Michael Ovitz Sues Insurer Over Anita Busch Settlement

Ovitz claims Fireman's Fund Insurance paid an amount well below its policy limits and forced him to personally pay the balance.
John Lamparski/WireImage; Courtesy of Brigitte Sire; Brian Vander Brug/LA Times via Getty Images
From left: Michael Ovitz, Anita Busch, Anthony Pellicano

After settling a long-standing legal battle with Anita Busch just days before a trial, Michael Ovitz has a new legal fight on his hands. This one is with Farmer's Fund Insurance, which the CAA co-founder says is refusing to pay its full share of his settlement to Busch.

The journalist claimed Ovitz hired now-jailed private investigator Anthony Pellicano to intimidate her into killing a story. After more than a decade of litigation, the parties reached an undisclosed settlement — until now, it was unclear whether that included a payment to Busch.

Ovitz denies Busch's claims, but acknowledged that going to trial risked both serious financial exposure and damage to his reputation. On Thursday, Ovitz sued the insurer for breach of contract, claiming the settlement was well within his coverage.

"An insurance carrier, it has been said, is a company that will sell you an umbrella when the weather is good, and take it back when it rains," writes attorney Eric George in the complaint. "[Fireman's] sold its aptly-named 'Umbrella Policy' to plaintiff, taking in substantial premiums for the promise of $30 million in excess insurance coverage. Then, when plaintiff himself was sued and sought to invoke the insurance benefits he paid for, Fireman's refused coverage."

Ovitz says both of his primary carriers have already paid up. Meanwhile, Fireman's is resorting to "extreme and frivolous" positions to avoid paying its full share, according to the complaint. Ovitz believes the insurer was trying to tank his deal with the journalist. It's also clear from the filing that the eleventh hour settlement had actually been in the works for months.

"Fireman's' bad faith tactics to stymie settlement forced Plaintiff — literally on the Friday before the Monday "Final Settlement Conference" preceding trial — to contribute his own funds in order to achieve settlement of the underlying claims," writes George.

AIG and Chubb contributed their policy limits, but the amounts were "far from sufficient to meet Ms. Busch's settlement demands." After months of correspondence from Ovitz's lawyers, Fireman's made a contribution "well below its policy limits," according to the complaint, which is posted in full below.  

Ovitz claims Fireman's took these actions to force him to trial in hopes that he'd lose and the insurer could use the adverse ruling as grounds to deny coverage. He's seeking unspecified compensatory and punitive damages, including related costs and attorney's fees.