By Jarett L. Warner
An attempt by an insurance company to disclaim excess coverage to the National Football League (NFL) relating to a multitude of lawsuits and claims by former players concerning neurological and other debilitating injuries has spurred even further litigation.
There have been numerous reports and claims of concussions and other neurological injuries to former NFL players in recent months. One excess insurer, Alterra America Insurance Company (“Alterra”) initially sought a judicial declaration that it is not obligated to pay defense costs or judgments obtained against the NFL relating to these claims and lawsuits. On the heals of Alterra’s declaratory judgment action, the NFL has filed a lawsuit of its own for a declaration that Alterra as well as numerous other insurance companies are obligated to defend and indemnify the NFL. Travelers Insurance Company (“Travelers”) most recently filed its own lawsuit concerning its obligations.
On August 13, 2012, Alterra filed a declaratory judgment action in the Supreme Court of the State of New York, County of New York (Supreme Court, New York County. Index No. 652813/12) against the National Football League and NFL Properties, LLC (collectively “NFL”).
In its pleadings, Alterra states that it issued an excess policy to the NFL for the time period of August 1, 2011 until August 1, 2012. The policy issued by Alterra has a limit of $25 million per occurrence and provides coverage to the NFL in excess to Ace American Insurance Company’s $1 million per occurrence commercial general liability policy and in excess of Chartis Insurance Company’s $50 million limit per occurrence umbrella liability policy. Alterra’s pleadings do not indicate the aggregate limits of the respective policies.
In its Complaint, Alterra asserts that the claims of the NFL’s former players neurological injuries were caused by, among other things, the NFL’s negligence and fraud. Alterra claims that although the NFL has tendered some of the underlying actions, it timely disclaimed coverage. The underlying claims tendered by the NFL include alleged debilitating injuries from notable players including, Jamal Lewis, Fred Barnett, Jeff Hostetler, Art Monk, Eric Dickerson and Danny White to name a few.
In its first cause of action, Alterra seeks a declaration that it has no obligation to defend the NFL in the underlying actions pursuant to the terms of its insurance policy. In its second cause of action, Alterra seeks a declaration that it is not obligated to indemnify the NFL with regard to the underlying actions.
Only two days after Alterra filed its action, the NFL filed its own action in the Superior Court of California (Cal. Sup. Court, Index No.: BC490342) seeking a declaration that more than twenty different insurers have an obligation to provide defense and indemnity with regard to the more than 3,000 concussion-related lawsuits filed by the NFL’s former players. Among the insurers that the NFL names as defendants in the California declaration action are Ace, Allstate, Chartis, Chubb, Crum & Forster, Fireman’s Fund, Hartford, OneBeacon, Transatlantic, Travelers and, of course, Alterra.
In addition to a declaration as to the insurance coverage owed by the defendants, the NFL seeks $5 million in attorneys’ fees and other costs it maintains that it has already expended in the defense of numerous neurological lawsuits brought by former players and their spouses.
Notwithstanding the already pending lawsuit commenced by Alterra in New York and the fact that many of the actions started by formers players have been consolidated into a single action in federal court in Pennsylvania, the NFL maintains that its action was properly brought in California because many of its policies were brokered in California and the NFL has three teams in the state and has held numerous championship games there.
A week after Alterra and the NFL’s respective lawsuits, Travelers filed a state action in New York (Supreme Ct., New York County Index No.: 652933/12) of its own. Travelers also seeks a declaration from the Court that it has no obligation to defend and indemnify the NFL with regard to these lawsuits. Travelers maintains that it only insured the NFL’s marketing company, NFL Properties, Inc.
This litigation will likely take years before there is a resolution. At the outset, the Courts may determine whether these various coverage actions should be consolidated for purposes of discovery and/or trial and, if so, in what venue. This will go hand in hand with choice of law arguments due to, among other things, differences in insurance coverage principles in New York and California. The State of California could crown additional Super Bowl champions before all is said and done.
Jarett L. Warner is of Counsel at Havkins Rosenfeld Ritzert & Varriale. He concentrates his practice in defending sports and recreational venues and operators, construction companies and premises owners and managers in personal injury actions. He can be reached at jarett.warner@hrrvlaw.com
