Duty to Defend and Indemnify Inviolate
Barry Zalma
Oct 6, 2023
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Four insurers (collectively, the appellants) appealed the district court’s order finding they are required to provide insurance coverage for an incident at Hampton Inn-Albany, a hotel owned by Albany Downtown Hotel Partners, LCC (Albany), and managed by Banyan Tree Management, LCC (Banyan). The four insurance companies-Citizens Insurance Company of America and Massachusetts Bay Insurance Company (collectively, Hanover), Westfield Insurance Company (Westfield), and Starr Indemnity &Liability Company (Starr)-issued commercial general liability insurance to Banyan and Albany.
In Citizens Insurance Company Of America, Massachusetts Bay Insurance Company, Westfield Insurance Company, Intervenor v. Banyan Tree Management, LLC, Albany Downtown Hotel Partners, LLC, Jane Doe, Starr Indemnity &Liability Company, No. 22-13581, United States Court of Appeals, Eleventh Circuit (September 28, 2023) the Eleventh Circuit affirmed.
FACTS
In 2015, an employee of Hampton Inn-Albany secretly recorded a hotel guest while she was showering in the hotel bathroom. Years later, the video was circulated, and the guest sued Banyan and Albany for negligence, premises liability, and vicarious liability, alleging she suffered emotional and subsequent physical injury (Underlying Complaint). Banyan and Albany subsequently sought coverage from their insurance providers, who disputed their duty to cover this injury, primarily arguing that the Underlying Complaint did not include allegations of “personal and advertising injury” arising out of Albany’s “legitimate business,” and that their policy exclusions precluded coverage.
DISCUSSION
Georgia law makes clear that ambiguities are to be resolved in favor of the insured noting that if the policy exclusions are ambiguous, the purported reservation of rights must be construed strictly against the insurer and liberally in favor of the insured.
The appellants failed to even make a showing of ambiguity, let alone definitively establish that the Underlying Complaint falls outside their policies or that an exclusion precludes coverage. The Eleventh Circuit found unpersuasive the arguments that the hotel guest’s right to privacy was not violated, and that the recording did not arise out of Banyan and Albany’s business.
While filming a showering guest is clearly not a “legitimate” hotel practice, when a hotel employee-who would not have had access to the room but for his authority-places the camera in the bathroom and circulates the video, the injury was undoubtedly imputed to the hotel.
Accordingly, the Eleventh Circuit affirmed the district court’s decision.
ZALMA OPINION
Hotel employees should not have the access to film a guest while she showered and then distribute the video to the world as she, believing she was taking a private shower, was clearly an illegitimate hotel practice performed by an employee who was given access by the hotel to include a camera where the victim showered. No exclusion applied and coverage was clearly applicable.
(c) 2023 Barry Zalma & ClaimSchool, Inc.
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Notice of Claim Later than 60 Days After Expiration is Too Late
Post 5089
Injury at Massage Causes Suit Against Therapist
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Hiscox Insurance Company (“Hiscox”) moved the USDC to Dismiss a suit for failure to state a claim because the insured reported its claim more than 60 days after expiration of the policy.
In Mluxe Williamsburg, LLC v. Hiscox Insurance Company, Inc., et al., No. 4:25-cv-00002, United States District Court, E.D. Missouri, Eastern Division (May 22, 2025) the trial court’s judgment was affirmed.
FACTUAL BACKGROUND
Plaintiff, the operator of a massage spa franchise, entered into a commercial insurance agreement with Hiscox that provided liability insurance coverage from July 25, 2019, to July 25, 2020. On or about June 03, 2019, a customer alleged that one of Plaintiff’s employees engaged in tortious ...
ZIFL – Volume 29, Issue 11
The Source for the Insurance Fraud Professional
Posted on June 2, 2025 by Barry Zalma
Post 5087
See the full video at and at
Read the full article and the full issue of ZIFL June 1, 2025 at https://zalma.com/blog/wp-content/uploads/2025/05/ZIFL-06-01-2025.pdf
Zalma’s Insurance Fraud Letter – June 1, 2025
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ZIFL – Volume 29, Issue 11
The Source for the Insurance Fraud Professional
Read the full article and the full issue of ZIFL June 1, 2025 at https://lnkd.in/gTWZUnnF
Zalma’s Insurance Fraud Letter (ZIFL) continues its 29th year of publication dedicated to those involved in reducing the effect of insurance fraud. ZIFL is published 24 times a year by ClaimSchool and is written by Barry Zalma. It is provided FREE to anyone who visits the site at ...
