LA Lakers seek punitive damages from insurer in bad faith claim denialJoseph M. Hanna
On Tuesday 2 September, the Los Angeles Lakers filed suit1 against its insurer, Federal Insurance Co., for bad faith denial of coverage for a Telephone Consumer Protection Act 1991 (TCPA) violation suit, which settled earlier this year.
David Emanuel brought the TCPA class-action lawsuit in 2012, claiming the Lakers were sending unwanted text message to his mobile device in violation of the Act. The Lakers sought defence and indemnity under its Corporate Liability Coverage policy from Federal; however, the insurer denied coverage claiming the suit fell within the “invasion of privacy exclusion.”
The Lakers repeated their request on several occasions, as the Emanuel suit did not claim invasion of privacy. Federal, nevertheless, denied coverage.
The TCPA claims against the Lakers were eventually dismissed with prejudice, and while the appeal was pending in the 9th Circuit, the parties reached a settlement. The Lakers however were not satisfied with footing the bill for the defence costs.
The Lakers’ complaint alleges that Federal Insurance Co. intentionally breached the terms of the insurance policy, resulting in a tortious breach of the implied covenant of good faith. The complaint alleges that Federal denied the Lakers’ claims with intent to injure, prior to and without performing an investigation into the claims.
With an allegation of bad faith, the Lakers seek punitive damages in addition to standard damages for failing to defend and indemnify.
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- Tags: Basketball | Contract | National Basketball Association (NBA) | Privacy | Telephone Consumer Protection Act 1991 (TCPA) | United States of America (USA)
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