The output dataset already exists and cannot be overwritten.
Check to see if the option, Overwrite the output of geoprocessing operations, is unchecked. Your settings may be preventing you from overwriting any data that already exists. To access the geoprocessing settings, click the Customize menu on the Standard toolbar of the application you are working in and click ArcMap Options, then click the Geoprocessing tab. Learn more about Controlling tool results.