When There are Two Damage Causing Events The Aggregate Limit Applies
Post 5078
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In February 2024, in the matter of Ciara Kilburn, et al. v. Bill Simmon, et al., 20-CV-461, a jury returned a plaintiffs’ verdict against Defendant The Media Factory f/k/a Vermont Community Access Media, Inc. (“VCAM”) and one of its employees.
VCAM’s liability insurer, plaintiff Hanover Insurance Company (“Hanover”) sued VCAM and the plaintiffs in the underlying suit, seeking a declaration as to the scope of its coverage obligations with respect to that verdict.
In The Hanover Insurance Company v. The Media Factory f/k/a Vermont Community Access Media, Inc. et al, 2025 Vt Super 051401, No. 24-CV-03700, Superior Court of Vermont, Civil Division, Chittenden Unit (May 14, 2025) decided how many occurrences impinged on the Hanover policy.
BACKGROUND
In the underlying action, Ciara Kilburn and Brona Kilburn alleged that in 2012 Bill Simmon, then an employee of VCAM, used a hidden camera to record them changing in and out of costumes in a utility room and then posted those videos on the internet. The women subsequently sued Simmon and VCAM. The jury found that Simmon invaded Ciara and Brona’s privacy and that VCAM negligently supervised Simmon. It awarded Ciara and Brona $1.75 million each from Simmon in compensatory damages, another $1.75 million each from VCAM in compensatory damages, and another $2 million each from Simmon in punitive damages.
THE INSURANCE
Hanover Commercial Line Policy No. ZHV 8849689 07 (“the Policy”) insured VCAM. The CGL Coverage Form describes the two coverages at issue here: Coverage A insures against “Bodily Injury and Property Damage Liability,” while Coverage B insures against “Personal and Advertising Injury Liability.”
Hanover issued no reservation of rights with respect to its obligations under the Policy. Rather it engaged counsel to represent VCAM and subsequently controlled that defense.
DISCUSSION
Hanover seeks a declaration that there can be no recovery under “Coverage B,” that there was only a single “occurrence” under Coverage A, and that VCAM’s coverage under the Policy is therefore limited to the $1 million per-occurrence limit.
There is no dispute that the most Hanover can owe under the Policy, whether under Coverage A, Coverage B, or any combination of the two, is the Policy’s aggregate limit of $2,000,000. A decision either that there were multiple occurrences or that Coverage B applies will leave the full aggregate limit exposed.
Because it did not reserve rights Hanover is now estopped from making the argument it should have reserved long ago.
The court concluded that Hanover’s aggregate limit, rather than the single occurrence limit, applies.
Focusing on the immediate cause-that is, the act that causes the damage-rather than the underlying tort-that is, the insured’s negligence-is consistent with the interpretation of other forms of insurance policies. An occurrence takes place at the time the party is actually damaged, rather than at some other moment when an allegedly wrongful act sets in motion the chain of events that eventually leads to the injury.
The Court found that sexual abuse does not fit neatly into the policies’ definition of continuous or repeated exposure to conditions. The jury verdict form further reflects that there were two “occurrences”: The jury found that Mr. Simmon invaded the Kilburns’ privacy by “taking the photos/videos” and also by “posting the photos/videos online/sharing them with a stranger.” The court rejected Hanover’s self-serving interpretation of the verdict form and instead concluded that there were two “occurrences” under the Policy.
The court denied Hanover’s motion and granted VCAM’s motion in part. The court declared that Hanover owes VCAM a duty of indemnification under Coverage A of the CGL coverage part of the Policy, up to its aggregate CGL coverage limit of $2,000,000, against the verdict obtained by the Kilburns in the underlying suit.
The determination that Hanover owes this duty under Coverage A moots any consideration of obligations owed under Coverage B.
VCAM and the Kilburns are entitled to judgment as a matter of law on Hanover’s Complaint.
ZALMA OPINION
When an insurer fails to advise its insured that it intends to reserve its right to limit coverage to a single limit of liability it essentially waives the right to make that claim. In this case, since there were obviously, at least, two separate actions causing damage to the underlying case’s plaintiffs which were two “occurrences” as defined in the policy and impinged two separate policy limits and requires Hanover to pay its full aggregate limit.
