Selman Breitman Upholds Dismissal of Coverage Action in 9th Circuit Involving an Underlying Verdict of $38 Million
Selman Breitman Partners Neil Selman, Rachel E. Hobbs, and Gil Glancz successfully defended Berkley National Insurance Co. against an action in which the underlying verdict was $38 million, with $7 million of coverage potentially exposed.
The win comes as a result of a suit filed by Bradley Cohen and Cohen Asset Management against Berkley National, who insured Cohen’s former tenant Ross Hansen, his company Northwest Territorial Mint LLC and employee Steven Firebaugh. Cohen alleged that Hansen created two websites, comparing Cohen to notorious financial fraudster Bernie Madoff and used false information to try and ruin Cohen’s businesses and reputation. In February 2016, a federal jury in the United States District Court for Nevada ruled that in fact Northwest Territorial Mint LLC, Hansen, and Firebaugh had committed the conduct with “fraud, oppression, and malice,” awarding Cohen $38.3 million in damages.
Cohen sought to collect this award under Berkley National’s primary and umbrella policies covering Ross Hansen, Northwest Territorial Mint LLC and Steven Firebaugh. The combined limit for these policies was $7 million. In response, Selman Breitman filed a FRCP 12(b)(6) motion to dismiss on the grounds that the judgment fell squarely within its exclusions for “personal and advertising injury” that constituted a “knowing violation of rights of another” and was “published with knowledge of its falsity.” The United States District Court for Nevada agreed and ruled that Berkley National did not have to pay the claim.
On appeal, the Ninth Circuit affirmed and agreed with Berkley’s argument that the conduct committed with “fraud, oppression, and malice” triggered the policies’ exclusionary language for knowingly violating the rights of others, and that the case was properly dismissed.
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