of North America was obligated to provide a defense on behalf of Sullcraft Manufacturing Company with respect to the claims referred to in the attached opinion.

 IT IS FURTHER ORDERED that Insurance Company of North America's Motion to Dismiss the Complaint for Declaratory Judgment for failure to state a claim on which relief can be granted is DENIED.

 IT IS FURTHER ORDERED that the parties shall file a Sitpulation with respect to the amount of costs including reasonable attorney fees incurred by Sullcraft Manufacturing Company with respect to the above mentioned matters, on or before the 20th day of July, 1978. In the event the parties cannot reach an agreement Sullcraft shall file its claim and any supporting evidence by said date and the matter will be set for hearing.

 IT IS FURTHER ORDERED that upon the approval of a Stipulation regarding the calculation of costs, the above-entitled action is DISMISSED.

 GERALD J. WEBER United States District Judge

 WEBER, J.

 A jury trial in the above-entitled action concluded on September 15, 1977, with a finding of no liability against defendant Daylin, Inc. Prior to trial of the action, third party defendant Sullcraft Manufacturing Company (Sullcraft) filed a third party Complaint for Declaratory Judgment against a new third party defendant, Insurance Company of North America (INA).

 Sullcraft's Complaint for declaratory relief requested this Court to declare that the claims asserted against Sullcraft were covered by the vendor's endorsement issued by INA in favor of vendors of cotton goods purchased from Dan River, Inc., and that INA was thereby obligated to provide indemnification in the event of a finding of liability against Sullcraft, and, a defense on behalf of Sullcraft.

 Because of the jury finding of no liability, we have no need to consider if Sullcraft is entitled to indemnification by INA. However, still pending is Sullcraft's request for a declaration of entitlement to all reasonable costs of defense, including but not limited to attorney fees incurred in defense of the above matter and in prior proceedings arising out of the same claim. *fn1"

 In its Answer to the Complaint for Declaratory Judgment, INA based its refusal to defend under the "plain and clear meaning of the exclusion" contained in the vendor's endorsement. INA alleges that the clear intent of the exclusive language in the endorsement was to exclude vendors who acquired materials from Dan River, Inc. which became component or integral parts of products manufactured by the vendors. Allegedly, vendors who changed the product as shipped by Dan River or labeled, packaged and re-sold the Dan River material, also were excluded from coverage.

 INA has moved to dismiss the Complaint for Declaratory Judgment for failure to state a claim based upon the language of the vendor's endorsement. INA also claims (in its brief in support of the Motion to Dismiss) that proof of the identity or origin of the pajamas was assumed throughout trial but never traced to any of the defendants, particularly Dan River. Because there exists no credible evidence to the contrary, we find that the subject ...


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