Legal feuds over an insurer’s duty to indemnify are rarely so salacious.
Scottsdale-based Nautilus Insurance Co. is suing Gawker Media LLC over a dispute involving legal expenses incurred while the celebrity gossip site has been battling wrestler Hulk Hogan over a clip it posted of a sex tape involving Hogan and a friend’s wife.
Hogan sued Gawker for $100 million over the release in 2012, an action that has snowballed into a $600,000 bill for the media outlet. Gawker has since lobbied for coverage from Nautilus under a commercial general liability policy.
Gawker asserts it qualifies for coverage as the “emotional distress and mental anguish” Hogan claims to have suffered are “bodily injury” and thus covered under the terms of the CGL. Nautilus responded that another insurer, which provides Gawker’s E&O media liability coverage, is responsible for the payment.
The insurance company blasted Gawker in court this month for claiming its intentional publication of the sex tape constitutes a covered “accident” under New York law.
“Gawker does not dispute that an ‘occurrence within the meaning of the Nautilus policy is ‘an event which from the insured’s point of view ‘was unexpected, unusual and unforeseen,” an attorney for the company wrote in a brief Thursday.
“Gawker nevertheless claims, contrary to the Second Circuit’s holding in Oak Park, that the event here—Gawker’s creation and publication of a prurient narrative to accompany its publication of a sex video…allegedly causing emotion distress—was ‘unexpected, unusual and unforeseen’ from its point of view.”
Through its suit, Nautilus is seeking reimbursement of defense costs, based on its assertion that the policy was only meant to cover bodily injury resulting from accidents taking place in Gawker’s Manhattan office.
The company also alleges its policy was not in place during the time Hogan filed his suit.
