Our coverage department continues its recent string of successes with two more summary judgment rulings in favor of insurers.
Gail Stargardter recently obtained summary judgment on behalf of Atain Specialty Insurance Company in a case filed in the United States District Court, Northern District of California. The court found that there was no potential for coverage for three cases in which the plaintiffs alleged that Atain’s insured, the owner of a building leased to a sole tenant who produced pornographic videos, was responsible for plaintiffs’ contracting the HIV virus after engaging in sexual activity at a pornographic video shoot. The court held that a Physical and Sexual Abuse exclusion, which precluded coverage for liability arising out of or resulting from sexual behavior intended to lead to, or culminating in any sexual act, applied to bar all claims asserted against the building owner, including claims for negligent hiring and supervision, and ruled that Atain is entitled to costs of defense incurred in defending the insured subject to a reservation of rights and any indemnification payments made on behalf of the insured to settle those claims.
Limor Lehavi recently obtained summary adjudication on behalf of Mid-Century Insurance Company in Orange County Superior Court that there is no continuing duty to defend and no duty to indemnify an insured in a case in which liability was found against the insured based on trespass and nuisance on the grounds that as a matter of law the insured’s liability did not result from any accidental conduct, which is required for the policy to apply. The court also found that Mid-Century ever had any duty to defend a corporation which is alleged by the insured to be his alter ego, but does not otherwise qualify as an insured under the policy. The case will proceed to a bench trial to determine the amount to which Mid-Century is entitled in reimbursement of defense costs incurred to date in defending the insured from claims that were not even potentially covered.