7:37am PT by Eriq Gardner
Harvey Weinstein Can't Stop Lawsuit From Insurers Who Don't Want to Defend Him
A federal judge has refused to completely stall a lawsuit brought by insurance companies denying any duty to defend Harvey Weinstein.
The movie mogul is currently facing legal action on many fronts. The most serious case is the criminal one in New York, where Weinstein faces the prospect of up to 25 years in prison for allegedly forcing two women into sexual acts. On top of that, Weinstein must contend with about a dozen lawsuits from other women who have asserted claims including harassment, sexual assault and defamation.
Chubb is among the insurers seeking a judicial declaration that under the "personal injury" policies of the homeowners insurance issued to Weinstein, they don't have to provide a defense nor indemnity thanks to various exclusions and public policy. Specifically, the insurers frame Weinstein's conduct as intentional acts outside of coverage and also hope to convince a judge that New York law provides a basis for allowing insurers to avoid coverage for claims alleging sexual assault.
In reaction, Weinstein first asserted counterclaims against the insurers for abandoning him before then asking a judge to pause the proceedings due to the risk of litigating the case while the criminal prosecution was playing out.
U.S. District Court Judge Paul Crotty responds that when it comes to the issue of whether the insurers have a duty to defend, what is important is comparing the terms of the policy with the allegations from the various underlying lawsuits. In other words, no big factual discovery is necessary to determine whether in fact Weinstein perpetrated sexual misconduct. The analysis is just an interpretation of the insurance policies.
"Weinstein argues that defending these lawsuits along with his criminal proceeding places him in the 'perilous position' of having to choose between seeking coverage and preserving his Fifth Amendment right," states Crotty's order (read here). "[T]he limited nature of the duty to defend inquiry makes this concern unavailing. Any testimony from Weinstein as to his guilt, innocence, or potential liability in the Underlying Lawsuits is immaterial to the Court's assessment of whether the Chubb Policies contemplate coverage for the Underlying Actions, which will be assessed on the face of their pleadings."
On the other hand, when it comes to the issue of whether the insurers have a duty to indemnify, that future determination will turn on an independent factual finding about Weinstein's liability in those civil suits within the coverage provided by the policy. As such, because of the more intensive need to investigate, Weinstein's arguments gain more traction here, and Crotty has decided to pause just this aspect of the insurance case.
The big issue at the moment in whether or not Weinstein picks up insurance coverage pertains to if New York law is being applied. The insurance companies rushed to file their action in New York with hope that legal precedent in the state would bolster their position of denying coverage to Weinstein. That's because New York courts have held that an "intentional acts" exclusion can be presumed in sexual abuse cases. Additionally, New York courts have held that public policy can provide a basis for allowing insurers to avoid coverage for certain sexual assault claims.
Weinstein, however, insists he's a Connecticut resident and that Crotty must apply Connecticut law to the issues in the case. In the past, Connecticut courts have found that an "intentional acts" exclusion can only be presumed in sexual abuse cases involving minors.
In Crotty's latest decision, the judge doesn't resolve whether this insurance dispute will be resolved under New York or Connecticut law. He wants more discovery on the topic of where — and how long — Weinstein has been domiciled.