An insurer whose commercial general liability coverage was exhausted is not obligated to continue to provide a defense, said a U.S. District Court, in a case involving the death of a camera assistant, who was killed while filming on a railway trestle in Georgia in 2014.
Sarah Jones, 27, was killed and eight other crew members were seriously injured on the first day of filming “Midnight Rider,” a biopic based on the life of Greg Allman, after director Randall Miller put his crew on live train tracks and a train came by.
Mr. Miller, who set up Pasadena, California-based Film Allman L.L.C. with his wife and producer, Jody Savin, served a little more than a year in jail after pleading guilty to criminal trespass and involuntary manslaughter in in the case, according to news reports.
In the latest legal development in the case, the U.S. District Court in Los Angeles ruled Monday in favor of New York-based New York Marine and General Insurance Co., a unit of ProSight Specialty Insurance Group Inc. in Film Allman L.L.C. v. New York Marine and General Insurance Company Inc.
The District Court had previously issued an order granting partial summary judgment in the case in December 2016. The latest ruling concerned the remaining causes of action in the case: breach of contract, breach of the implied convent of good faith and fair dealing, and declaratory relief.
There were three relevant policies at issue, according to the ruling: a commercial general lability policy that had a $1 million per occurrence limit; an umbrella policy with a $4 million limit in excess of the CGL policy’s limits; and a workers compensation policy, according to the ruling.
After Film Allman provided notice of the accident, New York Marine retained counsel to defend the firm against litigation including a lawsuit brought by Ms. Jones’ parents, as well lawsuits filed by other parties.
The action by Ms. Jones parents was settled in 2014 for $6.5 million, consisting of the CGL and umbrella policies’ $5 million of coverage plus $1.5 million contributed by the company that owned the land where the accident occurred, Jacksonville, Florida-based Rayonier Performance Fibers L.L.C., according to the ruling.
New York Marine then advised Film Allman that with exhaustion of its coverage, its duty to defend the company in connection with the accident had ended, which left Film Allman with the burden of defending remaining actions without insurance, according to the ruling.
“Once a carrier expends the limits of a policy in defending an action, then its duty to the insured is extinguished, provided that the policy expressly provides that the duty to defend terminates upon exhaustion of policy limits,” said the ruling by Judge Otis D. Wright II. “Here, the CGL policy did contain such language,” he said. “The controlling law is clearly on the side of the insurer here.”
While “Film Allman would have liked for its insurer to extend coverage beyond what Film Allman actually paid for rather than use up the policy limits dispensing with one case, there is no support for this,” he said.The ruling also said a motion for reconsideration by Film Allman “is a thinly veiled attempt to prolong this litigation, and the Court will not allow it.”
The motion is based “on what is in essence a rumor: that the FBI is currently investigating the criminal prosecution arising from the train accident,” the ruling said.
“The problem with this argument is that there is no evidence that the FBI investigation has uncovered any new facts or has reached any sort of conclusion that would benefit Film Allman,” said the decision, in granting New York Marine’s motion for summary judgment in the case and denying Film Allman’s motion for reconsideration.
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