No Coverage if Home Vacant for More Than 60 Days
Failure to Respond To Counterclaim is an Admission of All Allegations
Post 5085
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In Nationwide Mutual Insurance Company v. Rebecca Massey, Civil Action No. 2:25-cv-00124, United States District Court, S.D. West Virginia, Charleston Division (May 22, 2025) Defendant Nationwide Mutual Insurance Company's (“Nationwide”) motion for Default Judgment against Plaintiff Rebecca Massey (“Plaintiff”) for failure to respond to a counterclaim and because the claim was excluded by the policy.
BACKGROUND
On February 26, 2022, Plaintiff's home was destroyed by a fire. At the time of this accident, Plaintiff had a home insurance policy with Nationwide. Plaintiff reported the fire loss to Nationwide, which refused to pay for the damages under the policy because the home had been vacant for more than 60 days.
Plaintiff filed suit ...
ZIFL Volume 29, Issue 10
The Source for the Insurance Fraud Professional
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Zalma’s Insurance Fraud Letter (ZIFL) continues its 29th year of publication dedicated to those involved in reducing the effect of insurance fraud. ZIFL is published 24 times a year by ClaimSchool and is written by Barry Zalma. It is provided FREE to anyone who visits the site at http://zalma.com/zalmas-insurance-fraud-letter-2/ You can read the full issue of the May 15, 2025 issue at http://zalma.com/blog/wp-content/uploads/2025/05/ZIFL-05-15-2025.pdf
This issue contains the following articles about insurance fraud:
Health Care Fraud Trial Results in Murder for Hire of Witness
To Avoid Conviction for Insurance Fraud Defendants Murder Witness
In United States of America v. Louis Age, Jr.; Stanton Guillory; Louis Age, III; Ronald Wilson, Jr., No. 22-30656, United States Court of Appeals, Fifth Circuit (April 25, 2025) the Fifth Circuit dealt with the ...
Professional Health Care Services Exclusion Effective
Post 5073
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This opinion is the recommendation of a Magistrate Judge to the District Court Judge and involves Travelers Casualty Insurance Company and its duty to defend the New Mexico Bone and Joint Institute (NMBJI) and its physicians in a medical negligence lawsuit brought by Tervon Dorsey.
In Travelers Casualty Insurance Company Of America v. New Mexico Bone And Joint Institute, P.C.; American Foundation Of Lower Extremity Surgery And Research, Inc., a New Mexico Corporation; Riley Rampton, DPM; Loren K. Spencer, DPM; Tervon Dorsey, individually; Kimberly Dorsey, individually; and Kate Ferlic as Guardian Ad Litem for K.D. and J.D., minors, No. 2:24-cv-0027 MV/DLM, United States District Court, D. New Mexico (May 8, 2025) the Magistrate Judge Recommended:
Insurance Coverage Dispute:
Travelers issued a Commercial General Liability ...
A Heads I Win, Tails You Lose Story
Post 5062
Posted on April 30, 2025 by Barry Zalma
"This is a Fictionalized True Crime Story of Insurance Fraud that explains why Insurance Fraud is a “Heads I Win, Tails You Lose” situation for Insurers. The story is designed to help everyone to Understand How Insurance Fraud in America is Costing Everyone who Buys Insurance Thousands of Dollars Every year and Why Insurance Fraud is Safer and More Profitable for the Perpetrators than any Other Crime."
Immigrant Criminals Attempt to Profit From Insurance Fraud
People who commit insurance fraud as a profession do so because it is easy. It requires no capital investment. The risk is low and the profits are high. The ease with which large amounts of money can be made from insurance fraud removes whatever moral hesitation might stop the perpetrator from committing the crime.
The temptation to do everything outside the law was the downfall of the brothers Karamazov. The brothers had escaped prison in the old Soviet Union by immigrating to the United...
