Appeals Court: Capitol Films Can't Recover $20M in Samuel L. Jackson Lawsuit

David Bergstein company argued too late that it should have had insurance allowing the shutdown of "Black Water Transit."
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Samuel L. Jackson

Capitol Films' attempt to recover $20 million in insurance money for having to replace Samuel L. Jackson on the 2009 film Black Water Transit has been rejected by a California appeals court.

A month before shooting was to begin on the movie, Capitol learned that Jackson couldn't perform because of a back injury that required surgery. The film company was left with three options -- replace him, postpone the shoot or to abandon the project. Capitol wanted to go the latter course but was told by its insurer, USSIC, that because Jackson wasn't injured during principal photography, Capitol couldn't shut down the film. Instead, Capitol recast the role with Laurence Fishburne, incurred $20 million in losses and eventually sued its insurance broker, Aon/Albert G. Ruben Insurance Services, for negligence and breaches of contract and fiduciary duty.

The trial court threw out the claims because they were barred by a two-year statute of limitations, which Capitol appealed, leading to a decision Tuesday by California's Court of Appeals to uphold the trial judge's verdict.

Capitol argued that other insurers would have let the company abandon the film, but by placing its "Essential Element" coverage with USSIC, Aon had left the company with no choice but to recast the film.

But Capitol, acquired by David Bergstein and now in default and in a larger bankruptcy proceeding, didn't file its lawsuit against Aon until Dec. 14, 2009, more than two years after the May 2007 discussions about Jackson's bad back and whether Black Water Transit was still going to be made.

To fend off a demurrer that challenged whether Capitol should have broughts its claims sooner, the film company argued that though it learned of the situation in May 2007, the company hadn't experienced harm until USSIC had made a final coverage decision later that year.

The trial judge, and now the appeals court, are skeptical about this, pointing both to arguments made at a hearing and also to Capitol's separate complaint against USSIC that alleged it had to recast Jackson's role in "an effort to move forward with the Film and mitigate the harm caused to the Film."

According to Tuesday's decision from California appeals court justice Kathryn Doi Todd:

"From the moment USSIC informed Capitol in May 2007 that abandonment was not an option under the Policy, Capitol not only knew that its broker Aon was negligent, but also that Capitol had sustained significant damages that were not covered by the Policy. This fact of damage is the relevant consideration because the statute of limitations begins to run upon the occurrence of 'appreciable and actual harm, however uncertain in amount' that consists of more than nominal damages."

The decision also notes that Capitol has settled its case against USSIC.


Twitter: @eriqgardner

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