(c) 2025 Barry Zalma & ClaimSchool, Inc.
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Fraud Perpetrators Will Have Judgment Entered in Favor of Insurer They Defrauded
Post 5155
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Allstate Effectively Proactive Against Insurance Fraud
Plaintiffs Allstate Insurance Company and other Allstate companies (collectively, “Plaintiffs”) sued seeking redress for losses incurred due to an alleged insurance fraud scheme. Plaintiffs alleged that Defendants Toshner, Lacey Davies, Michael Trinh, Roadside Response, LLC, and Responsible Billing, LLC’s (collectively, “Defendants”) submitted false reimbursement claims for hazardous material cleanups that were never actually performed, were unnecessary, or did not involve an Allstate insured.
In Allstate Insurance Company, et al. v. Daniel Toshner, et al., No. 1:24-CV-27-RP, United States District Court, W.D. Texas, Austin Division (July 9, 2025) Allstate moved for default to be entered against the defendants.
...
When Plaintiff Gives Up Court Must Grant Summary Judgment
Post 5154
It is Contumacious to Sue an Insurer if You are Not Insured
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Defendant American National filed a motion for summary judgment because Plaintiff is not a named or third-party beneficiary of the Policy. Defendant contends that because Plaintiff is not covered by the Policy, Plaintiff cannot prove that Defendant breached the Policy or demonstrated bad faith under La. R.S. 22:1973 and 22:1892. In support of this contention, Defendant argued that the Policy only covers the “Named Insured/Mortgagee” of the property, Magee Holdings, LLC, and that the Policy does not name Plaintiff as an insured or a third-party beneficiary.
In Hannah Guillotte v. American National Property And Casualty Company, Civil Action No. 23-00931-BAJ-RLB, United States District Court, M.D. Louisiana (July 16, 2025) Plaintiff, the ...
When Plaintiff Gives Up Court Must Grant Summary Judgment
Post 5154
It is Contumacious to Sue an Insurer if You are Not Insured
See the full video at https://lnkd.in/ggmMWkcN and at https://lnkd.in/gJXMDYxG, and at https://zalma.com/blog plus more than 5100 posts.
Defendant American National filed a motion for summary judgment because Plaintiff is not a named or third-party beneficiary of the Policy. Defendant contends that because Plaintiff is not covered by the Policy, Plaintiff cannot prove that Defendant breached the Policy or demonstrated bad faith under La. R.S. 22:1973 and 22:1892. In support of this contention, Defendant argued that the Policy only covers the “Named Insured/Mortgagee” of the property, Magee Holdings, LLC, and that the Policy does not name Plaintiff as an insured or a third-party beneficiary.
In Hannah Guillotte v. American National Property And Casualty Company, Civil Action No. 23-00931-BAJ-RLB, United States District Court, M.D. Louisiana (July 16, 2025) Plaintiff, the ...
Rulings on Motions Reduced the Issues to be Presented at Trial
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CASE OVERVIEW
In Richard Bernier v. State Farm Mutual Automobile Insurance Company, No. 4:24-cv-00002-GMS, USDC, D. Alaska (May 28, 2025) Richard Bernier made claim under the underinsured motorist (UIM) coverage provided in his State Farm policy, was not satisfied with State Farm's offer and sued. Both parties tried to win by filing motions for summary judgment.
FACTS
Bernier was involved in an auto accident on November 18, 2020, and sought the maximum available UIM coverage under his policy, which was $50,000. State Farm initially offered him $31,342.36, which did not include prejudgment interest or attorney fees.
Prior to trial Bernier had three remaining claims against State Farm:
1. negligent and reckless claims handling;
2. violation of covenant of good faith and fair dealing; and
3. award of punitive damages.
Both Bernier and State Farm dispositive motions before ...
ZIFL Volume 29, Issue 10
The Source for the Insurance Fraud Professional
See the full video at https://lnkd.in/gK_P4-BK and at https://lnkd.in/g2Q7BHBu, and at https://zalma.com/blog and at https://lnkd.in/gjyMWHff.
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 ...
